Abstract

The article focuses on trade, investment, financial transactions, migration and other economic and political relations between China and other East Asian countries, which are reclassified as continental and insular Asia. Although there is great political and economic uncertainty in East Asia toward the end of this century and in the next millennium, a few trends are observable: 1) slower growth and the rise of domestic dissatisfaction, 2) unequal income distribution and regional disparity, 3) liberal trade and investment, 4) competitive cooperation in East Asia without regional integration, 5) urban growth centers and sup-regional development, and 6) the need for regional balance in foreign direct investment. The balance of power between insular Asia and continental Asia, particularly China, may be maintained via good understanding among Asian nations about the relations among economic development, political stability, and security. Finally, Japan's efforts for security and regional political stability can be achieved through maintaining trust in bilateral alliance with the United States, Russia, China, and other Asia countries, improving mutual trust among insular Asian nations by confidence-building steps, especially with China and Korea, and achieving arms control or arms reduction by mutual dialogue to reduce tension in East Asia.