Introduction

The international community is facing complex changes, with unilateralism and populism impacting globalization, and new technologies impacting traditional economic models. The global crisis provides an opportunity for global governance reform and promotes the expansion of global governance from local to global. Third party market cooperation is a Chinese proposal that helps China deepen its integration into the global economic system and participate in global governance. The cooperation between China and Japan in the third-party market has exposed many problems in practical operation. It is necessary to deeply analyze the current situation and problems, summarize experiences and lessons, and provide reference for its subsequent development.

Two Literature Reviews

The third-party market cooperation originated from the signing of the Sino French Memorandum of Understanding in 2015, marking China's deep involvement. This cooperation plays an important role in global economic governance, based on collaborative development of common interests, comparative advantages, and political consensus, respecting the will and development strategy of the host country. China led cooperation goes beyond the scope of simple international economic cooperation, providing cost-effective products and services, deepening economic cooperation, and improving global industrial division of labor. The scale and level of cooperation in the third-party market between China and Japan rank among the top. In 2018, a memorandum of understanding was signed, forums were held, and 52 cooperation agreements were signed, with a total amount exceeding 18 billion US dollars. Cooperation promotes the transformation of cooperation mode from bilateral reciprocity to multilateral reciprocity, alleviates vicious competition, optimizes the industrial division in East Asia, promotes the "the Belt and Road" initiative, builds a free trade area, improves customs clearance efficiency, and reduces trade costs. However, the cooperation is affected by Japan's vigilance against China, the coordination between the "Indo Pacific Strategy" and the "the Belt and Road", Japan's internal disputes, and American factors. The political environment and business environment of the host country are poor, capital and political stability are insufficient, increasing business risks, and the differences in the attitude of the host country towards China and Japan increase the uncertainty of cooperation. It is necessary to establish a fair and feasible regional cooperation model to solve the problems of high development costs and insufficient mutual trust among multiple parties, and promote stable development of cooperation.

Specific Cases of Third Party Market Cooperation between China and Japan

This chapter delves into specific cases of third-party market cooperation between China and Japan, covering four categories: product and service, engineering cooperation, investment cooperation, and industry finance integration. In the case of product and service, the cooperation between Nippon Express Co., Ltd. and Sinotrans in the field of logistics transportation has shortened the transportation time of goods from Japan to Europe through the China Europe freight train. At the same time, the safety and environmental advantages of railway transportation have also been reflected. Taking the Northeast Economic Corridor project in Thailand as an example, this engineering cooperation project showcases the cooperation and challenges faced by Chinese and Japanese enterprises in infrastructure construction, including Japanese companies withdrawing from the project due to cost and risk considerations, as well as the impact of political activities in the host country on cooperation. The investment cooperation project analyzed the importance of a reasonable investment, financing, and equity adjustment model for the success of the Abu Dhabi solar power plant jointly built by Chinese Jinko Corporation and Japanese Marubeni Corporation in the United Arab Emirates. At the same time, it pointed out the problems caused by long capital recovery time and lack of national level guarantees. Taking the cooperation between the Export Import Bank of China and the Japan Bank for International Cooperation as an example, this project explores the role of financial institutions in third-party market cooperation, as well as the price advantages and necessity of financial product innovation in the cooperation between the two parties. These case studies not only demonstrate the process and issues of third-party market cooperation between China and Japan, but also reflect the risks and challenges in cooperation, providing valuable experience and inspiration for further cooperation.

Four institutional distances and cooperation with third-party markets in China and Japan

Explored the impact of institutional distance on third-party market cooperation between China and Japan, including the differences between formal and informal institutions. The reduction of institutional distance can lower transaction costs and have a significant impact on the entry choices of international direct investment. A worse institutional environment will increase enterprise risks. The difference in institutional distance between China, Japan, and Southeast Asian countries affects business activities and international investment. The legal system in Southeast Asia is not sound, the business environment is poor, corruption and complex management issues occur frequently, which hinder cooperation. China's outward foreign direct investment has a special "preference" for institutional issues in some countries, while Japan has advantages in institutional distance and national image in Southeast Asia, emphasizing the construction of multilateral cooperation and public-private partnerships. Chinese companies lack interaction and communication with the host country's internal environment during their operations in Southeast Asian countries, resulting in structural issues in the host country's perception of Chinese companies. The third-party market cooperation between China and Japan faces disadvantages from outsiders in Southeast Asia, and Chinese companies need to pay more additional costs and face discriminatory treatment. The measurement methods and indicators for the institutional distance between China and Japan in Southeast Asia were also introduced, including five aspects: political system, economic system, legal system, cultural system, and psychological system. The institutional distance was calculated using the methods of Koga and Singh. The research results show that there is a significant difference in the formal institutional distance between China and Japan and Southeast Asian countries. Southeast Asian countries with higher levels of economic development have smaller formal institutional distances from Japan, while countries with lower levels of economic development have smaller formal institutional distances from China. The informal institutional distance between China and Japan and Southeast Asian countries is relatively small, reflecting the weak complementarity of their informal institutional distance in the region. Chinese enterprises need to strengthen their cross-cultural management capabilities, learn from the successful experience of Japanese enterprises, in order to better adapt to the local informal institutional environment, enhance competitiveness and influence.

Five conclusions and recommendations

Third party market cooperation is a new model of international economic cooperation between China and Japan based on historical development and trends of the times, aimed at shaping common interests, promoting deepening multilateral cooperation, and reducing risks through cooperation platforms. The Sino Japanese cooperation model is driven by the government and led by enterprises, building a multilateral cooperation platform to achieve win-win outcomes for all parties. There are non economic factors such as legal systems and cultural identity that affect cooperation, and it is necessary to promote cooperation development from political cooperation, intergovernmental cooperation organization construction, cultural and psychological differences handling, corporate social responsibility fulfillment, and localization problem solving.