But the honeymoon period that emerged in the first weeks of Shinzo Abe's watch was abruptly ended when North Korea performed a nuclear test on October 9, completely overshadowing the first meeting between China and Japan's leaders since 2002.
In some ways it was a blessing for Abe and President Hu Jintao, briefly uniting them as they condemned the actions of North Korean leader Kim Jong Il. Both countries backed the US-drafted UN weapons and financial sanctions in response to the test.
But Tokyo did not get everything it wanted. Beijing rebuffed its calls for even tougher measures, which it later said it could introduce unilaterally, and as CHINA ECONOMIC REVIEW went to press, further differences were emerging over how the agreed sanctions should be interpreted and implemented.
Tokyo announced the Japanese navy could take part in US missions to stop and search North Korean vessels, which it claimed was authorized under the UN resolution. However, Beijing argued that such a step ran perilously close to military action, which both it and Russia had expressly blocked from the Security Council resolution.
China's UN ambassador, Wang Guangya, clarified Beijing's position, drawing a distinction between Chinese inspections of North Korean cargo trucks being carried out along its 1,400-kilometer border and US and Japanese proposals for stopping cargo at sea. "Inspections yes, but inspections are different from interception and interdiction," Wang said.
Meanwhile, Washington's UN ambassador, John Bolton, piled the pressure on China, saying it had a "heavy responsibility" to influence North Korea's behavior as the country's chief ally and supplier of food and energy aid.
With North Korean missiles more likely to be aimed at Tokyo than Beijing, the former will be looking to the latter to apply pressure. How Beijing responds will be the key to future relations across the Sea of Japan. But in the meantime, a nuclear North Korea has put Yasakuni firmly in the shade.
Party backs Hu's policies
President Hu Jintao's vision of a "socialist harmonious society" was endorsed by the Communist Party Central Committee (CPCC) at its annual plenary session in Beijing in October. The official communique issued after the meeting said that, while maintaining economic develpoment remained the CPCC's central task, it would also seek limited political reform, fight corruption, reduce the rich-poor gap and give more prominence to the goal of building a harmonious society. It was the first time a CPCC meeting had focused solely on social issues. Policies announced included a plan to ensure more than one billion Chinese citizens have social security cover by 2020.
Woman tops rich list
A woman topped the Hurun list of China's richest people for the first time. Cheung Yan, the 49 year-old founder and chairwoman of top Chinese paper packager Nine Dragons Paper, saw her fortune balloon nine-fold to US$3.4 billion following her firm's March initial public offering. Worth US$375 million last year, Cheung swept past two-time leader Huang Guangyu of Gome Electrical Appliances into top spot. The 500 richest Chinese in the Hurun report are now each worth an average US$276 million, a 48% rise year-on-year, controlling a total US$138 billion in assets.
Hu gives rival key role
President Hu Jintao named his chief political rival to lay the groundwork for next year's crucial Communist Party congress. Vice-President Zeng Qinghong, fifth in the party's hierarchy but wielding considerably more clout than his ranking suggests, will head day-to-day preparations for the 17th Party Congress, two independent sources told the South China Morning Post. Zeng, who was chief lieutenant to Hu's predecessor Jiang Zemin, became vice-president when Hu became president. With Zeng now on side, Hu is expected to ease out Jiang's old guard in a sweeping leadership reshuffle next year.
More unions planned
Eastman Kodak, Dell and Apple supplier Foxconn are among the All-China Federation of Trade Unions' (ACFTU) targets for unionization following its successful introduction of labor representation at Wal-Mart's 62 stores. ACFTU director general Guo Wencai said the success with Wal-Mart had increased demands for unions to be set up in all foreign-funded enterprises in China, including Fortune 500 companies. A Kodak spokesperson said the company didn't oppose trade unions while a Dell spokesperson said they were committed to having open communications with staff at all levels.
China: tough for expats
China is one of the easiest places for recruiters to lure expatriate executives, but is also one of the hardest places for them to succeed, according to the 10th quarterly executive recruiter index released by executive recruitment firm Korn/Ferry International. The survey of more than 140 international recruiters found success was toughest for expatriates in China, Japan and South Korea. Reasons that assignments failed included the lack of cultural fit, family or personal issues or a lack of direction from managers.
Amnesty slams China
International human rights group Amnesty International said China was not honouring its commitment to improve human rights ahead of the 2008 Beijing Olympics. Amnesty said that, although senior officials said hosting the Games will lead to progress on human rights issues, activists, journalists and lawyers are still being imprisoned, harassed and tortured and media controls have been tightened. The organization asked the International Olympics Committee to "exert influence on the Chinese authorities" to secure reforms.
"Friendlies" no more
China's Olympic mascots may get a new name, a move that would cost organizers millions to replace souvenirs and promotional materials. The organizing committee for the 2008 Beijing Olympic Games said the five mascots, known collectively as "friendlies", will revert to the Pinyin form of their Chinese name, "fuwa". The mascots, unveiled last November, have faced scrutiny over their name. A PhD candidate from Lanzhou University first raised the issue in a letter to a paper in Gansu province, saying that "friendlies" could be broken down into "friend" and "lies", and is too close to "friendless".
BBC slammed for report
Health Ministry spokesman Mao Qun'an labeled a BBC report that organs of executed prisoners were being traded in China as "irresponsible", claiming it had made up the report to attack the Chinese legal system. Mao said the report failed to mention the efforts made by the Chinese government to strengthen the regulation of organ transplants. A ban on the purchase and sale of human organs was introduced July 1 and strict rules have also been imposed on human organ transplants in response to overseas criticism of China's transplant industry.
More Taiwan flights likely
Taiwan is considering launching weekend flights to China from next year, in addition to the holiday charters that already operate. The island is eager to attract mainland tourists and in June authorities agreed to allow 168 direct flights during the four major holidays every year. Cargo charters are dealt with on a case-by-case basis. However, cross-strait tensions remain, with Taiwan President Chen Shui-bian angering Beijing with plans to change the constitution and rename the island Republic of Taiwan. The proposed legislation, was dismissed by the mainland's Taiwan Affairs Office as "splittist" and a threat to regional peace and stability.
Holiday spending rises
Chinese consumers spent US$37.88 billion during the week-long National Day holiday, up 14.5% on 2005, Ministry of Commerce figures showed. Spending appeared to be spread evenly between small and big cities, but growth in some smaller cities surpassed that in bigger ones. Spending in Sichuan Province, for example, jumped 18%, 2.5% higher than spending growth in Beijing.
Rights lawyer arrested
Human rights lawyer Gao Zhisheng, who has acted for Falun Gong members, labor activists and dispossessed oil investors, was arrested by Chinese authorities on September 21 on "suspicion of inciting subversion of state power". The arrest was denounced by activists as further evidence of the Communist Party's drive to restrict citizens pursuing their rights through the courts or via publicity campaigns. Gao was detained by Beijing police in August having earlier organized a rolling hunger strike to protest against police harassment of political activists. If convicted, he could be jailed for up to five years.
Astronauts to spacewalk
Chinese astronauts are training for spacewalks, China National Space Administration (CNSA) head Sun Laiyan told the Financial Times. Sun said the country's next manned space journey, which could take place in 2007 or 2008, is likely to involve "extra-vehicular operations". China's space scientists believe it will be 15-20 years before they can send a person to the moon.
More lead poisoning
Authorities confirmed that nearly 1,000 children in Gansu province have "excessive" levels of lead in their blood, nearly four times as many as originally reported after a massive lead-poisoning case uncovered in August. Of 954 children found with high lead levels, 62 were being treated for moderate-to-severe lead poisoning. The children all came from two villages in northwest China contaminated by a smelter that ignored basic health and safety regulations.