China and Japan in the Process of Financial Integration in Asia

Abstract

The article discusses the main areas and features of China and Japan participation in the process of financial integration. A comparative analysis of the possibilities of interaction with Asian countries in the credit and securities markets has been carried out. A special place is given to China and Japan activities in regional financial organizations and associations. It is argued that sphere of regional financial integration is one of the areas of economic cooperation between the two countries where along with the trends towards cooperation there is also a process of increasing competition. Improving the quality of bilateral economic ties between China and Japan and the establishment of multilateral cooperation is not accompanied by a general restructuring of competitive relations in the region. A number of areas of economic activity remain in the sphere of competition which continues to increase both at the state and corporations and banks levels. China uses innovative aid technologies to create the Asian Infrastructure Investment Bank, eliminate existing bottlenecks, and acquire strategic assets in the region. Japan, despite strained relations with a number of Asian countries, continues to integrate into the regional economy through a network of production and logistics chains and is still a major source of capital for many Asian countries. All this suggests that, despite China's undoubted economic and financial success, it needs time to secure its leadership in the region. At the same time, the further deterioration of trade and economic relations between China and the United States, the consequences of the coronavirus crisis push China to more cooperation with Japan in stock, banking and currency areas, through regional economic organizations, and further expansion of the use of local currencies, primarily yen and renminbi, instead of dollars for investment and expansion of multilateral settlement and payment transactions in the region.