China-Japan relationship thaws, but elephants remain in the room

Tokyo

WHEN Shinzo Abe took office six years ago, it would have been unthinkable for China's leaders to roll out the red carpet for him. The Japanese premier can thank US President Donald Trump for the turnaround.

Mr Abe heads to Beijing this week to celebrate the 40th anniversary of a peace-and-friendship treaty between the Asian powerhouses, which have a long history of bad blood due in part to Japan's colonial invasions of China and atrocities committed during World War II. He will meet Chinese President Xi Jinping on Friday as part of the first bilateral visit by a Japanese leader in seven years.

The slow warming of ties between the neighbours has sped up since Mr Trump attacked them both on trade. Although Japan's alliance with the US keeps the nation in lockstep with Washington on most geopolitical issues, Mr Abe has moved to shore up economic ties with China - its biggest trading partner.

Mr Xi, in turn, sees Japan as a way to mitigate the risk of a trade war with the US.

China's Ministry of Commerce spokesman Gao Feng said last week: "Economic-and-trade cooperation is the ballast and propeller of the China-Japan relationship, laying the keystone for the mutual political trust."

Mr Abe is to bring a 500-strong business delegation with him to discuss cooperation in third countries, as pledged during Chinese Premier Li Keqiang's visit to Japan in May. The two sides will look to revive a currency swap framework dormant since 2013, and possibly progress toward an agreement on loans of giant pandas, said media reports.

They are also both pushing for a quick conclusion to Regional Comprehensive Economic Agreement, a trade deal involving 16 countries in the Asia-Pacific. The South China Morning Post reported this month that Beijing was also looking into joining the successor to the Trans-Pacific Partnership, which Japan pushed to complete after the US pulled out.

Mr Abe vowed in a speech to parliament on Wednesday to raise the relationship with China to a higher level through regular leaders' visits and business cooperation.

Gui Yongtao, an associate professor at Peking University's School of International Studies and a specialist in Chinese-Japanese relations, said: "We haven't solved our problems with Japan. But these are much less prioritised than the US risk. We still don't know what will happen with US policy towards China."

Still, for all the goodwill, formidable historical barriers remain to improved ties - none bigger now than territorial disputes. Tensions flared in 2012 - the year Mr Abe took power - when Japan bought part of an uninhabited chain of East China Sea islets disputed with Beijing, sparking sometimes violent protests in China, sending relations to arguably their most hostile since World War II. The islands are known as the Senkaku in Japan and the Diaoyu in China.

Ships from both countries continue to chase one another in the area; Japan made a formal protest over a Chinese incursion into what Japan considers its territorial waters just last week, broadcaster NHK reported. On its part, Japan held military drills involving a submarine last month in the South China Sea, where China has staked extensive territorial claims.

Defence chiefs from China and Japan last week agreed on more military exchanges and a hotline to avoid unintended clashes. But at their first meeting in three years, Japanese Defence Minister Takeshi Iwaya criticised China over its activities in the South China Sea; another Japanese government official said there would be no real improvement with China unless tensions further north in the East China Sea stabilise.

Territorial issues are a major reason why the Japanese public has one of the world's most negative views of China, said the Pew Research Center. Even as China's impression of Japan has recovered from the 2012 crisis, thanks partly to tourism, the Japanese have remained wary.

Yuichiro Tamaki, the leader of an opposition party, said that even some younger lawmakers in Mr Abe's ruling Liberal Democratic Party are cautious about the relationship. "There are few in the younger generation who want to be friendly with China," he said in an interview, adding that his own party favoured linking up with Beijing when appropriate.

And while Japan has been critical of Mr Trump's policy of slapping tariffs on China, Mr Abe's government shares some US concerns on trade and investment. Japanese Trade Minister Hiroshige Seko, who will be on the trip, is working with the US and Europe on proposals to address problems caused by state enterprises and forced technology transfers.

Even so, Mr Abe's visit cements a general warming of ties - and opens the door for Mr Xi to visit Japan as soon as next year.

Kunihiko Miyake, a former Japanese diplomat who is now visiting professor at Ritsumeikan University, said: "Nobody thinks ties with China have completely recovered, and they shouldn't think that. We're now in an era where having both sides make an effort to keep friction to a minimum is what we have to call 'good ties'." BLOOMBERG