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Rapprochement at APEC: Japan and China Trade Insults for Trade

Beijing.

Strange. A White House never shy about proclaiming its achievements, real or imagined, has been uncharacteristically reluctant to inform the world about one of its major successes.

Modesty? No, more likely those who toil on Pennsylvania Avenue were probably blindsided by the speed with which China and Japan overcame their mistrust and decided to trade insults for, well, more trade.

The rapprochement, occurred before the Papua New Guinea Apec summit that ended in rancor after its failure to produce a joint communique because of tensions between the United States and China over trade and security issues. This was the first time that Apec leaders were unable to agree on a formal written declaration. Officially, this was because the US wanted the declaration to call for the World Trade Organization to be reformed putting China in the position of championing the status quo. Unofficially, the two countries view each other with growing mistrust. They were never going to agree.

Both view the Indo-Pacific region as their battleground. At the moment the battle is for ideas and influence but could at some future date live up, literally, to its description.

Mike Pence, the US vice-president demanded at Apec that China “change its ways” on trade, intellectual property and human rights, and ridiculed Chinese President Xi Jinping’s “one belt, one road” multinational infrastructure initiative as a “debt trap” for the greedy and unsuspecting.

But Xi will not be too bothered. Unlike Barack Obama, who “pivoted” to Asia, China realises Trump is pivoting on the golf course. His commitment to Asia is less than wholehearted.

No one knows this better than Xi who has gone out of his way to improve relations with Japanese prime minister Shinzo Abe.

At the end of October Abe was wined and dined by Xi after an elaborate reception at the Great Hall of The People in Beijing. It was of huge significance.

It is not an exaggeration to say that these two countries came close to conflict on a number of occasions in the past six years over disputed islands. Neither was it unusual, especially at this time of year, for anti-Japanese criticism to be given full volume in China as the anniversary of the Nanjing Massacre approaches.

The massacre and mass rape occurred in Dec 1937 and the first indications that a new diplomatic front was being opened appeared last December when the level of anti-Japanese commentary in the Chinese media was far less than in previous years. We know now that discussions were well underway for Abe’s visit and that there would be no repeat of his visit in 2014 when Xi did nothing to hide his displeasure, distaste even, at shaking Abe’s hand in front of the world cameras.

So, why the shift?

With the clogging of the trade pipes to the US it was vital that China locks in and secures Japanese trade, not least its supplies of precision tools and know how. No one in Beijing expects ties with America to improve any time soon, regardless of the press releases focusing on a common future, win-win situations, the usual guff, that are bound to emerge from the G20 in Buenos Aires next month.

Japan too, is feeling bruised by Washington. When Trump came to office he withdrew the US from the Trans-Pacific Partnership. This trade agreement, covering 12 countries would cement US involvement in the area. And Trump has treated North Korea and Russia as erstwhile friends while shunning or criticizing America’s proven allies.

But doesn’t Abe risk being crushed by the panda’s embrace?

Japan wants to invest. Its central bank is sitting on assets greater than the value of the Japanese economy. It needs to place it somewhere and China Belt and Road is crying out for Japanese cash and expertise.

Greater investment opportunities in China will lessen maritime tensions but not so much that Japan’s defense budget of $46 billion approx will stall for the first time in seven years. The hawks in Tokyo are happy. From Beijing’s viewpoint, Apec does not matter, at least not that much. Washington is distracted, its allies in the region are not exactly putting up a united front and better relations with Japan and an increase in investment from Tokyo are a real possibility. Early skirmishes on the new battleground of the 21st century are going well for China.

More articles by:

Tom Clifford is a freelance journalist and can be reached at: cliffordtomsan@hotmail.com.

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