Japan Center for International ExchangeVol. 3 No. 2 | May 2008

A Japanese Perspective on theChina Question
Hitoshi Tanaka, Senior Fellow, JCIE
Chinese President Hu Jintao’s five-day visit to Tokyoin early May 2008 holds important implications forJapan-China relations. Indeed, much of what was accomplished warrants commendation, in particular ajoint statement calling for a “mutually beneficial relationship based on common strategic interests” andan agreement between the two sides to collaborate
on regional and global issues running the gamut
from UN Security Council reform to climate change
to human rights. Significantly, President Hu clearly
acknowledged Japan’s postwar development as apeaceful nation and pledged to adopt a “forwardlooking” approach to relations.
Nevertheless, the fact remains that what emerged
from the summit were mainly symbolic expressionsof will rather than concrete plans for solving bilateralissues and tackling regional and global challenges.
It is perhaps premature, therefore, to claim that a“warm spring” is already upon us. The Japanese media’s coverage of the summit, for example, revealed
how deeply cynicism and skepticism continue topermeate Japanese views of China. Moreover, particularly with regard to contentious issues such as thejoint development of gas fields in the East China Sea,
it is as yet unclear when or if these statements will
result in substantive action.

The tragic earthquake that occurred in Sichuan
Province only a few days after President Hu’s return
has sent shockwaves through the international community and understandably precluded any opportunity for further reflection on the summit’s outcome.
Nevertheless, the summit provides an excellent context for engaging in a deeper discussion about JapanChina relations. In addition to presenting a Japaneseperspective on “the China question,” the following
essay also offers a series of policy prescriptions about
how Japan should engage its increasingly powerfulneighbor in the years ahead.

A Japanese Perspective on Japan-ChinaRelations
The tension that defines contemporary relations between Japan and China is deep-rooted. Several of theprimary factors are as follows.
The role of identity
The role of identity is often overlooked in analysesof contemporary Japan-China relations. Remarkableachievements prior to World War II, coupled withJapan’s phenomenal postwar economic recovery,
have given rise to a benign superiority complex visà-vis China among the Japanese people. These same

period of remarkable growth and yen appreciation,
the Japanese economy had expanded such that itwas eight times that of China. However, as a result ofJapan’s economic stagnation in the 1990s, coupledwith rapid growth in China, by 2005 the Japanese
economy was only twice the size of China’s. Furthermore, recent predictions suggest that if China’s
economic growth continues at a pace close to current rates, by 2030 China’s economy will not only
have caught up but will be several times larger thanJapan’s. It is unclear whether the Japanese people,
who have long enjoyed their country’s reputation
as the world’s second most powerful economy, areready to accept these changes.

developments generated a complicated mixture ofveneration and resentment toward Japan among theChinese people, particularly given the perceptionthat Japan’s successes upset the traditional balanceof power in the region.
In the context of already widespread concern about
the relative decline of Japan’s global influence, Japanese apprehension about the implications of China’s
current rise is sometimes rooted less in concerns
about China’s absolute growth than in its expansion
relative to Japan. In other words, it is based on fears
that Japan will find itself relegated to its premodernera status as a subordinate power in East Asia.

The rise and fall of the “China economic
threat theory”
China has achieved average annual growth rates of
9.7 percent over the past 30 years and is on course
to become the world’s second largest economy by
2015. Until recently, many Japanese policymakers
and businesses saw China’s economic rise and inexpensive labor force as a threat to Japan’s economy.
However, over the last four or five years, what had
been popularly referred to as the “China economic
threat theory” has evolved into a “China pull theory.”
In other words, most large Japanese firms now see
the Chinese market not as a threat but as a valuable business opportunity. Japan is currently thelargest investor in China, having invested a total ofmore than US$60 billion to date. It is now widely
acknowledged in the Japanese business communitythat much of Japan’s recent economic recovery canbe attributed to China’s rise—i.e., China’s economic
growth has “pulled” the Japanese economy out ofthe doldrums.
While it may be true that China’s economic expansion is at least partially responsible for the recent
turnaround of the Japanese economy, however, acomparative analysis of the gross domestic product(GDP) figures of both nations over time elucidates
why many Japanese feel threatened by China’s rise
and are concerned about a relative decline in economic influence.
In 1980, Japan’s GDP was approximately five times
that of China. By the end of the decade, following a
EAST ASIA INSIGHTS

China’s military expansion
Japanese anxiety about China’s military expansion
stems from two distinct but related issues: (1) China’s
rapidly rising defense expenditures and capabilities,and (2) the relative lack of transparency in China’s
defense budget, which exacerbates uncertainties
about Beijing’s strategic intentions.
China’s double-digit increases in defense spending over the last decade have attracted a substantial amount of international attention. Following a17.6 percent increase (to US$59 billion) in 2008,
China’s spending now ranks second only to that of
the United States. Several provocative naval maneuvers by the People’s Liberation Army (PLA)
in and around Japan’s exclusive economic zone inrecent years, coupled with longstanding friction
over territorial disputes, make it clear why Japanis concerned about China’s military strength. This
concern is likely to deepen as China continues tomodernize and expand the capabilities of its navyand air force.
While it should be acknowledged that China’s defense spending was below international norms until
recently, a lack of transparency concerning the allocation of funds exacerbates existing concerns about
the rapid pace of its military expansion. Many experts claim that Beijing does not include costs related to research and development, overseas weaponprocurements, or support of the paramilitary People’s Armed Police in its calculation, thus suggesting
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push for a China-ASEAN Free Trade Area, and create the Shanghai Cooperation Organization to consolidate ties with its neighbors in Central Asia.
Although it is highly probable that China will
maintain its policy of “peaceful development” forthe immediate future, there are legitimate concerns
in Japan about how China’s foreign policy line willchange once it has completed its “rise.” Will it become more aggressive once it has the capabilities
necessary to pursue its interests with force, or will
it abide by President Hu’s pledge to pursue its interests peacefully within the existing global system?
The illicit entry of a Chinese submarine into Japanese waters in 2004 and the satellite incident in 2007
have raised doubts about the degree of civilian control over the PLA. Furthermore, the fact that China
is not a liberal democracy limits the extent to which
the international community can trust Beijing’scommitments and the degree to which Beijing can“build confidence” with other powers, such as Japanand the United States.

that the official budget represents only a fraction ofactual expenditures.

The danger of collapse
While there is undoubtedly a substantial amount ofconcern in Japan about the long-term implicationsof China’s expansion, Japanese policymakers andbusiness leaders are, somewhat paradoxically, also
seriously concerned about an economic slowdownor, even worse, a political collapse. Japanese leaders
are very worried about China’s domestic problems
such as pollution, corruption, and a rapidly expanding gap between rich and poor. Domestic unrest in
response to these issues could disrupt growth. Additionally, resource scarcity, coupled with dangerously
low energy efficiency (currently only one-eighththat of Japan), could choke China’s economy. Japan’s
economic wellbeing is so deeply intertwined withthat of China that such a development could push
Japan’s economy back into a recession.
China’s foreign policy
For most of the recent past, China has maintained a
relatively low-profile international posture and hesitated to adopt a role in global political and security
affairs commensurate with its economic influence.
Nevertheless, circumstances have begun to changeover the last several years and China seems to be
gradually embracing a role as both a regional and a
global political superpower. China’s increasingly assertive posture, which is visible in such initiatives as
its resource diplomacy in Africa and South America,
reveals both growing confidence and an increasing
willingness to proactively and independently pursue
its interests.
At present, China’s priorities are domestic and, on
the whole, the government has little interest in overseas adventurism. Rather, Chinese officials believethat the only way to solve domestic problems is tofocus on maintaining growth. Given the high level ofChina’s dependence on foreign trade (80 percent in2005), Chinese leaders understand the necessity of apeaceful external environment. This understanding
has led China to, among other things, peacefully settle the vast majority of its border disputes, actively
EAST ASIA INSIGHTS

Nationalism
Over the last few years, perceived Chinese hostility toward Japan has seriously damaged popular
impressions of China within Japan and caused anupsurge in Japanese nationalism. There are manyreasons for this development, such as the relative
decline in Japan’s regional and global influence, thevirtual disappearance of the Keiseikai (Japan’s proChina faction) as a powerful entity within the ruling
Liberal Democratic Party, and significant resentment toward the Chinese government’s politicization of the history issue.
Chinese nationalism is also on the rise. Although
the first exposure of many foreign observers toChinese nationalism may have been the Chinese
reaction to foreign protests over the Olympics andTibet, the Japanese government has been dealing
with anti-Japanese demonstrations in China intermittently over the last 25 years. The most recent
incident culminated in an anti-Japanese riot in2004 and massive demonstrations in 2005. Gradualliberalization of freedom of speech and the proliferation of the Internet and cell phones suggest that3Vol. 3 No. 2 | May 2008

A grand bargain between China and Japan, thetwo most powerful nations in East Asia, is a pre­requisite for creating healthy bilateral ties andconsolidating long-term peace and stability in theregion. Nevertheless, policymakers must also acknowledge that Japan and China are very different
countries with different political systems, cultures,values, and visions for the region. Consequently,
Japan must proactively engage China through multilateral frameworks as much as possible. Regional
security is one example of an area that demonstrates
the importance of engaging China through multi­
lateral institutions.
China has a substantial number of nuclear weapons and its military expenditures already far exceed
those of Japan. In short, China is big and getting
bigger. It is unrealistic to expect that a non-nuclear
power like Japan, which spends less than 1 percent of
its GDP on defense, can provide an effective military
deterrent against a state like China by itself. Rather
than rapidly increasing its own defense expenditures, which would only lead to a destabilizing arms
race, Japan should rely on the US-Japan alliance andother US security relationships in the region as ahedge against future uncertainties.
Unfortunately, however, 10 or 15 years from now
the US-Japan alliance may no longer be able to provide a sufficient hedge against the military capabilities of China. In order to ensure that China’s rise
does not foment instability in the region, Japan andthe United States must work together to consolidate
inclusive multilateral frameworks throughout East
Asia and gradually establish a norm of addressing
problems in a cooperative manner. In addition toexisting institutions such as the Six-Party Talks, theregion is also in need of an East Asia Security Forum(EASF)* to engage all states in the region in proactive
operations to address nontraditional security issues
such as maritime piracy, infectious disease, energy
security, transnational crime, and the proliferationof nuclear weapons. Japan, China, and the UnitedStates should also institutionalize regular ­trilateralmass nationalistic campaigns may continue into
the future.
Fortunately, however, Beijing is aware that suchdemonstrations are dangerous, not only for China’srelations with the outside world (particularly withJapan), but for the Communist leadership itself,which could very well become the next target of
popular protest. For instance, immediately following the April 2005 anti-Japanese demonstrations, thegovernment embarked on a widespread campaign
to convince the Chinese people that stable relations
with Japan are in China’s interest.

Japan’s Response: Comprehensive
Engagement and Multilateralism
How should Japan respond to China’s economic,
political, and military expansion? How can it ensure that fears about China’s future course do not
become a reality?
Given the immense opportunities provided by
China’s economic expansion and the extensive (andincreasing) interdependency of the two nations’economies, it is abundantly clear that any attempt tocontain China would be tantamount to Japan shooting itself in the proverbial foot. In stark contrast tocontainment, the most practical way forward has at
its core (1) a policy of comprehensive engagementand (2) a focus on consolidating multilateral ties
and rules-based cooperation throughout the region
that aims to “minimize the negatives and maximize
the positives” surrounding China’s expansion.
The single most important and urgent objective of Japanese policymakers should be to achievea “grand bargain” with China that places existing
issues between the two nations in the context of amutually acknowledged need to build healthier bilateral ties. The goal would be to create a win-win
framework for future relations that constructively
addresses existing issues between the two countries.
For example, although it may no longer be appropriate for Japan to continue providing ODA to build
economic infrastructure in China, certainly Japan
can actively support Chinese efforts to improve energy efficiency and limit the environmental impactof economic development.
EAST ASIA INSIGHTS* For more on the East Asia Security Forum proposal, see“East Asia Community Building: Toward an ‘East Asia SecurityForum,’” East Asia Insights 2, no. 2. (April 2007).

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Conclusion
There are many reasons for Japan to be concerned
about China’s future course. However impressive
Chinese economic growth may be, China remains anenormous developing nation with serious govern­ance issues. These problems are manifest in issues
surrounding the Olympic Games, Tibet, and thecurrent earthquake rescue operations. Nevertheless,the entire world has an interest in ensuring that China emerges peacefully and is enmeshed within theexisting global system. Japan is no exception; indeed,
it has an enormous stake in realizing this goal.
Recent developments, in particular President Hu
Jintao’s May 2008 visit to Tokyo, suggest that leaders in both countries have finally come to realizethat confrontation serves neither country’s interests
and that both have much to gain from enhanced cooperation. However, we must not forget that it was
only three years ago that relations between Japan and
China reached a postwar low. While the warming ofbilateral ties since the autumn of 2006 has been remarkable, relations between the two nations remain
in a fragile state. Only time will tell whether the twonations have truly put the past behind them and arecapable of working together to tackle the substantial
regional and global problems that both countries
will continue to face in the years ahead.

security dialogue as a complement to ongoing bilateral strategic talks. This will deepen confidencebuilding and promote further transparency of bothmilitary capabilities and strategic intentions.
Unfortunately, Japan cannot take US participation in these fora for granted. Rather, it must proactively persuade Washington to maintain its militarypresence in the region and stay involved in efforts toconsolidate intraregional ties through such multilateral initiatives as the East Asia Summit.
In the economic sphere, Japan must more assertively pursue bilateral and multiple economic
partnership agreements (EPAs) with other states in
the region. Although the spread of EPAs is only justbeginning and the process of consolidating these
nascent agreements may take many years, the longterm goal should be the creation of a region-wide
EPA and economic community that is linked to theWorld Trade Organization and obeys the rules andobligations of the international system.
Another institution that could contribute to theconsolidation of a rules-based economic system
would be an “Asian OECD.” This institution would
serve as a valuable supplement to existing institutions such as the Asian Development Bank andprovide guidelines for macroeconomic policy andsuch issues as investment, energy security, environmental protection, and provision of aid. In addition to serving as a valuable source for economic
and social data, the “Asian OECD” would also serve
as a multilateral forum for consultations amongstates in the region.

Hitoshi Tanaka is a Senior Fellow at JCIE, and he­previously served as Deputy Minister for Foreign Affairs of Japan.

East Asia Insights
East Asia Insights is an occasional newsletter focusing on East Asia community building
from the Japanese perspective.
Published by: Tadashi Yamamoto, President, JCIE
Please direct any comments or questions to eainsights@jcie.or.jp.
Japan Center for International Exchange
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EAST ASIA INSIGHTS

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