Examining the China-Japan-South Korea trade triangle as free trade deal sought

Chinese, Japanese and South Korean leaders held a three-nation summit in Seoul last month. In a joint statement, they vowed to strengthen cooperation on supply chains and accelerate talks toward a free trade agreement.

The following charts examine China's relationship with these two neighbors using official trade figures. While both nations remain very important trading partners, China's increasingly diversified trade with the rest of the world has had an effect in relative terms.

Japan and (to a lesser extent) South Korea have gradually become a less important part of China's overall trade mix, as our first chart shows. In 2000, exports to and imports from Japan accounted for well over 15% of China's trade; that share has fallen by roughly two thirds in both cases. Outgoing trade with South Korea has stayed steady at about 5% of China's total exports, though the share of imports originating in South Korea has almost halved.

As for the bilateral trade relationships as measured in USD terms, Chinese imports from South Korea have generally exceeded exports, except for the first half of 2023. China was usually a net importer from Japan before 2022, but since then the trade flows have roughly matched.

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