Honeymoon period

There are high hopes in China that the election of a new government in Japan with a clear mandate for change will breathe some life into Sino-Japanese relations. Premier Wen Jiabao has expressed a desire to work closely with his new counterpart Yukio Hatoyama, who he will meet at a China-Japan-South Korea summit in Tianjin in October.

However, though a change after 60 years of rule by a slavishly pro-Washington Liberal Democratic Party (LDP) is surely welcome to China, there are plenty of obstacles in the way of major rather than cosmetic changes in relations.

The cosmetics are not too difficult. Hatoyama seems unlikely to incite China with visits to the Yasukuni shrine or other gestures toward Japan’s unrepentant nationalists. There is a desire among those linked to the Democratic Party of Japan (DPJ) to develop mutual understanding with Beijing and less pressure to show sympathy for Taiwan’s Democratic Progressive Party.

Hatoyama’s government is sure to take measures to stimulate consumption in Japan, cutting back wasteful infrastructure spending and aiming to be less reliant on exports as growth generator. That will please China – though China also needs to do much of the same.

Best of friends?

While Hatoyama has exhibited a desire to distance himself from the US – he has been highly critical of aspects of US capitalism and wants a review of the military bases agreement with Washington – there are limits to how far this can go. Japan may yearn for more independence, but it is wary of weakening ties with the US given China’s rise as a military as well as an economic power in the region. The bases review could be more a sop to a minor coalition partner than presaging a major row with the US.

In addition to China’s rise, Japan faces the prospect of a nuclear-armed North Korea, and of both Koreas with ballistic missile capability. Again, this suggests a preference for status quo in its US relations once the rhetoric of "change" has subsided.

These defense and geo-political considerations may fly in the face of Japan’s need for close commercial ties with its neighbors, with their huge capacity for trade growth. But ultimately it seems unlikely that there will be much change in its basic desire to keep a balance between these opposing interests.

An independent-minded Japan might also wish to rely more on its own defenses in a nuclear northeast Asia, a more worrying prospect for China than hanging on to the US coattails. Hatoyama’s predecessor as DPJ head, the unpredictable Ichiro Ozawa, could push the party in that direction. Though he had to resign after a corruption scandal, Ozawa remains very influential and he believes Japan must play a more assertive role internationally.

Japan’s desire for closer relations with Asia involves not only China and Korea but also Southeast Asia. Earlier this year, under the auspices of the Japan-led Asian Development Bank, Tokyo and Beijing agreed  to a formula of equality for a multilateral fund to protect regional currencies from sudden market-driven falls in value. Some at least in the DPJ take the idea of an East Asian community, embracing the Association of Southeast Asian Nations (ASEAN) plus China, Japan and South Korea, seriously.

Regional rivals

There is little doubt, though, that there is keen rivalry for influence in the region, with Japan now trying to offset some of the huge gains made by China so far this decade. In particular, Japan has focused on Vietnam and Indonesia, two countries with a sometimes uneasy relationship with China, and is the de facto beneficiary of the security arrangement that the US has with most ASEAN members. It is also improving ties with India.

Given the weight both countries place on regional economic cooperation – China needs resources from Southeast Asia and technology from Japan, while Japan needs growing markets and young places to invest as its own population ages – a brief honeymoon between the two is likely.

However, the Japan-China relationship will remain difficult not so much because of history or even of running sores like the Diaoyu islands in the East China Sea, but because China is now the rising sun. It is aiming for equality not with Japan but with the US, while Japan’s demographics suggest that it is well past its peak – but still an industrial and technological giant.