Japan-China Ties

Ahead Of Modi Visit, Japan’s Pivot To China

Ananth Krishnan New Delhi, India 28 October 2018

The growing closeness of India’s relations with Japan were on display when Prime Minister Narendra Modi on Sunday kicked off a two-day visit, starting with a personal dinner at Prime Minister Shinzo Abe’s holiday home. Their talks on Sunday will focus on working even more closely in the Indo-Pacific region, where India and Japan have shared interests — as well as what are deep and shared concerns on China’s growing footprint.

At the same time, what makes this two-day visit to Japan unusual is the rather unexpected backdrop. Just before hosting Modi, Abe travelled to China for an unprecedented three-day visit — the first bilateral visit in seven years. The Beijing visit marked a remarkable turnaround in relations from the nadir in 2012, when ties were in deep freeze over the disputed East China Sea islands, called Senkaku by Japan and Diaoyu by China. Relations then were so vitiated that anti-Japanese protests convulsed China, with hundreds marching to the Japanese Embassy in Beijing and vandals ransacking Japanese car showrooms and other businesses, so much so that many Japanese companies recalled many of their personnel, fearing for their safety. And when Abe visited the previous year, he was given a frosty reception by President Xi Jinping when he was in Beijing for the APEC summit, with Xi pointedly making him wait, and then wearing an explicitly grim expression in front of the cameras.

Fast forward seven years, and the optics couldn’t have been more starkly different as Abe was hosted first by Premier Li Keqiang, and then held talks with Xi. “Under the new situation,” Xi told him, “China and Japan have become more reliant on each other. Globally, the two countries also share more diverse mutual interests and mutual concern.” Abe, for his part, declared that the relationship was a historic turning point.

What does this turnaround mean for India? For one, Japan has calibrated its position on China’s One Belt, One Road initiative (OBOR). Japan had been, along with India, among the region’s most vocal critics of OBOR. Indeed, Modi and Abe had, a year ago, flagged off an Asia Africa Growth Corridor plan, billed as an OBOR counter. One year on, however, the plan has appeared slow to take off.

Abe has now appeared to strike a more pragmatic position on OBOR, eyeing an opportunity for Japanese companies. Some Japanese firms have, in fact, already informally begun working with Chinese companies on OBOR-related projects. The major Japanese logistics firm Nissin, for example, has said it will work with Chinese logistics firm Sinotrans to open up a new sea-and-rail transport route to Europe for Japanese goods, which will be shipped across the East China Sea to the eastern Chinese port of Lianyungang, and then travel by rail to Khorgos on the China-Kazakhstan border, and onward to Hamburg.

The cost of this route is still three times that of the shipping route through the Indian Ocean, but Nissin said it expected that to come down and also saw the value of an alternative “in case of a rise in geopolitical tensions int the Middle East”.

That may be just the beginning. A more ambitious joint project may be a first-of-its-kind coming together of China’s high-speed rail and Japan’s Shinkansen – so far, competitors in countries ranging from Indonesia to India – in a joint project in Thailand, according to The Mainichi newspaper, although talks are at an initial stage.

This rapprochement on OBOR appears to be driven by different motivations. For Japan, suggested Chinese strategist Wang Yiwei, participation would offer “an alternative path in globalisation and hedges against risks from America by accelerating economic cooperation with China.” He, however, avoided mentioning perhaps what would be an even bigger benefit for China, with OBOR facing increasing questions on its credibility amid concerns on high debt related to Chinese projects and a lack of transparency. Partnering with Japan could soften the scrutiny. This also appears to be the reason behind China’s new keenness on what it calls “Plus-One” projects in the region, which began with the suggestion of a “China-India-Plus One” project in Afghanistan when Modi met Xi in Wuhan in April (which was later announced as a rather modest and underwhelming initiative to train diplomats). Since then, China has said it would work on similar “Plus One” projects with Singapore, and now Japan.

The second big factor – which Xi hinted at in his reference to “the new situation” in his remarks to Abe – is the uncertainty unleashed by Donald Trump, who has criticised not only China but also Japan for what he calls unfair trade practices and the trade surpluses they enjoy with America. This uncertainty about the future of free trade and globalisation has appeared to push Beijing’s reaching out to both India and Japan, who have, for the same reason, been happy to reciprocate. In Beijing, China and Japan signed a currency swap deal for around $30 billion to boost trade, that would allow the People’s Bank of China and the Bank of Japan will be able to exchange up to 3.4 trillion yen for 200 billion yuan over the next three years, with the hope of providing some stability despite global fluctuations.

Neither of these developments is necessarily a cause for worry for India. For one, the India Japan relationship has its own logic and is driven by shared strategic concerns over China’s role in the region. For Tokyo, these concerns remain and have not diminished, and the pivot to China is, at best, tactical. That the India-Japan relationship punches below its weight has less to do with China than what has been a pattern of failing to yield deliverables that match the closeness in both strategic objectives and values. For instance, the much-hyped bullet train project remains mired in delays, as do long-discussed big-ticket military purchases. The hope is Modi’s visit will make some headway on both fronts. At the same time, as Modi and Abe dine in Tokyo, Japan’s quiet pivot to China does serve a useful reminder, at least to some in the commentariat in Delhi, who tend to forget that India’s friends in the region neither have a limitless appetite to confront China, nor none of their own interests to protect.

(The author is a Visiting Fellow at Brookings India, and was previously China correspondent for India Today and The Hindu. Views are personal.)

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