China and Japan: Is Reconciliation Possible?

Japan and China have had a fraught relationship which is older than most modern states on the contemporary map. In the 20th century, the Japanese Nanjing Massacre (also known as the Rape of Nanjing) and the overall brutality of Japanese forces towards China in the 1930s and 1940s, remain among the worst acts of war criminality in recorded history.

Many noted that this year’s memorial to the victims of the Japanese Nanjing Massacre was particularly understated with a focus on pan-regional peace taking precedence over the natural anger that many in China continue to feel due to the brutality of the Japanese invaders.

Following on from this, 2018 has been marked not by an atmosphere of hostility between Beijing and Tokyo, but one of cautious rapprochement. It has just been announced that China and Japan are to establish a military hotline designed to help avoid confrontations in the East China Sea and elsewhere.

According to a statement from the Chinese Foreign Ministry,

“China and Japan should work together to build the East China Sea into the sea of peace, cooperation and friendship”.

While the ghosts of a blood-soaked history will always shape Sino-Japanese relations to some degree, today’s issues are more about the practicality of avoiding maritime incidents in the waters of north east Asia and more importantly, it is about accepting economic coexistence and even reaping the benefits of economic cooperation.

Separating ideals and fears from reality 

When Japan was a stronger economy than that of China, as it was during most of the 20th century, there was an implied advantage that Japan had in negotiations with Beijing. Now that China has attained both economic and military superiority over all potential rivals, it is now possible for Japan, the world’s third strongest economy, to internalise the fact that China, the second (soon to be first) strongest economy in the world, will have to be respected, rather than avoided or denounced.

In many ways, the difficultly of securing a Sino-Japanese rapprochement for the 21st century, is because China and Japan are both industrial economic powerhouses competing for similar export markets. China’s ability to outproduce Japan combined with China’s great leap into the market of luxury industrial goods, means that there are now few things Japan can do in terms of industrial quality that China cannot match.

Learning from the pitfalls of failed Russia-US reconciliation

An example of how China and Japan do not require a great deal from each other (with some notable exceptions), is analogous to why Russia-US reconciliation was always going to be a tall order. One of the reasons that the US and Russia can afford poor relations with one another is because they require little from one another. Traditionally, Russia and the US have had very different export markets, both countries are once again energy self-sufficient, both countries manufacture their own weapons and security technology systems and neither country is dependant on the other in foreign policy making matters. The US anger at Russia is generally far more severe than Russian frustrations towards the US, perhaps because Russia is cutting into many traditional US markets while the US has had mixed fortunes in breaking into traditional Russian markets.

Russia has begun working on energy projects and the sale of weapons to NATO member Turkey, while Russia is looking to sell weapons, including the powerful S-400 missile defence system to Saudi Arabia. The durability and lower cost of Russian weapons which are in many cases better than their US equivalents, mean that these systems are increasingly attractive to many US allies–especially those looking to assert their geopolitical independence from Washington.

By contrast, US adventures into Ukraine, Georgia and parts of Central Asia that are historic Russian lands, have not been so profitable. Because of the impoverished nature of these countries and regions and an unfavourable exchange rate, it is difficult for the US to sell its goods at a profit. The same is true in eastern and central Europe where Russian gas remains vastly more affordable and easily delivered than US produced liquified natural gas.

One Belt–No Go

While China continues to re-establish itself as a large state that is increasingly energy self-sufficient (just as the US has done), Japan remains a country largely dependent on energy imports, especially in the wake of the Fukushima nuclear disaster which has made many Japanese increasingly sceptical of nuclear power.

As China rapidly becomes energy self-sufficient while able to supplant its needs with affordable energy from its Russian partner, there is a chance that China could begin supplying energy to Japan–whether Chinese produced or Russian produced energy services. Agreeing to such an arrangement, would however, be politically difficult for any Japanese government due to the fears of being ‘overly reliant’ on a country that is not viewed as an ally or partner. The US would also been deeply intent on dissuading Japan from such a deal.

This is one of the reasons that with America’s blessing, Japan and Chinese antagonist India have been working on new trading agreements. However, due to the fact that Japanese goods remain expensive in the Indian market and also due to the fact that an easy Indo-Japanese trade route does not exist, especially considering the opposition to One Belt–One Road from both Tokyo and New Delhi, there are natural limitations to such a partnership which Japan acknowledges in private and India is reticent to admit in any context.

Due to Japan’s close relationship with the US, Beijing is able to exercise a far greater level of foreign policy independence vis-a-vis Tokyo. This is why a wealthy, strong and confident China continues to champion a free trade area covering not only Japan and China but also South Korea. Speaking of China’s hopes of improved ties with Japan, Premier Li Keqiang stated that the two economies are “highly complementary”.

The Korea Component 

In many ways South Korea’s rapidly improving ties with China could actually help convince Japan to enter into such an agreement. Unlike Japan, South Korea is inevitably dependant on China as a guarantor of peace in any future agreement between the two Korean states. As the peace minded administration of Moon Jae-in looks to decrease tensions with the DPRK, much to the chagrin of a war hungry United States, Seoul could prove to be the wildcard in a Sino-Japanese Korean free trade deal.

Ultimately, economic cooperation agreements binding North and South Korea together are required in order to preserve peace on the Korean peninsula. If Japan sees a partly western modelled South Korean economy using this experience to enhance trading ties with China, Tokyo might be persuaded that it could benefit from a similar arrangement.

As China makes the transition into a high-quality industrial economy, both Japan and South Korea will become increasingly less threatened by the long discredited though still often cited theory of “Chinese dumping”. The fact of the matter is that the hi-tech/hi-quality production capabilities of all three East Asian economies are in fact complementary.


Because China is already Japan’s number one export market while Japan is China’s number two export market after the United States, the pragmatic realities of mutual economic ties could ideally facilitate a more formal agreement which would create a harmonious atmosphere between China, Japan and also South Korea, which could in turn implicitly reduce geopolitical/security tensions in the region. Crucially, this trade, as outlined above is not due to the inability of Japan and China to be self-sufficient, but due to the pragmatic discovery that there are some Chinese products that Japan is content not to replicate and likewise there are some Japanese products that China is content not to replicate. This is therefore a complimentary rather than interdependent relationship which makes for the ideal setting for a free trade agreement. While China and Japan are capable of living without each other’s goods, the US for example would initially struggle if either Chinese or Japanese goods were cut off or made unenforceable through tariffs.

Such a free trade agreement would also demonstrate that the great East Asian powers are capable of reaching such accords of their own volition, without the intervention of the United States. It would also see Japan integrated into the One Belt–One Road through the back door. This will become especially important when Japan realises that its economic power will long outlast America’s geopolitical power. Both China and Japan should also remember that at various times in history, they have both been accused by the US of “dumping” goods on North American markets. This has been the case in spite of an allegedly overvalued Yen in the 1980s or an allegedly undervalued Yuan in the 2000s. The fact of the matter is that in spite of exchange rates, strong Asian economies have always been able to efficiently outproduce western economies. This reality ought to create at least a measure of common ground between China and Japan. This could easily be the beginning of conversations designed to inaugurate the “fresh start” between China and Japan that Xi Jinping spoke of in 2017.

Without the US to divide Japan (or South Korea)  from its Asian neighbours, Tokyo will have to face the realities of a changing world where China and not the US will be the de-facto strongest force in global geopolitics.

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