China and Japan are unlikely to reach agreement on the Free Trade Association by the end of this year, Jiang Yuechun, director of the Research Department of the World's Economy and Development of China Institute of International Studies, said on Tuesday, Aug. 20.

Jiang made his remark on the economic and trade relations between China and Japan at a"Journalist Saloon" held by All-China Journalists Association for journalists from both home and abroad.

“Before reaching agreement with Japan, China will probably sign the FTA pact with South Korea first, even though the unofficial organizations from both China and Japan have prepared for over 10 years for the pact," said Jiang.

“But the delay in the implementation of the FTA between China and Japan should be largely attributed to Japan's lack of initiative, because the Japanese government are busy with talks on the Trans-Pacific Partnership (TPP)," Jiang continued.

Initiated by (Asia-Pacific Economic Cooperation) APEC members New Zealand, Singapore, Chile and Brunei, the TPP has been much encouraged by the United States since the agreement's inception in 2008 because its terms correspond to U.S. president Obama's strategy of refocusing on Asia. But China, an important APEC member, has been excluded from the TPP negotiation.

The FTA is a pact to create a free trade zone among China, South Korea and Japan, the three most important countries in East Asia. Despite big progress made between China and South Korea in their negotiation of the pact, the Japanese government led by Shinzo Abe has been reluctant to join in talks. Japan's bid to"nationalize" the Diaoyu Islands also chilled Sino-Japan relations, Jiang said.

In addition to Japan's reluctance, China's lack of manufacturers of high-tech, high-value sophisticated products was also an obstacle in negotiations, Jiang said.

Additionally, China's rising labor costs, the Japanese yen's devaluation, the restructuring of the Chinese economy and expectations for Japan's economic recovery have all affected the countries' ability to reach an agreement.

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