Sino-Japanese Relations and the ‘Wen Jiabao effect’

It is no exaggeration to state that Sino-Japanese relations are currently going through a phase of renewal and revival. Reflecting current sentiments that seek to build an optimistic future, Wen Jiabao became the first Chinese leader to visit Japan since 2000. Wen’s visit follows Japanese Prime Minister Shinzo Abe’s surprise visit to China in October 2006, which was unfortunately overshadowed by the North Korean nuclear test. During the tenure of Japan’s previous Prime Minister, Junichiro Koizumi, Sino-Japanese relations had cooled substantially because of his annual visits to the controversial Yasukuni shrine, as also Japan’s refusal to deal ‘appropriately’ with its history textbooks which glossed over atrocities committed by its Imperial forces in China during World War II. On the contentious ‘history disputes’ between the two countries, Wen presented himself at his accommodative best by stating that “to reflect on history is not to dwell on hard feelings, but to remember and learn from the past to open a better future.” Wen’s visit to Japan took place just before the Yasukuni shrine starts an important biannual religious ceremony honouring the ‘war dead’ called Reitai-Sai on 21 April.

Outlining a methodology for bilateral political relations, Wen highlighted five principles guiding their future development in a speech delivered to the Japanese Diet. These are: “to enhance mutual trust and honour commitments; to consider the overall interests of both countries and in the meantime seek common ground and shelve differences; to pursue common development on the basis of equality and mutual benefit; to strengthen exchanges with an eye on the future; and, to conduct close consultations to cope with challenges.’

Reading between the lines, these principles refer to China’s expectations that Japan would adhere to the Sino-Japanese Joint Statement of 1972 – the foundation of their bilateral relations, as also Japan’s stated position on the ‘One China’ principle. As countries of influence which have important stakes in safeguarding peace and stability in Northeast Asia, China possibly expects Japan to increase its profile in the region by sharing its technological and financial expertise. From a Chinese perspective, while there are differences in opinion on various issues, the common interests that the two countries share negate the impact of these divergent views.

Significantly, the Wen visit had an important economic aspect, which effectively balances the political differences the two countries have on various issues. Since diplomatic relations were established in 1972, commercial ties have been exemplary. Bilateral trade volume between the two countries was estimated to be around US $207.3 billion in 2006 – 200 times the figure for 1972! Japan’s direct investments in China exceed $58 billion, and are responsible for the establishment of more than 30,000 enterprises and joint ventures.

For China, Japan is one of its top economic partners and until recently a major source of development assistance. Currently, China ranks third behind India and Indonesia as a recipient of Japan’s Overseas Development Assistance (ODA). It would appear that for both governments mutual economic benefit is increasingly the primary determinant of the relationship. Seeking deeper economic linkages, Wen called for the two countries to jointly “explore new areas and channels” to intensify economic co-operation. He put forward a five point proposal that primarily reflects China’s growing awareness about achieving a transformation of its economy into an ‘efficient’ one in place of its somewhat ‘wasteful’ current status. The five points are: “to strengthen cooperation in environmental protection; to deepen energy cooperation; to facilitate cooperation between small and medium sized enterprises; to broaden cooperation in the financial sector; and to promote mutual investments.”

The above proposal is indicative of China’s growing concerns arising out of the excesses resulting from its rapid economic development and consequent need for cleaner technologies to rein in environmental degradation. China seeks access to Japanese expertise in optimising energy efficiency and the shift to environmentally friendly and socially responsible manufacturing processes. Lending gravity to this aspect was the trade delegation that accompanied Wen, which comprised of 150 executives from 50 major Chinese energy companies. The need for China to step up co-operation and learn from small and mid-sized enterprises in Japan is a pointer to the fact that all is not well with the ongoing process of restructuring Chinese state owned enterprises (SOEs), which in the pre-reform period were the foundations of its socialist economy. By inviting Japanese capital into its financial system, China hopes to bring in stability and transparency to a sector that has been dogged by collusion, dodgy financial dealings and off-the-record record transactions. China also invites Japanese investments into the ‘western development programme’ as also for the revival of industrial growth in northeast China – the SOE heartland.

The ‘feel good factor’ generated by Wen Jiabao could be interpreted in two ways. First, to the domestic audience in China, Wen was putting across the message that anti-Japanese sentiments need to be toned down in favour of a greater economic relationship with Japan. Second, to observers in Japan, Wen came across as a ‘moderate’ who is pushing for active co-operation with Japan and willing to be accommodative on the recent past as well as outstanding issues. Wen’s sober statements reflect the Chinese promotion of a ‘responsible rise’ that tempers extreme views on Japan without compromising on its grievances against Tokyo. Despite the recent bonhomie, tensions prevail and the image of Japan in China oscillates between that of a ‘partner’ (huoban) and a ‘rival’ (duishou). China closely watches Japan’s policy statements on Taiwan despite Tokyo’s espousal of the ‘One China’ policy. As a rival, Japan’s quest to be a ‘normal state’ coupled with its symbiotic alliance with the United States generates heated debate in China. The 1997 Guidelines for US-Japan Defence Co-operation, which gave Japan regional security responsibilities, remains a sore point. For Chinese hardliners especially, Japan has forfeited the moral right to be a political or military power owing to wartime excesses committed by its troops in China and Southeast Asia. Hence, China remains highly sensitive to any development in Japan that would seem to confirm Chinese doubts over latent Japanese militarism. Given all this, Wen Jiabao’s visit has to be seen as an attempt at restoring ties with Japan to normalcy before the process of deeper engagement takes over.