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Foreign Policy

New Context for China-Japan Relations

Dec 04, 2023
  • Liu Junhong

    Researcher, Chinese Institute of Contemporary Int'l Relations

Chinese President Xi Jinping meets with Japanese Prime Minister Fumio Kishida in San Francisco, the United States, Nov. 16, 2023. (Xinhua/Wang Ye)

Chinese President Xi Jinping meets with Japanese Prime Minister Fumio Kishida in San Francisco, the United States, Nov. 16, 2023. (Xinhua/Wang Ye)

On the sidelines of the recent APEC Summit in San Francisco, leaders from China and Japan reasserted the strategic and mutually beneficial nature of China-Japan relations, infusing it with fresh meanings. They captured global attention as they marked a pivotal moment in shaping China-Japan relations for the New Era.

China and Japan, being respectively the second- and third-largest global economies, are key players in the Asia-Pacific region. Their leaders have taken effective and responsible actions on multilateral platforms, demonstrating their commitment to advancing the healthy development of the global economy and the orderly progress in international politics.

The shared responsibilities assumed by the leaders of both nations have set a pragmatic developmental tone for China-Japan relations in the New Era, which are now in a new stage of inheriting the past and ushering in the future, characterized by strategic mutual benefit. 

Of particular note at the APEC Leaders’ Meeting was President Xi Jinping’s speech, which provided guidance for the diverging global economy and recalibrated the course for major-country relations.

APEC’s economic output constitutes about 60 percent of the global total, with its trade volume at 50 percent, and it has nearly 40 percent of the world’s population, making it the largest global economic circle. This also signifies an eastward shift of the global economic center. Within this context, China and Japan hold a central position. The distribution of power within this framework significantly influences the global power structure.

Over the 45 years since the China-Japan Peace and Friendship Treaty, the economic scale of the two countries has shifted, altering their global power balance. For instance, China’s GDP in 1978 was just 22 percent of Japan’s in U.S. dollars, which further declined to 11 percent by 1991 at the end of the Cold War. However, after 45 years of development, China’s GDP not only surpassed Japan’s in 2010 but is now approximately 3.5 times larger. This shift reflects not only new global economic trends but also a new structure and historical trajectory in China-Japan relations.

The economic structures of China and Japan have evolved, moving beyond an era of asymmetric dependence to a new phase characterized by mutual reliance and a horizontal division of labor. China has emerged as Japan’s foremost trading partner, with their trade constituting more than 20 percent of Japan’s total trade volume.

The scale is swiftly growing. Between 1995 and 2021, Japan’s imports from China increased more than sixfold, while its exports to China grew nearly ninefold, making China Japan’s top export market. During the same period, Japan’s imports from the U.S. increased by a factor of only 1.6, and exports to the U.S. grew by a factor of only 1.2. In 2021, Japan’s imports from China reached 20 trillion yen, far exceeding the 8.9 trillion yen in imports from the U.S. Thus, Japan’s dependence on products made in China now exceeds its reliance on American goods.

The economic interdependence between China and Japan is deeply rooted in the historical accumulation of mutual investments over more than 40 years of China’s reform and opening-up. This foundation is robust and not easily shaken. Despite pressure from the U.S. for Japanese companies to adjust their industrial layouts, the substantial trade volume and the closely knit regional industrial division system between China and Japan make it challenging to follow the lead of Washington.

In today’s world economy, there is an emerging dynamic featuring European, North American and Asian economic circles, with the latter centered on China. The world is once again at the brink of a technological innovation wave. Against the backdrop of climate change, the digital transformation and green energy transformation are becoming increasingly prominent. China and Japan are at the forefront, facing new opportunities for industrial upgrading. The implementation of RCEP has laid a foundation upon which both countries can create world technology standards through regional markets.

As major economies, China and Japan generate a significant spillover effect in regional economic development, providing the impetus for regional infrastructure, basic industries and market formation. Chinese and Japanese companies are transitioning from competition to coordination, seeking cooperative opportunities within their horizontal divisions of labor and playing new roles in the practical development of China-Japan relations.

The international landscape is becoming increasingly complex, with continuous emergence of risks and challenges. International coordination and cooperation are never straightforward. China-Japan relations in the New Era also need to adapt to the evolving times, embracing the correct direction with a spirit of learning from history to forge a bright future, maintaining the original intention of normalizing diplomatic relations and actualizing the political consensus of being cooperative partners without posing threats to one another. Since 2014, the leaders of China and Japan have established four principles of consensus for improving bilateral relations, setting the tone for the relations between major countries.

Amity between people is the key to sound state-to-state relations. Extensive and diverse cultural exchanges are the bedrock for nurturing healthy and stable relations between China and Japan. Enhancing these ties is inextricably linked to civilian engagement in cultural and tourism exchanges. Specifically, this entails expanding tourism between the two countries — developing initiatives such as deep cultural and historical experience tours, Silk Road expansion tours, student study and research tours and even international red tours — thus initiating new avenues and projects for civilian interaction.

Additionally, keeping pace with the era of technological advancement means broadening avenues for corporate technological exchanges, enriching industry technology and enhancing product exhibitions, sales, and discussions. This also includes fostering trading and exchanges of intellectual property and technology patents and promoting collaborative research and development in cutting-edge industrial technologies. Further, invigorating academic exchanges across various domains adds depth to the China-Japan relationship, with frequent and multilevel media interactions documenting history and guiding contemporary trends.

In the context of international relations, the immediate neighborhood is of primary importance; major powers are crucial; and developing countries form the foundation. Japan, is both a neighbor and a major power. China, a nation in peaceful ascent, is in a position to align with the times, forge significant relationships with other major powers and its neighbors, lead its relations with Japan in the New Era and exemplify a model for maintaining global peace and fostering regional collaborative development.

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