China and Japan pledge to take their relationship in ‘new historic direction’

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Summary

Japan prime minister Shinzo Abe and China President Xi Jinping met in Beijing to discuss trade deals, which highlighted the improved relationship between the world’s second- and third-largest economies.

The visit brought multibillion-dollar deals and strengthened the economic and financial ties between the two countries. Abe is accompanied by 500 business representatives, and deals worth $18 billion were signed by companies from both sides. Central banks in Japan and China also signed a three-year credit swap agreement that allows $30 billion currency exchanges between them, making it easier for banks to facilitate trade. Other deals regarding elderly care and securities market are also achieved. China and Japan also agreed on joint development in Southeast Asia and to promote a Chinese-led regional trade deal called the “Regional Comprehensive Economic Partnership”.

The agreements indicated both leaders’ concerns about their economies. As the trade war with the United States exacerbating and President Trump’s tariffs adding burdens to its cooling domestic economy, China is trying to lessen its exposure to the American market and explore new economic ties. And Japan, in addition to worrying about becoming collateral damage in the trade war, appreciates China’s market. The 250 million middle class in China would supplement the shrinking domestic market in Japan and provide tantalizing opportunities to Japanese businesses. Based on reasons above, these two countries put away previous tensions caused by the territorial dispute and try to seek common ground for mutual interest.

The partnership, not surprisingly, does not come with entirely trusting. While Japan worried about China dominating the region, China remains suspicious about Japan’s intention to revise the pacific constitution. Moreover, the tightened bond between China and Japan might upset the U.S., where the Trump administration hopes to isolate China in the trade war and have European Union and Japan on its side. However, leaders from both China and Japan have decided to take a pragmatism attitude and are making an effort in boosting mutual interest.

 

 

 

China and Japan pledge to take their relationship in ‘new historic direction’

 

The leaders of China and Japan vowed Friday to open a new chapter in their often-fraught relationship and strengthen financial and trading ties between the world’s second- and third-largest economies. BEIJING —

The pledge, accompanied by multibillion dollar deals, comes as China is mired in a protracted trade war with the United States, the world’s biggest economy and Japan’s most important security ally.

It underscored Chinese president Xi Jinping’s efforts to lessen his country’s exposure to the American market, but also noted a certain amount of pragmatism from the Japanese prime minister, Shinzo Abe.

“From competition to coexistence, Japanese and Chinese bilateral relations have entered a new phase,” Abe told reporters in Beijing after meeting with China’s top two leaders. “With President Xi Jinping, I would like to carve out a new era for China and Japan.”

Xi also struck a remarkably upbeat note about the neighbors’ relationship, saying they should move in a “new historic direction” by working together at a time of growing global “instability and uncertainties.”

“Sound and stable development of China-Japan relations would fundamentally benefit the people of both nations, and that is something that the regional and the international community want,” he said.

This was their first official meeting in seven years and was a sharp departure from their last encounter in Beijing, on the sidelines of a multilateral forum in 2014. Then neither Abe nor Xi could muster the faintest hint of a smile and they could hardly wait to get their handshake for the photographers over and done with.

That visit came during the days of a heated territorial dispute that brought the countries to the brink of military conflict.

That dispute, over a set of islands controlled by Japan, has not been resolved. But this year, on the 40th anniversary of the Sino-Japanese friendship treaty, the two leaders are finding a way to put their differences behind, superficially at least.

Abe was treated to a full red-carpet welcome by Premier Li Keqiang, inspecting an honor guard with him and being celebrated at a reception in the opulent Great Hall of the People.

This was accompanied by the somewhat startling sight of Japanese and Chinese flags flying together along the wide central boulevard between Tiananmen Square and the Forbidden City, fluttering in front of a huge portrait of Mao Zedong, the founding father of Communist China.

Memories of Japan’s aggression against China during the first half of the 20th century remain strong here.

Abe brought 500 business representatives with him, and Japanese and Chinese companies had signed deals worth $18 billion during the visit, Li said. He hailed as a sign of the “bright prospects” for the countries’ economic relationship.

Their two central banks also signed a three-year credit swap agreement that will allow them to exchange $30 billion worth of each others’ currencies, a measure that will make it easier for banks to facilitate trade between the two countries.

“Vigorous trade will bring the bonds between our people ever closer,” Abe said Friday.

They also signed deals relating to elderly care and the securities market, although details were vague. And they pledged to work together on joint developments in Southeast Asia and to promote a Chinese-led regional trade deal called the Regional Comprehensive Economic Partnership.

There is still plenty mistrust between the longtime rivals. For one, China is highly suspicious of Abe’s efforts to revise Japan’s pacifist constitution, and for another, Tokyo thinks Beijing is intent on regional domination.

But their focus on common interests reveals both leaders’ concerns about their economies.

China is trying to shore up other big markets — it is Japan’s largest trading partner — as President Trump’s tariffs begin to bite at the same time as the domestic economy cools.

And Japan is both concerned about becoming collateral damage in the trade war and about its shrinking market as its population ages rapidly. China’s middle class totals about 250 million people, double the entire population of Japan, representing a tantalizing opportunity for Japanese consumer goods companies.

This comity is likely to cause some discomfit in the White House, where the Trump administration has been seeking to punish China over unfair trading practices and encourage advanced economies like Japan and in the European Union to join it in loudly condemning practices like intellectual property theft.

 

 

Source: The Washington Post, Anna Fifield, Oct. 26, 2018. Photo credit to Kyodo News via ( AP) .