50 Years of Normalization of Japan-China Relations 2nd and 3rd Largest Economic Powers in the World History of Economic Relations

29th marks the 50th anniversary of the normalization of diplomatic relations between Japan and China in 1972.

The economic relationship between the two countries, which began with Japan, which had a large lead in economic and technological strength, supporting China, has changed dramatically over the past 50 years, and Japan has increased its presence as the world's second largest economy. I decided to face China, where

This section traces the history of economic relations between Japan and China.

Japan supported China's "reform and opening up"

In 1972, diplomatic relations between Japan and China were normalized.

At that time, the GDP (gross domestic product) of both countries was 113.6 billion dollars for China, and 318 billion dollars for Japan.

There was a clear difference in economic power between China, whose economy and society were in great turmoil due to the Cultural Revolution, and Japan, which had become the second largest economy in the world after the United States after a period of rapid economic growth.

In October 1978, the deputy prime minister at the time*, Mr. Deng Xiaoping, visited Japan, which triggered the deepening of economic relations between the two countries.

Mr. Deng visited factories of Japanese companies and met with Konosuke Matsushita and other business people to ask for their cooperation. turned it off.

* Tou = Ascent + Ozato

Japanese companies have also made inroads into China, and in 1988, Japan's direct investment in China exceeded $500 million.

China's GDP nearly doubled in 10 years to $407.8 billion.

“Economic cooperation” even after the Tiananmen incident

However, in 1989, a situation occurred that greatly hindered China's economic development.

The Tiananmen Incident was a violent suppression of student protests demanding democracy.

Western countries moved to impose sanctions, casting a shadow over the "reform and opening up" policy aimed at actively attracting foreign investment.

Under these circumstances, Japan quickly declared the resumption of yen loans to China.

After Prime Minister Kaifu's visit to China in 1991, the enthusiasm for investment in China increased again, and in 1997 the amount of direct investment in China was 4.3 billion dollars, more than eight times the amount before the Tiananmen Square crackdown.

Era of political cold and economic heat Sino-Japanese trade expands

With the help of Japan, the Chinese economy has returned to a growth trajectory.

In 2001, we joined the WTO (World Trade Organization) and continued to develop remarkably as the "world's factory".

As China continues its rapid economic development, diplomatic relations between the two countries will change.

In China, President Jiang Zemin promoted "patriotic education."

Diplomatic relations between the two countries cooled down as a result of strong opposition to Prime Minister Koizumi's annual visit to Yasukuni Shrine.

However, on the economic front, Japanese companies continued to expand into coastal areas such as Shanghai and Guangzhou in search of cheap and abundant labor, and this situation was said to be "political cold and economic heat."

The Japanese and Chinese economies are deepening their relations despite the cold diplomatic relations.

The value of trade, including imports and exports, will more than triple in 10 years from $85.7 billion in 2000 to $301.8 billion in 2010.

During this period, Japan's trade with China surpassed that with the United States, making China the world's largest trading partner for Japan.

Japan's stagnant GDP, second largest in the world, China

On the other hand, this period was also a time when the difference between China, which continued to grow at a high rate, and Japan, which was stuck in the long-term stagnation after the bursting of the bubble economy, became conspicuous.

At the time of the Lehman Brothers bankruptcy in 2008, the Chinese government's economic package of 4 trillion yuan, or more than 50 trillion yen at the exchange rate at the time, was highly anticipated by various countries, further enhancing the position of the Chinese economy.

Then, in 2010, a symbolic event came.

Japan's GDP this year was $5.759 trillion.

On the other hand, China reversed this with 6 trillion 87.1 billion dollars, and Japan surrendered the position of "the world's second largest economy" to China.

After that, while Japan continued to grow at a low rate, China's GDP continued to grow, widening the gap with Japan.

From "the world's factory" to "the world's market"

China's economy will grow to overtake Japan's, and the role of China in the world economy will change.

As the middle-income class has increased along with economic development, it has come to occupy an important position not only as the "world's factory" but also as a "consumer market."

Japan is no exception, and if you look at Japan's main industry, automobiles, it becomes clear at a glance.

The number of passenger cars sold by Japanese automakers in China last year reached 4.42 million, a scale comparable to the number sold in Japan.

In addition, China has become a loyal customer in the field of tourism.

In 2010, the Japanese government significantly eased visa requirements for Chinese individual tourists, triggering a boom in travel to Japan in China, and the term ``explosive shopping'' to describe the vigorous consumption of Chinese people.

In 2019 before Corona, 9.59 million Chinese visited Japan, accounting for 30% of foreigners visiting Japan that year.

It is said that the increase in the number of Chinese visiting Japan has led to an improvement in feelings toward Japan, especially among young people who were originally familiar with Japanese culture such as manga and anime.

US-China struggle for hegemony New Japan-China relationship

On the other hand, the rise of China brought about a major change in the political environment, which could be described as a struggle for hegemony between the United States and China.

In the midst of deepening political conflict between China and the United States, which has strengthened its authoritarian side under the Xi Jinping regime, economic separation or "decoupling" between the United States and China is being talked about, and the human rights situation in the Xinjiang Uyghur Autonomous Region and other areas is becoming a hot topic. While China is being scrutinized, there are also situations where Japanese companies are being asked to respond.

Furthermore, the spread of the new coronavirus infection is also changing the economic relationship between Japan and China.

China, where the infection spread first in the world, has still adhered to the "zero corona" policy for more than two years.

In March this year, Shanghai, the largest economic city, imposed severe restrictions on going out for more than two months, causing a delay in the supply of parts from China, which had a major impact on the production and sales of Japanese automobile and home appliance manufacturers. came out.

In addition, due to rising labor costs, especially in the coastal areas of China, the merits of being the "world's factory" have diminished. The movement to move is also spreading.

On the other hand, the supply chain between Japan and China, which has been built over 50 years of economic relations, cannot be resolved overnight, and the importance of the Chinese market, the world's second largest economy, will not change for the time being. .

With the rise of China in the international community and the confrontation between the United States and China, words such as "New Cold War" and "Taiwan Emergency" are being used frequently. is required.