China, Japan and South Korea pledged to increase mutual co-operation in security, technology and energy in a meeting at the recent Association of Southeast Asia Nations (Asean) summit in Bali, Indonesia. However, they stopped short of agreeing to a free trade area between east Asia's three largest economies.
Tokyo and Seoul have been working on a feasibility study into a possible northeast Asian economic community whose size would rival the European Union and the North American Free Trade Agreement. Premier Wen Jiabao proposed studying the creation of a wider trade area, incorporating the 10 economies in the Asean grouping. South Korea, in particular, is thought to favour a more limited northeast Asian pact and is already in advanced talks with Japan on a bilateral trade deal.