As Tokyo continued to press unsuccessfully for a date on Xi Jinping’s state visit to Japan, frictions continued on matters such as the number of Japanese nationals detained in China, human rights concerns involving Xinjiang and Hong Kong, and Japan’s tentative reaction to participation in both the Regional Comprehensive Economic Partnership and the Belt and its Road Initiative. Trade relations remained strong despite declining economic growth in China and near stagnation in Japan, with both sides continuing to enhance their defense capabilities.

Politics

Responding to Prime Minister Abe Shinzo’s warning to African states not to accumulate too much debt, Beijing’s Global Times accused him of implicit hostility to China, to which China was unlikely to turn a blind eye. The paper characterized Abe’s statement that he hoped to cooperate with African states to safeguard the Indo-Pacific as indicative of Japan’s desired to play an important part in US strategy, or even to replace US leadership in line with Japan’s own national interests, and to contain China. Sino-Japanese rivalry in Africa also played into the issue of United Nations reform, with the votes of the 54 African states crucial to obtaining the necessary two-thirds majority to move the proposals forward. China has consistently opposed the G-4’s (Brazil, Germany, India and Japan) plans for reform.

The Tokyo International Conference on African Development (TICAD), recently held every three years instead of, as previously, every five, most recently attracted 42 leader-level participants vis-a-vis the 53 that participated in the Forum on China-Africa Cooperation (FOCAC). Yomiuri quoted an unnamed high-ranking Japanese official as saying China put explicit pressure on African countries not to attend TICAD, with delegates from some countries reportedly even turning back en route. A Global Times op-ed described Japan’s aid to Africa as motivated by big-power competition and desire to become a permanent member of the United Nations Security Council. According to the paper, Japan would never win the support of Africans, no matter how large the sums. Chinese aid, by contrast, is aimed at alleviating poverty and creating jobs. Xi’s spring visit to Japan will include a forum on infrastructure in third counties, with both countries providing financial and other support to these projects once terms are set. Zhu Feng, director of Nanjing University’s Institute of International Studies, urged that China do away with a “problem-based perspective” when dealing with Japan and understand that it will take some time to re-establish trust. Opining that it would be unwise for China to expect a sudden spurt in ties, he suggested a “coopetition” model.

In a reminder that the Chinese government had not forgotten the war guilt issue, air raid sirens opened the 25^th iteration of a ceremony in Shenyang to mark the 1931 Shenyang (Mukden) incident that began the Japanese invasion of Manchuria. However, China’s official press agency Xinhua made no mention of high-ranking central government officials attending. On the eve of the 70^th anniversary of the founding of the People’s Republic of China, observers described the so-called thaw as the leadership of both sides trying to reap domestic benefits while remaining keenly aware of their broader strategic rivalry. According to a poll released by the Pew Research Organization at the same time, Japanese views of China had declined to 85% unfavorable, 14% favorable, amid a general drop in China’s image internationally. Xi, speaking with former Japanese Foreign Minister Kawaguchi Yoriko, said that although China needed to do some things to improve its image, the responsibility to undo prejudiced and biased views against China rested with Japan.

An opinion piece in The Japan Times warned Japanese that China had weaponized its tourist industry, the world’s largest. It urged Japan, as well as other Asian tourist destinations to welcome, but also diversify away from, Chinese tourists, the largest group visiting Japan in 2018. Noting that the participants in this year’s meeting of the Quad—Japan, India, Australia, and the US, at the United Nations General Assembly—had been raised to foreign ministerial level, a Chinese academic stated that, rather than become alarmed, China must deepen engagement with Japan, India, and Australia.

Minster of Okinawa and Northern Territories Eto Seiichi became the first cabinet member to visit the Yasukuni Shrine since Sanai Takaichi in April 2017. Eto signed the shine’s register book with his formal title, but emphasized that he had paid for the ritual tamagushiryo with his private funds. Abe sent the sacred masasaki offering, also with his formal title as prime minister, but did not attend. The Chinese Foreign Ministry responded with a standard stern representation, its spokesperson urging the Japanese side to “faithfully honor its statements and commitments on facing up to and reflecting upon its past aggression…by taking concrete actions.” China is reportedly seeking what it terms a fifth communique during Xi’s visit to Tokyo in spring 2020, which Beijing hopes will include Abe’s endorsement of China’s Belt and Road Initiative.

In September Professor Iwatani Nobu, a specialist in Sino-Japanese relations in the 1930s, was detained in China on suspicion of espionage. He had previously worked for the National Institute for Defense Studies, a nominally independent think tank associated with the Japanese Ministry of Defense. China released Iwatani after Japanese officials hinted that the issue should be resolved in order to create “a good environment” for Xi Jinping’s state visit in spring 2020. Xinhua noted that Xi and Abe had sent congratulatory letters to the first meeting of the China-Japan high-level consultation mechanism on people-to-people and culture exchanges. Although the meeting was held in Tokyo, Japanese papers largely ignored it. In late November, Chief Cabinet Secretary Suga Yoshihide revealed that another Japanese in his 50s had been detained in Hunan since July on undisclosed charges.

Abe and Xi, meeting in Beijing in late December, pledged to “jointly open a new future for relations,” with Xi saying that they were “facing an important development opportunity.” According to Foreign Ministry spokesman Otaka Masato, Abe did not shy away from sensitive areas, including China’s handling of Hong Kong, the detention of more than a million Muslims in Xinjiang, Japanese who have been detained, and maritime security. Nikkei noted that, in his reply to Xi, Abe did not use Xi’s pet phrase “a community with a shared future for humanity,” that Chinese authorities are trying to insert into a fifth communique. A compromise statement at the meeting was “shared responsibility for peace and stability in Asia and the world.” But the wording of the fifth communique has not been finalized, nor has Xi committed to a date for the visit. Within Japan, there is significant opposition to a state visit by Xi, including from the Japanese Communist Party, whose party platform has condemned Chinese hegemonism as well as its actions in Xinjiang, Hong Kong, and the disputed Senkaku Islands.

Abe and Xi meet in Beijing on Dec. 24, 2019. Photo: Nikkei

As the year closed, the director of the international strategy division of the Chinese Academy of Social Sciences opined that, since Japan fears China but cannot compete with China on its own and considers itself part of the West, it is attempting to counter the PRC through various means. These include the creation an “Arc of Freedom and Prosperity,” and participation in sundry international organizations while dithering on participation in the Regional Comprehensive Economic Partnership (RCEP) and giving limited support to China’s Belt and Road Initiative (BRI).

Economics

International e-commerce support firm Trend Express reported that hundreds of billions of yen are made annually between Japan and China through “social buyers”—Chinese citizens living in Japan buying Japanese goods in bulk to resell on social media sites to followers in China. Since Japanese-branded products enjoy a reputation for safety and quality, Chinese consumers have been willing to pay the transaction fees. In response to the US-China trade war driving manufacturers out of the country, Chinese regional governments are courting Japanese companies to bring in new investments. Nikkei cited an unnamed source familiar with Sino-Japanese ties as saying that the municipalities are likely doing so on orders from the central government. While some of their bids have been turned down, other Japanese business interests see a window of opportunity for Japanese corporations.

Toyota expanded its cooperation with Chinese partners Guangzhou Automobile Group and FAW to include production of hydrogen fuel-cell cars. Reuters, citing minutes of internal Toyota meetings, says the plan reflects Toyota management’s desire to “strike a fine balance between China and the United States.” Nikkei reported that Japanese dominance of the Southeast Asian auto market is increasingly challenged by Chinese brands. Japanese automakers, heavily invested in large gas-powered vehicle plants in Thailand, have been slow to respond to government-promoted efforts to increase sales of electric and hybrid powered cars. China’s Sany Heavy Industry also gained on Japanese giants like Komatsu and Hitachi Heavy Industries. as well as the industry leader, US-based Caterpillar. Sany, whose prices are 20% cheaper than Komatsu’s, will partner with Huawei to develop autonomous construction machinery.

Huawei chair Liang Hua, speaking in Tokyo to executives and researchers from Japan’s top companies, said that his company expected to spend $11 billion on procurement in Japan, on par with what it spent with the US, its biggest supplier, and employ more than a thousand people in its facilities in Japan. Japan’s strengths in manufacturing, physics, and chemistry could complement Huawei’s in mathematics and processing to expand sales. Kyodo reported that, according to the website of Hikvision Digital Technology, Japanese corporations Sony and Sharp are among its suppliers, despite Hikvision being one of the entities the US has blacklisted for human rights violations. Honda continues its joint research with the blacklisted facial recognition company SenseTime for self-driving technology. The number of Japanese studying in China has been rising, with an increasing number expressing interest in working for Chinese companies, despite salaries being roughly the same in the two countries.

The government of Pakistan’s Sindh region has sought $2.6 billion in Japanese funds to complete a railway envisioned as part of the China-Pakistan Economic Corridor (CPEC). Analysts hypothesized that the economic burden to Pakistan, coupled with concerns over loss of sovereign control, have created buyer’s remorse over the project. Loans from the Japan International Cooperation Agency (JICA) also carry a lower interest rate. In the Philippines, the Chinese-Japanese railway rivalry appears to favor Japan: the research conducted by JICA placed Japan closer to the country’s economic center of gravity and its projects are proceeding faster. Despite Philippine President Rodrigo Duterte’s friendship with Beijing and poor relations with Western states, Tokyo-Manila ties are strong. To ensure its influence in the Philippines does not fall behind Japan’s, Beijing should look beyond the country’s rail sector to capital projects and trade arrangements. The Japanese government prevented a Chinese corporation from obtaining operating rights at a port in El Salvador by warning that it would withdraw $102 million in Official Development Assistance if the El Salvador government agreed to the Chinese tender.

Japanese generic drug manufacturers, having become dependent on China for less expensive precursors, found themselves in difficulties after a leading supplier shut down due to insufficient treatment of waste water. A report jointly sponsored by several Japanese medical associations had previously urged supporting domestic production despite greater costs, since the supply of such drugs was a national security issue. Japanese authorities searched the home of a Diet member and former minister in charge of integrated resorts issues with regard to the illegal transfer of millions of yen from a Chinese investor who wished to build a resort complex in Hokkaido. After years of lobbying by Tokyo, boneless beef from Japan aged 30 months or less will be allowed into China for the first time since September 2001. High-end wagyu beef has become a favorite of the PRC’s new rich, with Japanese planners hoping to double production by 2035. Amid concerns that Chinese were buying up land for reasons not necessarily strictly economic, Liberal Democratic Party lawmaker Akimoto Tsukasa was arrested and charged with accepting bribes from Chinese company 500.com to push through legislation for construction of an integrated resort facility. Since these combine gambling, accommodations, food, drink, entertainment, and meeting facilities, opponents fear the potential for gambling addiction, corruption, prostitution, and espionage.

Defense

Nikkei, Japan’s leading economic daily, complained about the increasing intrusions of Chinese research vessels into Japan’s exclusive economic zone (EEZ) without prior permission, as required by Article 246 of the United Nations Convention on the Law of the Sea. China does not recognize the validity of the median line between the two countries’ EEZs. NHK reported that Japan is to establish a new police unit covering the disputed Diaoyu/Senkaku islands. Its members will be responsible for dealing with unauthorized landings in the uninhabited islands of the East China Sea. Additional funding has been requested for the new unit, with up to 159 officers and equipment, the avowed intent being to signal to China that there will be increased costs if it attempts to advance its gray zone tactics in the area. Self-Defense Forces’ pay will be increased more than 5% during the next fiscal year, with recruitment standards requiring higher levels of competence to deal with cyberspace and outer space threats from unnamed sources. At present, the SDFs have been able to meet only about 70% of recruitment targets.

China maritime research activities around Okinawa Trough. Photo: Nikkei

US and Japanese ground forces staged a simulated attack against an enemy ship in an exercise that plainly had China in mind. This was the first such exercise in Japan, although a drill also involving land-to-ship missiles was held in the US last year. Typhoon Hagibis necessitated cancellation of a seven-nation fleet review which for the first time would have included China. In another first, the Ministry of Defense’s Defense of Japan 2019 raised China above North Korea as the major threat to Japanese security. Shortly thereafter, Japan’s National Institute for Defense Studies (NIDS), affiliated with the Ministry of Defense, published the 2020 iteration of its annual China Security Report. Subtitled “China Goes to Eurasia,” the text predicted that any initiatives going beyond the language of consent and support with counterpart counties could imperil any achievements to date. Contrary to its practice after the release of previous editions of the NIDS reports, the Chinese press did not immediately react.

Satellite images released by the Washington-based Center for International and Strategic Studies showed what a Singaporean expert termed a factory for aircraft carriers and other very large vessels. London-based analysis suggested that Chinese naval capability development might be entering a new phase. A US coast guard officer, speaking on condition of anonymity, stressed the need for discussion between the Japanese government and public about the Chinese threat. The PRC continues to build a weapons inventory threatening Japan and other regional states: Japan’s constitutional avoidance of offensive weaponry is “no longer acceptable and should be another topic of discussion with the public.” In light of recent maritime advances by China, the Japanese government has purchased Mageshima, a heretofore privately held uninhabited southwestern island, for the use of the US military and the SDF.

A 10-person team was established within Japan’s National Security Council in response to alleged intellectual property violations and technology theft by China, as well as cyberattacks by North Korea. Concerned about leaks in sensitive technology due to the large increase in foreign students—up 12% from 2018 and 140% over 2008—the Japanese government is struggling to find regulations that do not elicit criticism that their real target is the 38% of foreign students, the largest group, who are from the PRC.

In November, Japan held its first ever full-fledged arms show, hoping to create a forum that will help it tap technology to counter threats posed by China and North Korea, with demonstrators gathering in front of the convention center to protest a perceived affront to the nation’s constitution. Japanese and US government sources revealed in November that, in discussions in August, Chinese officials warned Japan and South Korea against allowing the United States to base intermediate-range missiles on their soil. Due to concerns about information security, the Japanese Coast Guard will stop procuring and using the several dozen Chinese-made drones it currently uses. Nine of the Japanese Coast Guard’s 12 new large patrol vessels will be deployed around the disputed Senkaku Islands where, despite improved Sino-Japanese relations, Chinese vessels sailed for 264 days in 2019, exceeding the record 243 in 2014. Intrusions into Japanese territorial waters also increased to 29 from 19, and is expected to exceed 30 for the first time in three years. An unnamed official, acknowledging improved relations, states that “the Senkakus issue is another matter. We must remain vigilant.” In light of these and the detention of Japanese nationals under unclear circumstances, a group of nationalist Diet members formally stated to the prime minister’s office their opposition to Xi’s anticipated visit.

Two days before he was to leave for Beijing and a day before the official launch of China’s first indigenously built aircraft carrier, Japanese Defense Minister Kono Taro lashed out against the PRC’s military buildup, saying that countries cannot be allowed to expand their spheres of influence by force and “aggressors must be forced to pay the cost.” The remarks took on added significance, as Kono is regarded as a potential successor to Abe. Kono and his Chinese counterpart, General Wei Fenghe met in Beijing, agreeing to set up a defense hotline and work together to denuclearize the Korean peninsula. Kono stressed “unresolved issues” and expressed “strong concern” about Chinese government ships’ activities in the vicinity of the Diaoyu/Senkaku Islands. Wei’s response was not disclosed. Kono, addressing the crew of the helicopter destroyer Izumo, described the security environment as severe since, due to Chinese government ships’ repeated intrusions into Japanese territorial waters in the East China Sea and North Korean missile launches, their duty had become significantly more important. The Japanese defense budget for fiscal year 2020 will be 5.313 trillion yen ($48.5 billion), the bulk of which will go toward enhancing capabilities in outer space and cyberspace, purchasing F-35B stealth fighters, and developing a next generation fighter to replace the ASDF’s F-2s.

Culture

On the same day as it castigated Japanese aid to Africa as selfishly motivated, another Global Times article stated that warmer Sino-Japanese ties meant an increase in the number of Japanese young people studying in China. Although their impressions were positive, their parents had concerns about air pollution and other environmental problems and stereotypes still exist.

Chart of Japanese studying in China. Photo: Nikkei

Taiwan

Japan and Sweden co-sponsored a conference in Taipei on disinformation, reflecting the Taiwan government’s concern that China is seeking to influence its upcoming elections. Yomiuri expressed alarm at the Solomon Islands and Kiribati breaking relations with Taiwan in favor of China, stating that caution regarding Chinese moves into the South Pacific was “indispensable.” Asahi, generally friendly to China, ran a lengthy obituary on Taiwan activist Su Beng, who passed away in Tokyo aged 100, noting that he “remained committed to Taiwan’s independence until the final moments of his life.” Meeting Japan’s new de facto ambassador to Taiwan, President Tsai Ing-wen said that the timing was right for the two countries to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), in which Japan plays a leading role. According to Kyodo, Japan is Taiwan’s third largest trading partner and Taiwan is Japan’s third largest trading partner, with 2018 bilateral trade increasing 7% over the previous year and 59% of Taiwanese saying they felt more affinity with Japan than any other country.

Partnerships between Taiwanese and Japanese tech companies have been increasing since 2016, the year Tsai Ing-wen’s anti-unification party took power. Most recently, Panasonic sold its chip business to Nuvoton; United Microelectronics acquired a Fujitsu plant, and Advantech purchased a subsidiary of Omron. The aim is to counter China’s supply chain.

A meeting between Japanese and Chinese politicians, at first postponed after Beijing demanded that over 40 Diet members take part in a meeting in Gansu, to compensate for the 17 who attended a meeting in Taiwan, was cancelled.

Conclusion: A Breakthrough Ahead?

Repeated references to the thaw in China-Japan relations occurred alongside actions that indicated ongoing tensions. Proclamations on the advantages of cooperation for mutual benefit notwithstanding, China and Japan continued to compete in infrastructure projects such as railroad construction in the Philippines and Pakistan and in international fora including China’s Forum on China Africa Cooperation (FOCAC) vs Japan’s Tokyo International Conference on African Development (TICAD). Chinese sources expressed dissatisfaction with Japan’s reluctance to commit itself to either the Regional Comprehensive Economic Partnership or its Belt and Road Initiative. Both sides continue to increase their military capabilities, even as bilateral trade remained strong despite economic woes in both countries. Difficulties have arisen in drafting a so-called fifth communique that is to be signed during Xi’s long-delayed state visit to Tokyo, for which a date has yet to be announced. Even should the visit take place, it remains to be seen whether substantive breakthroughs can be achieved in such perennial frictions as the territorial status of the islands disputed between them, Japanese nationals detained in China, human rights concerns involving Xinjiang and Hong Kong, trade issues, and war guilt.replicas of the originals as well as repair past substandard efforts.