China Looks Beyond Koizumi in its Japan Diplomacy

by Wenran Jiang

Volume 6, Issue 12 (June 07, 2006)
China Brief, Jamestown Foundation

Japanese Prime Minister Junichiro Koizumi is reportedly preparing for another visit to the Yasukuni Shrine where World War II war criminals are being honored among the war dead. If he carries out his sixth homage before stepping down as the prime minister in September, Tokyo’s relations with China, South Korea and other Asian countries are certain to become more strained. There are positive signs, however, that Sino-Japanese relations are improving—an indication that both senior Chinese leaders and their Japanese counterparts are willing to look beyond Koizumi.

Resumption of High-Level Contacts

Political relations between China and Japan have been at low ebb for much of the past five years since Koizumi began his pilgrimages to Yasukuni. The deadlock over the issue, combined with the large-scale anti-Japanese demonstrations in major Chinese cities in the spring of 2005, has cut off much of the senior level contacts between Tokyo and Beijing. Chinese President Hu Jintao reiterated China’s bottom line on its policy toward Japan in late March: there would be no summit between the two countries as long as Japan’s prime minister visits the Yasukuni Shrine. Nevertheless, in spite of the political impasse, bilateral economic relations have developed along a separate track.

Two years ago, China became Japan’s largest trading partner and Tokyo is keenly aware that much of Japan’s economic recovery in the past years is due primarily to a growing Chinese market. China and Japan have continued to hold bilateral strategic consultations and negotiations aimed at resolving disputes over territories and exclusive economic zones in the East China Sea. After much speculation and negotiation, Chinese Foreign Minister Li Zhaoxing met with Japanese Foreign Minister Taro Aso on the sidelines of an Asia economic conference in Doha, Qatar. This was the first foreign-minister level meeting of the two countries in a year and the first time for Aso in his capacity as the foreign minister to meet his Chinese counterpart. The two ministers chatted about sports and took a forward-looking posture. “We will benefit from good relations,” Li said. “But if we fight, we will both be worse off. The world also wants Japan-China relations to improve.” Aso’s response echoed this tone: “We should have more dialogue. We should do that especially when we have difficulties, and Japan is open to this” (The Daily Yomiuri, May 25).

Both Li and Aso agreed that the two sides should speed up negotiations on the East China Sea dispute where Japan fears that China’s development of gas fields on the Chinese side of Japan’s declared “median line” (not acknowledged by Beijing) might lead to the loss of resources on the Japanese side. Aso has also proposed another meeting in Malaysia as a part of the “ASEAN+3” (Association of Southeast Asian Nations plus South Korea, Japan and China) next month when ASEAN foreign ministers will meet with their counterparts from China, Japan and South Korea. Aso even predicted with optimism that Japan is on its way to restoring relations with both China and South Korea.

A New Focus of Bilateral Cooperation

A few days after the meeting of the two foreign ministers, China’s Minister of Commerce Bo Xilai met with Japan’s Minister of Economy, Trade and Industry Toshihiro Nikai while attending the Sino-Japan Forum on Energy Saving and Environmental Protection in Kyoto. Participating in one of the largest bilateral events in recent memory with 700 government and business leaders from both sides, Bo was received by the Japanese side with formal head-of-the-state status (Kyodo, May 28). He talked to Nikai about the importance of bilateral commerce and how cold political relations have affected economic ties. In the end, both agreed to pursue further collaboration in the areas of energy efficiency and environmental protection.

Senior-level attention in these areas has marked a renewed focus in the development of bilateral relations. China’s “11th five-year program” has placed a tremendous emphasis on energy conservation and environment-friendly measures. Japan, on the other hand, is one of the most energy efficient users in the world and is a leader in many of the technologies needed by China. Nobuyori Kodaira, director-general of Japan’s Natural Resources and Energy Agency, who recently engaged in bitter talks with China over the East China Sea dispute, has now signed a memorandum of cooperation with China on energy conservation.

But Bo went further to suggest broader, long-term cooperation based on energy and the environment. He drew a comparison to the European Union that began with the European Coal and Steel Community centered on France and Germany. "If China and Japan can do better in the area of energy and environmental cooperation, Sino-Japanese relations will be pushed to a new platform,” said Bo (Kyodo, May 30).

Tokyo seems to have sensed the new momentum. In what will certainly be seen by Beijing as a positive step forward, it announced that Japan's Official Development Assistance (ODA) to China for the 2005 fiscal year—frozen due to the deadlock over the East China Sea negotiations—will be resumed with 74 billion yen (US$650 million) worth of low interest loans and assistance being dispersed soon (Asahi Shimbun, June 6). When Tokyo began to provide China with ODA in the late 1970s, it was part and parcel of Japan’s energy security policy. The initial projects focused on large infrastructure projects that directly benefited Chinese exports of coal and oil to Japan. After becoming a net oil importer in 1993, China continued to supply Japan with good-quality, low-cost crude from its Northeast Daqing Oil Fields, only stopping in early 2004 when the two sides could not agree on the pricing. At the same time, China, with its own energy in serious short supply, overtook Japan as the second-largest energy consumer in the world. Although Japan has substantially decreased its ODA to China since the 1990s and expects a total suspension in the near future, it remains an important source of finance and is a symbol of close economic relations between the two countries. In the past few years, Japanese ODA to China has shifted to environment-related projects since China’s growth has caused many environmental problems that have an increasingly detrimental effect on Japan.

Post-Koizumi Diplomacy in Full Swing but Obstacles Ahead

These developments are certainly music to the ears of those who would like to see China and Japan overcome the “Yasukuni syndrome” and move forward to build better relations that will benefit not only the two countries, but also the entire Asia-Pacific region. Even on issues of history, Beijing has indicated through informal channels that it is willing to conduct joint studies with Japan—a sign of flexibility in searching for a breakthrough in this sensitive area. Beijing’s new posture toward Japan recalls its efforts in the 2001-2004 period when Chinese leaders implicitly endorsed the “new thinking” on Japan advocated by some scholars and journalists who argued that China should move beyond issues of history and forge a future-oriented relationship with Japan. Unfortunately, neither the Japanese leadership nor other segments of Japanese society responded with positive measures and the “new thinking” lost its appeal in China and was largely discarded.

The tide seems to be changing now and the Japanese public is overwhelmingly concerned about the state of Japan’s deteriorating relations with China. Furthermore, seven former prime ministers have called on Koizumi to stop visiting the Yasukuni Shrine, the business community has clearly voiced its opposition to Koizumi’s homage and consensus is growing that the next prime minister should refrain from going to Yasukuni in order to repair relations with Japan’s Asian neighbors. Shinzo Abe, Koizumi’s chief cabinet secretary and a leading contender for the prime minister’s position, has recently softened his hawkish stand on the Yasukuni issue. Once adamant about going to Yasukuni if selected as the next prime minister, Abe is now refusing to give a clear answer. Aso, another contender for the prime minister position and an advocate for the emperor’s worshipping at Yasukuni, also treads carefully on the issue: “I’ll make an appropriate decision with both my personal belief and my public duty taken into consideration” (The Daily Yomiuri, May 25). Additionally, former cabinet secretary Yasuo Fukuda has clearly expressed his opposition to the Yasukuni visit and has built his bid for the prime minister’s post mainly on the resumption of healthy, friendly ties with Beijing and Seoul.

While it is unclear how the Yasukuni issue and the “history question” will manifest itself in Japanese politics in the next few months, it is unlikely to be a source of military conflict. A much more difficult obstacle, however, lies in the East China Sea where territorial claims by both China and Japan have caused much tension. In a world of diminishing resources, it is estimated that there are 200 trillion cubic feet of potential gas reserves and up to 100 billion barrels of oil deposits on the entire shelf of the East China Sea. The reserves, close to both Japan and China, could provide a long-term, secure supply to both countries if a cooperative solution is worked out. Yet, the complex interdependence between Beijing and Tokyo has created an economic security dilemma—one country’s drive to secure its own energy supply has turned into a real or perceived depletion of the other’s potential resources.

Although the positions of Beijing and Tokyo remain at odds after the fourth round of negotiations, both sides have expressed willingness to continue negotiations that would allow for joint-exploration. It is evident that both countries are attempting to search for grounds of cooperation and are making an effort to move beyond the areas of contention. One can only hope that the potential Koizumi visit to the Yasukuni shrine will not derail the hard-earned progress in Sino-Japanese relations.