Good foundation to build on

Extending pragmatic trade and technology cooperation can help China and Japan improve their relations

Tensions between China and Japan over the Diaoyu Islands, known as the Senkaku in Japan, have alarmed trade and diplomatic circles around the world. The timing was particularly disconcerting because of the signs of a downturn in economic performance in both countries.

Conflict between China and Japan is not just a regional matter. Its implications for international peace and security are profound. Fortunately, long-term trade and technology cooperation between the two countries is a stronger force for peace than is publicly appreciated.

After continuous debates and bitter quarrels, the Diaoyu Islands dispute between China and Japan escalated in September when the Japanese government decided to "nationalize" the islands through a "purchase". Chinese protests, coupled with declining Japanese exports to China, led some analysts to argue that the bilateral economic relationship between the two East Asian giants had been seriously affected.

However, close scrutiny of their trade and technology ties over the past half century shows strong bonds and incentives that will pre-empt a costly military dispute and economic losses. In essence, the two countries have over the years created a web of trade and technology relations that is not likely to be torn apart by the temporary dispute over the islands.

Despite the current tensions, it is reasonable to argue that the existing and perhaps extended forms of such pragmatic trade and technology cooperation will contribute to improving China-Japan relations in the foreseeable future.

Even more significant in fostering peaceful coexistence is the central role that the two economies play as economic anchors for the Asian region as a whole. In this respect, peace between the two countries is not just a regional necessity it's also a global imperative.

China's rise as an industrial power owes a great deal to Japan providing technology at a critical moment. Following the Sino-Soviet split in the early 1960s, Japan emerged as a source of technology. By the 1970s Japan accounted for nearly 70 percent of China's technological imports. The imports also included strategic know-how as well as management practices. And, in a way, Japan served as an industrial role model for China at a time when the country was isolated from much of the world.