MONTEREY, Calif. — Sunday marks the 60th anniversary of the end of the Pacific War. In Asia, it is an especially critical milestone as China, South Korea and many Southeast Asian countries recall their struggle against the Japanese invasions, valuing peace all the more today. Time is supposed to heal wounds, but Asia’s two great powers, China and Japan, still live in cold peace.

The immediate postwar era set China and Japan on a course of hostility on opposite sides of the Cold War. The San Francisco Peace Treaty was concluded without the participation of the People’s Republic of China, and Tokyo’s recognition of the Chiang Kai-shek put Sino-Japanese relations in a deep freeze.

The resumption of diplomatic relations between Tokyo and Beijing in September 1972 marked the beginning of two decades of what both Chinese and Japanese analysts call the “golden age” of the bilateral relationship. Economic, social, and cultural contacts quickly expanded. Nurtured by the older generation of leaders such as Zhou Enlai, Deng Xiaoping, Kakuei Tanaka and Masayoshi Ohira, China and Japan strengthened their political alignment against the perceived Soviet threat and “hegemonism.”

However, since the mid-1990s the bilateral relationship has been under increasing strains. History, territorial disputes, growing assertiveness and geopolitics seem destined to set Asia’s two great powers on a collision course.

History continues to haunt bilateral relations. China is particularly incensed by (1) Prime Minister Junichiro Koizumi’s annual visit to Yasukuni Shrine, where 14 convicted Class-A war criminals were enshrined alongside 2.5 million dead Japanese soldiers; and (2) middle school textbooks that whitewash history and Japan’s responsibilities in the Pacific War.

Tokyo, on the other hand, is tired of making apologies and seeks to move beyond the period of Japanese militarism and aggression by presenting itself as a pacific and responsible member of the international community.

Bilateral territorial disputes have in recent years intensified: Beijing and Tokyo both lay claims to exclusive economic zones in the East China Sea and accuse each other of illicit incursions as the two compete for and seek possession of energy resources.

China and Japan are becoming increasingly assertive — China because of its dynamic economic growth over the past two decades, increasing political influence in the region and continuing military modernization. Japan is prompted by its pursuit of becoming a “normal” country and gaining a permanent seat on the reformed U.N. Security Council.

Mutual suspicions are as strong as they are palpable. Beijing is sensitive to Japanese constitutional reform and the Japanese Self-Defense Forces’ expanding role and activities beyond its territories as a sign of re-militarization. Tokyo, meanwhile, is no longer coy about publicly stating its concerns about Chinese military modernization.

Finally, there is China’s concern with the U.S.-Japan security alliance and its impact on regional geopolitical landscape. Beijing was quite upset by last February’s U.S.-Japan joint statement in which Tokyo, for the first time, explicitly referred to the peaceful resolution of issues concerning the Taiwan Strait and China’s military transparency as among common strategic objectives it shares with Washington. For Beijing, this was unacceptable interference in China’s internal affairs — beyond the scope of a bilateral security pact whose original objective was the defense of Japan.

Clearly, an estranged and, worse, a potentially adversary relationship between Asia’s two great powers threatens the region’s stability and is detrimental to the two countries’ fundamental interests. An Asian “Franco-German” rapprochement would go a long way toward building the region’s peace and prosperity.

First, China and Japan must learn to live with each peacefully. Historically, the two have never been of equal status; now they have to adapt to and accept the other’s rise. Accommodation rather than confrontation should be the basis of bilateral relationship in the years to come.

Second, Beijing and Tokyo must develop mechanisms for regular high-level exchanges on issues of bilateral concerns. It is unfortunate that, since October 2001, there has been no summit meeting between the two governments. This only results in situations where public opinion and sentiments are allowed to prevent or dictate the terms of diplomatic dialogue.

In addition, lack of dialogue also allows worse-case scenario assessments to influence policy formulation, further heightening mutual suspicions and leading to acrimony over issues such as the U.S.-Japan alliance, Taiwan, and Chinese military modernization.

Third, the media can play an important role in either promoting or discouraging Sino-Japanese relations and, therefore, should make greater efforts in urging mutual exchanges and understanding instead of stoking nationalism and fanning hatred.

Fourth, there need to be greater people-to-people contacts at the grassroots level. In the 1980s, such exchanges greatly promoted better understanding and friendship between the two peoples. Renewed efforts should be undertaken to deepen the ties, especially between the young.

Sino-Japanese relations are at a crossroads. The two countries have developed close economic interdependence with annual bilateral trade exceeding $170 billion ($205 billion if Hong Kong is included) and growing. Thousands of Japanese companies have invested in China. China and Japan are also critical players in the region’s development of stable financial institutions, free trade, and greater regional integration. How to return the bilateral relationship to a positive trajectory is the greatest challenge for Beijing and Tokyo.

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