Japan's Prime Minister Shinzo Abe, left, shakes hands with China's President Xi Jinping during their meeting in Beijing on October 26, 2018. Photo: pool via Jiji Press / AFP
Japanese Prime Minister Shinzo Abe shakes hands with Chinese President Xi Jinping during their meeting in Beijing on October 26, 2018. Photo: pool via Jiji Press / AFP

Japanese Prime Minister Shinzo Abe arrived home on Saturday after a three-day visit to China buoyed by good vibes and some promising agreements. But there was considerable vagueness hanging over free-trade deals and strategic issues.

With Chinese President Xi Jinping facing massive trade pressure from across the Pacific – pressure that Abe is also subject to, albeit indirectly, there was good reason for the two leaders to focus on economic positives rather than geostrategic and political negatives.

That prerogative seems to have defined the trip. However, while much appears promising, there was a lack of detail on actual results in regard to trade, China’s controversial Belt and Road Initiative and territorial disputes.

One key weather-vane of the trip was always going to be whether Chinese President Xi Jinping would agree to a reciprocal visit to Tokyo – the first by a Chinese leader since Hu Jintao’s visit in 2008.

The outcome on that seems to sum up the outcome of the summit overall. Xi said, in response to Abe’s invitation, that he would “seriously consider” a visit. That not-quite-concrete reply did not satisfy Tokyo. “We need to nail down a date now,” Deputy Chief Cabinet Secretary Yasutoshi Nishimura told reporters in Beijing.

The pluses

Still, the optics were excellent. In the leaders’ first bilateral meeting in China in seven years, Xi rolled out the red carpet, with a military parade for Abe, a grand reception marking the 40th anniversary of the Sino-Japan Friendship Treaty in the Great Hall of the People, and a banquet in the Diaoyutai State Guesthouse. Japanese media also noted that Xi’s facial and body language in Abe’s presence was more upbeat than in other, recent meetings between the two regional rivals.

Given the issues straining relations in recent years – there are major policy differences over Pacific War history, the disputed Senkaku-Diaoyu islands, freedom of navigation in the South China Sea and North Korea policy – the fulsomeness of this reception was a plus.

The nitty-gritty was worked out between Abe and Premier Li Keqiang, with a subsequent meeting and state banquet providing Abe and Xi the opportunity to talk up the reset of relations.

“As the international situation changes, China and Japan are becoming increasingly dependent on one another,” Xi told Abe, adding (perhaps with reference to Washington): “The rapid changes in the world are providing China and Japan with opportunities for more in-depth cooperation.”

Ties between Beijing and Tokyo plunged in 2012 when Tokyo “nationalized” the Senkaku-Diaoyus. Relations between the two countries are now “back on track,” Xi noted.

Abe, who some consider a hawk and others consider a pragmatist, seemed equally keen to make positive noises. “From competition to co-existence, Japan and China bilateral relations have entered a new phase,” Abe said. “With President Xi Jinping, I would like to carve out a new era for China and Japan.”

Li – in what looked like an acknowledgment of many of the issues that foreign, including Japanese, businesses face in China – told Abe: “China will unswervingly forge ahead opening-up to the world, promote fairer regulation, strictly protect intellectual property rights and create a market-oriented, law-based and internationalized business environment.”

The main takeaways from the summit appeared to be in the area of economic stability and bilateral business. As of 2017, when bilateral trade hit $300 billion, China returned to being Japan’s leading trade partner, but Japan – like South Korea – will be hurt by US sanctions against China, as it supplies many of the components used in Chinese finished exports.

Abe, who is militarily dependent upon the United States for defense against both Chinese expansionism and North Korean brinksmanship, noted: “Retaliatory measures do not benefit anyone. The US and China should resolve their tensions through dialogue.”

Amid IMF warnings of upcoming financial turmoil and in the face of Washington’s predatory trade maneuvers, the two countries agreed on a $30-billion currency swap and on setting up a yuan clearing bank in Japan.

They also agreed to boost cooperation in securities markets, including the listing of exchange-traded funds (ETFs), and the facilitation of smoother Customs clearance.

Abe was accompanied by a large Japanese business delegation, and 52 deals worth $18 billion in third-party markets were inked on Friday, the flagship project being the redevelopment of an industrial park in Chonburi, Thailand, into a ‘smart city’.

Vague outcomes

However, in other areas, it was far from clear what was achieved. While officials talked up issues, there was little reference to concrete outcomes.

Japan and China have been fierce competitors in regional infrastructure projects. Observers say Japan offers higher quality, more expensive services, but is frequently being undercut by cheaper, but lower quality services from China, which are promoted as part of its Belt and Road Initiative (BRI). In this sphere, Chinese media trumpeted what Chinese Foreign Ministry spokesperson Hua Chunying said: “Japan has also expressed its readiness to actively participate in the BRI… We are now actively conducting third market cooperation. We are looking for more proactive cooperation in this regard.”

Chinese media made clear that the two had agreed to move ahead on the Asia-centric, China-sponsored Regional Cooperation Economic Partnership, or RCEP, though details were scant on what those moves amount to. Japan is a party to the RCEP, but Tokyo’s trade officials are more aggressively promoting a rival free-trade initiative in Asia-Pacific, the revamped TPP, or Trans-Pacific Partnership, in the region.

Abe also thanked China for its willingness to consider lifting a ban on some Japanese foodstuffs instituted after the 2011 Fukushima nuclear crisis. China said it would conduct scientific studies on the issue.

The negatives

While the two agreed on the continuation of sanctions on North Korea to press the regime to denuclearize, many observers are suspicious over how stringently these sanctions are applied by Beijing, which is responsible for 80-90% of North Korean trade. Earlier this week in South Korea, a conservative congressman, cited Chinese Customs data and alleged that Pyongyang has imported some $4 billion worth of luxury goods since 2012, the year that Kim Jong Un took power.

Territorial issues were also discussed. A Japanese government spokesman said Abe told Li during their meeting on Friday that there would be “no genuine improvement” in ties unless there was “stability in the East China Sea” – almost certainly a reference to the Senkaku-Diaoyu dispute, where Chinese fishing boats have aggressively challenged Japanese vessels.

The two sides agreed to hold a meeting between defense officials, possibly before the end of this year, but there was no agreement on the establishment of a crisis hotline to prevent accidental clashes, a subject that has been under discussion for months. In all, a Japanese official told the Nikkei newspaper, the meeting was “a half-step forward.”

After their Beijing tete-a-tete, the two leaders are both poised for more summitry.

The Indo-Pacific-focused Abe is due to welcome Indian Prime Minister Narendra Modi in Japan on Sunday and Monday (October 28-29), while Xi faces a potentially stormier meeting with Trump on the sidelines of the G20 meeting in Argentina at the end of November.

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