No. 35 — September 15, 2000


Weekly Review


The gradual evolution of ties between the People's Republic of China and Japan has been on display in recent weeks as top officials from the two nations have met to smooth out some new wrinkles in bilateral relations. From August 28 to August 31, Foreign Minister Yohei Kono was in Beijing where he met (in order) with Foreign Minister Tang Jixuan, the head of the Chinese Communist Party's Organization Department, Zeng Qinghong, President Jiang Zemin, Vice Premier Qian Qichen and Premier Zhu Rongji. Mr. Kono expressed Japan's concerns about China's military modernization program, its overall defense spending, recent violations by its research vessels of Japan's 200-mile exclusive economic zone and activities by the Chinese navy near Japanese waters. In turn, Mr. Kono had to listen to Beijing's continuing exasperation with the Japanese government's refusal to accept its responsibility for inhumane military actions during World War II and recent visits by nearly 20 Japanese politicians and government officials to the annual commemoration at Tokyo's Yasukuni Shrine.

The mutual discomfort threatens the steady growth of bilateral economic ties. Japan is the top foreign investor in China as well as its major source of foreign aid. Right-wing Japanese politicians grumble that Tokyo's economic assistance to the communist country allows Beijing to boost its military beyond what it could afford without this help. Tokyo's aid policies, they add, complicate Japan's regional security situation. In addition, these critics say, the spectacular growth of the Chinese economy over the past two decades undercuts the argument that Beijing continues to need large amounts of assistance. There are many other countries whose economies could benefit more from Japanese aid money, it is argued. These concerns had led the Ministry of Foreign Affairs to delay the signing of a new ¥17.2 billion ($156.4 million at ¥110=$1.00) package of development loans for China.

The next exchange of views took place September 6 in New York when Prime Minister Yoshiro Mori and Mr. Jiang took part in the United Nations' Millennium Summit of world leaders. Messrs. Mori and Jiang focused on how their governments could cooperate on reestablishing diplomatic ties between Japan and North Korea. The Chinese president agreed that better relations between Tokyo and Pyongyang would help reduce tensions on the Korean peninsula, and he pledged to support Mr. Mori's initiatives in this area.

These meetings apparently smoothed over bilateral tensions enough to allow the foreign policy committee of the Liberal Democratic Party to recommend September 7 that the Foreign Ministry proceed with the new loan package while trying to resolve, at a minimum, the problems created by Chinese civilian and military vessels operating in or near Japanese waters. Mr. Kono hinted that he had obtained Beijing's understanding on this point, although whether the Chinese government promised to give Tokyo advance notice of its ships' activities is unclear.

Both sides are preparing the groundwork for the October 12-17 visit to Japan by Mr. Zhu. As one of the architects of his country's ongoing economic restructuring, the Chinese premier will have the rapt attention of Japan's business community. As Mr. Kono and Mr. Mori know, however, Sino-Japan ties remain a sensitive balancing act.

The views expressed in this report are those of the author
and do not necessarily represent those of the Japan Economic Institute

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