Private-sector contacts kept the bilateral relationship afloat while high-level official contact began to re-engage. Defense ministers met in June in Singapore and foreign ministers met in July in Beijing. In each instance, they agreed on the importance of advancing the strategic and mutually beneficial relationship. In early August, Japan’s Ministry of Defense released its 2011 Defense White Paper, which expressed concerns over China’s military modernization, its increasing activities in waters off Japan, and its “overbearing” conduct in the South China Sea.  Eight days later, the Chinese aircraft carrier Varyag left port for initial sea trails. Meanwhile, activities in the Senkaku/Diaoyutai Islands area continued to generate political friction in both Tokyo and Beijing.

Business and economics

On May 16, Keidanren Chairman Yonekura Hiromasa met China’s Foreign Minister Yang Jiechi in Beijing and expressed Japan’s appreciation for the assistance extended by China in the wake of the March 11 earthquake and tsunami. Yonekura emphasized that Japan is focused on recovery and the resumption of its role in the global economy and asked that Yang work to expedite normalization of customs procedures on Japanese exports to China, which stagnated after March 11 due to health and safety concerns.  Yang promised to do his best and expressed China’s interest in a trilateral free trade agreement with Japan and the Republic of Korea.

Tourism ministers of Japan, China, and the ROK met in South Korea on May 29 to discuss crisis management procedures to deal with natural disasters that affect tourism.  In the joint statement issued at the conclusion of the meeting, the ministers confirmed both public- and private-sector cooperation to promote recovery of the tourist industry and to encourage resumption of tourism to Japan. According to the Japan National Tourism Organization, the numbers of foreign tourists visiting Japan in April 2011 plummeted 62.5 percent in comparison to April 2010.  Tourists from China fell an estimated 60 percent. The ministers also agreed to cooperate in the prompt sharing of information in the event of natural disasters or critical incidents.

Following Premier Wen Jiabao’s proposal on the sidelines of the Trilateral Japan, China, ROK Summit in Tokyo, a 100-member mission from China led by Shao Qiwei, the head of China’s National Tourism Administration, visited Japan at the end of May to address expanding Chinese tourism to Japan.  Shao’s group met representatives of Japan’s tourism industry and local government officials interested in attracting Chinese tourists. Speaking at a meeting organized by Japan’s Tourism Agency, Shao said that his agency would make every effort to encourage tourism to Japan, with the exception of the disaster-ravaged northeast region of Honshu.

In a Japanese effort to boost Chinese tourism, Chief Cabinet Secretary Edano Yukio, on May 27, announced that, beginning July 1, Chinese tourists would be eligible to visit Okinawa using multiple-entry visas.  The Foreign Ministry took an additional step on Aug. 10 when it further eased conditions for tourist visas for Chinese citizens and extended the duration of stay from 15 to 30 days. Previously visas were restricted to government or corporate representatives.

On June 1, representatives of 32 Chinese and 62 Japanese companies met in Beijing for the Japan-China Green Expo, a three-day conference aimed at promoting environmental technology and green growth in China and the Asia-Pacific region.  Addressing the conference, Keidanren Chairman Yonekura called for “closer public-private sector cooperation in energy saving and new energy fields,” while Wan Jifei, chairman of China’s Council for the Promotion of International Trade, expressed the hope that China and Japan will “cultivate a new market and build ‘win-win’ relations.”

High-level meetings

The Trilateral Japan, China, ROK Summit was held in Japan on May 21-22. Prime Minister Kan, Premier Wen Jiabao, and President Lee Myung-bak visited the area of northeastern Japan devastated by the earthquake and tsunami.  In Fukushima, near the damaged nuclear reactor, they met with evacuees and sampled local agricultural produce, which Wen described as being “very delicious.” Wen also expressed his appreciation for the actions taken by Sato Mitsuru, a 55 year-old president of a fish processing plant in Miyagi, who saved the lives of 20 Chinese trainees and lost his life in the process, telling reporters that “a friendship nurtured in calamity is valuable and important.  I hope for a further improvement in relations between China and Japan”

The summit concluded in Tokyo on May 22, with the three leaders agreeing to cooperate in promoting nuclear safety and crisis management.  President Lee and Premier Wen agreed to cooperate in assisting Japan’s recovery. Wen said, “In times of natural disaster of this scale, mutual understanding, assistance and support from the international community, especially neighboring countries, are of crucial importance.”

When Prime Minister Kan expressed his deep regrets over sea contamination as a result of water leaking from the Fukushima reactor, Wen asked Kan to take steps to prevent further radiation leakage and to understand the concerns of neighboring countries. He also announced that China would ease restrictions on Japanese agricultural imports on the condition that the Japanese government certifies their safety. On June 13, China’s General Administration of Quality Supervision, Inspection and Quarantine loosened restrictions on food imports from Japan and removed Yamagata and Yamanishi prefectures from China’s food import ban.  Government inspection certificates were required only for dairy products, vegetables, fruits, tea leaves, fisheries, and other perishable products. Wen also said that China wanted to set up a “maritime crisis management mechanism” to prevent the recurrence of Senkaku-like incidents. Wen did not respond when Kan called for an early resumption of negotiations on the East China Sea. The three leaders agreed to consider joint rescue drills to deal with natural disasters, to accelerate processing of visa applications to promote tourism, and to move ahead on a trilateral FTA.

On July 4, Foreign Minister Matsumoto Takeaki traveled to Beijing to meet Chinese counterpart Yang Jiechi in the first visit made by a Japanese Cabinet-level official since August 2010.  At the outset, both ministers emphasized the importance attached to improving ties. Yang said that China believes it is “very important to promote and maintain strategic and mutually beneficial relations” between the two countries.  Matsumoto replied that “it goes without saying that it is desirable to secure mutual confidence and stability as neighbors.” Matsumoto went on to express Japan’s concerns over tensions arising from the territorial disputes in the South China Sea between China and its southeast Asia neighbors as well as Japan’s “strong interest” in the recent People’s Liberation Army (PLA) Navy exercises in waters off Japan. He emphasized the importance the international community attaches to “freedom of navigation and maritime safety” and called on China to refrain from escalating tensions in the South China Sea, telling Yang that Japan would “make efforts to secure freedom of navigation and maritime security” as agreed to with the US in the recent “Two-Plus-Two” meeting in Washington.  Matsumoto also called on China to increase military transparency and asked Yang to ease restrictions on the import of Japanese food products. Following his meeting with Yang, Matsumoto met Vice President Xi Jinping and State Councilor Dai Bingguo.

Turning to the East China Sea, the ministers agreed to work toward the resumption of negotiations to implement the 2008 Japan-China agreement on resource development in the East China Sea, which Beijing suspended following the September 2010 Senkaku incident.  Matsumoto called for cooperation in dealing with resource development issues and the creation of a “multilayered crisis management mechanism” to deal with maritime contingencies.  However, after the meeting he declined comment on Yang’s reaction to his proposal for a crisis management mechanism.

Finally, the two ministers committed to maintain high-level contacts through frequent visits and to expand cultural ties as well as people-to-people exchanges in recognition of next year’s 40^th anniversary of the normalization of relations. On July 7, Japanese and Chinese parliamentarians resumed their annual meeting, which China also suspended following the September 2010 Senkaku incident.  Kawabata Tatsuo, chairman of the Lower House Steering Committee, led the Japanese delegation and Li Jianguo led the Chinese delegation.

Commenting on the Yang-Matsumoto talks, the statement released by China’s Foreign Ministry said that “Yang reiterated to Matsumoto that the Diaoyu Island and its affiliated islands are China’s inherent territory” and called on Japan “to work together to create a favorable atmosphere and conditions for implementing the principled consensus on the East China Sea.”  Yang also expressed China’s concern “over the China-related issues being raised by the US-Japan military alliance….”

ODA

Shortly after the Matsumoto-Yang meeting, the Kan administration, on July 12, announced a 7.6 percent reduction, approximately 350 million yen, in official development assistance to China in fiscal year 2012.  The cut was far smaller than the drastic cuts previously advocated by former Foreign Minister Maehara Seiji.  A Foreign Ministry official explained that deeper cuts had been put off because they “could deteriorate the bilateral relationship despite emerging signs of improvement.”

Senkakus

By mutual agreement, Senkaku/Diaoyutai territorial claims were kept off the agenda at the Trilateral Japan, China, ROK Summit.  According to the Sankei Shimbun, Tokyo and Beijing refrained from taking up the issue in an effort to improve public sentiment in both countries.   On May 18, China’s Foreign Ministry spokesperson said that “sensitive issues should not be made a major topic of discussion at the China-Japan leaders meeting.” Five days after the summit, the Japanese government, on May 27, designated Okinotorishima as a Particular Distant Island/base point for protecting Japan’s Exclusive Economic Zone (EEZ) claims and approved maintenance activities on the island’s western sea wall, anchorage, and temporary road and port facilities. On June 15, Okinawa Gov. Nakai Hiroshi paid a call on Chief Cabinet Secretary Edano and asked the government to strengthen measures to prevent illegal fishing in the area of the Senkakus.

On June 17, Foreign Minster Matsumoto, addressing a Xinhua report that a Chinese oceanographic research ship had deployed into the western Pacific through Japan’s EEZ around Okinotorishima on May 16, told reporters that, if true, China had not observed the bilateral agreement for prior notification of such activities and that Japan would be inclined to deal with the matter through diplomatic channels. Chief Cabinet Secretary Edano speculated that the research ship was monitoring radiation emitted from the Fukushima reactor, but made it clear that the government could not countenance such activities within its EEZ and would make every effort to protect Japan’s EEZ and territorial waters.   When, on June 23, Tokyo protested through its embassy, Beijing replied in a manner that dismissed Japan’s EEZ claim. Meanwhile, the China Daily reported that China would increase the size of its maritime patrol forces from 260 ships to 350 and personnel from 9,000 to 15,000 by 2020.

A Japanese Coast Guard ship confirmed on July 3 that a Chinese fisheries patrol boat was operating in the contiguous zone (22 km outside territorial waters) off the Senkaku Islands.  Warned by the coast guard ship against entering Japanese waters, the Chinese ship replied that it was operating appropriately in waters under Chinese jurisdiction and later departed the area.  That same morning, 10 boats from an Ishigaki fishery cooperative left port bound for fishing grounds in the Senkaku Islands.  Experiencing rough seas, the Ishigaki fishing boats returned to port on July 4.  Meanwhile, Beijing asserted its territorial claims and protested the commercial activities as “illegal and invalid.”

In late July, the Japanese Coast Guard again spotted a Chinese fisheries patrol boat operating in Japan’s contiguous zone, marking the 11^th confirmed instance of a Chinese patrol boat operating in the contiguous zone since the September 2010 incident. The next day, a Chinese maritime research ship was spotted 60 km north northwest of Uotsuri Island in the Senkakus.

On Aug. 10, Chief Cabinet Secretary Edano told the Upper House Select Committee on Okinawa and the Northern Territories of the government’s commitment to maintain Japan’s effective control over the Senkakus, and “in the event of an aggression by another country, Japan, at whatever costs, would exercise the right of self-defense and expel the invaders.”

Early on Aug. 24, two Chinese fisheries patrol ships entered Japanese territorial waters in the Senkaku Islands. Despite repeated warnings by Japanese Coast Guard ships, the Chinese boats remained in the area, asserting that they were operating under Chinese law.  Later in the morning, they left Japan’s territorial waters but remained in Japan’s contiguous zone until departing later in the day. To protest the incident, Japan’s Vice Minister of Foreign Affairs Sasae Kenichiro called China’s Ambassador Cheng Yonghua to the Foreign Ministry.  Sasae made it clear that the islands are Japanese territory and that the actions of the Chinese ships were against the spirit of the mutually beneficial relationship. When Cheng explained China’s position regarding the islands, Sasae reiterated his earlier remarks and asked China to take steps to prevent future incidents. In Beijing, Ambassador Niwa Uichiro called on Assistant Minister of Foreign Affairs Liu Zhemin to protest the incident.

Meanwhile, directors of the Lower House Administration Oversight Committee met on Aug. 23 to consider asking the government to approve on-site inspection of the Senkakus to gather information on the island’s ecology and environment and, in the process, strengthen Japan’s claim to sovereignty.  On Aug. 31, representatives of both government and opposition parties agreed on the “necessity” of the on-site inspection and to take the proposal to their respective parties for consideration.

Security

On the sidelines of the Shangri-La Dialogue in Singapore, Minister of Defense Kitazawa Toshimi met his Chinese counterpart, Liang Guanglie. They agreed to re-open defense relations, which China had halted since the September 2010 Senkaku incident.  They also agreed that the early establishment of a maritime crisis management mechanism was indispensable and that exchange visits of defense officials should be resumed at the earliest possible date.

On June 8, a flotilla of eight Chinese warships transited in international waters between Okinotorishima and Miyakojima for exercises in the western Pacific Ocean.  Three Chinese frigates followed on June 9.  In Tokyo, the Foreign Ministry noted that because the passage took place in international waters, there was no issue.  Commenting on the exercises, Chief of the Joint Staff Gen. Oriki Ryoichi remarked that the PLA Navy had introduced the latest high-tech capabilities, including unmanned aircraft, and that the upgrade in its fighting power was notable.

Minister of Defense Kitawaza met PLA Deputy Chief of Staff Lt. Gen. Ma Xiaotian in Tokyo on July 25.  Ma expressed sympathy for the victims of the earthquake and tsunami.  Kitazawa, in turn, expressed his appreciation of Ma’s remarks and observed that bilateral relations had been moving forward since normalization “despite some twists and turns.”  Ma observed that the fundamental national interests of both countries called for the development of a strategic and mutually beneficial relationship and that military-to-military relations are an “important part” of bilateral relations.  They agreed to promote defense exchanges as an important step in the process of building mutual trust and confidence.

On July 26, Lt. Gen. Ma led the Chinese delegation to the Ninth China-Japan Consultation on Defense and Security. The Japanese delegation was led by Administrative Vice Minister of Defense Nakae Kimito.  Ma called for “solid efforts to maintain friendship, improve people’s feelings toward each other, handle the sensitive problems properly and strengthen the strategic, mutually beneficial relationship.”  Nakae said that Japan was prepared to work with the PLA “to establish better understanding and mutual trust ….”  Both agreed to set up a maritime crisis management mechanism in the East China Sea and to enhance communication and cooperation between defense establishments.

The next day, China’s Ministry of Defense for the first time officially acknowledged reconstruction and refitting of the aircraft carrier, Varyag, and that work on the ship had moved to its final stages.  The ministry’s spokesperson announced that the Varyag would be used for training and research and went on to say that possession of an aircraft carrier would allow China to defend itself and its maritime rights. A Xinhua column observed that construction and deployment of aircraft carriers was indispensable to the development of great powers.   Reports followed that the Varyag would put to sea in the first week of August.

Addressing the aircraft carrier reports, Chief Cabinet Secretary Edano told the media that  China’s lack of transparency and military buildup had become matters of concern to the region as well as internationally and that China should clarify the purpose of its air carrier construction and plans for deployment. Earlier, writing in China Daily, Rear Adm. (ret.) Yang Yi dismissed the “carping comments” of the Western media over the aircraft carrier as “unwarranted.”  He explained that China is “a land-sea power with a very long coastline and maritime rights and interests; it thus needs a strong navy to defend itself.”

Japan’s Ministry of Defense released its 2011 Defense White Paper on Aug. 2.  The report reprised longstanding concerns about China: its lack of transparency, the size of the defense budget, which has increased 70 percent in the past five years, and the pace of its ongoing military modernization program.  The document for the first time devoted a section to China’s actions in the South China Sea and China’s “overbearing” conduct there.  Meeting with reporters, Defense Minister Kitazawa also expressed concerns about China’s “overbearing” conduct in East Asia, while also expressing hope that outstanding problems could be managed within a framework of friendly relationships.

On Aug. 3, the People’s Daily found the use of the word “overbearing” as another example of efforts to stoke the “China threat” debate.  The paper noted that Japan’s recent National Defense Program Guidelines called for a strengthening of Japan’s defense posture in the southwestern islands and emphasized the China threat to justify its policy decisions. China’s Foreign Ministry spokesperson found the use of the word “irresponsible.” China, he explained, strictly follows the path of peaceful development and that China’s defense and military modernization is “solely to safeguard its own sovereignty, security and territorial integrity, not targeting any country.”  He concluded with the hope that Japan “can regard history as a mirror, earnestly reflect on its own defense policy and do more to deepen mutual trust with neighboring countries…”

On the morning of Aug. 10, the aircraft carrier Varyag left the Dalian shipyards and put to sea for sea trials, which Japanese media closely followed through Chinese reporting. Drawing on Xinhua sources, the Yomiuri Shimbun reported on the rise in ship and aircraft-related stocks, while the Sankei Shimbun speculated on the possibility of take-off and landing drills by aircraft from nearby bases and on 2014 as the date when China’s indigenously constructed aircraft carriers would join the fleet. On Aug. 12, Defense Minister Kitazawa told a press conference that “there is no doubt that the move will have a big impact on the region” and went on to say “we will keep a watchful eye on events.” At the same time he asked why a carrier, with its mobility and striking power, was necessary and called for transparency with regard to its purpose.

August 15 and Yasukuni

For the second consecutive year, Prime Minister Kan and members of his Cabinet refrained from paying homage at Yasukuni Shrine on the date of Japan’s surrender in World War II.  But, over 50 members of the Diet from both governing and opposition parties did visit the shrine, as did former Prime Ministers Mori Yoshiro and Abe Shinzo and Tokyo Gov. Ishihara Shintaro. More  controversially, Japan’s Minister of Finance and now Prime Minister Noda Yoshihiko reiterated his belief that Japan’s Class-A war criminals are not, in fact, war criminals and thus posed no impediment to the prime minister visiting Yasukuni Shrine. Asked if he would visit the shrine as prime minister, Noda dodged the question, finding such talk “hypothetical.”

Public opinion

On Aug. 11, Japan’s public opinion research institute Genron NPO and the China Times released the results of their annual joint survey of public opinion.  Asked of their impression of China, 78.3 percent of Japanese respondents said it was “not good,” an increase of 6.3 percent over 2010.  Asked the same question about Japan, 65.9 percent of Chines respondents replied that it was “not good.”  The negative responses in both countries are the highest since the joint polling began in 2005.

Outlook

There will be a new prime minister in the Kantei. Whether this will open the door to re-engagement with China and how China will respond to the new government will be of interest over the coming months. While Prime Minister Noda has made some encouraging statements on Japan’s future relationship with all Asian neighbors including China, there remains a great deal of concern that both sides will be able to manage fulfillment of their promise to seek win-win solutions to their ongoing disputes.