1 Background of East Asia integration.

Regional integration has started since the end of the Secong World War and began to flourish after Cold War when external environment was stable and economic development became the major issue for every country. Unlike NAFTA and EU， East Asia is said to be a natural trading bloc in that there were no formal region-wide arrangements but was generally based on market-driven force （Byeong， 2002）. Driven mainly by market， the intra-regional trade in East Asia has accounted for more than 50% of its total trade by the end of 1990s （Beeson， 2007）. However， countries in East Asia have gradually realized the importance of establishing regional institutions and the benefits it could bring about， especially after witnessing the huge achievements made by EU and NAFTA with the GDP keep increasing every year. Under such circumstances， some major functional integration programs were created. ASEAN and APEC are among the most influential ones which will be discussed in detail in the following sections. Besides， China and Japan are the two countries that contribute most to the regional integration in East Asia.

The main achievements of regional integration in East Asia.

Looking back the history， East Asia was first led by Japan in the 1980s and then followed by the rise of NIEs and China in the 1990s， together with Japan as the major countries for regional integration （Byeoing， 2002）. To a large extent， it is the achievements of the above institutions and countries that have helped East Asia to accelerate the process of regional integration.

1） ASEAN

The regional cooperation between East Asian countries could be traced back to the 1960s when Association of South-East Asian Nations （ASEAN） was founded in 1967. Its members are Indonesia， Malaysia， the Philippines， Singapore， Thailand， Brunei， Cambodia， Laos， Myanmar and Vietnam. ‘And its aims include the acceleration of economic growth， social progress， cultural development among its members， the protection of the peace and stability of the region， and to provide opportunities to member countries to discuss differences peacefully.’ Economically， ASEAN comes out with policies and projects every year in order to promote regional economic integration. For example in the 1970s， the schemes of the Preferential Trading Arrangements （PTAs） were created to intensify economic cooperation within the region. In 1992， ASEAN Free Trade Area was built to further accelerate the process of integration. Up till 2002， another scheme was introduced for the purpose of enhancing intra-regional trade by cutting tariffs in a wide range of products （Zhang， 2003）. Although the export is falling under the current economic climate， the recent meeting of the G-20 in Washington provides new hope for improved policy coordination and consultation across countries. Regional organization such as ASEAN is already pursing the possibility of creating an agreement of bilateral swap arrangements currently totaling $824 billion. Politically， ASEAN regards dialogues and cooperation as its basic principles to deal with international affairs， emphasizing on keeping neutrality and balance. The Ministerial Meeting is held annually to discuss about establishing trust mechanism and developing solutions to regional disputes such as the disputes between Japan， China and Taiwan over the Senkaku/Diao yu Islands in the East China Sea； the Paracel Islands claimed by China， Taiwan， and Vietnam； and the Spratly Islands involving China， Malaysia， the Philippines， Taiwan， and Vietnam in the South China Sea （Emmers， 2009）. All in all， ASEAN acts positively to build trust among its member countries and to help keep a safe and sound regional environment.

China

Since the open-door policy from 1980s， China has been developing at an amazingly fast speed. At present， China is the world’s fastest growing economy. It is also positioned as the most attractive place for Foreign Direct Investment （FDI）. In the 1990s， 20% of the FDI to East Asia was absorbed by China and 50% by ASEAN； but today， as China is further opening its domestic market and offers more favorable policies for foreign trade and investment， the situation has reversed： 50% of the FDI is flowing into China and 20% to ASEAN （Breslin and Shaun， 2005）. What's more， since the second half of the 1980s， ASEAN countries have also started to invest in China （Byeoing， 2002）. As Japan's economy is suffering while China's economy is flourishing， the 'Flying Geese Pattern' led by Japan was gone.

China's rise and the entry to WTO have also contributed significantly to the regional integration in East Asia. With multinational firms as a linkage and China as the major manufacturing center， the East Asian countries are now more closely connected. In the process of regional integration， China does not only act as a manufacturer. With the world's largest population， it is also a huge consuming market with great potential. China's booming economy and the newly-formed regional pattern （after Flying Geese Pattern） in East Asia has led to an increase in supply and demand which has helped to form even closer ties between countries in the region.

Potential for further integration.

The close cooperation between Japan， NIEs and the developing countries in East Asia is the best indicator for further regional integration. After the strengthening of new regionalism， the actual export driving force of East Asia economies relies more on regional market rather than European and North America markets， which also implies the great potential for further integration （Byeoing， 2002）.

However at present， obstacles do exist： Japan’s strengthening of Japan-US military alliance， the ex-prime minister Junichiro Koizumi’s visits to Yasukuni Shrine. Those are all disadvantages that prevent the two countries from having a sound relationship. If the situation continues， East Asia will never have a real regional integration like EU and NAFTA.

Thus， the future of East Asian integration is full of uncertainties， facing both opportunities and challenges.

Conclusion

This paper mainly discussed about the regional integration on East Asia. From about half century ago especially after the Second World War， East Asia has started its process of regional integration， influenced by world-wide trend of globalization and regionalization. Mainly driven by market force， there have been some major achievements. ASEAN and APEC are two of the most successful functional integration programs which have contributed a lot to the integration. Besides， China and Japan are also playing indispensable roles in the process. The impact of those achievements on economies and firms are also evaluated and the potential for further integration is definitely great， though problems and difficulties are in the way.

References

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