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New developments in Sino-Japanese ties

Updated On: Sep 04, 2007

China and Japan make up as scandal over Chinese-made products grows.

Chinese Foreign Minister Yang Jiechi and his Japanese FM Nobutaka Machimura had a phone conversation, exchanging views on bilateral relations. Yang reaffirms the Chinese government’s emphasis on Sino-Japanese ties to build up strategic relationship of mutual benefit. Machimura also said that Japan is willing to make efforts to push for a greater development along with China.

Back in the capital, Japan’s PM Abe met with visiting Chinese Defense Minister Cao Gangchuan, and welcomed the Chinese defense chief's visit to Japan. To continue the momentum of Sino-Japanese goodwill, Abe emphasized that China's development is a good thing both for Japan and the whole world. Returning Sino-Japanese niceties, Cao said that the prime minister's "ice-breaking" visit to China in October 2006 was an important step towards the improvement of bilateral ties which was returned with great fanfare by Chinese Premier Wen Jiabao's "ice- melting" visit to Japan.

While China and Japan shake hands and make up, there are areas in which there is still intense competition between the two Northeast Asian giants. Japan is planning its space project which is the biggest since Apollo while Chinese probes are being readied to study the lunar surface to plan a landing. A race is on between the two. "I don't want to make this an issue of win or lose. But I believe whoever launches first, Japan's mission is technologically superior," said Yasunori Motogawa, an executive at JAXA, Japan's space agency. "We'll see which mission leads to the scientific breakthroughs." "It's the race for the South Pole all over again," said Hideo Nagasu, former research head of JAXA's predecessor organization, the National Aerospace Laboratory. "In the interest of furthering Asia's space technology, cooperating would be the best option. But I don't think either side wants to do that just yet."

Tokyo has completed a network of four spy satellites that can monitor any spot on the globe on a daily basis. Tokyo spends about $500 million a year on the program. Japanese space officials have said their $276 million SELENE project is the largest lunar mission since the Apollo program, beating NASA's Clementine and Lunar Prospector projects. In contrast, Chinese spending is much more modest with $185 million spent on the program to retrieve samples from the moon in later missions.

Economic comparisons are still inevitable. Elsewhere in the Pacific, Chinese power has overtaken Japan. For example, China has replaced Japan as Australia's number one trading partner. Australia's trade with China was worth 50.5 billion Australian dollars (US$41.6 billion; €30.5 billion, fiscal year through June) while trade with Japan totaled A$49.7 billion (US$40.9 billion; €30.0 billion). China had beaten this 36-year old record.

However, beneath the figures, upon closer analysis, Japan is still the main destination for Australian exports, taking A$32.4 billion (US$26.7 billion; €19.5 billion) in goods. In other words, Australia is still more dependent on Japan for exports rather than China. Chinese trade power ranks first in Australia because it is the main supplier of goods to Australia at A$27.5 billion (US$22.7 billion; €16.6 billion). Australian appetite for Chinese goods has surged. Put in another way, Australia depends on Japan as its main customer while consuming manufactured goods that are made in China more than any of its partners. Such consumption of goods in the past have a tendency to lead to widening trade imbalances amongst China’s trading partners with China.

Australia aside, there are also indications of Sino-Japanese economic competition in the world’s most lucrative US market. China is expected to overtake Japan as the third largest U.S. export market at the end of 2007. But both countries benefit from each other. By 2006, the United States had set up more than 50,000 enterprises in China with investment totaling more than 54 billion U.S. dollars while Chinahad established more than 1,100 enterprises in the United States with investment of nearly three billion dollars. China is expected to overtake Japan as the third-largest export market for the US at the end of this year or early next year. China has been the fastest-growing export destination of the United States for five years in a row, with an annual growth rate of 24 percent, Chinese Vice-Minister of Commerce Gao Hucheng said. According to Customs statistics, bilateral trade between China and the US reached $262.7 billion in 2006, increasing by over 100 times from 1979.

In any case, Sino-Japanese rapprochement is especially good for Chinese public relations in the wake of the scandal over tainted Chinese-made products. China has begun an offensive against charges of its tainted products, saying that Mattel has only itself to blame for a huge toy recall that has stoked global alarm about Chinese-made goods. The overseas edition of the People's Daily, the ruling Communist Party's official paper argued that: "If it comes down to blame, then it all lies with the U.S. side," the paper said of the Mattel magnet recall, noting that the problem was a design defect. "The Chinese manufacturer only produced according to those specifications."

Eighty-five percent of the roughly 20 million toys that Mattel recalled were due to design faults, Li Changjiang, director of the General Administration of Quality Supervision, Inspection and Quarantine, told reporters. Li said only 15 percent were deemed unsafe due to Chinese manufacturers using dangerous lead in the paint. "So I would like to pose this question: the Chinese manufacturers have their share of the responsibility, but what kind of responsibilities do the American importer and the product designer have?" he said.

Li was quoted in state media saying the international safety concerns were due to trade protectionism that aimed to "demonise" China. Other than apportioning blame, China also blamed protectionist sentiments for the current media spotlight on the issue. "People have reason to fear that some government officials and media in the United States hope to use doubts about the overall quality of Chinese goods to press for narrow trade protection."

While China goes on the media blitz to stave off the scandals, it now has to handle another potentially bad PR issue – pig virus. A highly infectious virus is sweeping China’s pig population, creating fears of a global pandemic and has spread to 25 of 33 provinces and regions. The virus is also moving inland and westward. “This disease is like a wind that swept in and passed from village to village,” said Ding Shurong, a 45-year-old farmer in a village near here who lost two-thirds of his pigs . “I’ve never seen anything like it. No family was left untouched.”

The government says officially that about 165,000 pigs have contracted the virus and it has caused a panic stampede as farmers are selling diseased or infected pigs to illegal slaughterhouses which could pose problems. This number is believed by some to be an underestimation as Government scientists themselves said that last year the virus affected two millions pigs and killed 400,000.

The Chinese government is trying to cope with the disease by reporting it to the international health bodies and developing as well as distributing a vaccine. The United Nations Food and Agriculture Organization is now pressing China to share its research and tissue samples. “I’ve asked my two vets in Beijing to work with the government and get some of those samples out,” said Juan Lubroth, head of infectious disease at the F.A.O.. “Our experience has shown us that working with carrots is better than working with sticks.” (3 September 2007)

Sources:

Australian government figures show China takes top spot as trade partner over Japan (AP, 31 August 2007)

Chinese, Japanese FMs exchange views on bilateral ties (People’s Daily, 30 August 2007)

China says toy recall scare shows protectionist agenda (Reuters, 30 August 2007)

Japanese PM meets with Chinese defense minister (People’s Daily, 30 August 2007)

After Stumbling, Mattel Cracks Down in China (NY Times, 29 August 2007)

Wages Up in China as Young Workers Grow Scarce (NY Times, 29 August 2007)

China says toy recall scare shows protectionist agenda (Reuters, 30 August 2007)

China blames design for Mattel recalls (Channelnewsasia, 27 August 2007)

China to beat Japan in US imports (People’s Daily, 24 August 2007)

China to see investment slide: JETRO (Japan Times, 24 August 2007)

Food from China safe, says New Zealand (People’s Daily, 24 August 2007)

ChinaJapan to launch lunar missions (AP, 24 August 2007)

China to become U.S. third largest export market by year end (People.s Daily, 23 August 2007)

Virus Spreading Alarm and Pig Disease in China (NY Times, 16 August 2007)