China-Japan trade booms despite irreconcilable differences -commentary


That amounted to the squaring of the circle for a man who forged a veto-proof parliamentary majority on a platform “Take Back Japan” (“Nippon o Torimodosu”), featuring the economic revival through aggressive monetary easing and an export-boosting cheaper yen, a tough line on territorial disputes with China and South Korea and an unacceptably idiosyncratic reading of Japan’s history to his Chinese and Korean neighbors.

Abe quickly ran into huge problems with Beijing and Seoul, but, following an apparent trade inertia driven by long-term contracts, and Japan’s strong sales efforts, exports to China held up well in 2013 and 2014. The worsening political relations caught up, though, and Japan’s China business went on a sharp decline in 2015 and 2016.

Japan, however, did not give up its quest of strong export sales to China against a background of flammable disputes. An unending flow of business and parliamentary delegations kept filing into Beijing seeking “cooperation and understanding,” while Abe tirelessly worked for elusive summits with his Chinese counterpart.

Eventually, China began to relent as hostile winds of trade and security were starting to blow across the Pacific after the U.S. presidential elections in late 2016.

So, Abe got some time with China’s President Xi Jinping in November 2017 on the sidelines of the Asia Pacific Economic Cooperation (APEC) meeting in the Vietnamese resort city of Da Nang.

“A fresh start,” both leaders agreed, with Xi insisting that “constructive steps” must be made to “appropriately manage and control disputes that exist between the two countries.”

Indeed. The disputes kept simmering despite a slew of high-level exchanges and empty shells of ritual incantations about mutual benefits from friendly and cooperative relations, while Beijing and Tokyo knew that they were making no progress at all on their irreconcilable differences.