Onus on Japan to boost regional trade

A special session of the Japanese Diet, or the national legislature, is likely to be held on Dec 24 to choose a new prime minister, and if re-elected to the post, Shinzo Abe needs to change his provocative military and foreign policies in order to revive Japan's sagging economy. This is important because without closer cooperation with China and the Republic of Korea, he cannot achieve the goal.

An official survey in Japan showed Japanese people's antipathy toward China and the ROK has reached record levels, which is not conducive to the revival of the country's economy. Therefore, Japanese politicians have to take concrete measures to change Japanese people's wrong perceptions about neighboring countries, and they could start by promoting trade talks.

According to a Japanese think tank report issued a few years ago, the establishment of a free trade area (FTA) with China would help Japan's GDP grow by 0.68 percent, much more than the additional growth FTAs with other countries could spur. For example, the report said, the US-Japan FTA could only push up the Japanese economy by only 0.35 percent while the Trans-Pacific Partnership will add 0.54 percent growth.

Plagued by two decades of deflation, Japan hopes to set up an FTA with China to boost economic growth. But because of Japan's reluctance to open up its domestic market and allow increased investment from Chinese enterprises - because of its deteriorating ties with China over the Diaoyu Islands dispute and Abe's visit to the Yasukuni Shrine that honors 14 Class-A war criminals - Sino-Japanese trade has further shrunk and the bilateral FTA talks have suffered.

Hence, whether or not the trilateral (China-Japan-ROK) FTA talks will progress depends on whether Tokyo can take the initiative to create a good environment for cooperation with Beijing and Seoul. The onus is now on Japan to break the stalemate, for example, by clarifying its stance on key issues to ease the misgivings of China and the ROK.

Ever since Abe was sworn in as Japanese prime minister for the second time rightist sentiments have been running high in Japanese politics, as indicated by some politicians' denial of the Japanese army's history of aggression and use of "comfort women", and the visits to the Yasukuni by Japan's leaders. And because of this development, Chinese and ROK leaders have stopped visiting Japan or inviting Japanese leaders to their countries.

On the eve of the Asia-Pacific Economic Cooperation conference in Beijing in November, the Chinese and Japanese governments reached a four-point agreement, which facilitated the meeting, albeit brief, between the two countries' leaders. Leaders of Japan and the ROK, too, met separately on the sidelines of the APEC conference, and expressed willingness to resume cooperation. This raised the hopes of peoples in the three countries that Japanese leaders would improve relations with China and the ROK as soon as possible.

After his meeting with Chinese and ROK leaders, Abe told a NHK program that he would make an important announcement on the 70th anniversary of the end of World War II in 2015. Speaking on Aug 15, 1995, the 50th anniversary of Japan's surrender in World War II, then Japanese prime minister Tomiichi Murayama acknowledged that Japan's past wrong policies led it toward war and that the country should make profound self-reflections and learn from history. Before that, on Aug 4, 1993, Japanese chief Cabinet secretary Kono Yohei, speaking on "comfort women", said that Japan should admit its wrong perception on the issue.

It is not known what Abe will say on the 70th anniversary of the end of World War II. But any negation of Japan's war crimes will not only worsen Tokyo's ties with Beijing and Seoul, but also jeopardize the trilateral FTA talks.

To help the trilateral FTA talks progress, Japan and the ROK should also take part in the China-led initiative for the Asian Infrastructure Investment Bank, because it is an effort to support infrastructure construction in Asian counties and regions and promote common prosperity. As Asian countries that together account for 70 percent of Asia's GDP, China, Japan and the ROK should make bigger contributions to Asia's economic and trade development and cooperation.

The finance ministers and representatives of the 21 founding members of the AIIB, including China, India and Singapore, agreed in Beijing last month to take the initiative further and thus advanced the bank's preparatory work. But Japan and the ROK were absent from the initiative. With sound economic foundations and rich financial experiences, Japan and the ROK should work with China and other Asian countries to help improve infrastructure in the region and promote common development.

The author is a researcher at the Chinese Academy of International Trade and Economic Cooperation, affiliated to the Ministry of Commerce.