IV. China's Policy and Role
As a big regional power, China should have a strong regional strategy.
The following factors should enable China to be positive towards
EAC:
(1) China has a vital economic stake in East Asia, with more than
60 percent of its foreign trade and capital inflow from the
region. Based on a regional production network in East Asia,
the Chinese economy has become an integrated part of the
regional economy. A liberalized, secure and stable regional
market is in China's interest which encourages China to adopt
an active policy in participating and promoting RTAs, for
example, a China-ASEAN FT A, a proposed Northeast Asian
trilateral F TA and an EAFTA. China is also interested in particle
ipating and promoting regional monetary and financial
cooperation, like the Chiang Mai Initiative, and regional capital
market development, though with caution for a high-level instir
national arrangement at this early stage.