Analysts are calling the resumption of aid by Japan to China as a détente, a warming up of relations. They call it this because they are not comfortable with calling it an actual resumption of relations.
This is because the two countries still has some fundamentally overlapping conflict of interests. Let’s take for example, the crucial issue of energy. Japan wants to step up its efforts in 'resource diplomacy' with energy producers, something that the Chinese are already doing, and doing very well, especially in Central Asia and also into Middle East and Latin America, and of course, Southeast Asia.
But, in the grand picture, the great thaw in icy relations, catalyzed ironically by Japanese Foreign Minister Taro Aso and the willing pragmatism of his Chinese counterpart Li Zhaoxing has unleashed a great optimistic momentum. It has allowed dove forces in both countries to push for Sino-Japanese relations to be back on track for each other’s sake. Even in the field of energy, China and Japan are quietly looking at cooperation. Despite diplomatic frictions, Japan also held a three-day forum with Chinese officials in May 2006 to discuss energy efficiency measures. But the icing on the cake came with the Japanese resumption of aid. Japan would provide loans of 74 billion yen (US$660 million) to China retroactively for fiscal year 2005.
The leading candidate to succeed PM Koizumi has spewed cautious language about the state of Japanese ties with China. Mr Abe said that the decision to freeze Chinese aid in the beginning did not mean the government was cutting off or freezing aid to China, but Tokyo needed more time to work on what it called the "various situations" in Sino-Japanese affairs. In other words, it was a temporary delay rather than a change in policy direction. This was a softer language used to deflect what some within government circles and Japanese media saw as an attempt to demonstrate Japanese unhappiness with Chinese policies through the freezing of aid.
The current détente have been brought about, not by chance, but by the work of many rallying behind the scenes in both countries. At a time of crucial transition to Post-Koizumi Japan, many powerful forces in Japan have pushed for reconciliation with China, bearing in mind national interests and powerful economic incentives. These include politicians (the Hashimoto faction, the Yamazaki faction, the Fukuda faction, the Kono Yohei faction, the Nakasone faction), media organizations (like Asahi Shimbun which just ran an editorial criticizing the Yasukuni visits), business organizations (Keidanren, Nikkeiren), opposition party leaders (the Ozawa faction) and a whole slew of Sino-Japanese friendship organizations.
Even PM Koizumi’s former political master, former Prime Minister Mori and his faction, have asked for a stop to Yasukuni visits. Perhaps, the current magnet of anti-Koizumi, anti-Yasukuni forces, is former cabinet secretary Fukuda who is running against Shinzo Abe for the LDP leadership. Abe is supportive of many Koizumi policies. Fukuda enjoys the support of all these forces as well as powerful friends and allies in South Korea, Beijing and Washington. Even if Abe is re-elected, he will be significantly weakened by the competition to pursue a more moderate position on China.
Japan to focus on 'resource diplomacy' (Straits Times, 7 June 2006)
Japan decides to unfreeze aid loans to China (Mainichi, 6 June 2006)
Japan preparing to resume aid to China (Asahi, 6 June 2006)
Japan unblocks aid loans to China (BBC, 6 June 2006)
China regrets Japan makes aids loans a sensitive issue (People’s Daily, 6 June 2006)