Speaking Of Asia

Sino-Japan ties set for thaw?

Both worry about American President Donald Trump's unpredictability, and both want to do business with each other.

Has it indeed been five years since Tokyo decided to nationalise the Senkakus, a move that sent Japan's ties with China, which refers to the islands as the Diaoyu, into a tailspin?

The anniversary passed on Sept 11, largely unnoticed, and perhaps that's not a bad thing. Sino- Japanese ties have seesawed over the decades but several pointers suggest that the two are working to climb over the latest trough.

In May, Japanese Prime Minister Shinzo Abe asked one of his most trusted political allies, Liberal Democratic Party secretary-general Toshihiro Nikai, to carry a personal letter for President Xi Jinping. The contents of that note can only be guessed at but the gesture was immediately reciprocated. State Councillor Yang Jiechi, who has emerged as a key henchman for Mr Xi, flew to Tokyo for discussions with Mr Abe, then Foreign Minister Fumio Kishida and a meeting that caught everyone's eye- a full five hours with National Security Adviser Shotaro Yachi.

A few days later, Mr Abe, who earlier had directed his government to join the US boycott of the China-sponsored Asian Infrastructure Investment Bank, adopted a more nuanced approach to Mr Xi's Belt and Road Initiative, better known as the One Belt, One Road plan. The BRI, he said, could be a "landmark" initiative.

There have been some other mutual gestures. Last week, observers took note that unlike the previous two annual Japan-India summits, the joint statement issued at the end of Mr Abe's hugely successful trip to India avoided explicit mention of the South China Sea, even as it spoke of freedom of navigation and overflight.

THE TRUMP FACTOR

An Abe-Xi summit is all but certain to take place within the year and there is a lot driving it. A prime factor, no doubt, is the worry each has over the mercurial and unpredictable US President, Mr Donald Trump.

Japanese officials who are tasked with maintaining the vital US-Japan alliance put on a brave front, waxing lyrical over the several contacts Mr Abe and Mr Trump have had since the latter's stunning victory last November, including the latest one this week. They say that the Trans-Pacific Partnership pullback aside, US policy towards the region has been fairly stable and claim to place their trust in the wisdom and expertise of key staff such as Defence Secretary James Mattis and National Security Adviser H.R. McMaster.

Still, there is unexpressed worry about a slate of things, including the durability of the US nuclear umbrella under which Japan has managed to hold down its defence spending, not to speak of trepidation that Mr Trump would yield to Beijing on Asian maritime issues, particularly a free pass in the South China Sea.

As one senior Japanese official told me in Tokyo recently, the freedom of navigation operations conducted by US warships in the region, while no doubt valuable, are, at the end of the day, just operations. They do not amount to a South-east Asia policy.

Japan has been taking a keen interest in the South China Sea issue because it sees developments there impacting its own troubles with China and South Korea in the East Sea. For this reason, the last thing Japan wants to see happen is a US-China deal on maritime issues without Tokyo being in the loop.

Beijing is wary too of Mr Trump, although it perhaps approaches the real estate tycoon with a bit more self-confidence than Tokyo seems to show around him.

Still, there is little question that it is skittish about the developing US-Japan-India-Australia strategic compact. Hitching itself to the US apron, Tokyo has been assiduously developing strategic ties with both New Delhi and Canberra, and is eager for Washington to move faster on the Vietnam account, where it would itself like to follow.

At their trilateral meeting last month, held on the sidelines of the Asean foreign ministers' meeting in Manila, Japan held out forcefully for the US and Australia to join it in urging South-east Asia and China to ensure that a code of conduct being drawn up for the South China Sea will be "legally binding, meaningful, effective and consistent with international law".

That statement went on to voice "strong opposition to coercive unilateral actions that could alter the status quo", a message aimed unmistakably at China.

Aside from working to cool Japanese ardour to build up this budding quadrilateral alliance - Tokyo is now one of the most enthusiastic endorsers of the "Indo-Pacific" concept spawned by the US Pacific Command - Mr Xi must surely see other good reasons for making nice with Mr Abe.

For one thing, it is obvious that the Chinese President, as he settles down for the next five years, and perhaps even beyond, is not the only durable-looking leader in his neighbourhood. Mr Abe has shown surprising resilience himself and looks likely to extend his domination with a snap election that could be announced as early as upon his return from the annual UN General Assembly meetings currently being held in New York.

Also, it is obvious that not expecting to be given a second shot at power after he resigned his first term on account of poor health, Mr Abe is determined now to leave a lasting imprint on his nation, just as Mr Xi himself is with his own country.

It is clear too that while Japan is indeed concerned about Chinese assertiveness in the Asian region, it does not see the mainland as a "threat" on the same lines as it sees North Korea. Conversely, Beijing perhaps judges Mr Abe to be less of a revisionist than it had initially thought him to be. Far better for both then to build a good working relationship even if warmth is some distance away.

MONEY AND MARKETS

Beyond strategic issues, economics is also playing a hand.

China's convulsive anger over the nationalisation of the Senkakus proved so blinding that among the Japanese factories on the mainland that were attacked by mobs was the Panasonic plant in Shandong. Yet, four decades ago, it was Panasonic owner Konosuke Matsushita, reacting to a direct request from Deng Xiaoping, who had led large-scale Japanese investment on the mainland, predicting that the 21st century would be "the era of Asia, including Japan and China". Panasonic continued to invest in China even when it was in the global doghouse over the Tiananmen Square incident.

Japanese companies are now actively looking away from China and towards Asean and India. With foreign direct investment inflows sliding - Singapore has emerged as the top FDI source for China - it makes little sense for China to present a hostile environment for Japanese investors, who, for their part, are acutely aware of the imperatives of continued access to the Chinese market.

Just take tourism. Chinese accounted for 27 per cent of the 24 million visitors Japan received last year. While their spending has eased somewhat lately - the Japanese coined the term "bakugai" (explosive spending) for them - Chinese still account for an estimated 40 per cent of the 1.48 trillion yen (S$18 billion) that tourists in Japan spent last year.

This is not to suggest that a new dawn for Sino-Japanese ties is on the horizon. Mutual suspicions abound, and will not go away in a hurry.

This week, China Post of Taiwan reported that the Japan Coast Guard will strengthen its training system for JCG officers stationed on Miyakojima island in Okinawa prefecture, a base for the defence of waters around the Senkaku islands. The JCG plans to set up its first shooting range in the nation's remote islands in 2019, according to China Post. It also plans to conduct training simulations for detaining the crews of Chinese fishing boats that have intruded into Japan's territorial waters.

For its part China has increased the number of Coast Guard vessels on regular patrol around the Senkakus/Diaoyu from three to four. The Japanese complain that maritime intrusions have been more frequent as well, that China has been doing energy exploration closer to the medium line and that its air defences are being probed at a rate not seen in more than a decade. On the other hand, Chinese public rhetoric on Japan has not been as hard lately as it used to be.

Clearly, not all of the mutual suspicions will evaporate; nor does anyone expect Mr Xi and Mr Abe to be carving each other's names on their favourite trees. But, as long as they have an honest dialogue, and agree not to aggravate each other's insecurities, there is reason for some cheer.

A version of this article appeared in the print edition of The Straits Times on September 22, 2017, with the headline 'Sino-Japan ties set for thaw?'. Print Edition | Subscribe