Publication: China Brief Volume: 4 Issue: 20

The recent Asian Cup finals in Beijing on August 7 could have constituted a watershed in Sino-Japanese relations and ironically launched a real rapprochement between Beijing and Tokyo.

To the horror of the Japanese audience, Chinese fans in the Workers’ Stadium in Beijing drowned the Japanese anthem at the start of the game with shrilling boos. Then, when China lost 3-1 (including one controversial goal), hostilities broke out outside the Stadium; Japanese players and fans had to be escorted out by Chinese law-enforcement officers. These pictures were broadcast to the world, reportedly even stunning the Chinese leadership. The incident could have been perceived as Beijing having lost control over Chinese fans, thus projecting bad sportsmanship and an “unworthy” image, just four years before China holds its “showcase” Olympics in 2008. This image seems especially unwanted after China’s recent star performance in Athens, with 32 golds, just behind the United States and ahead of Russia and Japan.

A Japanese diplomatic source recently indicated that Chinese ministers and officials have been making it clear to Tokyo (though embarrassingly) that it was not a deliberate official Chinese policy or attempt to support such an outburst of “ugly nationalism against Japan” during the Asian Cup finals. On the other hand, a Chinese diplomatic source suggested that China was itself fearful of rising nationalism on its soil, which apparently vented itself on Japan given its limited channels to do so in China under the present political context.

Chinese leaders could now perhaps be equally concerned that they may not be in full control of this rising nationalism, not only in China, but also in Japan, which is itself facing (in the eyes of the Chinese leadership) a real threat of “rising militancy.” Both sides experienced this during the recent landing of Chinese activists on Senkaku/Diaoyutai islands. Nationalist sentiments almost came to a boil at that time, just as the two governments showed utmost restrain in resolving the issue expediently. The gap between the governments and popular sentiments has inevitably widened and there is now a common concern in both capitals that they may ultimately become hostages of public opinion and rising nationalism. (Possibly in a way akin to the May 4, 1919 incidents in China after the First World War, or the Sino-Japanese feud of 1930-1945, when Japanese militarists made use of popular Japanese nationalistic sentiments to launch the Second World War and garner popular support within Japan against China.)

It is beyond doubt and fully recognized that “economic enmeshment” between the two Asian giants has progressed enormously in the past years, as Japanese investments and manufacturing capacities flock to China for obvious economic reasons. However, some observers see clear limits to Deng Xiaoping’s “economic enmeshment” theory (which was originally to be applied to Hong Kong and Taiwan), especially with the current mammoth exhibition in Beijing and Hong Kong to celebrate the 100th anniversary of the birth of paramount leader Deng Xiaoping.

The conventional wisdom propounded by Deng was that economic enmeshment and increasing people-to-people exchanges should fuel political rapprochement and tie societies and peoples even closer together. However, the reality of the situation today is that socio-economic rapprochement may also need political will for it to be effective, especially when history continues to play such a determining factor in inter-state relations. The decision to have Japan’s tourism advertisements in China not feature Prime Minister Junichiro Koizumi because of the latter’s persistent visits to the Yasukuni Shrine, is a good example of such will. On August 15, Beijing again expressed disappointment with some Cabinet Ministers (though not Koizumi) for visiting Yasukuni, asking that this tradition be terminated, as long as fourteen “Class A criminals” from the last War are interned in Yasukuni and not removed. The LDP had actually planned a release two years ago, but those plans were stalled thanks to the rising anti-Chinese feelings in Japan at that time. Despite the economic enmeshment between Beijing and Tokyo, the two countries are still very far apart politically. Yasukuni, Senkaku/Diaoyutai and the apologies issues will constitute this political barrier, which harks back to the paramount place that history continues to play in this part of the world.

But this economic enmeshment has also provoked certain problems, fears and concerns within Japan vis-à-vis China. Although the latter currently enjoys booming trade and even a small trade surplus with China for the first time last year, there have been concerns of increasing Japanese job losses as its manufacturing capacity shifts to China. Unemployment is a powerful specter that hangs over every developed economy today, but mixed with nationalism and the threat of unresolved history, this Sino-Japanese economic enmeshment may indeed also contain the seeds of potential social problems or disruptions. The 100-yen shops in Japan underscore this point further (although consumers do indeed benefit from cheaper Chinese goods), just as Chinese illegal immigrants remain a real social issue in Japan. This is especially true at a time when Chinese triads are now reportedly competing with the Japanese yakuza to “gain territory” and control gambling, “certain trade,” pachinko and other “concessions” in sections of Shinjuku in Tokyo. In daily life in Japan, China still poses a threat in their socio-economic psyche, just as Beijing raises political and historical fears and vice versa.

As China’s foreign reserves rise to an almost estimated US$600 billion versus Japan’s US$800 billion, competition and rivalry will inexorably increase. China has already indicated that it would no longer need Japanese Official Development Assistance (ODA), just as Tokyo decides to re-deploy its ODA towards India. With rising Chinese international prestige, Japan would also need to equally seek China’s concurrence to join the prestigious United Nations Security Council (UNSC) club as a permanent member. Some hard bargaining between the two Asian giants can be expected here. China can be expected to ask for a greater voice and role within the Asian Development Bank (ADB) in exchange, just as Haruhito Kuroda, Advisor for Financial Affairs to Koizumi, is now tipped to become the next ADB President. China could also try to impose certain limits on Tokyo’s participation in the American-led Theatre Missile Defense (TMD) framework, especially in the present charged-up ambience over Taiwan and cross-Straits relations and after Tokyo’s constitutional revision, which now allows peace-keeping operations beyond Japan’s territorial boundaries.

Sino-Japanese rivalry will intensify in the region, especially in Southeast Asia. The on-going talks for an ASEAN-China Free Trade Agreement by 2010 and its recent spectacular hosting of the Third International Conference of Asian Political Parties or ICAPP, as well as leaders of Malaysia, Philippines and Thailand to Beijing testify to Beijing’s tremendous efforts in building up its presence within the Asia-Pacific region. Elsewhere in Southeast Asia, China has begun a charm offensive and even a dollar diplomacy, like the recent Chinese US$400 million loan to finance the high-speed link between Manila and Clark (a former U.S. airbase and today, a growing logistics hub for the Philippines). In return, Manila has most probably agreed to conclude a defense cooperation with Beijing (despite Manila’s own defense alliance with Washington). Even more pertinent would be the growing rivalry between Japan and China in the Greater Mekong Sub-Region (or GMS), where increasing Chinese financial clout would challenge Japan’s role in the regional economies of Thailand, Vietnam, Cambodia, Laos and Myanmar.

It is significant to remember the 1995 gestures of Japan’s socialist Prime Minister Murayama in signaling political rapprochement and professing Japanese apologies to South Korea and Southeast Asian countries. However, Japanese sources have always blamed the stalled rapprochement with China on the showdown between former Chinese President Jiang Zemin and ex-Japanese Prime Minister Obuchi in Tokyo during the former’s visit to Tokyo, when an apology drafted by the Japanese government was deemed “insufficient” by Jiang. After the incident, Beijing accused Tokyo of not being sincere in apologizing to China for its past atrocities. Jiang probably has personally experienced the horrors of the Japanese invasion (he was a student in Shanghai). It is hoped that the fourth generation of leaders will perhaps be less emotional with Japan and take a more off-handed relationship with Tokyo, as most of them have not lived through the harsh realities of “Imperial Japan’s expansionist war.” Nationalistic sentiments unfortunately continued to rise on both sides after the Jiang-Obuchi episode till today, but based on latest indications, both China and Japan may now be intent on reducing this nationalistic flare-up with perhaps a real rapprochement in sight.

Indeed, recent changes in China’s diplomatic representation to Tokyo (which could have also been a direct fall-out of the Asian Cup fiasco in Beijing) could signal the beginning of a rapprochement between Beijing and Tokyo. Wang Yi, a Japanese speaker and specialist, who headed the Chinese delegation to “six-party” talks over Korea, is now the new Chinese Ambassador to Tokyo. The appointment is perceived by Tokyo as an “upgrade” of Sino-Japanese relations and perhaps a signal of better times to come. Hopes are high in the region for an East Asian Community one day and a budding Sino-Japanese rapprochement could definitely help restore confidence to the region and pave the way towards this end.