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Sino-Japanese ties – a new starting point?

Updated On: Dec 08, 2006

Now that China and Japan seems to be making up, opinion-makers are betting on a rosier future for East Asian regionalism.

To cap off the optimistic atmosphere, Cui Tiankai, Chinese assistant foreign minister declared that "the two sides are making active preparation work for the meeting between the two countries' leaders". Chinese State Councilor Tang Jiaxuan also said that Chinese Premier Wen Jiabao would meet with Abe in the Philippines.

Even more significantly, the 10th ASEAN (Association of Southeast Asian Nations) plus Three (China, Japan and the Republic of Korea) summit, the 10th China-ASEAN summit, an east Asian regional summit and the 7th annual meeting of leaders of China, Japan and the Republic of Korea will all be used as platforms for East Asian regionalism by the two Northeast Asian giants together with South Korea. Such news give the prospect of East Asian regionalism a shot in the arm.

ASEAN leaders have also spoken out for stronger East Asian regionalism. Malaysia's Prime Minister Abdullah Ahmad Badawi warned that East Asian countries were arguing too much, diminishing their own efforts to enhance regional integration. 'In recent times, we have witnessed public recriminations, violent mass demonstrations and hostile saber-rattling,' Mr Abdullah said. 'Greater restraint and moderation in the conduct of our relations with one another would certainly do well for the cause of community building,' he said.

ASEAN institutions are also pushing for greater regionalism. The Fourth East Asia Congress organised by the Institute of Strategic and International Studies (ISIS) Malaysia with the theme "East Asian Community Building: Strategic Issues, Critical Imperatives" became a timely opportunity for East Asian experts to push for East Asian Regionalism in the wake of Sino-Japanese rapprochement.

Prof Makoto Taniguchi, president of the Iwate Prefectural University of Japan and Japan’s representative to the Congress argued for a reorientation of Japan’s Fukuzawa Yukishi-era worldview of rejecting East Asia for the West and refocusing the country’s energies back to East Asia. He argued that Japan must work with China, one of the emerging economic powerhouses in the world, instead of trying to move away from China and Japan must not look at China as a threat but should look at ways to harness the benefits from the latter's development.

The very idea of the EAC originated from the East Asia Economic Caucus (EAEC) proposal by former Malaysian Prime Minister Mahathir but faltered because ofWashington pressure on Japan not to go along with it. Given Washington’s recent distraction since 911 and its weakening economic position, it is ironical that a resurgent Japan is the first to revive this idea with a new twist to include AustraliaIndia and New Zealand. In this sense, Prof Taniguchi felt that Japan should not be too concerned over protestations from the Americans in working for East Asian regionalism.

For more concrete initiatives, the China and Japan together with South Korea are keen to expand investments mutually in each other’s economy. This was in fact an idea that was first conceptualized in November 2004 with six working level meetings since then but frosty relations between the three dampened its viability. Chinaand Japan both have their self-interests in this. Not satisfied with its current rate of absorption of Japanese Foreign Direct Investments (FDIs), China is unhappy that trickles of Japanese investments are heading towards Vietnam and wants to attract more Japanese investments through brushing up its Intellectual Property Rights (IPRs). Also not satisfied with its dominant foreign investor position in the Chinese economy, Japan is keen to penetrate the China market deeper and wants the Chinese government to be more flexible on local content rules.

Sino-Japanese rapprochement offers a valuable window of opportunity for Northeast Asian states to collaborate more, given that many are now seeing the Rise of China as a counterweight to US Pacific influence. One important measure of Chinese power is the hitech sector. In December 2006, China overtook Japan to become the second-biggest on research and development after the USChina is responsible for 13.4 % of the projected world’s US$1 trillion in overall R&D spending in 2006. While China is increasing its high-tech R&D to 14.8% of the global share next year, the US is declining from 32.7% in 2005 to 32.4% in 2006 and a projected 31.9% in 2007. The decline for many marks the ascendancy of East Asian hitech sector, an industry many see as the backbone of East Asian economic power. 

Sources:

Asia's big 3 move towards investment pact (Straits Times, 7 December 2006)

Japan Should Look Towards Asian Neighbours In EAC Initiative (Jakarta Post, 6 Dec 2006)

Leaders from China, Japan to hold talks (China Daily, 6 December 2006)

China overtakes Japan as No 2 in R&D spending (Straits Times, 5 December 2006)

M'sia urges E. Asian restraint to stop squabbling (Straits Times, 4 December 2006)