Sino-Japanese Relations in 2020 and Implications for Taiwan

This article was originally published by Global Taiwan Institute in its weekly newsletter, The Global Taiwan Brief, Vol. 5, Issue 3. Used with permission. To get the Global Taiwan Brief in your inbox every week, subscribe at globaltaiwan.org/subscribe. 

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By I-wei Jennifer Chang, a research fellow at Global Taiwan Institute.

Japan was one of a handful of governments around the world that congratulated President Tsai Ing-wen (蔡英文) on her re-election on January 11, 2020. Japanese Foreign Minister Toshimitsu Motegi sent an official congratulatory message to President Tsai lauding the island’s democratic election. Tokyo’s congratulatory message to Tsai hit a nerve with Beijing, whose preferred China-friendly candidate Han Kuo-yu (韓國瑜)lost to the incumbent president. In response to Motegi’s statement, the Foreign Ministry of the People’s Republic of China (PRC) called on Japan to “abide by the “One-China” principle,” though Tokyo has not changed its official stance on Taiwan’s status since the 1970s. Tsai’s re-election comes at the heels of Chinese President Xi Jinping’s (習近平) upcoming state visit to Japan scheduled for April, and at a time when Japanese Prime Minister Shinzo Abe strives to improve relations with Beijing while maintaining close ties with Taipei.

Japanese Prime Minister Shinzo Abe has steered Japan’s overall policy stance to improve relations with China since assuming the position in 2012. Yet, a Japanese scholar mentioned to this author that Tokyo, which values its friendship with Taipei as well as Taiwan’s role in Japanese security, will not sacrifice its relations with Taiwan in order to strengthen relations with China. [1] According to this scholar, the Abe administration is content that Tsai was re-elected because her continuation as Taiwan’s president benefits Japan’s security prospects. [2] If Taiwan were to come under Chinese military influence by electing a pro-China Taiwanese administration, that would change Japan’s security situation and make US power projection more difficult, said the scholar. [3] Furthermore, Tokyo’s congratulatory message to Tsai does not harm Japan’s economic and security relations with China. [4] The Abe administration’s balancing act between China and Taiwan reflects the strategic and economic importance of both sides of the Taiwan Strait to Japan’s national interests.

Shifting Indo-Pacific Geoeconomics

President Donald J. Trump’s protectionist trade policies have cast a shadow over Washington’s relations with both Japan and China and have created a new scenario where Tokyo and Beijing see the benefits of mending differences and bolstering economic and trade cooperation. The Trump administration’s imposition of tariffs on Japanese steel and aluminum in March 2018, coupled with the US withdrawal from the Obama-era Trans-Pacific Partnership (TPP) shortly after Trump’s inauguration in January 2017, has exacerbated trade frictions with its ally Japan. Meanwhile, the Chinese economy has suffered under the two-year US-China trade war. Trump’s belligerence against foreign trade partners has injected new momentum for the two Asian powers to find new opportunities for economic cooperation.

A “New Era” of Sino-Japanese Relations: From “Competition to Cooperation”

Beijing and Tokyo have heralded the “new era” of Sino-Japanese relations that aims to replace the competitive undertones towards enhancing collaboration. “From competition to cooperation, the Japan-China relationship is shifting to a new phase now,” said Abe, speaking in Beijing in October 2018. “We are neighbors; we’re partners who will cooperate with each other, rather than be a threat to each other,” the Japanese prime minister said. At the eighth trilateral summit meeting of China, Japan, and South Korea in Chengdu in December 2019, Abe, calling China and South Korea “precious dear partners,” said Japan wants to work with both countries and the Association of Southeast Asian Nations (ASEAN) to “take trade to a new level.”

However, Abe continues to emphasize that concrete progress must be made on resolving maritime disputes in the East China Sea before there can be any major improvement in bilateral relations. “No true improvement in Japan-China ties can be achieved without stability in the East China Sea,” Abe said to Chinese Premier Li Keqiang in Chengdu late last year. In 2019, Japanese sightings of Chinese naval vessels entering the contiguous zone around the Senkaku/Diaoyu Islands reached a record high of over 1,000 incidents. While the Japanese government is in consensus that the country cannot accept a hegemonic China, the military and economic spheres of the government differ on how to deal with a rising China, said Satoru Nagao, a visiting fellow at the Hudson Institute. [5] Xi’s visit to Japan is very important from an economic perspective, Nagao said. [6] Both countries strive to temporarily shelve the longstanding maritime dispute, which continues to be a thorn in bilateral relations, so that they can reap mutual economic benefits.

Xi’s state visit to Japan—scheduled for April but could be postponed due to outbreak of the Wuhan coronavirus—is expected to continue this conciliatory tone in Sino-Japanese relations. Japanese news reports indicate that both sides might issue a new political document that will lay the foundation for their future relations and could have implications for Taiwan. Japan and China signed four political documents in 1972, 1978, 1998, and 2008 that have shaped bilateral relations over the past five decades. In the 1972 Communiqué, Japan stated it “fully understands and respects” the People Republic of China’s (PRC) position that Taiwan is an inalienable part of Chinese territory, without fully adopting the PRC’s stance as official Japanese policy.

According to Chinese news reports, Abe and Xi also agreed to a four-point consensus in November 2014 and a ten-point consensus in June 2019 to promote ties. During his trip to China in December 2019, Abe mentioned the fifth document, saying that Japan and China “will step up efforts to bring results in each area.” The fifth political document that may emerge from Xi’s visit to Japan will likely be under construction until the last minute and will not change Japan’s official stance, namely the “One-China” policy, said the Japanese scholar. [7]

Taiwan-Japan Relations: Friendly Partners with Trade Frictions

In the Japanese foreign minister’s congratulatory message on President Tsai’s re-election, he called Taiwan “an important partner” and “a precious friend to Japan.” The foreign minister also stated, “We share basic values and enjoy close economic relationship and people to people exchange. The Government of Japan will work toward further deepening cooperation and exchanges between Japan and Taiwan, based on the existing position to maintain Japan-Taiwan relations as a working relationship on a non-governmental basis.” It is beneficial for Japan to strengthen official relations with China as well as unofficial ties with Taiwan, said a Japanese scholar. [8] To deter Chinese military expansion, it is important for Japan to strengthen relations with Taiwan, he said. [9]

In the realm of unofficial ties, Taiwan and Japan share robust economic ties. Taiwan is now Japan’s fourth-largest trading partner, while Japan ranks among Taiwan’s top trade partners following China, ASEAN, and the United States. Bilateral trade totaled USD $67.3 billion in 2019. Japanese investment in Taiwan reached USD $1.5 billion in 2018, a dramatic jump of more than 138 percent from 2017. Taiwanese investment in Japan climbed to USD $620 million in 2018, an increase of 206 percent compared to the previous year.

President Tsai has called on Japan to smooth Taiwan’s entry into the Japan-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), as part of Taipei’s broader efforts to participate in multilateral economic institutions. The free-trade agreement among 11 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) that came into effect in December 2018, CPTPP was formed after the United States withdrew from TPP in 2017. Some current and former Japanese politicians and government officials have voiced their support for Taiwan’s accession, but Tokyo has not formally endorsed Taiwan’s entry into CPTPP. During former Premier William Lai’s (賴清德) visit to Japan in May 2019, Hajime Sasaki, a lawmaker from Japan’s ruling party, Liberal Democratic Party (LDP), welcomed Taiwan’s participation in the second wave of CPTPP negotiations. Taiwan’s economic standing makes it a suitable member of CPTPP, said Tadashi Ikeda, former chief representative of the Interchange Association, now called the Japan-Taiwan Exchange Association (日本台灣交流協會), Tokyo’s representative office in Taipei.

However, friction over Taiwan’s ban on Japanese agricultural exports from Fukushima and four other prefectures following the Fukushima Daiichi nuclear disaster in 2011 may hinder Japanese support for Taiwan’s efforts to join CPTPP. Despite Abe’s hope that Tsai would end the import ban when she entered office in 2016 and Abe’s overtures to discuss a regulatory agreement on nuclear food safety, Taiwan’s government has not changed its stance. Furthermore, Taiwanese citizens voted in a November 2018 referendum to maintain the government’s prohibition on Japanese agricultural imports from the nuclear-affected areas. South Korea and China have more restrictive food bans related to the Fukushima disaster, but were those countries to ease their restrictions, Taiwan would be put in an awkward position as a Japan-friendly country that still maintains a comprehensive ban on Japanese food imports.

At a time when Xi and Abe both desire closer economic cooperation, Taipei also should seek to strengthen trade links and overall cooperation with Japan. In 2019, Japan joined the United States and Taiwan as a coordinating partner in the Global Cooperation and Training Framework (GCTF). Tsai has said the GCTF could be a springboard for further collaboration with Japan, including on bilateral trade agreements and building support for Taiwan’s entry into CPTPP. Moreover, Taiwan’s government should carefully watch developments in Sino-Japanese relations and ensure that Taipei retains Japanese support as Beijing seeks to thwart Tsai’s ambitions to raise Taiwan’s international profile and carve out more international space for the island.

The main point: Japan wants to both improve relations with China while maintaining robust economic and unofficial ties with Taiwan. Economic tensions arising from Taiwan’s import ban on Japanese agricultural goods may dampen Tokyo’s support for Taipei’s entry into the Japan-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

[1] Author’s interview with anonymous Japanese scholar, January 30, 2020.[2] Ibid.[3] Ibid.[4] Ibid.[5] Author’s interview with Dr. Satoru Sagao, January 30, 2020.[6] Ibid.[7] Author’s interview with anonymous Japanese scholar, January 30, 2020.[8] Ibid.[9] Ibid.