China-Japan: what comes next?

ON 21 MAY 2013 (a date randomly selected by this author), the China Daily ran an article that criticized Japans unilateral actions in nationalising the Senkaku/Diaoyu islands, and put forward evidence that challenged Japans historical claim to the disputed islands. That same day, the China Daily also ran a story about Megumu Ubasako, the 57-year old Japanese chairman of the 7-Eleven franchise in China, whose 90 stores in Chengdu have contributed more than 150 million yuan to the local economy this year. In Japan, articles in the Nikkei on 21 May noted that major Japanese medical equipment manufacturers were accelerating product development and manufacturing in China, and that the share prices of Japanese steelmakers had risen on the back of the Chinese governments new economic reform plans. Yet that same day, the Japan Times also published a report on Chinas most recent Defence White Paper, warning of the relentless modernisation of Chinas military capabilities, and calling on China to better explain its strategic thinking. How should we, in Australia, make sense of these seemingly incompatible strands in the China-Japan relationship? The stark contrast between booming economic ties and tense political and military relations understandably leaves many of us perplexed. Yet I suggest that the factors that have produced this particular combination of economic interdependence and political and military tension in the China-Japan relationship are not as incompatible as we might think. In fact, the history of the China-Japan relationship is one in which the economic story is deeply intertwined with the political and military story. For either country to achieve its national ambitions has required close economic integration with the other.