January 1, 2007｜China
Senior Staff, Business Planning Department, Japan-China Economic Association
If one looks at the Web-site for the Japan Meteorological Agency, when the term “wind speed” is normally used it refers to the average wind speed for a ten-minute period, while momentary wind speed is the wind speed measured for 0.25 seconds, and this can be 1.5 to 3.0 times the average wind speed.
Such figurative phrases for recent Japan-China relations as “the wind has changed direction” and “a favorable wind has come” are often heard. They are—though to be taken with a pinch of salt—probably surprisingly close to reality, indicating the about-face in the reporting positions of both countries up to and ever since the meeting of the leaders of the two countries, which took place in autumn of last year. With the New Year, at the Japan-China New Year Greeting party which took place in Tokyo, the atmosphere was more fevered than in a normal year, and in the words of greeting of the persons involved a mood of welcome and expectation for the future was to be felt. Subsequently, there was many an opportunity to hear words and thoughts about the future that were filled with a sense of expectation, and human interaction seems to have increased. The slow and steady efforts of the many parties concerned on both sides during the hitherto prevailing headwind have come to fruition and this is a cause for jubilation, but there is also a sense of leaders such as the politicians and commentators holding center stage now putting on such a big show that they seem to have been “crying just a while ago but now already smiling”. That is probably in the nature of politics though.
Let’s set to one side the question of whether or not this is political hyperbole. It can be said that the situation has settled down in the economy and investment which have supported bilateral relations to date. Last year, the number of instances of foreign investment into China was negative, and the actual total invested has virtually leveled off—and within that the instances of Japanese investment and the total amount invested have both greatly decreased. Based upon that, there are people who say it is the end of the third investment-boom in China, and there are calls from far and wide of “Let’s actively pursue further economic interchange”.
Doubtless, negative factors have increased, such as the readjusting of preferential policies for foreign investment, the high costs from the rise of labor costs and land prices, and the shifting of investment to other countries with the intention of the spreading of risks. At the same time, the total amount committed per investment has increased and from this time on the positive aspects will still be great, such as large-scale investment related to mergers and acquisitions, business expansion of enterprises which have already set up in China, and improvement in business results in sales inside China. Moreover, it seems fair to say that the curtain has only just risen on the initiatives relating to the environment and energy conservation which have been taken up in the political arena too.
The pioneering nations investing in China—including Japan, the ROK and the USA—have fallen back in terms of investment year on year, while both the number of instances and the scale of investment in China by Hong Kong and the countries of the EU are continuing on a trend of expansion. Rather than thinking that investment in China is declining, enterprises’ investment in plant and equipment in China has reached maturity, and so couldn’t it be said to be the beginning of a new economic relationship of serious interaction with the Chinese economy?
Precisely at just such a juncture, effort is needed to have frank discussion and to achieve mutual understanding. In “the last several years” many people, including the Chinese leadership, have said “Take history as a mirror, and look to the future”. “The last several years” during which both countries’ political and emotional cooling continued have already become part of a venerable history. Without forgetting the history in which anti-Japanese demonstrations and diplomatic spats were prominent, I would like to see a phlegmatic building of relations of trust. Similarly in economic relations as well, the important issues and improvements should be clearly vocalized on both sides, without raising a clamor after looking at statistics alone, while carefully considering methods which are mutually beneficial. I think I would like to make an effort, as one involved in Japan-China relations, to do whatever an individual can.
I would like to hope that current bilateral relations won’t be called the strongest of momentary winds, or anything of that ilk.