Japan's relations with China and India: Future prospects

The three regional powers -- China, India and Japan -- are casting their own shadows and their strategic interests are creating their own dynamics in international relations. Their respective economic developments are also generating consumer demand and employment throughout Asia. This in turn, is affecting competition as well as the process of foreign direct investment as a factor for spurring growth.

The rise of Asia, which roughly started in 1960-70, was largely due to the Japanese economic miracle. This format collapsed in 1997-98, with meltdowns in Republic of Korea, Indonesia and Thailand in particular. Asia however now appears to be again on the rise -- this time thanks to the boom in China and India.

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Japan has watched India's rapid growth with great care but not with any degree of anxiety. She knows India is not, at this point of time, a threat, as most of its goods and services are still geared towards domestic consumption. Japan seems to be more concerned of the Chinese boom. This burgeoning rivalry has also highlighted the continuing historical tensions between the two countries.

Japan is faced with a dilemma. On the one hand Japan realises that the resurgent bilateral trade relations with China has helped to reduce recession and generate employment within Japan. On the other, she understands that, in all likelihood, the Chinese economy will surpass that of Japan in the next decade or two, thereby creating its own regional dynamics.

It would of course be useful to note here, that at this moment, the Chinese economy is only one third the size of Japan's. That is not insignificant. It has made China the world's second largest importer of oil after the US. It is also a nation with a labour force of the size of three European Union. In fact, statistics indicate that in 2004, it accounted for 40 percent of the world increase in consumer demand.

This upsurge on the part of China is also creating a different kind of anxiety among Japanese economists. They are beginning to debate the question as to whether China will abide by the laws of comparative advantage. To this has been added the other factor -- serious concern in Tokyo over China's military capabilities and its intentions.

Mr Okamoto, former Special Adviser to Japanese Prime Minister Koizumi, speaking recently in Brussels, has made certain interesting observations. He has noted that Japan had recently endured two "shocks" in Asia. The first was the violent anti-Japan demonstration in China, and the second was the lack of support in the region for Japan's bid for a permanent seat on the United Nations Security Council.

According to him, the demonstrations reflected China's increasingly aggressive attitude towards Japan -- something Mr Okamoto acknowledged might be connected to Japan's imperial expansion in the early 20th century. He felt that reconciliation had remained incomplete between the two countries, with successive generations of Chinese still antagonistic towards Japan.

In this context, he also highlighted the 'problem' related to the Chinese education system, which 'exaggerates the scale of Japanese atrocities during the Second World War.' He also expressed his disappointment that the Chinese continued to refuse the 'apologies that had been made for the actions of previous generations by the Japanese political leadership.' The Chinese know that the Japanese establishment is irritated with their approach, but they feel that Japanese regrets are not sufficiently sincere.

Signs of the other shock, (according to Okamoto) was evident in the fact that eventually only a few countries backed Japan's bid for a permanent seat in the UN Security Council. This, according to him was a "great embarrassment" for Tokyo, particularly, the lack of support from those, who had benefited so much from Japanese investment over the past decades. Analysts have since come to the conclusion that such a course resulted from the reluctance of many Asian nations to "take on" China by siding with Japan.

One presumes that confronting the legacy of the past, on the part of China and Japan, will require a better and more accurate understanding of what actually happened without any glossing over or distortions of historical facts. This has become that much more important giving the fact that Asia's future depends on necessary adjustments. All of us have to remember that the best scenario for the region would be the establishment of a multi-polar group of nations committed to free trade, built around Japan, Republic of Korea, China and India. The worst scenario would be a wobbly Asia caused by an unstable China or a weak and stagnant India.

Both United States and the EU realise that what they do, or do not do in Asia, will have a major impact. Consequently, through a flurry of visits, both the EU and the USA have decided to "put the picture together" through the launch of a strategic dialogue, which will create a stable geo-political balance in Asia. It is also being hoped in this context that the simmering rivalry between China and Japan and to a lesser extent between Japan and Korea will be kept under wraps through the APEC and the ASEM mechanism.

It is generally believed that Japan has decided to enhance its strategic relationship with India not only out of its own desire to contain future Chinese influence in South Asia but also because Japan has been persuaded to do so by the United States. This, in a manner of speaking, may be even termed as anticipatory self-defence. Japan has provided billions of dollars in aid to China, but has also watched with growing concern China increase its defence spending. Japan's defence budget, meanwhile, has been steadily decreasing as a percentage of her GDP.

This anxiety on the part of Japan has been translated into her creating a proxy support for Taiwan in that island's relationship with mainland China. As expected, this has not endeared relations of Japan with China, who has described such a step as another example of resurgent nationalism in Japan. It has also been seized upon by China as proof of rising 'military ambitions' on the part of Japan.

Nevertheless, one thing is very clear. Despite all the hard talks, Japan-China business relations are much better than the political mood, with 200 billion dollars of bilateral trade a year -- something nobody wants to see put at risk.

India, China and Japan all know, that the future equation in Asia as well as in the neighbouring regions, will be greatly influenced by their inter-active relations. Japan, technically, is far ahead of the pack. Their ability to invest and also provide technical know-how has given them an edge. Japan, however, is gradually realising, that they cannot stay away totally from the fray despite all the latent controversies.

Economic powers like Singapore, Republic of Korea and Malaysia on the other hand are watching from the sidelines very carefully. Their policy planners know that what transpires over the next decade will determine the course of international relations in Asia for the rest of this century.

Muhammad Zamir is a former Secretary and Ambassador who can be reached at mzamir@dhaka.net