"Essentially, there are enough similarities and differences between these 3 countries to make a closer integration amongst the Chinese, South Korean and Japanese economies a logical and natural outcome. What, or who, has been holding up this long overdue move? The United States."

The above map of the Far East gives one the impression that the region is vast. To answer this question, let us get some perspectives. The fastest direct flight from Beijing to Tokyo is 3 hours 10 minutes with a distance of 2,093 km. The fastest direct flight from Beijing to Seoul is only 2 hours with a distance of 953 km. The fastest direct flight from Seoul to Tokyo over a distance of 1,153 km takes slightly over 2 hours. How near or far are these 3 cities from one another?

For comparison, a direct flight from Kuala Lumpur to Kota Kinabalu takes 2 hours 31 minutes with a distance of 1,623 km, or further than from Beijing to Seoul. A direct flight from Madrid to Frankfurt has a duration of 2 hours 18 minutes with a distance of 1,446 km. A direct flight from Rome to Amsterdam takes 2 hours 4 minutes over a distance of 1,297 km, or further than from Seoul to Tokyo.

Beijing, Seoul and Tokyo have very long established and strong traditions of Confucianism and Buddhism, and they share many other similar cultural values. The family names are written in front. Even the physical appearances of the Japanese, Koreans and Chinese are similar. (Source: Shutterstock)

Kuala Lumpur and Kota Kinabalu are two cities within the same country. Madrid, Frankfurt, Rome and Amsterdam are all part of the European Union. In comparison, Beijing, Seoul and Tokyo are physically very near to each other. Moreover, these three countries have very long established and strong traditions of Confucianism and Buddhism, and share many other similar cultural values. The family names are written in front. Even the physical appearances of the Japanese, Koreans and Chinese are similar. It is not just the Westerner who cannot distinguish between physical appearances of the 3 nationalities; very often, the Japanese, Koreans and Chinese themselves cannot either. If there are countries that should easily and naturally think and act like one, China, South Korea and Japan would fit the bill. Should they?

Among the 3 Asian powerhouses, China is the biggest in terms of area and population. For one, there are 1,433,783,686 Chinese versus 126,860,301 Japanese and 51,225,308 South Koreans. With a land size of 9,388,211 sq km (excluding Macau, Hong Kong and Taiwan), mainland China is 25.75 times bigger than Japan and 96.56 times larger than South Korea. Japan is the most affluent with a GDP per capita of US$39,185 in Dec 2018. South Korea, with a GDP per capita of US$33,346 is next, followed by China, with a GDP per capita of US$9,776 in Dec 2018. However, in terms of absolute nominal size, China has an economy of US$14.140 trillion, US$5.154 trillion for Japan and US$1.629 trillion for South Korea. The 3 Asian economic giants are also major exporters. In 2018, China exported goods and services worth US$2.651 trillion, with US$929 bln and US$724 bln from Japan and South Korea respectively. However, as a percentage of GDP, exports of goods and services make up 44% of South Korea’s GDP versus around 19% for China and Japan. The three countries account for about 24% of world trade, and have tightly-bound supply chains, with more than US$720 bln in trade moving between them last year. Essentially, there are enough similarities and differences between these 3 countries to make a closer integration amongst the Chinese, South Korean and Japanese economies a logical and natural outcome. What, or who, has been holding up this long overdue move? The United States.

Take away the United States, China, South Korea and Japan would have formed some form of free trade area or economic association a long time ago. This is why the US cannot allow the 3 Asian nations to become closer. This economic bloc would have massive economic clout on a global level and would also tilt the balance in the global geopolitical structure away from the US and Europe. A northern Asia consisting of a more closely integrated China, South Korea and Japan would be good for the global economy and global peace. This is why this week’s summit involving Chinese prime minister Li Keqiang, Japanese prime minister Abe Shinzo and South Korean president Moon Jae-in in Chengdu, Sichuan, is a very welcome move.

Chinese premier Li Keqiang said in Chengdu that their "trilateral cooperation has become an important engine for East Asia". He correctly added, "We all proposed that we have to protect free trade and accelerate the integration of the economy. The protection of free trade will also contribute to world peace". The trilateral summit dates back to the fallout from the 1997 Great Asian Crisis, which devastated businesses across the region and prompted moves toward greater economic integration. China has led a push for a 16-nation grouping, the Regional Comprehensive Economic Partnership, but its final agreement was prevented when India said it was not ready to participate. Nevertheless, closer economic ties and warmer diplomatic relations between China, Japan and South Korea can only augur well for Asia's security and economic prospects.

i Capital is retaining its short-term outlook of the Hang Seng Index at a range of 22,000 to 29,000 to cater for the still-volatile local and global conditions. i Capital is also retaining its medium-term outlook of the Hang Seng Index at a range of 22,000 to 35,000 and with the same caveat. i Capital is maintaining its bullish long-term outlook of the Hong Kong stock market and expects the Hang Seng Index to eventually rise beyond 50,000. As i Capital has pointed out, the Chinese economy has successfully progressed to a stage where it possesses true resilience. Our long-term bullish view of China remains the same. Capital Dynamics foresees China celebrating her 100th anniversary in 2049 with even greater splendour.