Asian Social Science; Vol. 10, No. 13; 2014 ISSN 1911-2017 E-ISSN 1911-2025 Published by Canadian Center of Science and Education 155 Economic Integration vs. Conflicts in Northeast Asia - A Role of Confucianism Heeho Kim 1 & Byeong-hae Sohn 2 1 Department of Economics, Kyungpook National University, Republic of Korea 2 School of Economics and International Trade, Kyungpook National University, Republic of Korea Correspondence: Heeho Kim, Department of Economics, Kyungpook National University, Republic of Korea. E-mail: kimhh@knu.ac.kr Received: April 13, 2014 Accepted: May 21, 2014 Online Published: June 25, 2014 doi:10.5539/ass.v10n13p155 URL: http://dx.doi.org/10.5539/ass.v10n13p155 Abstract This study has examined the culture commonality of Northeast Asian countries based on Confucian values, and their relations to institutional economic integration. This study demonstrates that Confucian values inherent in the Northeast Asian countries have served as the cultural ethos for the rapid economic growth of this region since the 1960s and will be able to form the foundation of Northeast Asian values in the future. This paper re-appreciates these cultural values as a necessary condition for regional integration to catalyze the stagnated discussions about economic integration and extends its inter-weaving connection role for intra-regional transaction among China, Japan and Korea. Keywords: confucianism, Northeast Asia, economic integration, economic growth, conflicts 1. Introduction In the process of modernization during the 20 th century, the Northeast Asian countries such as China, Japan and Korea (C.J.K) have passed through a harsh history of colonization, military invasion, ideological confrontations, and national division by ideological war. These historical experiences make the Northeast Asian countries find it hard to shake off their strong nationalism, despite the growing regionalism elsewhere. These historical remnants have prevented C.J.K. from laying a credible foundation for political and economic cooperation in this region and have made it difficult to establish an institutional economic community although intra-regional trade within Northeast Asia is rapidly increasing. Institutional Economic Integration is to set up an integrated economic community among the specific country members by eliminating all kinds of tariff and non-tariff barriers to free trade and economic activities between themselves. One of main types of the institutional economic integration is Free Trade Agreement (FTA) which eliminates all internal tariff barriers to free trade between the member countries within a region. The rapid economic growth of China since the 1990s has led to increasing economic interdependency among Northeast Asian countries, and consequently a market led functional economic integration has been developing in this region. The statistical analysis in the section 4 shows that there was a growing tendency of functional economic integration and the increasing intra-regional trades among China, Japan and Korea (C.J.K) during the last decades. A region-wide institutional integration scheme is required to expand a degree of this functional integration, and continues to discuss on building a Northeast Asian economic community (Note 1) since the 1990s. In spite of the functional necessity for institutional integration of the Northeast Asia, no inter-governmental integration agreement has yet been concluded due to the emotional barrier of mutual distrust resulting from historical conflicts. This emotional distrust among neighboring countries is so hard to eliminate that it needs to develop common regional identity and common values based on cultural commonality as necessary condition for the institutional integration. Nevertheless, the discussion on institutional economic integration led by C.J.K has focused mainly on enhancing economic interests rather than on recognizing culture commonality. Most sociologist and economists have tended to overlook socio-cultural factors in analyzing regional integration issues because they are implicit, invisible and immeasurable.