The Sino-Japanese relations consist of contradiction, harmony and frictions as well as cooperation. As China's reform and opening-up drive enters the 31st year, one can say basically the "Japan factor" has had a positive and constructive overall impact on China's reforms.
There is no doubt China achieved fast development since it started the reform and opening-up by mainly tapping into its own strengths, which means the nation's "internal factors" have been the driving force behind the great success. At the same time it is also necessary to evaluate the role that foreign influences, or "external factors", have played in China's reform and openness. This article discusses the role the "Japan factor" has played in China's fast development since the reform began.
First, in the past 30 years of reform and opening-up the "Japan factor" has played a basically positive role in China's fast development.
When China launched its reform and opening-up, it badly needed a peaceful and stable surrounding environment that allowed it to focus on economic construction. It so happened that China and Japan signed the Peace and Friendship Treaty in the same year, which means the desire to end the "abnormal state" of bilateral ties between the two neighbors, or the "state of war", expressed in the China-Japan Joint Communiqu of 1972, officially became law. It also ushered in a new era of peaceful coexistence between China and Japan.
The significance of the Peace and Friendship Treaty also lies in the fact that the two nations reached a consensus on opposing hegemony, a concept that has worked positively for China to earn a perimeter of security around its territory.
Second, the Japan factor, out of all foreign influences, has been enjoyed top priority in China's economic exchanges with the outside world ever since the reform and opening drive started.
Non-official and "semi-official" trade between China and Japan began as early as the 1950s. And from 1966 to the mid-1980s Japan was China's No 1 trading partner for nearly 20 years. The following seven years saw Sino-Japanese trade overtaken by the country's trade with Hong Kong (under British rule at that time) in terms of total value.
In the 1990s a virtuous cycle in which bilateral trade and direct Japanese investment in China boosted each other took hold as direct investment in China by Japanese enterprises grew fast. Between 1993 and 2002 Japan regained and occupied the spot as China's top trading partner for a decade.
Not counting Hong Kong, Japan led China's foreign trade partners for 25 years out of the past 30 in terms of annual value and was replaced by the US only in the last five years.
The growth of China-Japan trade and investment in China by Japanese enterprises has made Japan the leading supplier of production technology to China on the one hand and a key export market for Chinese industries on the other. Meanwhile, China has become an important export market for Japan as well. The country's export to China in July 2008 surpassed that to the US for the first time and China is now the largest market for Japan's export trade.
This means the "Japan factor" has played a positive role in China's sustained development as well as reform and opening; while the "China factor" has become more important than ever to Japan's economic development. It also constitutes the vital foundation for the two neighboring countries to construct the strategic relationship of mutual benefit.
Third, the Japan factor served as the most important source of positive experiences and negative lessons for China as the latter learned from foreign countries' successes and failures in economic development.
During his visit to Japan in October 1978 Deng Xiaoping said: "China must admit it is way behind (industrialized nations). We must learn from developed countries in terms of science and technology and business management." As a researcher of the Japanese economy this author witnessed the "learn-from-Japan" craze that swept across China's mainland back then.
Fourth, the Japan factor for quite a long time topped other Western countries for supporting China's reform and opening-up as the world's most populous nation sought economic aid for its modernization drive.
Japan is the first country to provide economic aid to China after the latter began reform and opening-up. Between 1982 and 1986 China received more official development aid (ODA) from Japan than any other country did. In 2000 Japan's ODA for China accounted for 61.2 percent of the total foreign official aid China received that year.
The economic aid from Japan spurred bilateral trade and Japanese investment in China, which for a while increased energy resources export to Japan as a result. Providing ODA to China was apparently a "win-win" undertaking for Japan, which is considered fortunate because China happens to take its reputation very seriously and always kept its promises. After all, not every recipient of Japanese loans has repaid their debts as they promised.
Fifth, the Japan factor is still relevant today, after China has adopted the scientific outlook on development, in that it offers experiences and facilitates cooperation for win-win results.
In the 1990s calls for "drawing from Japan's experiences" gradually disappeared from the Chinese media as China's development reached new heights whereas Japan slipped into an economic trough. The desire to learn from Japan was replaced by aspirations for the sustained economic prosperity that the US achieved through the information technology revolution of the '90s and for the American way of consumption and lifestyle.
The US has many worthy experiences for us to learn. No doubt about that. However, when it comes to natural resources, land conditions, the status of the US dollar as an international currency and the desirable age structure of the nation's population, China is simply no match for America.
Both Japan and China suffer from a "genetic" deficiency of natural resources. Because of its lack of natural resources and high population density, Japan was the first Asian nation to feel the constraint from resources shortage, the environment and aging population after beating other countries on the continent in achieving fast economic growth. Therefore, how it managed to sustain economic development under all these constraints, be it success or failure, throughout the post-war era offers us plenty to study and cherish.
It must be noted that the fourth report presented by the United Nations Inter-Government Panel on Climate Change in November 2007 points out: Climate change is becoming a major threat to the eco-environment on this planet and sustainable development of the human society. As the problems with the global and regional environment become more pressing by the day, there is really not much scope left for China and Japan to let their relations suffer more disruptions.
Having established strategic ties between them in the 1980s, it is now time for the two neighbors to form the most important strategic partnership in the 21st century - joining hands in fighting environmental crises.
The author is a senior advisor to the National Society of Japanese Economic Studies.
(China Daily October 20, 2008)
