Commentary / Japan

Normalizing Japan-China ties poses risks

Japan and China are finally on track to put their relations on a normal path, following Prime Minister Shinzo Abe’s visit to China in late October. During his meeting with Chinese President Xi Jinping, Abe announced that the relationship between the two countries was transitioning “from competition to cooperation.” He continued: “With President Xi Jinping, I would like to carve out a new era for China and Japan.”

However, this development is of a different order than the 2006 agreement between Abe and then Chinese President Hu Jintao for a “strategically beneficial” mutual relationship between the two countries. Put more starkly, recent developments have simply returned the Japan-China relationship from a “minus to zero.”

Normalization of China and Japan relations was due in large part to the Trump factor.

At the end of April, a delegation of representatives from Chinese think tanks visited Japan ahead of a state visit by Chinese Premier Li Keqiang. Asia Pacific Initiative (the think tank I am chairman of) organized a forum for these Chinese delegates to exchange opinion with China specialists in Japan. During their discussion, one Chinese delegate opined: “There is a very real risk that free trade will be destroyed by Trump’s trade policies. The U.S. now poses a risk, and it would be dangerous not to have an insurance policy in place. Japan and China should take out this insurance policy together.”

The United States has certainly become a risk for Japan, as evidenced by its withdrawal from the Trans Pacific Partnership under the administration of President Donald Trump, subsequent application of Section 232 of the Trade Expansion Act to steel and aluminum imports (as “threats that could impair national security”), and adoption of a hard-line stance in the bilateral talks with Japan, in which the American side has sought to force Tokyo into negotiating a free trade agreement with the U.S. by threatening to extend the application of Section 232 to automobile and auto parts imports.

In fact, it was before the advent of the Trump administration that Japan began efforts to improve its relations with China. The meeting between Abe and Xi on the sidelines of the November 2014 Asia-Pacific Economic Cooperation summit —during which Xi wore the memorably sour expression — represented the first attempt. Since then, the two leaders have occasionally met on the sidelines of other international conferences, but never for longer than 30 or 40 minutes. Chinese domestic media reports explained that these Abe-Xi meetings were convened “at the request of Japan.”

This time, however, the Chinese took the initiative. I was told by sources in the know that at a high-level foreign policy meeting in June, government and Communist Party members decided to respond to the dangers posed by the Trump administration by improving relations with China’s neighbors, particularly Japan and India. Indeed, China’s relationship with India has improved markedly since then.

The stabilization of the Japan-China relationship is good for the Asia-Pacific region, and will be welcomed by the countries of Southeast Asia, which resent the pressure to “choose” between China and Japan. At the same time, there are certain risks associated with Japan’s pursuit of improved relations with China.

First, there is the risk that normalization will be interpreted as a sign of Japan’s weakness — and as evidence that Japan is sidling up to China. As the U.S. toughens its approach toward China, evidenced by Vice President Mike Pence’s speech at the Hudson Institute in October, Japan’s improved relationship with China could be an unwelcome “eyesore” for the U.S.

The Abe administration has consistently taken a hard stance on China’s military buildup, and particularly on the country’s offensive to expand its territorial dominion over the South China Sea. The Abe administration has also been cautious toward participating directly in China’s Belt and Road Initiative (BRI), citing concerns about its transparency and governance.

At their most recent meeting, however, Abe and Xi went so far as to discuss joint infrastructure development in third countries. This elicited concerns from within the White House, where the gesture was seen as Japan cooperating with the BRI.

Next, Japan’s China diplomacy could be viewed as an effort to hedge against the U.S. under Trump, and promote the perception that Japan has begun to distance itself from the U.S. If this spread, it could drive a wedge between Japan and the U.S. This is exactly what China is hoping for.

Depending on the future trend in U.S.-China relations, this could spew out various risks.

China and the U.S. are embarking on a battle for hegemony of high-tech industries, including artificial intelligence and 5G. The U.S. is strengthening measures to lock China out of its tech industry by restricting China’s ability to acquire American tech companies and tech industry talent — and may call on Japan to follow suit. The U.S. could also fault Japan for concluding regional trade agreements that include China but not the U.S., such as the Regional Comprehensive Economic Partnership.

On the other hand, it is also possible that Trump and Xi will abruptly decide to shake hands and resolve their trade issue. This would be yet another “Trump deal,” akin to Trump’s 180-degree turnaround on North Korea, which swung from the threat of nuclear war to Trump claiming that he “fell in love” with North Korean leader Kim Jong Un.

There is also the historical precedent of the “Nixon Shock,” in which the U.S. bypassed Japan to strike a reconciliation with China. Inside the Japanese government, many whisper their doubts about the wisdom of Trump’s brand of foreign policy, with its exclusive devotion to American interests. The current trend toward managed trade and Trump’s casual disdain for the security alliances are cause for grave concern in Japan.

It is impossible for Japan to choose unequivocally between the U.S. and China. Or between national security and the economy. Or between alliances and autonomy. These are no straight either-or choices.

Yoichi Funabashi is chairman of the Asia Pacific Initiative and a former editor-in-chief of the Asahi Shimbun. This is a translation of his column in the monthly Bungei Shunju.