Chinese leadership is playing Russian roulette with its Japan issues.
The situation is murky as always in China. But a section of the Chinese leadership seems to believe threats and mob violence against Japanese diplomatic and business establishments in China can bring the Japanese to heel on a variety of issues. Beijing is counting on the leftwing Japanese media and a pacifist electorate inclined to accept Chinese bonafides to help
The campaign is directed by Chinese security forces. The fact it has gotten out of hand, and controlled media is trying to rein it in suggests there is divided council atop China's cliquish and opaque policymaking mechanism.
Of course, Beijing has issues with Japan. But past history, textbooks, and Japanese Prime Minister Junichiro Koizumi’s visits to the Japanese military memorial, the Yasukuni Shrine, are not the hot button items for policy makers. They are used to fire up university students – trucked in to the demonstrations, and told on cue when to leave. This Chinese regime, heir to a Communist past costing millions of Chinese lives, can hardly take the high moral ground against past Japanese atrocities. It has yet to account to the world for mowing down innocent, unarmed students and workers in Tiananmen Square. Insufficient Japanese apologies, or grudging textbook admissions, are more than has come from Prime Minister Wen Jiabao, political commissar of the Beijing garrison in 1989.
One set of issues is economic. Japan is pursuing economic self-interest as only the Japanese can. It is cutting off Japanese official development assistance [ODA] — grants, concessionary lending, free tech transfer and assistance — which poured into China for years, in part as an admission of the hurt Japan inflicted in decades of aggression. [Chiang Kai-shek, China’s Nationalist leader with his long association and knowledge of the Japanese, refused reparations, believing that economic collaboration would be best for China.] That Japanese aid is not been trivial: in 2004 it came to almost a $1 billion.
Meanwhile, Japanese trade with China has gone from heavy deficits to virtual balance, with every possibility Beijing will soon be running a deficit with Tokyo. Furthermore, Japan’s growing exports to China are largely components for Japanese companies who reexport the assembled product to Japan and third country markets. They keep coastal China’s factories busy [along with similar American, Taiwanese, Korean and European multinational operations]. But the Chinese content is only cheap labor and energy now increasingly imported at higher prices.
While Japanese trade with China is booming [China has now outstripped the U.S. as the No. 1 partner], direct investment may have peaked. Japan is third after the U.S. and Taiwan. And in some areas – like automobiles where foreign investors are running into a glut and lower profits — the Japanese are pulling back. Furthermore, while the Japanese are happy enough to use cheap Chinese labor, they are quietly taking a tougher line on technology transfers and intellectual property rights, increasingly pulling state-of-the-art facilities back in Japan.
Quietly, across the board, the Japanese are stiffening their line on issues China is most interested in influencing. The Japanese are moving slowly to shut down the North Korean economic exchanges, after China’s trade and aid, Pyongyang’s lifeline. That is going to put the onus more and more on Beijing in any effort to curb North Korea’s pursuit of weapons of mass destruction. The Japanese public endorsement of Washington’s line on Taiwan [one China yes, but pledged to see that it is put together peacefully] is anathema to Beijing, of course. It is one thing for the powerful Americans to take that line but not “the hairy little dwarfs in the Eastern Sea”. Meanwhile, in virtually every aspect the U.S.-American military integration proceeds apace and Japanese strategists publicly have identified China as a potential enemy.
China’s propaganda offer for free trade agreements with the ASEAN countries has been countered by traditionally protectionist Japan offering to raise Beijing’s bid — more realistically offering to negotiate bilateral FTAs as it has done with Mexico, and seems on its way to doing with several Southeast Asian countries. For all their talk of satisfaction with higher commodity and component sales to China — no one in Southeast Asia [Australia take note] is going to sign on to naming China as a “market economy’ under World Trade Organization rules and get swamped with cheap manufactures, some dumped through currency manipulation.
What is frightening about this display of Chinese policy run amuck is it suggests Chinese leadership may be suffering from hubris brought on by the kowtowing the world has recently displayed at the Forbidden City. [France’s Jacques Chirac, for example.] Nobody knows better than Communist Party leadsership that public demonstrations, even those initiated by the security apparatus, can get out of hand in a police state like China. In a society with no escape valves and so much corruption and repression, they could easily turn on the government itself.
Playing with this social dynamite suggests either turf battles have again got out of hand in Beijing or some leaders are willing to take big risks in a dangerous world. Neither nor both possibilities are happy thoughts.
Sol W. Sanders, (solsanders@comcast.net),
is an Asian specialist with more than 25 years in the region, and a former correspondent
for Business Week, U.S. News & World Report and United Press International.
He writes weekly for World Tribune.com.
