Fear of Trump Helps Bring Rivals China and Japan Closer Together

(Bloomberg) -- When Shinzo Abe took office six years ago, it would've been unthinkable for China's leaders to roll out the red carpet for him. The Japanese prime minister can thank U.S. President Donald Trump for the turnaround.

Abe heads to Beijing this week to celebrate the 40th anniversary of a peace-and-friendship treaty between the Asian powerhouses, which have a long history of bad blood due in part to Japan's colonial invasions of China and atrocities committed during World War II. He'll meet Chinese President Xi Jinping on Friday as part of the first bilateral visit by a Japanese leader in seven years.

A slow warming of ties between the neighbors has accelerated after both found themselves under attack from Trump on trade. Although Japan's alliance with the U.S. keeps the nation in lockstep with Washington on most geopolitical issues, Abe has moved to shore up economic ties with China -- its biggest trading partner. Xi, in turn, sees Japan as a way to mitigate the risk of a trade war with the U.S.

“Economic-and-trade cooperation is the ballast and propeller of the China-Japan relationship, laying the keystone for the mutual political trust,” Chinese Ministry of Commerce spokesman Gao Feng said last week.

Abe is preparing to bring a 500-strong business delegation with him to discuss cooperation in third countries, as pledged during Chinese Premier Li Keqiang's visit to Japan in May. The two sides will look to revive a currency swap framework dormant since 2013 and possibly progress toward an agreement on loans of giant pandas, according to media reports.

Read: China Looks to Historic Foe for Lessons on Handling Trump

They are also both pushing for a quick conclusion to Regional Comprehensive Economic Agreement, a trade deal involving 16 countries in the Asia-Pacific. The South China Morning Post reported earlier this month that Beijing was also looking into joining the successor to the Trans-Pacific Partnership, which Japan pushed to complete after Trump pulled out.

Abe vowed in a speech to parliament on Wednesday to raise the relationship with China to a higher level through regular leaders' visits and business cooperation.

“We haven't solved our problems with Japan,” said Gui Yongtao, an associate professor at Peking University's School of International Studies, who specializes in Chinese-Japanese relations. “But these are much less prioritized compared to the U.S. risk. We still don't know what will happen with U.S. policy towards China.”

Still, for all the goodwill, formidable historical barriers remain to improved ties -- none bigger now than territorial disputes.

Tensions flared in 2012 -- the year Abe took power -- when Japan bought part of an uninhabited chain of East China Sea islets disputed with Beijing, sparking sometimes violent protests in China and turning relations arguably their most hostile since World War II. The islands are known as the Senkaku in Japan and the Diaoyu in China.

Ships from both countries continue to chase one another around the area, with Japan making a formal protest over a Chinese incursion into what Japan considers its territorial waters just last week, according to broadcaster NHK. For its part, Japan held military drills involving a submarine last month in the South China Sea, a body of water where China has extensive territorial claims.

Defense chiefs from China and Japan last week agreed on more military exchanges and a hotline to avoid unintended clashes. But at their first meeting in three years, Japanese Defense Minister Takeshi Iwaya also criticized China over its activities in the South China Sea, and another Japanese government official said there would be no real improvement with China unless tensions further north in the East China Sea stabilize.

Territorial issues are a major reason why the Japanese public has one of the world's most negative views of China, according to Pew Research Center. Even as China's impression of Japan has recovered from the 2012 crisis, thanks partly to tourism, the Japanese have remained wary.

Yuichiro Tamaki, the leader of a main opposition party, said even some younger lawmakers in Abe's ruling Liberal Democratic Party are cautious about the relationship. “There are few in the younger generation who want to be friendly with China,” Tamaki said in an interview, adding that his own party favored linking up with Beijing when appropriate.

Next Steps

And while Japan has been critical of Trump's policy of slapping tariffs on China, Abe's government shares some U.S. concerns on trade and investment. Japanese Trade Minister Hiroshige Seko, who will join the trip, is working with the U.S. and Europe on proposals to address problems caused by state enterprises and forced technology transfers.

Even so, Abe's visit cements a general warming of ties -- and opens the door for Xi to visit Japan as soon as next year.

“Nobody thinks ties with China have completely recovered, and they shouldn't think that,” said Kunihiko Miyake, a former Japanese diplomat and now visiting professor at Ritsumeikan University. “We're now in an era where having both sides make an effort to keep friction to a minimum is what we have to call good ties.”

--With assistance from James Mayger and Adrian Leung.

To contact the reporters on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net;Peter Martin in Beijing at pmartin138@bloomberg.net;Emi Nobuhiro in Tokyo at enobuhiro@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Daniel Ten Kate

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