Currently, China is Japan`s largest trading partner and South Korea, and Japan and South Korea are China`s second and third largest trading partners, respectively. At the eighth China-Japan Summit of Heads of State and Government and last year, the heads of state and government of the three parties said they would work hard to achieve a free, fair, non-discriminatory, transparent, predictable and stable business and investment environment, and to keep markets open. At present, the stability and improvement of Sino-Japanese relations have also created good conditions for the improvement of economic relations between the two sides. Japanese companies, in particular, are optimistic about the potential of China-Japan free trade cooperation, and calls for more cooperation from China and Japan are growing. Negotiations for a bilateral free trade agreement between Japan and Korea, which failed in 2004 despite several attempts at recovery, face unresolved tensions resulting from Japan`s occupation of Korea in the first half of the 20th century and Japanese opposition to a reduction in tariffs on agricultural imports. A possible free trade agreement between China, South Korea and Japan must be taken into account in the context of the ongoing economic and political rivalry between China and the United States, as Washington considers creating a new regional free trade and investment agreement through membership of the Trans-Pacific Partnership (TPP). The free trade agreement between China and Japan and South Korea is a proposed free trade agreement between China, Japan and South Korea. The free trade agreement between China and Japan and South Korea was proposed in 2002. Negotiations on the agreement were launched in 2012.  The three nations account for up to 19.6% of the world economy. The first formal discussions on this subject took place in Seoul from 26 to 28 March 2013.
Further discussions took place in China and Japan during 2013 and more were planned for early 2014. Two-way trade between South Korea and China totaled $230 billion in 2013.  In January 2012, the South Korean and Chinese presidents announced that they were moving towards negotiating a bilateral agreement between the two countries. In March 2012, the three countries concluded an investment agreement between them, seen as a step towards a broader free trade agreement. In May 2012, China and Korea held their first round of negotiations for a free trade agreement in Beijing. In 2007, China, Japan and South Korea began negotiations for a trilateral investment agreement. The agreement was officially signed in May 2012. In November of that year, the three countries formally began negotiations for a free trade agreement between China and Japan and South Korea.
The eleventh round of discussions took place from 9 to 11 January 2017, during which trade in goods, trade in services and investment was discussed.  Despite the effects of the COVID 19 pandemic, bilateral trade between China and Japan reached nearly $150 billion in the first half of 2020. Japan`s investment in China amounted to about $2 billion, which is essentially the same level as the previous year. These resistant flows reflect the deep foundations and enormous potential of Sino-Japanese relations. Currently, a U.S.-led block of free trade in developed economies is beginning to take shape. The United States and Japan reached a trade agreement on tariff concessions in October 2019.