Cooperation Strategy toward China

According to a report of Nikkei Shimbun at the end of last year, the government of Japan concluded the policy to improve its relationship with China. To cooperate with China’s geopolitical expansionistic strategy, One Belt One Road, Japanese government is going to support Japanese companies exploring joint project with Chinese companies. It is considered that Prime Minister Shinzo Abe will exchange new political agreement with Chinese President Xi Jinping when he will hopefully visit Japan.

China is extending its economic influence to the west with two economic integration projects: Silk Road Economic Belt that is mainly development of infrastructure, such as road, railroad or power plant, in the countries in Middle or Southeast Asia, and 21^st Century Maritime Silk Road that extends trade to Mediterranean Sea by connecting ports in Southeast, South Asia and Middle East. Although One Belt One Road is geopolitically aimed to connect non-American nations, Japan cannot ignore the movement in which around 70 countries are already involved.

Japanese government is going to support private projects in categories like energy saving, industrial improvement or physical distribution. It is supposed that governmental financial organizations such as Japan Bank for International Cooperation will accommodate loan for them. For that loan, there will be considerations on transparency and feasibility of the project, maintenance of healthy fiscal structure of recipient country or no possibility of military utilization.

Chinese Prime Minister Li Keqiang is planning to visit Japan for Japan-South Korea-China trilateral leaders’ meeting in Japan this April. Japanese government hopes to reach an agreement with Li on some joint projects like solar power generation with photovoltaic panels. Prime Minister Abe is going to visit China this summer or fall to cerebrate 40^th anniversary of Japan-China Peace and Friendship Treaty, hoping to fix Xi Jinping’s schedule to visit Japan in 2019. It is likely that Xi will visit Japan taking opportunity of Group of 20 Leaders Meeting in Japan.

Having said that, Japan is not going to participate in Asia Infrastructure Investment Bank, taken initiative by China. Japan has been a leader in regional development finance through Asia Development Bank. In terms of supporting developing countries in Asia, Japan is still taking the side of United States. However, Japanese officials have not determined how US President Trump is dealing with relations with Asian nations. Having withdrawn from Trans-Pacific Partnership, Trump administration has been seeking bilateral deals with China, excluding Japan. Japan has to develop positive economic relationship with China for its own survival.