China’s High Rate of Growth and Future Sino–Japanese Relations

|China

China is today continuing a high rate of growth unprecedented in world economic history. In 1978 China greatly shifted its economic policy, and adopted the so-called “Reform and Opening Policy”; the average annual growth rate of GDP over the 30 years since has been 9% or more, and the average annual industrial growth rate has been 11 % or over. While China has also suffered the impact of the global economic slowdown, which stemmed from the United States’ financial crisis, the forecast, nevertheless, for 2009 is 7.5% (IMF), and with minus growth being forecast in developed countries such as Japan, the European Union, and the United States, and in many developing countries, China is sustaining a conspicuously high growth rate.

China’s high growth rate can be discussed from many angles, but I would like to raise nine matters as key factors: 1) the opening up and adoption of market economics of the socialist economic system; 2) urbanization; 3) the utilization of foreign capital, in particular FDI, and through that the utilization of advanced technologies from overseas; 4) the virtually smooth expansion of the global economy; 5) generally appropriate macroeconomic controls; 6) the system of the state ownership of land; 7) the gradualness of reform; 8) the decentralization of society; and 9) the historical tradition of a market economy. Many of these factors remain in effect, and there is the possibility of growth exceeding the global average for some time to come.

The result of the high growth in the Chinese economy is that the global economy and global trade have expanded, and Japanese exports have also expanded. In addition, poverty in China has been cut, and the number of people who subsist on less than one US dollar a day, the World Bank benchmark for poverty, has greatly decreased in the 20-odd years from 1981 to 2003 from approximately half of the total population to just under 7% (Hu Angang, Country Report: Challenges for the Economic Superpower of China). Disparities (in absolute value) have increased, however. For example, in the Xinjiang Uygur Autonomous Region, in which rioting broke out recently, GDP went from 18.9 billion yuan in 1988 to 304.5 billion yuan in 2006, a 16-fold increase over 18 years, and per capita GDP grew from 1,299 yuan to 15,000 yuan, an 11.5-fold increase. However, although the disparity in terms of comparative size with Shanghai—the most advanced area—shrank slightly from 4.0 times (the figure for Shanghai, taking Xinjiang as “1”) in 1989 to 3.8 times in 2006, the disparity in absolute-value terms has expanded more than 10-fold, from 4,000 yuan to 42,700 yuan (China Statistical Yearbook). Furthermore, accompanying economic growth, China’s consumption of resources has expanded. In order for China to maintain high growth, the maintaining of social stability, preventing the expansion of economic disparities, is necessary, along with overcoming resource and energy constraints.

As above, the result of the high rate of growth of the Chinese economy is that Sino–Japanese relations are facing a new stage of development.

First, Sino–Japanese relations are continuing to move toward a relationship that is more level and involves reciprocal exchange. To date Japan’s internationalization has been an “outgoing internationalization”, but in the future it will simultaneously grow into a development phase via an “incoming internationalization”. Through the two geographically close countries of Japan and China expanding reciprocal exchange, the possibility of being able to realize their respective economic and social development is great.

Second, despite relations between the two countries of Japan and China having a leveling tendency, Japan’s advanced technology and systems can still continue to contribute to the development of China’s economy and society. The scale of China’s economy will very soon overtake Japan’s, but with China’s population being more than ten-times that of Japan, per capita GDP is still one-tenth of Japan’s. The potential is great for Japan to contribute to China’s development—such as improvement of the environment, energy-saving technology, social security including public healthcare, and construction of social infrastructure including legal and administrative systems—and the basis for the activities of the Japanese business world, NPOs and NGOs (including universities) will go on expanding. It goes without saying that the improvement of the environment and social stability of neighboring countries brings the development of Japan’s economy and society and the enhancement of the quality of life.

Third, not stopping simply at the relations between them, but cooperating for the solution of the several problems which the region of Northeast Asia is facing, both Japan and China’s contributing to the construction of an economic community in East Asia—lagging behind in comparison with other regions, such as Europe, North America, and South America—is a possibility. Not needlessly playing out disputes over ascendancy, seizing upon narrow-minded nationalism, a sense of superiority, and the sense of inferiority on its flip side, the significance is great of Japan and China, as well as of Japan, China and the ROK, cooperating and progressing toward a long-term goal of sustained economic growth and the building of peace in the East Asian region.

[Translated by ERINA]