After almost two years of the election of Shinzo Abe as the Prime Minister of Japan, he and and Chinese President Xi Jinping met for the first time at a summit meet on the sidelines of the Asia-Pacific Economic Cooperation (APEC) gathering in Beijing on 10 November 2014. Shinzo Abe and Xi Jinping have deliberately avoided each other since coming to power. The rivalry between China and Japan over the islands in the East China Sea and other maritime and historical disputes have overshadowed huge economic exchanges and the dependence that both countries have on each other. Many have commented that if their foreign policy courses are not corrected, it would have a destabilising effect on the region. Thus, even though the meeting between Xi Jinping and Shinzo Abe lacked substance and was more symbolic, it has been appreciated as a positive gesture from both sides.
The second and third largest economies of the world have had strong disagreements on political, security and strategic issues for some time. In Asian politics, one is considered to be a rising power and the other also seeks to maintain its foothold and be more assertive. In an era when the Asian political landscape is a contested arena both for the countries (new and old regional powers) and for the models of inter-state relations (cooperative and balance of power), the bilateral relations between China and Japan have been and should be followed with keen interest.
The economic exchanges between the two countries have been one of the largest in the world but in the past few years, it has been a bit derailed by politics. It is said that the year 2010 was the turning point in their bilateral relations. This year, China replaced Japan as the second largest economy in the world and in September 2010 a crisis erupted when a Chinese trawler collided with Japanese patrol boats near the Senkaky/Diaoyu Islands. It has also been said that the incident was blown out of proportion because of some disputes related to the export quotas of rare earth minerals. While this may or may not be true it was definitely a new moment in Asian politics in which Japanese economic superiority was surpassed by China.
For almost two and half decades, Japan found solace in being the number one economy in Asia and number two economy in the world, despite a stagnant economic growth. It might be claimed that China catching up with Japan in the economic sphere was hard for Japanese people to accept and it was one of the factors, along with rising nationalism, that provided Shinzo Abe with the support for his assertive policy. Japan was probably uncomfortable to coexist with an economic equal in the neighborhood. When the Japanese government decided to buy three islands of the Senkaku/Diaoyu in September 2012, it led to a huge political and diplomatic crisis between the two countries. Strong posturing and words were exchanged and it severally affected their bilateral economic exchanges. These events affected bilateral trade and the Japanese investment to China has since gone down by almost 50 per cent in the first nine months of 2014.
Meanwhile, China has also been negotiating its future course, both external and internal, and how a stronger China would stand in Asian politics. There was a consensus that China should work for its ‘peaceful rise’ or economic growth rather than overtly making political and strategic assertions. In 2010, when the Chinese economy became the second largest economy in the world, the hawkish forces in China started demanding a more assertive China. The aggressive Chinese behaviour in the trawler collision incident, Senkaku/Diaoyu Islands disputes, South China Sea disputes, and declaration of ADIZ could be linked with pressure from Chinese political hardliners who want a more assertive China as they believe that China now has enough economic clout to sustain it.
By recasting China-Japan relations in this manner, it can be said that the change in economic equations between the two made them aggressive and assertive - one because of over-confidence and another because of a sense of loss. A military conflict between China and Japan is hard to visualise and the economic implications of the present bilateral rivalry have been bad for both the countries.
Thus, the meeting between Xi Jinping and Shinzo Abe might be an important course correction for mutual coexistence with an acceptance of the new realities by both China and Japan. It does not mean that political and security rivalry related to the future of Asia and their roles in it would be resolved once and for all. The way both countries made claims and counter-claims about the ‘agreed’ issues of the summit meet make it clear that it would be premature to say that it is a thaw in their relations. But it is definitely a new beginning in the contest of ‘who blinks first’.