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China-Japan -- the cold thaw

While Abe's ties with Trump are tense, Xi offers few acceptable alternatives

| Japan
A thaw of convenience? Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping in Beijing on Oct. 26 (Photo by Konosuke Urata)

Japanese Prime Minister Shinzo Abe's recent visit to Beijing for a summit with Chinese President Xi Jinping -- his first since taking office nearly six years ago -- was designed as a display of mutual respect, if not friendship.

But the politically orchestrated thaw coinciding with the 40th anniversary of Japan's diplomatic recognition of the People's Republic of China is, at best, a halfhearted suspension of a long-term feud.

The two countries have merely temporarily set aside their deep-rooted mutual suspicions in a tactical response to U.S. President Donald Trump's foreign policy, including his trade war with China. It is most unlikely to prove a historic turning point.

China has a great interest in splitting the U.S.-Japan alliance. However, Beijing does not seriously believe it can drive an effective wedge between Tokyo and Washington over security. So, it is instead focusing on economic ties -- and betting Japan will see that interests are so intertwined with China that Abe will try to limit the economic damage of Trump's trade war.

Japanese companies had a cumulative investment sum of $118 billion in China at the end of 2017, mostly in manufacturing. Direct investments in manufacturing cannot easily be withdrawn, unlike those in services, or portfolio investments.

Japan has tried to diversify its investment destination after anti-Japanese riots in Chinese cities in 2012 following the government's purchase from a private owner of the disputed Senkaku Islands, which are claimed by China. But this diversification drive has not seriously reduced Japanese exposure to China's possible economic and social disruptions. So, the U.S.-China trade war puts Japanese companies at grave commercial risk, compounded by the impact of a possible yuan plunge, and the danger of the destruction of Japanese property in the event of more riots.

The resumption of the bilateral currency swap -- after the last lapsed in 2013 -- was billed as a sign of cooperation but its main purpose for Tokyo is protecting Japanese businesses in China.

Abe has been frustrated by the unpredictable turns in Trump's North Korea policy. The outcome of the U.S. president's planned second summit with North Korean leader Kim Jong Un is uncertain, after the first meeting produced unclear results.

But China is little help to Tokyo in this diplomatic tussle. The U.S. currently appears vulnerable to North Korea's global peace drive and call for the early lifting of the sanctions that Washington so painstakingly organized.

But China, together with South Korea, is sympathetic to Pyongyang's effort to move faster on sanctions. Japan has no choice other than to stand by the U.S. and lobby against premature lifting of the sanctions without "complete, verifiable, irreversible disarmament" as Washington demands, and without some resolution of its own key issue -- the Japanese abductees allegedly snatched by the North.

Japan is at risk at both ends of the diplomatic spectrum. A disastrous turn in the U.S.-North Korea talks could provoke a war where Japan would be in the front line. Meanwhile, a soft U.S. compromise that allowed the North to retain some nuclear and short-range missile capability would leave Japan vulnerable even if it made the -- more distant -- U.S. mainland safer.

Either way, Japan would only increase its dependence on collective defense with the U.S. There is not a chance of a diplomatic opening for China.

Meanwhile, China and the U.S. remain Japan's two biggest trade partners. Tokyo's long-standing aim has been to emmesh both the U.S. and China in a liberal global economic order, with World Trade Organization rules for trade. Now, with Trump abandoning U.S. leadership in the global liberal economic order through his America First approach, some experts argue Japan is the last protector of this order.

But filling America's shoes is hardly possible. At the policy level, Japan has skillfully salvaged the Trans-Pacific Partnership after the U.S. pullout, but generating momentum for similar future pacts will be much harder without Washington.

At the more immediate level of the trade war, Tokyo is in no position to challenge Trump. The conflict is a lose-lose game, in which the U.S. puts up with some losses (such as higher import prices on some goods) for the aim of causing greater losses for China. But Tokyo cannot interfere and wave the free trade flag -- the cost of antagonizing Trump by putting Japan's economic interests before U.S. strategy in this way would be too high.

All Tokyo can hope for in its current bilateral talks with Beijing are a few pragmatic gains from modestly reduced tariffs in China. In theory, the fact that Japan is now in trade negotiations with Beijing -- albeit with South Korea in a trilateral process -- should deter the U.S. from making overly unreasonable demands of Tokyo. But in practice, Japan cannot play the China card without enraging Trump. The fact that Abe's Beijing trip did not bring any commitments to an early conclusion of the negotiation with China and South Korea shows how modest are the Japanese prime minister's options.

Moreover, Abe, like his predecessors, remains a prisoner of geography and history. His visit to China did nothing to narrow the bilateral dispute on boundaries in the East China Sea. Nor did it close the gap on interpretations of modern Northeast Asian history, especially the Second World War.

The negotiations toward joint development of the Chunxiao/Shungyo gas field which possibly stretches into disputed waters near the median line between China and Japan, which the two countries promised to resume, were quickly suspended in deadlock.

China is not abandoning its "history card" for hitting Japan with war-related nationalist assaults. Indeed if Xi feels his effort to reinforce his authoritarian power -- or counter possible social unrest in the coming economic slowdown -- needs bolstering, it will be tempting to whip anti-Japanese sentiments once more.

For Xi, it was important to be able to tell the domestic audience that it was Abe who blinked first in the bilateral freeze -- by coming to Beijing. But the Chinese president did not respond with the gesture that Tokyo has long awaited -- and accept a long-standing Japanese invitation to Tokyo. His answer to Abe was an uncommittal "seriously consider."

So all Japan's prime minister got for his trouble was the chance to put in a good word for Japan's economic interests. This is less of a reflection of his personal diplomatic skills than Japan's enduring political weakness.

Yoichiro Sato is a professor at Ritsumeikan Asia Pacific University.

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