Senior political and diplomatic contacts expanded in late 2015. Prime Minister Abe met Premier Li in October and President Xi briefly in November.  Meanwhile, maritime issues dominated the policy agenda: China’s natural gas exploration in the East China Sea, incursions into Japan’s territorial waters near the Senkaku/Diaoyu Islands, and China’s land reclamation projects in the South China Sea. History issues also punctuated the period – the September victory parade in Beijing, at UNESCO, and the anniversary of the Nanjing Massacre in December.  Nevertheless, there was a general sense that relations were moving in the right direction.

High-level meetings

There were a number of important meetings held covering a range of issues, highlighted by several brief encounters by high-level political leaders and a substantive meeting between Prime Minister Abe Shinzo and Premier Li Keqiang on the sidelines of a trilateral South Korea-Japan-China summit in Seoul.  In general, the encounters served to improve the relationship.

At the end of September, Liberal Democratic Party (LDP) General Council Chairman Nikai Toshihiro attended a China-Japan business symposium in Beijing at China’s International Economic Exchange Center.  Discussion focused on strengthening economic cooperation.  Afterward, it was announced that 50 of China’s top business leaders would visit Japan in mid-October.  China’s Foreign Ministry spokesperson welcomed the visit, noting Nikai’s effort to “promote China-Japan exchanges and improve relations.”

On Oct. 13, National Security Council Advisor Yachi Shotaro met Chinese counterpart Yang Jiechi in Tokyo.  Yachi noted the overall improvement in bilateral relations, while expressing concerns over Chinese actions in the South and East China Seas, in particular China’s unilateral development of gas fields in the East China Sea. He called for the operationalization of a maritime notification mechanism at the earliest possible date to avoid unforeseen incidents at sea.  Notwithstanding existing problems, Yachi said that Japan wanted “to exchange views frankly in order to develop friendly ties.” He went on to express concern over China’s application to UNESCO to enter documents related to the Nanjing massacre into the Memory of the World Program. Yang commented that relations had, “to a certain degree,” improved and took a forward-looking view toward further improving relations. Both agreed on the importance of continuing high-level dialogue and looked to cooperate in arranging an Abe-Li conversation on the sidelines of upcoming trilateral summit in Seoul.

On Oct. 14, State Councilor Yang met Prime Minister Abe at the prime minister’s residence.  Abe found China’s use of UNESCO to memorialize the Nanjing massacre “regrettable.”  Rather than excessively focusing on the unfortunate past, Abe advocated a future-oriented construct to shape bilateral relations. Yang replied that to advance into the future, it was important “to squarely recognize the past.” Abe also expressed “deep concerns” over China’s repeated incursions into Japan’s territorial waters in the Senkakus and the unilateral development of gas fields in the East China Sea.  Despite differences, both agreed to advance the “mutually beneficial strategic relationship” and the early operationalization of a maritime communication mechanism. Japanese media reported that the 45-minute meeting was conducted in “a very friendly atmosphere.” Meanwhile, the LDP’s Foreign Policy Committee drafted a resolution, finding “completely unacceptable” the politicization of UNESCO and calling on the government to cease financial support for the institution.

LDP Secretary General Tanigaki Sadakazu and Komeito Secretary General Inoue Yoshihisa met Yu Zhengsheng, chairman of the Chinese People’s Political Consultative Committee, in Beijing on Dec. 4.  Speaking about China’s South China Sea island building, Yu made the point that China was carrying out the projects on its own territory and asked Japan not to overreact.  In reply, Tanigaki emphasized freedom of navigation through the area.  When Yu noted that China-Japan relations had deteriorated since Tokyo’s nationalization of the Senkaku Islands, Tanigaki emphasized Japan’s sovereignty under international law. At the same time, Yu remarked that relations “had taken a turn for the better this year … but there needs to be more time for a fundamental improvement.”

On Oct. 15, Komeito leader Yamaguchi Natsuo, at the invitation of the Chinese Communist Party (CCP), attended a meeting of the Asia Political Parties’ Special Conference on the Silk Road in China, where he was greeted by President Xi Jinping.  The two shook hands and spoke for approximately one minute.  Yamaguchi handed Xi a personal letter from Abe, conveying Abe’s wish for a meeting with Premier Li during the trilateral summit in Seoul.  The following day, Deputy Chief Cabinet Secretary Kato Katsunobu told reporters that Abe made it clear that he “by all means wanted” a meeting with Li. Later, it was reported that Yamaguchi had invited Xi to visit Japan to view next year’s cherry blossoms.  Chief Cabinet Secretary Suga Yoshihide told reporters that the government had made no decisions on that proposal.

Prime Minister Abe and Premier Li met on Nov. 1 on the sidelines of the South Korea-Japan-China summit in Seoul.  The first formal meeting between the two lasted approximately one hour.  They agreed to reopen high-level exchanges starting with annual reciprocal visits of foreign ministers, initiate a high-level economic dialogue, and work together for the early operationalization of a maritime communication mechanism.  Li questioned why high-level China, Japan, ROK meetings had not taken place for three years and volunteered that Japan knew the answer.  Abe replied that, going back to his first government, he has had an “unshakeable” commitment to the concept of a mutually beneficial strategic relationship as the instrument for improving relations.

Prime Minister Abe later told a BS-Fuji television audience that he had raised several concerns with Li, including China’s artificial island building in the South China Sea and that candid views had been exchanged on issues related to history, East China Sea resource development, the air-maritime communication mechanism, and respect for the rule of law.  Abe said that he had made it clear that Japan had learned from its past and had advanced as a peaceful country, respecting human rights.  Looking ahead, he considered agreement on high-level economic dialogue and reciprocal visits of foreign ministers to be a great step forward.

On Nov. 30, during his visit to France for the UN climate change conference, Prime Minister Abe held a four-minute, stand-up conversation with President Xi.  Referring to his meeting with Premier Li in Seoul, Abe noted that he was able to have a good exchange of views with Li.  In reply, Xi said that “it is important to continue to deepen the present good atmosphere.”

On Dec. 7-8, Japanese and Chinese diplomats and defense officials met in Amoy, Fukien Province.   Issues discussed related to Chinese island building in the South China Sea and the proposed maritime communication mechanism.

East China Sea

China’s oil and gas exploration continued in the East China Sea.  Photographs taken by Japan’s Maritime Self-Defense Forces in mid-September and released by the Foreign Ministry showed a total of 16 exploration platforms on the Chinese side of the median line.  At two of the four sites under development plumes were detected indicating gas production was underway, and for the first time, mobile drilling rigs were detected near the mid-line boundary. On Sep. 16, Chief Cabinet Secretary Suga told a press conference that “It is truly regrettable that China has been unilaterally proceeding with gas development while the demarcation line between Japan and China has yet to be settled.” Japan’s Foreign Ministry called in the Chinese Embassy to protest the activity. On Sep. 23, China’s Foreign Ministry spokesperson made it clear that “China’s oil and gas exploration in the East China Sea are all carried out in undisputed waters under Chinese jurisdiction.  There is no such thing as unilateral exploration. It is hoped that the Japanese side can correctly understand the principled consensus on the issue of the East China Sea and stop raising unreasonable demands.”

Chinese research ships operated in Japan’s EEZ in the East China Sea from Sep. 19-25. Japanese Coast Guard requested an end to operations claiming they are at odds with the mutually agreed to prior notification. In mid-December, the Japanese Coast Guard reported that Chinese research ships had violated terms of the prior notification agreement 22 times in 2015, a steep rise over nine times in 2014, seven times in 2013, three times in 2012, and eight times in 2011.

On Nov. 12, Japan’s Coast Guard observed a PLA Navy intelligence ship operating for the first time in international waters south of the Senkakus, repeatedly moving in west to east direction and returning. Chief Cabinet Secretary Suga found the operation of the vessel “abnormal” and made clear the government’s commitment “to defend our country’s land, sea, and air space.”

Intrusions into Japanese claimed territory near the Senkaku/Diaoyu Islands also remained an area of bilateral tension. On Sep. 10, Chief Cabinet Secretary Suga found Chinese incursions in the areas to be “extremely regrettable.” He pointed out that historically, and in international law, the Senkaku Islands are Japan’s sovereign territory; “there is no territorial issue that needs to be resolved.” On Sep. 11, Foreign Minister Kishida Fumio told a press conference that Japan “absolutely cannot allow” China’s frequent incursions into Japanese water.  Kantei sources reported that, while Chinese Coast Guard ships were deploying into the area, Japan Maritime Self-Defense Force (MSDF) ships were not deployed in order to avoid escalation.

Japan continued to track intrusions by Chinese vessels in the area near the Senkaku Islands in the East China Sea. Chinese fishing boats reportedly have increased operations in the area. In the period September 2014-August 2015, Japan recorded a total of 708 Chinese government ships operating in Japan’s contiguous zone for a total of 233 days. Below is a summary of the reported activity in late 2015.

Aug. 25-Sep. 30: Chinese Coast Guard ships Haijian 2113, 2166, 2305, 2307, 2308, 2506 operated in Japan’s contiguous zone of the Senkakus; on Sep. 7, Haijian 2307, 2308 and 2506 entered  Japan’s territorial waters.

Oct. 2-14: Haijian 2101, 2112, and 2401 operated in Japan’s contiguous zone.

Oct. 12-17: Haijian 2501 and 2506 operated in Japan’s contiguous zone.

Oct. 23-28: Haijian 2149, 2501 and 2506 operated in Japan’s contiguous zone.

Nov. 4-9: Haijian 2102 2307 and 2308 operated in Japan’s contiguous zone.

Nov. 12-23: Haijian 2101, 2149, and 2401 operated in Japans contiguous zone; on Nov. 23, the ships entered Japan’s territorial waters.

Nov. 30: Haijian 2101, 2149 and 2401 operated in Japan’s contiguous zone.

Dec. 4-5: Haijian 2113, 2501 and 2506 operated in Japan’s contiguous zone.

Dec. 10-13: Haijian 2501 and 2506 operated in Japan’s contiguous zone.

Dec. 20-23: Haijian 31239 operated in Japan’s contiguous zone equipped with what appeared to be an automatic cannon, marking the first time an armed Chinese ship had entered Japanese waters; The ship was accompanied by Haijian 2102, 2307 and 2308.

Dec. 20: Haijian 2307 and 2308 entered Japan’s territorial waters, marking the 35^th incursion into Japan’s territorial waters in 2015.

South China Sea

Developments in the South China Sea continued to influence relations between Japan and China. While most of the activity occurred in the context of third-party interaction, it was clear that Japan is increasingly prepared to express its concerns about Chinese actions and provide support to those countries that are directly affected by Chinese territorial claims in the region, while China has maintained its position that the South China Sea “belongs to China.”

Following his meeting with Vietnamese Communist Party General Secretary Nguyen Phu Trong on Sep. 15, Prime Minister Abe told a press conference that, “It is very significant that we share grave concerns over continuous unilateral actions and increased tensions in the South China Sea, which includes large-scale land reclamation and building of outposts.”  The day before, Chinese Vice Adm. Yuan Yubai told a London conference that “The South China Sea, as the name indicated, is a sea area.  It belongs to China.”

During the trilateral summit in Seoul, Prime Minister Abe referred to the international community’s “strong concerns” with developments in the South China Sea.  Responding to Abe’s statement, China’s Foreign Ministry spokesperson told the press that “Some people keep expressing concern about the South China Sea issue.  As a Chinese saying goes, there  won’t be any trouble in the world, unless people look for trouble themselves … it is hoped that relevant countries would be objective, impartial, and reasonable about the relevant issue and join China to play a constructive and reasonable role safeguarding peace and stability in the South China Sea.”

On Oct. 28, the UN Permanent Court of Arbitration in The Hague ruled that it had jurisdiction to consider a submission filed by the Philippines regarding disputed features of the South China Sea.  On Oct 29, China’s Foreign Ministry’s spokesperson said that “The award is null and void and has no binding effect on China … China has indisputable sovereignty over the South China Sea and the adjacent waters.  As a sovereign state and a State party to UNCLOS China is entitled to choose the means and procedures of dispute settlement of its own will.”

Concern over developments in the South China was also a reflected in comments by Japanese Cabinet members. In a statement issued during Defense Minister Nakatani Gen’s visit to Vietnam, the two governments expressed concerns with China’s unilateral efforts to change the status quo in the South China Sea through land reclamation projects and the militarization of the reclaimed areas and their support for freedom of navigation. On Nov. 6, Chief Cabinet Secretary Suga announced that “the activities of the Self-Defense Forces in the South China Sea are issues to be considered in the future while paying close attention to impact on Japan’s security.” Earlier, Shibayama Masahiko, a special advisor to the prime minister, told a BS Nippon TV program that “this issue is being discussed at the Kantei,” adding “we need to think carefully about the level of risk to Japan’s vital interests in that area.”  On Nov. 8, Foreign Minister Kishida Fumio told an NHK audience that issues related to the South China Sea were “legitimate matters of concern to Japan and the international community.” A day earlier, President Xi, in a speech delivered in Singapore, made clear that from ancient time the islands of the South China Sea were part of China and the Chinese government could not shrink from protecting Chinese sovereignty. On Nov. 11 during the adjournment session of the Upper House Budget Committee Abe told the committee that, with regard to Self-Defense Force deployments to the South China Sea he wanted to keep “various options open and fully deliberate on the matter.”

Prime Minister Abe in series of meetings, beginning with the G20 Summit in Turkey, the APEC Economic Leaders Meeting in the Philippines, and the ASEAN Plus 3 meeting and the East Asia Summit in Malaysia, continued to raise the issue of freedom of navigation in the maritime and air domains, the rule of law, support for the conclusion of a code of conduct, and opposition to China’s militarization of artificial islands in the South China Sea.  These issues were included in the Chairman’s Statement issued at the conclusion of the ASEAN Summit for the first time.

Anticipating Abe’s diplomatic activism, China’s Foreign Ministry spokesperson told a Nov. 13 press conference that “The construction activities by China on some islands and reefs of the Nansha islands fall completely within China’s sovereignty, targeting and affecting no one.  There is nothing disputable about that.  Japan is not a party involved in the South China Sea issue.  Historically, the Nansha islands were once snatched away by Japan, but recovered by the Chinese government after the war … Japan has no right to make inappropriate remarks on the sovereignty of the Nansha islands.” Foreign Minister Wang Yi repeated the talking points during a Nov. 23 interview with Hong Kong’s Phoenix television.

On Nov. 22, during East Asia Summit, Prime Minister Abe and Premier Li held a five-minute standing conversation. After the meeting, Abe reiterated his concerns with China’s increasing maritime activities and Japan’s commitment to deal firmly and calmly with unilateral attempts to change the status quo in the South China Sea.  Japan would also work to strengthen ASEAN’s surveillance and reconnaissance capabilities and support US freedom of navigation operations; Japan, however would not participate in the operations.  Japan and ASEAN defense ministers had met earlier in Sapporo on Sep. 7.

Business and economics

On Nov. 4, Premier Li Keqiang met a delegation of Japan’s leading business executives in the Great Hall of the People. The 45-minute meeting was the first in six years between China’s premier and Japan’s business leaders.  The delegation of 200 executives was led by Keidanren President Sakakibara Sadayuki and Muneoka Shoji, chairman of the Japan-China Economic Association.  Afterward, Li announced the two sides had agreed to “move toward improved relations, taking lessons from history.”  Sakakibara reportedly told Li that “the recent political and diplomatic environment is making Japanese companies hesitant to expand in China.”

Japanese investment in China during 2014 totaled $4.33 billion, down close to 40 percent over 2013. From January-August 2015, investment was down 28.8 percent from the same period in 2014.  A report by Tokyo Shoko Research found that between April and September 43 Japanese companies went bankrupt, a 40 percent increase over the same period in 2014.  The most frequently cited reason for business failure was increased rents, labor costs, and a slowing economy in China.

In mid-November, 60 of Japan’s top executives met with 50 of their Chinese counterparts in Tokyo for the Japan-China CEO Summit.  The executives discussed ways to cooperate in expanding economic ties, with Chinese executives emphasizing the significant opportunities for Japanese investment in a Chinese economy that is transitioning to long-term stable growth and becoming increasingly urbanized. Economic engagement continued as vice ministers attended the Japan-China Economic Partnership Conference in Beijing on Dec. 11.

Security

Security issues remained prominent in the relationship with mutual accusations of increasing tensions, even as there was apparent progress on establishing a bilateral maritime communication mechanism.  On Aug. 31, Japan’s Ministry of Defense announced a budget request of ¥5.0911 trillion for FY2106, an increase of 2.2 percent over 2015, marking the fourth consecutive year of an increase in the defense budget.  Acquisition of maneuver combat vehicles that could be used in amphibious operations, establishment of a mechanized amphibious training corps in anticipation of the creation of an amphibious mechanized division in FY 2017, and the enhancement surveillance and reconnaissance capabilities pointed to a focus on the defense of Japan’s southwest islands. Meanwhile, the Diet adopted legislation to implement the new Japan-US defense guidelines in late September.

In Beijing, the Foreign Ministry spokesperson commented that “The passage of the security legislation … is an unprecedented move taken by postwar Japan in the military and security fields.… Japan’s recent military buildup and drastic changes to its military and security policies are out of step with the trend of the times … making the international community question whether Japan is going to drop its exclusive defense policy and deviate from the path of peaceful development it has been following after World war II.”

The Oct. 4 Yomiuri Shimbun reported that China had responded negatively to Japan’s draft plan, to implement the bilateral maritime communication mechanism.  Submitted in June, the Japanese proposal reportedly excluded territorial waters and air space in an effort to deny China a pretext for intruding into Japan’s territorial waters and air space provided it had notified Japan.

On Oct. 19, Japan’s Ministry of Defense reported that from July to September the Air Self-Defense Force had scrambled 117 times in response to Chinese aircraft, up from 103 scrambles over the same period in 2014.  From April to September, the first half of Japan’s fiscal year, scrambles against Chinese aircraft totaled 231.  In response Beijing called on Japan “to cease all interfering actions targeting China…”

During the ADMM Plus in Kuala Lumpur, on Nov. 4, Defense Minister Nakatani met Chinese counterpart Chang Wanquan.  Nakatani used the occasion to call attention to “unilateral actions heightening tension” in the South China Sea, which he characterized as a “concern shared by the international community.”  In their bilateral meeting, Chang reportedly told Nakatani that the South China Sea is “not an issue between China and Japan.” At the same time, the two ministers agreed to an early implementation of a maritime communication mechanism. However, the Asahi Shimbun reported that, despite high-level defense contacts, major progress in the talks had not been made and that an effective start-up date was still lacking.   After their meeting, Nakatani said that “Defense cooperation and exchanges … are necessary for stability in the Asian region.”

Security: spy incidents

On Sep. 30, Chief Cabinet Secretary Suga announced that Chinese authorities in Zhejiang and Liaoning provinces, in May, had taken into custody two Japanese citizens accused of spying.  Suga denied the accusations and announced that Japan’s diplomatic missions were taking appropriate steps to protect the Japanese citizens. Japanese media also reported that a third Japanese national had been detained in Beijing since June.  Later, reports surfaced that a fourth Japanese national, a woman employed by a Japanese language school in Tokyo, had been detained since June in Shanghai.  Suga called on Beijing to release the Japanese citizens “as soon as possible.” He returned to the issue on Dec. 25, telling a press conference that Japan “does not engage in such conduct,” but refrained from commenting on the details of the situation.

Security: at the UN

On Oct. 22, during a meeting of the General Assembly’s First Committee on Disarmament, Chinese Ambassador Fu Cong expressed concern that Japan’s growing stockpile of fissile material would allow Japan to manufacture 1,000 nuclear warheads, posing “grave risks both in terms of nuclear security and nuclear proliferation.”  The ambassador charged that Japan’s nuclear inventory “far exceeds its legitimate needs” and asserted that “some political forces in Japan have continuously clamored for the development of nuclear weapons, claiming that Japan should have nuclear weapons if it wants to be a power that could sway international politics.”

Afterward, Fu told reporters that Japan could produce nuclear weapons in an “extremely short” time, saying “Japan has everything and the only thing that is missing is the so called political will.” In reply, Japan’s ambassador for disarmament, Sano Toshio, said the international community recognized Japan’s efforts to maintain transparency of its nuclear program.

History

History issues continued to play an important role in shaping bilateral relations. China took every opportunity to highlight the past misdeeds of Japan, while Japan argued that China was excessive in its accusations and that it refused to acknowledge the positive contribution Japan has made to world peace since 1945.

On Sep. 3, China hosted a commemorative parade, marking the 70^th anniversary of the Chinese People’s Victory in the War Against Japanese Aggression.  Former Prime Minister Murayama Tomiichi attended the parade.  In Tokyo, Chief Cabinet Secretary Suga commented that “We think China should not excessively focus on its unfortunate past history but show its intention to tackle common issues facing the international community with a view to the future.”

Visits to Yasakuni Shrine also drew attention. On Oct. 19, Chief Cabinet Secretary Suga told reporters that Prime Minister Abe, in his personal capacity, had made an offering to the Yasukuni Shrine during the Autumn Festival.  As for the visits of Cabinet ministers, Suga said that they had visited in their private capacity and that as a matter of freedom of religion should not be interfered with by the government. On Oct. 20, a supra-party delegation of 70 members of the Diet paid homage at the shrine.   China’s Xinhua News Agency commented that “over a long period of time the continuing visits by some Japanese political leaders have strained Japan’s relations China, Korea and the countries of Asia.”  The English edition, referring to Abe’s offering, found it having the appearance of “a provocative act.”

On Oct. 27, the curator of Nanjing’s People’s Resistance to the Japanese War of Aggression Museum visited the Miyazaki Prefectural government and requested the return of three cornerstones, pillaged from Nanjing, now in the Peace Tower in the Miyazaki Peace Park. The Prefectural government turned down the request.

On Dec. 22, the LDP’s panel dedicated to the study of history met for the first time in Tokyo.  Commenting on the meeting, China’s Foreign Ministry spokesperson observed “we hope that the Japanese side would demonstrate sincerity on the issue of history, respect the common sense and verdict upheld by the international community, face squarely the history of aggression … and take concrete actions to win the trust of its Asian neighbors and the international community.”

UNESCO and history

After a two-year review process, UNESCO agreed on Oct. 12 to add 47 new inscriptions in the Memory of the World Register. Among them was a request by China to include documents from the Nanjing Massacre.  Among the documents submitted by China were court documents from the International Military tribunal for the Far East as well as photos and film footage.

Reaction in Japan was negative.  A Foreign Ministry statement said that “It is extremely regrettable that a global organization that should be neutral and fair entered the documents in the Memory of the World Register, despite the repeated pleas made by the Japanese government… As a responsible member of UNESCO, the Japanese government will seek a reform of this important project, so that it will not be used politically.”  The statement became a talking point in subsequent high-level Japan-China meetings, and LDP Diet members called on the government to consider termination of financial support to UNESCO.

On Oct. 11, LDP General Council Chairman Nikai Toshihiro told an audience in Tokushima City: “if Japan is said to be bad, Japan should tell UNESCO that it will stop making financial contributions to the organization” Two days later, Chief Cabinet Secretary Suga claimed that the decision-making process lacked “transparency’ and violated UNESCO’s political neutrality… The Japanese government has not even been allowed to see the documents.”  Suga made clear “we will consider all possible options, including suspension of payment.” China’s Foreign Ministry responded that it was time for Japan to quit complaining about China’s submission and cease slandering threatening the work of UNESCO.

Outlook

In the face on increasingly challenging maritime issues, both governments appear to be committed to keeping events moving in a positive direction.  The next four months will test the skill of political leadership in Tokyo and Beijing and the strength of their commitment.