Published daily by the Lowy Institute

Japan-China: A winter's tale

Japan-China: A winter's tale
Published 8 Feb 2013 

During the Koizumi prime ministership, China depicted Japan-China relations as 'politics cold, economy hot', with Japanese FDI inflows into China a key warming agent. Liberal optimists have repeatedly represented this situation as inherently moderating (Sam's brief response to Raoul Heinrichs also touches on this argument).

The belief that cooperative economic interests will trump divisive political and security ones is certainly under test at the moment, particularly with Beijing's willingness to politicise the Japan-China economic relationship.

More worrying for this central liberal belief, Japan-China political tensions and Japanese business concerns about China are cooling Japanese interest in the Chinese market. This December 2012 internet survey of the Japanese business community tells a bracing tale. Only 14% of those surveyed view China as 'an essential production base for Japan' while 77% (roughly 5 times as many) see that China 'has been an essential production base up to now, but will not remain so in the future.' 61% of the business people polled believe that the Chinese economy will fall into disorder within 5-10 years. 

Today, it is better to think of Japan-China relations as 'politics freezing, economy cooling'.

Photo by Flickr user vivafilmsky.

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