In the last few decades, Sino-Japanese relations have been defined by repeated predictions of conflict and hostility between the two East Asian states (The Guardian, 2014; McCurry, 2014). These predictions appeared to be coming true in the early 2010s after the territorial dispute in the East China Sea escalated and Japanese remilitarization was called for again (Lee, 2011; Sieg, 2019). Sino-Japanese relations have been easing since 2017, characterized by increased economic cooperation. As a result, it can be optimistically argued that this relaxation could lead to sustainable cooperation between China and Japan (CGTN, 2019; Nakamura, 2020). However, the détente will eventually lead to renewed tension and hostility.
This article presents the pessimistic refutation of the optimistic case for sustainable cooperation. The discussion begins with an overview of the origins of the détente in US foreign trade policy and its defining characteristics of economic cooperation and the concept of Hot politics, cold economy. This is followed by an examination of the optimistic case for sustainable cooperation based on the Sino-Japanese participation in the creation of a regional rule-based order and the evidence of economic interdependence between the two countries. The last section of this article contains a pessimistic refutation of the points raised in the optimistic case. This counter-argument includes an analysis of the changing context of Sino-Japanese relations, evidence of the existence of competition for regional influence, and a discussion of the shortcomings of the Hot economics, Cold politics Concept. This discussion pessimistically concludes that the changing context, regional competition and underlying political issues of Sino-Japanese relations will mean an end to the détente.
The origins and characteristics of Sino-Japanese relaxation
The origins of the Sino-Japanese detente lie in external relations established both in China and in Japan’s relations with the United States. The current trade war between China and the US has diminished China’s trade and investment income. Investment and trade revenue flows are essential for China as they offset the structural constraints of its economy, namely declining labor growth and slowing productivity (World Bank, n.D.). The US-China trade war has significantly reduced these revenue streams, and the value of Chinese exports to the US fell by $ 53 billion in the first nine months of 2019 (Liesman, 2019). As a result of this antagonistic US policy, China turned to the world’s third largest economy, Japan, as an alternative source of income loss. This is evident given the fact that in anticipation of a trade war with the US, China increased bilateral trade with Japan by 7.8% and established itself as Japan’s second largest trading partner (Ministry of Commerce, People’s Republic of China, 2017). The increased economic cooperation with Japan is therefore a direct result of the antagonistic foreign trade policy of the USA.
The threat from the Trump administration to withdraw US troops from East Asia if Japan fails to expand its own military has driven Japan to cooperate with China (Klinger et al., 2019). Trump’s position is problematic for Japan, as Article 9 of his constitution severely limits Japan’s military capabilities. Hence, for military security, Japan relies on its allies in the US to provide military deterrence to potential attackers and improve the operational effectiveness of the Japanese armed forces (Chiang, 2019). Because of its constitutional restrictions on military force, Japan has traditionally engaged other nations economically to stem possible hostilities (Tamaki, 2020). The threat of US withdrawal from the region has also encouraged Japan to look to China economically. Japan capitalized on China’s willingness to engage and used economic cooperation to mitigate future Chinese threats (Brito, 2019). This strategy aims to ensure national security when there is no US military presence in the region.
Since one party wants economic security, while the other uses economic engagement as a means to maintain national security, the Sino-Japanese detente is strongly characterized by increased economic cooperation. This resumed the high-level economic dialogue between China and Japan, which had been suspended for eight years (Nikkei, 2018; Hurst, 2018). In addition, China and Japan have broken new ground in economic cooperation in the form of macroeconomic ventures. A Sino-Japanese committee has been set up to encourage collaboration and prevent competition in Asian infrastructure projects planned for the next decade, valued at $ 26 trillion (Shimada, 2018). This joint macroeconomic venture presents a long-term plan for Sino-Japanese economic cooperation and has the commitment of Japanese companies to the Belt and Road Initiative, China’s global program for infrastructure projects in developing countries (Mastro, 2019; Ito, 2019).
This economic cooperation is in direct contrast to the early 2010s, when the economy was an instrument for political gain in a confrontational Sino-Japanese relationship. For example, in 2010, amid large-scale anti-Japanese protests, China threatened Japanese production by curtailing exports of rare earths because of the territorial dispute in the East China Sea (Green et al., 2017).
While economic cooperation has increased, engagement between China and Japan on the political issues in their relationship is limited. This is in line with the concept of Hot politics, cold economy. This is the idea that China and Japan can engage each other through intense economic cooperation and that this will overcome the controversial political issues in their relationship (Dreyer, 2014). These topics include competition for regional influence, Japanese attempts at reform under Article 9, and the territorial dispute in the East China Sea (Lee, 2011; He, 2013; Chiang, 2019).
It is evident that the concept of Hot economy, cold politics plays a role in the current relaxation in the rhetoric used. For example, Xinhua, China’s state-owned media company, has described détente as a “win-win” and “mutual benefit” and stated that China and Japan “reserve differences” (Xinhua, 2020). Given the external origins of the détente, it is logical to conclude that the “win-win” situation is economic, while the differences Xinhua refers to are the seemingly irreconcilable views of China and Japan on the political issues in their relationship .
An optimistic case
It can be argued optimistically that the Sino-Japanese detente will lead to sustainable cooperation between China and Japan. This case is found in liberal internationalism, a theory of international relations that holds that peace can be achieved by promoting a rules-based order and interdependence between international actors (Ikenberry et al., 2018). The logic behind this point of view is that the actors can predict each other’s behavior with set rules, while the interdependence makes conflict too costly for those involved. The validity of this logic was tested using data models from historical case studies. It was concluded that increased economic engagement between two communities correlates with a reduced likelihood of conflict in the relationship between these communities (Ashan et al., 2020).
The recent announcement of a new regional trade bloc that includes both China and Japan suggests that both countries are interested in establishing and engaging with a rules-based order. The Regional Comprehensive Economic Partnership contains rules for economic engagement among member states with provisions regulating intellectual property rights, financial services and electronic commerce (BBC News, 2020a). While the regional broad economic partnership is an economic bloc, the European Union sets a precedent for such organizations to work overtime (Carnegie Endowment, 2010) and evolve into broader political, social and political cooperation (European Commission, 2020).
Franco-German relations could provide an insight into the future of relations between China and Japan within the framework of the regional comprehensive economic partnership. This is because France and Germany, like China and Japan, have a history of rivalries and conflict, but their shared experience as founders and leaders of the European Union has helped at least in part to forge a lasting relationship of cooperation and friendship (Gardner Feldman, 2019 ). Accordingly, it is plausible that China and Japan, based on their shared experience of working together to create a rule-based economic order, will create a rule-based sociopolitical order in which their cooperative relationships can be maintained.
In terms of interdependence, China’s dependence on Japan is a major motivator for participating in the relaxation. This is because China relies on Japan as the main source of investment and trade revenue to mitigate its structural economic problems mentioned above. In 2018 alone, China received $ 124 billion in direct investment from Japanese sources (Chiang, 2019), strengthening China’s economy without US sources of income.
Another way that China is dependent on Japan is by reliance on Japanese expertise for its overseas infrastructure projects, especially for bullet trains. China has relied on the transfer of Japanese locomotive technology to Chinese companies in the fulfillment of its domestic high-speed rail projects. For example, the transfer of the MT205 traction motor from Mistibushi to CSR Zhuzhou Electric (Shimbun, 2017). This reliance on Japanese expertise shows that China will benefit greatly from direct Japanese contributions in its plans for joint infrastructure projects, which creates a vested interest in sustainable cooperation.
Japan’s dependence on China is evident in domestic financial planning. Faced with stagnating economic growth rates, Japan has sought to diversify its economic portfolio, for example by embarking on immigration to strengthen its workforce, easing monetary policy, and encouraging new areas of growth (McBride and Xu, 2019). One of these growth areas is the Japanese tourism sector, which has set a target of 20 million visitors per year by 2020 (Chiang, 2019). During the relaxation, Chinese tourism to Japan has grown exponentially. The annual number of Chinese visitors increased from 2.41 million in 2014 to 7.4 million in 2017, and in 2018, Chinese nationals represented 35% of all tourist spending in Japan (Chiang, 2019). This upward trend in Chinese tourists during the relaxation caused the Japanese government to double its target to 40 million visitors per year by 2020 (ibid.). This suggests that Japan’s tourism sector is becoming increasingly dependent on China, which means that containment of economic stagnation depends, at least in part, on Sino-Japanese cooperation.
A pessimistic refutation
In response to the optimistic argument for sustainable collaboration, there is a compelling pessimistic refutation. This counter-argument argues that the changing external context of Sino-Japanese relations will undermine any interdependence that results from economic cooperation. Nikkei (2018) wrote at the beginning of the détente that the “insecure international environment” that brought China and Japan together was not guaranteed. This claim has been proven correct as US President-elect Biden plans to reaffirm US alliances in the region and re-involve China economically (Bisley, 2020). When this transition from antagonistic US policies comes to fruition, the original drivers of Sino-Japanese cooperation will be eliminated while undermining interdependence.
With regard to China, an end to the US-China trade war would reduce China’s dependence on Japan as a source of investment and trade revenue. While it is possible for China to keep Japan as the primary source of these sources of income, China’s dependence on Japan is only undermined by the existence of a viable alternative source of income. US investments in China totaled 116.2 billion US dollars in 2019 despite the trade war between the US and China, indicating potentially significant monetary damage if China were to focus its economic engagement on the post-war US (Rudden , 2020). With China’s economic structural constraints unlikely to resolve anytime soon, the income surge that comes with the shift from economic engagement with Japan to the US could be a necessary part of Chinese policies to sustain growth.
At the same time, US assurances regarding military support would reduce Japan’s dependence on economic cooperation. Japan could continue its economic cooperation with China while benefiting from US security guarantees. As with China’s reliance on Japanese investment and trade returns, however, it is the existence of an alternative source of security that undermines Japan’s reliance on economic cooperation to mitigate future threats to China.
Japan increased its defense budget by 2.7% in 2018 in response to concerns about China’s growing military strength (Chiang, 2019). This surge in defense spending during the downturn suggests that economic engagement alone will not address Japan’s security concerns about China. If so, renewed U.S. security guarantees that reduce Japan’s reliance on economic cooperation could lead Japan to seek alternative means to resolve its uncertainty about China. For example, the hypothetical evolution of a Japanese nuclear deterrent has been discussed in recent years (Yoshida, 2019; Fitzpatrick, 2019).
The recent change in Japanese leadership exacerbates the threat to Sino-Japanese cooperation due to the changing external context. It is understood that familiarity among national leaders helps dispel uncertainty, leading to greater opportunities for collaboration and peaceful coexistence (Booth and Wheeler, 2007). Shinzo Abe, Japan’s prime minister from 2012 to 2020, sought to maintain the détente as an example of a diplomatic success story of his tenure (Hurst, 2018). Surely Abe and Chinese President Xi Jinping had pledged to work together to alleviate tension. Because of this improved relationship, Abe visited a Japanese prime minister in China for the first time since the dispute over the East China Sea weighed on diplomatic relations in 2012 (Rachman, 2020; Kyodo, 2019).
Just starting his tenure, Abe’s successor, Yushihide Suga, doesn’t have the benefit of the familiarity Abe was able to rely on at the beginning of the détente. Meanwhile, Suga plans to continue Abe’s more controversial policies, such as Article 9 reform, which has proven unpopular in China (Rich, Inoue, and Dooley, 2020). Suga also made controversial decisions in his early months, such as the appointment of Nobou Kishi, a well-known Taiwanese believer, as Minister of Defense (Kobara, 2020). Japan’s implicit proposal to comment on Taiwanese sovereignty could lead to tensions with China in the future. This is due to China’s controversial claim on the island of Taiwan and its strict diplomatic requirement that other countries not recognize Taiwan as an independent state (ibid). Accordingly, Japan’s change in leadership means the elimination of a stabilizing variable in favor of cooperation alongside the impending shift in the external context, which initially led to relaxation.
Refuting the optimistic case claim that China and Japan want a common rules-based order is the continuation of selfish regional competition. Despite working together to create a regional economic order, both countries seem to be pursuing their own interests in competing for regional influence rather than working on creating new governance structures. Proof of this is the joint commitment of China and Japan to the $ 6.9 billion Thai rail project, in which Japan withdrew in favor of work on the Indian high-speed railroad (Wijaya and Osaki, 2019).
The decision to work on India’s rather than Thailand’s railroad in partnership with China may be tied to Japan’s quest for a closer relationship with India as a counterbalance to China’s regional influence. Japan and India share territorial concerns as territorial claims overlap with China in the East China Sea and the Himalayas, respectively, and have worked together to secure strategic sea lanes in competition with China (Chand and Garcia, 2017; BBC News, 2020b). This shows that despite the cooperation in the creation of a regional economic order, there is also self-interest and competition in Sino-Japanese relations, which hinder the expansion of the regional economic order to include a socio-political order. It also shows a lack of substance in Sino-Japanese macroeconomic cooperation and the failure of the new Joint Infrastructure Committee to weaken Sino-Japanese competition.
The final argument in this pessimistic rebuttal of the optimistic case for continued Sino-Japanese cooperation rests on the mistakes of Hot economy, cold politics. At first glance, this appears to be a pragmatic foreign policy approach that enables both conflict and cooperation. However, this approach has already been tried several times by China and Japan and has failed. The result of these attempts is a routine cycle of collaboration, followed by increased competition, as unaddressed political issues re-emerge and create tension (Brito, 2019). This is a well-observed phenomenon in contemporary Sino-Japanese relations. The last cooperative phase seems to have taken place in the 1990s, before China increasingly criticized the US-Japan alliance and Japan seriously considered remilitarization (He, 2013; Manning, 2015).
China and Japan have taken steps during the current detente to deal with the political issues in their relationship and hope that the detente could break the cycle of cooperation and tension. One such mechanism is the launch of a sea and air communications system to avoid hostilities resulting from the territorial dispute in the East China Sea (Hurst, 2018). However, similar efforts have been made in earlier periods of economic cooperation and have resulted in failure. For example, in the late 1990s / early 2000s, China and Japan agreed to administer fishing rights in the East China Sea only so that the problem would reappear in 2010 with mass protests and the use of naval vessels in the disputed region (Zou, 2003; Lee, 2011 ). The failure of the past to resolve political tensions in times of economic cooperation sets a precedent for the mechanisms put in place during the current détente to also fail.
Efforts to address the underlying policy issues within the parameters of economic cooperation, rather than addressing them, cause those problems to re-emerge as the drivers of cooperation change. Given the above prediction that Biden will reverse the Trump administration’s antagonistic foreign trade policies, the resurgence of underlying political issues could be imminent. Some political issues not addressed, namely competition for regional influence, are already evident. As a result, Relaxation appears to have failed to break the cycle of collaboration and tension that derives from the concept of Hot politics, cold economy. This makes continued Sino-Japanese cooperation very unlikely.
Given the evidence, it is difficult to be optimistic that the Sino-Japanese detente will establish sustainable cooperation between China and Japan. Rather, it makes sense to be pessimistic and conclude that Sino-Japanese relations will eventually return to tension and hostility. This is due to the changing external context of Sino-Japanese relations. Eliminating one of the main factors in creating détente will weaken China and Japan’s dependence on economic cooperation between themselves. At the same time, Japan’s recent change in leadership has weakened familiarity between the two countries and removed it as a stabilizing variable for cooperation. Japan’s new prime minister is also continuing his controversial policies and making controversial decisions himself that could spark tensions with China.
China and Japan are working together in the regional comprehensive economic partnership to create a regional economic order. However, the simultaneous Sino-Japanese competition for regional influence represents an obstacle to the expansion of a rule-based economic order into the socio-political area and at the same time undermines common macroeconomic ventures. Finally, the underlying political problems in Sino-Japanese relations that the détente does not address are likely to re-emerge as economic cooperation diminishes. This is historically a precedent as the détente does not appear to have moved China and Japan away from routine cycles of economic cooperation followed by political tensions.
For the next few years, Détente’s failure to establish sustainable collaboration will be a research topic among scholars of Sino-Japanese relations. This research could provide insights into the US’s role in China-Japan relations, or the limits of the economy alone as a driver of improving relations. Most importantly, the study of relaxation could provide a learning experience for practitioners of Sino-Japanese relations. In this way, it can serve as the basis for a new argument for optimism in the future.
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