World
A Dose of Vitality
Successful cooperation in third-party markets will give impetus to ties between Japan and China
By Yasushi Ito  ·  2018-11-05  ·   Source: | NO. 45 NOVEMBER 8, 2018

The first Forum of China-Japan Cooperation on Third-Party Market Cooperation is held in Beijing on October 25 (VCG)

Japanese Prime Minister Shinzo Abe's visit to China in October, the first by a Japanese government head to China since 2011, indicates that Japan-China ties have returned to the right track.

In addition to a host of major outcomes, the Japanese and Chinese governments reached consensus on third-party market cooperation. During his meeting with Chinese President Xi Jinping, Abe said the China-proposed Belt and Road Initiative is promising and expressed Japan's willingness to beef up cooperation with China in wide areas, including the exploration of third-party markets.

The Belt and Road Initiative focuses on strengthening economic ties, promoting connectivity of policies, and boosting academic, cultural and personnel exchanges. It envisions a diversified and inclusive economic network and has attracted wide attention from the international community.

Since the second half of 2017, the Japanese Government has shifted the focus of its policy toward supporting the Belt and Road Initiative by participating in it. Against this backdrop, the projects jointly launched by Japan and China in third-party markets have become highly pivotal to Sino-Japanese economic relations, showing the good momentum of bilateral ties.

Long-term vision needed

Still, concerns and even negative reactions to the Belt and Road Initiative based on individual cases have loomed up in the international community. Some view it as a "debt trap" set by China and an instrument to promote "neo-colonialism" and "new imperialism." In Japan, according to a recent survey conducted by The Nikkei, many white-collar workers believe the Belt and Road Initiative is more military than economic in nature.

This year marks the fifth anniversary of the Belt and Road Initiative since it was first proposed. However, the initiative, which comprises the overland Silk Road Economic Belt and the 21st-Century Maritime Silk Road, was put into practice only three years ago.

It aims to strengthen the economic and trade relations between China and other developing countries and emerging markets. For example, China and many African countries are strengthening their medium- and long-term economic relations under the framework of the initiative. The significance of the initiative can be gauged only from a long-term perspective. What really counts is how China and Southeast Asia, Africa and the Middle East can strengthen partnerships after one or two decades.

Moreover, China and other emerging countries will inevitably bear various risks in the process of launching projects such as bad debts. The Chinese Government and companies entering overseas markets are exploring appropriate financing and lending practices and accumulating project construction experience, which will take a long time.

In the late 20th century, Japan carried out many investment projects in several Southeast Asian countries in the form of official development assistance (ODA) after it entered a phase of rapid economic growth. Although the Japanese ODA program was widely criticized by the international community and faced opposition from local people in some countries, the negative comments gradually faded away through Japan's protracted efforts.

It is therefore important to evaluate the Belt and Road Initiative from a long-term perspective and promote the drive in an all-round manner. A major criterion should be how the Belt and Road projects perform after a decade, especially how local people can benefit from the development opportunities brought about by investment from China. The criticism of the initiative will vanish as long as the launched projects prove conducive to economic development of the host countries.

A man displays Chinese sugar painting skill on the 2018 China Festival in Tokyo on September 8. The event is a fair that presents Chinese cuisine, specialties, culture and entertainment to the Japanese people (XINHUA)

Rule-based cooperation

Before the Belt and Road Initiative was launched, Japanese and Chinese enterprises already had de facto cooperation on projects in third countries such as a thermal power plant in Kazakhstan. According to the Kazakh Government, the gas turbines manufactured by Hitachi were suitable, while the cooperation between Japanese and Chinese companies reduced costs. Numerous similar cases prove it is more feasible for Japanese and Chinese companies to jointly carry out projects in third-party markets.

The Belt and Road Initiative has attracted a great number of companies and organizations through diverse projects. As the most institutionalized and internationalized organization related to the initiative, the Beijing-headquartered Asian Infrastructure Investment Bank (AIIB), a multilateral development lender established in January 2016, has clarified its intention of developing into an international institution. By May 2, 2018, the AIIB had 86 member states. It is feasible for Japan to participate in the Belt and Road Initiative by becoming a member of the AIIB.

Japan-China cooperation in third-party markets still has many obstacles to overcome. Some of the Belt and Road projects may carry no market value or may have even been called off due to transfer of power between rival parties in the host countries. Since projects launched by specific leaders or administrations solely can lack sustainability in the medium and long term, communication and negotiation between enterprises on both sides is required.

Looking ahead

This year marks the 40th anniversary of China's reform and opening up and the signing of the Japan-China Treaty of Peace and Friendship. In the past 40 years, the Chinese economy has achieved market-oriented and rapid growth based on the fundamental policy of reform and opening up. Japan and China have also maintained an overall peaceful relationship and made considerable progress in economic and cultural exchanges.

However, the tension caused by disputes over territorial and historical issues is still alive despite the thaw in bilateral relations.

According to Japanese media reports, the Japanese and Chinese governments are discussing signing a fifth political document. The earlier ones are the 1972 Sino-Japanese Joint Statement, the 1978 China-Japan Treaty of Peace and Friendship, the 1998 China-Japan Joint Declaration, and the 2008 joint statement on advancing strategic and mutually beneficial relations.

The new document, which is supposed to define the bilateral relations in the next 40 years, would assist both countries to seek consensus under a more institutionalized framework, reach a common ground vis-à-vis pending issues, and jointly contribute to an open global economic system. To achieve these goals, the leaders of both countries still need to put in more thoughts and efforts.

The author is an associate professor with the Institute of Social Science, the University of Tokyo. The article is based on an exclusive interview published in People's China, a magazine in Japanese

Copyedited by Sudeshna Sarkar

Comments to yulintao@bjreview.com

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