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The Asian side of the world

Jean-François Sabouret

Part two. National challenges and their strategies to overcome them

China and Japan face to face: economic partners, strategic rivals

Claude Meyer

Texte intégral

1February 2007

2The improvement of political relations between China and Japan has been somewhat sensitive since the visit of the new Prime Minister, Shinzo Abe, to Beijing on 8th October 2006. This slight improvement should not, however, mask the seriously deteriorating relations between the two countries that have been on going for several years now, despite the increase in economic exchange. The structural reasons for this antagonism remain; although it is partly explained by the conflict of memories and resurgence of nationalism, its underlying cause lies elsewhere, namely in the clash of two ambitions. If the relationship between these economic partners is marked by mistrust, it is because they are rivals for leadership in Asia.

Flourishing economic relations against a backdrop of political divorce

3Japan is currently the leading supplier of China and China is its leading trading partner. Trade between the two countries doubled from 2002 to 2005 and this trend should continue, as the two economies complement each other, at least in the short-term. This complementary nature of the Chinese-Japanese exchanges is the result of the differences in the development of the two economies in terms of technology and is based on the interplay of their comparative advantages – technological leadership for Japan, labour costs for China – that structures a mutually beneficial division of labour. The two economies are not only complementary, but also interdependent through direct Japanese investments in China that have doubled since 1999 to reach in total of 53 billion US dollars at the end of 2005. The dependence, however, is greater for China in this regard, as the ability of its industries to develop rapidly relies heavily on technological contributions from foreign companies.

4The contrast between these flourishing economic relations and political divorce has been all the more striking since 2001, in particular. Two main reasons, apart from territorial disputes and competition for accessing energy resources, could explain this deterioration. The first explanation concerns the divergent interpretation of a conflictual past. The clash of these conflicting memories concerns Japan’s military period and the crimes committed in Asia, for which Tokyo considers having offered a clear apology, while China criticises it for having half-heartedly apologised. According to Beijing, there is no genuine remorse in Japan, but instead waves of revisionist drifts, such as the approval of certain revisionist schoolbooks and the visits of the Prime Minister, Jun’ichirô Koizumi, to the Yasukuni shrine where soldiers who died for their country are honoured, but also a number of war criminals. The second reason for the political divorce is the antagonistic assertion of national identities stemming from the new geopolitical context in Asia and the two countries’ international positioning; the “Pacific rise” for China and Japan’s aspiration for “normalisation”. Beyond the rhetoric, the Chinese Communist Party knows that its legitimacy, and therefore its survival, depends on two essential factors, namely pursuing strong economic growth and maintaining social cohesion despite the growing income disparities. In order to strengthen this cohesion, the authorities are exploiting the society’s national morale and Japanese phobia. Japan seeks to strengthen its international stature and aspires to become a “normal” country, equipped with a defence capacity in line with its power and the threats to its security. Such development is triggering a shift to the right of the political world and public opinion concerning matters of defence and foreign relations, especially with China. China’s animosity and mistrust of Japan match the anti-Japanese sentiments among the Chinese; Chinese “patriotism”, nurtured by the country’s success and Japanese phobia, contrasts with assertive Japanese “patriotism” that seeks to regain all means of power to counter the increasing influence of China in Asia.

The Chinese-Japanese rivalry for leadership in Asia

5Beyond a conflictual relationship of the memories of war and the antagonistic assertion of national identities, it is the clash of ambitions that truly fuels the rivalry between the two countries, as both of them aspire to take leadership in Asia. Each of the two dominant powers has strong assets to offer for such leadership, but neither of them meets all the requirements for an undisputed hegemony on the economic, diplomatic and military front. If China could maintain its economic expansion at its current pace, in terms of its diplomatic dynamism and the modernisation of its armed forces, its domination in Asia would be inevitable in the next twenty-five years. Japan cannot bring itself to such a dialectic reversal of the turbulent history linking it to the Middle Kingdom. It hopes to curb these Chinese ambitions with its economic leadership and strengthen its regional influence, especially on security matters.

6Its economic influence in Asia is indeed overwhelming and it is probable that its lead over China will last for the next two or three decades. Its industrial strength has come out stronger after a long period of crisis, which has forced many industrial companies to restructure, and the economic system to be renewed. The ongoing technological innovation is at the centre of the Japanese industry’s outstanding international competitiveness, even against competition from the new industrialised Asian countries. Moreover, its financial strength is still intact, in spite of the crisis in the 1990s, Japan is by far the leading creditor in the world; its financial system has stabilised and its banking groups are among the world global leaders. This domination has, however, its limitations, as the long-term growth prospects are poor, given the maturity level of the Japanese economy; there will be a high public sector debt, not to mention the rapid ageing of its population. China, on the other hand, could register an average growth rate of 7% for the next two decades and thus catch up with Japan. It has sound assets to achieve this, including large savings by economic agents, massive influx of foreign investments stimulating technological progress, considerable sources of low-cost labour and consequently, an excellent export competitiveness-price ratio. It is not, however, certain that such an expansion rate could be maintained for such a long period, as heavy constraints weigh on the Chinese growth: the rise in inequalities, financial weaknesses and above all, dependence on foreign countries for natural resources, technologies and export markets.

7If the economic hegemony of the Land of the Rising Sun in the region remains indisputable, China, on the other hand, has strong assets within the field of diplomacy and strategy. Being a permanent member of the UN Security Council and with nuclear power, it is also an influential player for regional cooperation and security. One of the main goals of Chinese foreign policy, as is the case for its economic policy, is to support the legitimacy of the Party by strengthening the international influence of the People’s Republic of China. This leads to three objectives: reducing American influence in Asia, deflecting Taiwan’s efforts for independence and preventing Japan from establishing itself as the dominant power in Asia. Japan, on the other hand, wants to establish itself as a “global power” and is no longer satisfied with being relegated to being a “political dwarf” by the pacifism of its constitution. Its application to become a permanent member of the UN Security Council seems justified, both by its economic influence and diplomatic efforts. Japan is the first to practice democracy in East Asia; it considers itself to have an active role in maintaining peace within the confines of its constitution and exerts increasing influence to finding solutions for major international problems. Its pacifist position is subjected to two areas of controversy, the country’s desire for “normalisation” and concerns for its security. Thus national ambition and external threats force the country to redefine its strategic options, to contemplate a constitutional reform in order to clarify the role of self-defence forces and to shift the emphasis of its defence policy along more “interventionist” lines. Being Asia’s economic leader, Japan has many strategic assets to counter China’s ambitions. However, its diplomatic efforts in Asia sometimes lack clarity. It wishes to play a leading regional role, but fluctuates between regionalism and multilateralism in trying to overcome the mistrust that the surrounding countries have of Japan.

8Japan and China, inevitable economic partners and strategic rivals, remain divided by the weight of the past and more so by their ambitions. Neither of the two dominant powers currently truly qualifies for economic and political leadership in Asia; this leadership can only be shared. The emergence of a Beijing-Tokyo combination is, however, improbable, even in a composed political climate. Closer economic ties will not put an end to their strategic rivalry, as the rulers of the Middle Empire and the Land of the Rising Sun would undoubtedly prefer a classic Chinese precept on strategy, “consider your neighbours both as friends and enemies.”

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