Abe and Xi Signal Thaw in Bilateral Relations as Tokyo Cuts ODA to Beijing
Japanese Prime Minister Shinzo Abe made a state visit to the People’s Republic of China — his first official state visit to Beijing as Prime Minister — from Oct. 25 through Oct. 27, 2018. The visit comes immediately after the 40th anniversary of the commencement of the 1978 Treaty of Peace and Friendship that normalized ties between the two World War Two enemies (and Cold War rivals) and is the first official state visit made by a Japanese Prime Minister to the People’s Republic since 2011.
Signaling a potential thaw in the strained relations between Japan and China, the visit was marked by the signing of new cooperation agreements — over 500 separate business deals valued at around 2.6 billion USD — between Abe and Chinese Premier Li Keqiang. Additionally, and perhaps most importantly, the Japanese government formally announced the end its Official Development Assistance (ODA) to China.
Japan’s ODA to mainland China began in 1979 shortly after the normalization of ties and provided assistance to China via grant aid, financial assistance with no obligation of repayment; loan aid, financial loans made under relaxed conditions to recipient countries; and technical cooperation, the sharing of technology and skills to better the lives of people and improve the economic base of the recipient country. Since the start of ODA to China, Japan has contributed a total of 157.2 billion yen (1.41 billion USD) in grant aid, 3.13 trillion yen (28 billion USD) in loan aid, and 181.7 billion yen (1.62 billion USD) in technical cooperation programs.
Japan’s financial assistance has been crucial for the development of numerous economic infrastructure projects across China, including Beijing Subway Line 1 and Shanghai Pudong Airport. Since the late-1990s onwards, Japan’s ODA has shifted its focus from pure infrastructure construction to the development of environmental protection mechanisms and human resource enhancement.
The Chinese government has historically described Japan’s massive ODA receipts to China as being borne out of Tokyo’s sense of atonement for the atrocities committed during the Second World War and rarely acknowledged the scale and significance of Tokyo’s contributions.
However, in a marked departure from China’s longstanding narrative, a spokesperson for China’s Foreign Ministry stated on Oct. 23, ahead of Abe’s scheduled visit to Beijing, that “Japan’s official financial cooperation with China has played an active role in China’s reform and opening-up and economic construction.”
China surpassed Japan to become the world’s second-largest economy in 2010. As such, Japan has been steadily reducing the ODA over the past decade, with loan aid being discontinued in 2007. In a recognition of the equal footing of China and Japan, Abe announced the end of Japan’s “historical mission” to assist China monetarily during the reception on Thursday evening, Oct. 25.
Following his grand welcome at Tiananmen Square on Oct. 26, Abe spoke of the shift in Japan-China relations from “competition to cooperation.” Li, in a similar vein, commented that the relations between the two countries were “back to their normal trajectory.”
Apart from the inking of the host of business deals, Abe also conveyed a willingness to provide support to new programs under China’s “One Belt, One Road” initiative — a possible departure from Tokyo’s continued pointed refusal to sign on. However, a spokesperson later stated that Tokyo’s support is contingent upon China functioning on “international standards of transparency, environmental protection, and economic viability.”
While the summit may signal a momentary thaw in Japan-China relations, underlying structural conflicts, such as the territorial disputes between the two countries, remain unresolved. Policy experts and regional observers have suggested that so long as Tokyo regards Beijing as a “revisionist state bent on reestablishing a Sino-centric regional order”, no real sea change in bilateral ties will occur.
Others have speculated that the warming of relations between the two erstwhile rivals is a response to the trade friction caused by United States President Donald Trump’s “America first” policies. However, Japanese government sources rejected suggestions that the summit would mark the start of a shift by Tokyo away from Washington and instead noted that “the U.S.-Japan alliance is the most important for us.”