EASTECONOMICS, POLITICS AND PUBLIASIAC POLICY IN EAST ASIA ANDFORUM The PACIFIC Vol.7 No.3 July–September 2015 $9.50 Quarterly Japan–China relations Michael Yahuda How war memory divides China and Japan Zhang Yunling From modernisation to great-power relations Ryo Sahashi and Zha Daojiong Fixing the relationship Madoka Fukuda The Koizumi years, a time of lost opportunities Rumi Aoyama What’s pushing Japanese firms out of China? . and more ASIAN REVIEW: Amitav Acharya Will ASEAN survive great-power rivalry? EASTASIAFORUM CONTENTS 3 MICHAEL YAHUDA Quarterly How war memory continues to divide China ISSN 1837-5081 (print) ISSN 1837-509X (online) and Japan 6 JEAN-PIERRE LEHMANN From the Editors’ Desk Economic ties won’t ensure peace between neighbours The China-Japan relationship has made headlines in recent 8 ROBERT A. MANNING AND JAMES J. PRZYSTUP years. Political and security rivalry has badly damaged the bilateral Asian stability hangs in the balance relationship, yet major trade and investment ties continue to fuel the economies of both China and Japan, and the wider Asian region. 10 MADOKA FUKUDA Can this economic relationship alleviate China-Japan rivalry? Or will The Koizumi years, a time of lost opportunities the political and security tensions between these two states lead to conflict in Asia? What will it take for China and Japan to negotiate a 12 RYO SAHASHI mutually acceptable regional order? Fixing the relationship: a view from Japan These are the questions with which this issue of East Asia Forum 14 ZHA DAOJIONG Quarterly deals. On the 70th anniversary of the end of World Fixing the relationship: a view from China War II, the China-Japan relationship is mired in tensions over the 17 AMITAV ACHARYA remembered history of Japanese war and imperialism, maritime ASIAN REVIEW: Will ASEAN survive disputes in the East China Sea, and contested views about Asia’s great-power rivalry in Asia? future strategic order. Yet Chinese President Xi Jinping and Japanese 21 NATASHA KUHRT Prime Minister Shinzo Abe have also used backchannel diplomacy ASIAN REVIEW: Is Sinocentrism putting and two face-to-face meetings to lift the relationship from its Russia’s interests at risk? nadir in 2012–13. Even more important are the trade, investment 24 TAKASHI INOGUCHI and growing people-to-people ties that serve as ballast in the ASIAN REVIEW: Uncertain times cast a relationship. cloud over happiness in Asia Yet the relationship is now at a crossroads. Japan can no longer 27 NOBUHIRO AIZAWA invest in China as a low-cost manufacturing base, as China ASIAN REVIEW: Indonesia’s foreign policy shifts towards higher-value-added manufacturing and services. takes an economic turn Strategically, Japan should choose whether to remain dependent 29 SHIRO ARMSTRONG on the United States and resist China’s efforts to dominate regional Economic embrace is warm enough to thaw order or negotiate relationships with China and the United States the politics that make Japan feel secure. Equally, China must decide where Japan 31 HE PING fits in its own vision of regional order, and must find a productive Could Sino–Japanese competition benefit way to relate to Japan, recognising that insecurity in relations will Asia? thwart China’s efforts for regional leadership. 33 RUMI AOYAMA This special issue brings together top experts from China What’s pushing Japanese firms out of China? and Japan, as well as voices from beyond the region, to offer 35 ZHANG YUNLING their perspectives on what is needed to fix the relationship. They From modernisation to great-power relations emphasise the importance of diplomacy and economics, the role of 38 AMY KING leadership in shaping domestic expectations and the need for both No shared vision yet on a strategic order in sides to acknowledge squarely the positive and negative aspects of Asia the interdependent history between China and Japan. COVER: Cool greetings: Japan’s Prime Minister Shinzo Abe Amy King and Shiro Armstrong. and China’s President Xi Jinping in Beijing in November eastasiaforum.org 2014, the first leaders-level meeting in two years. PICTURE: Kim Kyung-Hoon / REUTERS / AAP. 2 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2015 the polItIcS of hIStory picture: AP / AAP This huge calligraphy work, displayed at Changchun railway station in September 2015, shows confessions made by Japanese war criminals after World War II. How war memory continues to divide China and Japan MICHAEL YAHUDA cooperation and the perils of military the current leader and his legitimacy. conflict, outweigh historical memories, It did not suit Mao Zedong to dwell NE might think that the 70th however contrived this history may be. on the war with Japan. Apart from O anniversary of the end of Japan and China remain divided one occasion, he withheld Communist World War II would lead to further over how to remember successive wars forces from fighting. After the People’s deterioration in relations between dating from the Sino–Japanese war in Republic of China was established, China and Japan. But, to the contrary, 1894 to World War II (known in China Mao chose to approve films on the the Chinese and Japanese leaders, as the War of Resistance against Japan war that depicted Kuomintang (KMT) President Xi Jinping and Prime [1937–1945]). Official histories in both officers and landlords as class enemies Minister Shinzo Abe, are exploring countries have been written to serve who tried to betray heroic workers the prospects for yet another meeting political needs, not respect historical and peasants to the Japanese soldiers. (they have already met four times in accuracy. Mao’s claim to historic legitimacy the last three years). It seems that Writing history under the aegis of stemmed from his victory in the civil the pragmatic calculations of regime the Chinese Communist Party (CCP) war. survival, which include economic has always been designed to bolster Despite his campaigns against class EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2015 3 enemies and traitors of many kinds, security of the region as a whole. Mao did not launch any campaign The CCP depicts itself as the EASTASIAFORUM against alleged collaborators with the authentic representative of China’s Quarterly Japanese. Many of those dislodged past glory at home and in the world from urban offices by the returning more broadly. The ‘rejuvenation of EDITORIAL STAFF KMT after the Japanese surrender China’ promised by CCP leaders and were welcomed in rural Yan’an as Xi Jinping’s ‘China Dream’ all grow out Issue Editors people with much-needed skills. Mao of this history. Amy King is a lecturer in the Strategic did not attack Japan diplomatically There is a tendency in Japan, too, and Defence Studies Centre, Coral Bell School of Asia Pacific Affairs, ANU. during most of the time he held power, to present itself as a victim of the except when some Japanese leaders war. Much is made of the bombing of Shiro Armstrong, Crawford School of Public Policy, ANU. displayed a preference for old friends Japanese cities—including the fire- Series Editors in Taiwan. bombing of Tokyo—culminating in the Attitudes (and therefore history) nuclear devastation of Hiroshima and Peter Drysdale, Head, East Asia Forum and East Asian Bureau of Economic began to change after Deng Xiaoping Nagasaki. But few Japanese residents Research at the Crawford School of became leader. Class struggle was knew much about the actual fighting Public Policy, ANU. dropped in favour of a new emphasis and the cruelties inflicted on civilians Shiro Armstrong, Co-director, on the unity of the Chinese people, and prisoners of war in China, on the Australia-Japan Research Centre and which from 1979 onwards also Korean peninsula and throughout Executive Director, EAF and EABER, included their ‘compatriots’ in Taiwan. Southeast Asia. Crawford School, ANU. The CCP’s historical legitimacy After the first year of the American- Editorial Staff henceforth was based on the War of led occupation, administrators did Coordination: Mark Fabian. Resistance Against Japan. There can not dwell on the pursuit of war Editing: Alison Darby, Owen Hutchison, Patrick Deegan, Linda Ma, Amanda be little doubt that this was welcomed criminals or exposing the horrors Maclean, Nawaaz Khalfan, Stephen by many of the millions of people of Japanese conduct during the war. Norman, Catherine Yen, ANU. who had genuinely suffered from From 1947 onwards the main goal of Editorial Advisers: Japanese wartime atrocities. But the the occupation was to rebuild Japan Peter Fuller, Max Suich. official historical narrative was less as a pillar against communism in East Production: Peter Fuller, Words & Pics. interested in historical accuracy than Asia. Imperial bureaucrats and former Original design: Peter Schofield. in extolling the alleged role of the CCP Zaibatsus (business conglomerates Email [email protected], in defeating the Japanese aggressors, that held much power in the Japanese [email protected]. even though the bulk of the fighting economy from the Meiji era to the was done by Chiang Kai-shek’s forces end of World War II) such as Mitsui and not the Red Army. and Mitsubishi, which had served the The views expressed are those of the In 1993, after the Tiananmen imperial war machine were called back individual authors and do not represent disaster, Deng’s successor, Jiang Zemin, the views of the Crawford School, ANU, deepened the call for patriotism by . it is Japanese EABER, EAF, or the institutions to which setting up a huge patriotic education the authors are attached. campaign that persists to this day. historians who have Japan in particular was excoriated as the last and most cruel of the done most to expose the foreigners who had humiliated China over 100 years, beginning with the fallacies of the Japanese First Opium War in 1839–42.