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Sino-Japanese Power Politics pp 79–102Cite as

Palgrave Macmillan

Money: Economic Rivalry and Economic Statecraft in Sino-Japanese Relations

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Abstract

China and Japan also aggressively competed for international influence through economic levers. The bilateral power game coincided with the inauguration of bold economic initiatives by both sides, changes that were both dictated by the broader undercurrents of great power competition and hastened or facilitated by the Senkaku/Diaoyu Islands standoff. Abe won the general elections of December 2012 by promising “Japan’s Comeback” (Nippon wo torimodosu), and he did so through a set of bold, if often risky, economic reforms that granted him domestic stability and an economic shield against China. In addition, Beijing and Tokyo embraced international initiatives, such as the Asian Investment Infrastructure Bank and the Trans-Pacific Partnership that betrayed their mutual geopolitical antagonism and quest for political leverage.

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Notes

  1. 1.

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  2. 2.

    Kent Calder and Min Ye, The Making of Northeast Asia, Princeton: Princeton University Press, 2010, p. 263. (Calder and Min 2010)

  3. 3.

    Jack Snyder, Myths of Empire, pp. 66–111. (Snyder 1991)

  4. 4.

    Hidetaka Yoshimatsu, “Economic-Security Linkages in Asia,” in Saadia Pekkanen et alia (eds.), The Oxford Hanbook of the International Relations of Asia, Oxford: Oxford University Press, 2014, pp. 569–585. (Yoshimatsu 2014)

  5. 5.

    Eric Heginbotham and Richard Samuels, “Mercantile Realism and Japanese Foreign Policy,” International Security, vol. 22, no. 4, Spring 1998, 171–203. (Heginbotham and Samuels 1998)

  6. 6.

    Richard Katz, “Mutual assured production: why trade will limit conflict between China and Japan,” Foreign Affairs, July/August 2013, https://www.foreignaffairs.com/articles/china/2013-06-11/mutual-assured-production.

  7. 7.

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  8. 8.

    Richard Katz, “Mutual assured production”; James Reilly, “China’s economic statecraft turning wealth into power,” Lowy Institute for International Policy, November 2013, http://www.lowyinstitute.org/publications/chinas-economic-statecraft-0.

  9. 9.

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  10. 10.

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  11. 11.

    Li Jiabao, “Crisis ‘will hit Japan trade’,” China Daily, September 20, 2012; Chen Jia, “Dispute adds to Tokyo’s woes,” China Daily, September 23, 2012.

  12. 12.

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  13. 13.

    Francesca Congiu, “China 2015: implementing the Silk Road Economic Belt and the 21st Century Maritime Silk Road,” in Asia Maior Vol. XXVI 2015, pp. 19–51. (Congiu 2015)

  14. 14.

    “21 Asian countries sign MOU on establishing Asian Infrastructure Investment Bank,” Xinhua, October 24, 2014, http://news.xinhuanet.com/english/business/2014-10/24/c_133740149.htm; Asian Infrastructure Investment Bank, “The Asian Infrastructure Investment Bank Inaugural Ceremony,” January 16, 2016, http://www.aiib.org/html/2016/NEWS_0119/87.html.

  15. 15.

    Kerry Brown, “Green light for China’s Silk Road,” Inside Story, May 19, 2015.

  16. 16.

    Hideo Suzuki, Shin haken kokka Chūgoku x TPP nichibei dōmei, Tokyo: Asahi Shinbun Shuppansha, 2016, pp. 99–101, (Suzuki 2016)

  17. 17.

    Hideo Suzuki, Shin haken kokka Chūgoku x TPP nichibei dōmei, pp. 98–9 (Suzuki 2016); Toshiya Tsugami, Chūgoku taitō no shūen, Tokyo: Nihon Keizai Shinbun Shuppan-sha, 2013, pp. 23–36.

  18. 18.

    Conversation with high-ranking European diplomat responsible for Asia-Pacific affairs, January 5, 2016.

  19. 19.

    Chen Dadao, “Zhongguo de quanqiu diyuan zhengzhi da huanjing,” Zhongguo guojia dili, October 14, 2015, http://www.dili360.com/cng/article/p5645561a337ab75.htm; “Ya-Ou dalu zhongxin daodi shi zai Xinjiang, Zhong Ya haishi Dong Ou?” Zhongguo guojia dili, October 14, 2015, http://www.dili360.com/cng/article/p5656b6a77213a76.htm.

  20. 20.

    Zhang Xin and Guo Chen, “Cong TPP he Ya Tou Hang kan Zhong-Mei zhanlüe boyi,” Shijie jingji yu zhengzhi luntan, no. 9, 2015, 23. (Zhang and Guo 2015)

  21. 21.

    See, for instance: Michiel Foulon, “Neoclassical Realism: challengers and bridging identities,” International Studies Review, vol. 17, no. 4, 2015, 635–661. (Foulon 2015)

  22. 22.

    Yachi Shōtarō, Taniguchi Tomohiko, Kaneda Hideaki and Akita Hiroyuki, “Sōkatsu zadankai ‒ sōgōteki nichibei anzen hoshō kyōryoku ni mukete,” in Yachi Shōtarō (ed.), Nihon no gaikō to sōgōteki anzen hoshō, Tokyo: Wedge, 2011, pp. 396–397; pp. 388–454. (Yachi and Taniguchi 2011)

  23. 23.

    Hideo Suzuki, Shin haken kokka Chūgoku x TPP nichibei dōmei, pp. 39–41. (Suzuki 2016)

  24. 24.

    Hideo Suzuki, Shin haken kokka Chūgoku x TPP nichibei dōmei, pp. 61–79. (Suzuki 2016)

  25. 25.

    “Hillary Clinton’s U-turn on TPP deal has team working overtime ahead of debate,” The Guardian, October 13, 2015.

  26. 26.

    Masahiro Kawai and Kanda Naknoi, “ASEAN economic integration through trade and foreign direct investment: long-term challenges,” ADBI Working Paper Series, October 2015, 14.

  27. 27.

    Shintaro Hamanaka, “Trans-Pacific Partnership versus Regional Comprehensive Economic Partnership: control of membership and agenda-setting,” ABD Working Paper Series on Regional Economic Integration, no. 146, 2014, 9–12. (Hamanaka 2014)

  28. 28.

    Ben Bland, “Japan China step up fight for Asean infrastructure contracts,” Financial Times, November 22, 2015.

  29. 29.

    “Shouquan fabu: Zhonggong Zhongyang guanyu zhiding guomin jingji he shehui fazhan di shisan ge wunian guihua de jianyi,” Xinhua, November 11, 2015, http://news.xinhuanet.com/fortune/2015-11/03/c_1117027676_2.htm.

  30. 30.

    Zhao Jianglin, Zhong-Mei sichou zhi lu zhanlüe bijiao yanjiu: jianyi Meiguo xin sichou zhi lu zhanlüe dui Zhongguo de teshu yiyi, Beijing, Shehui kexue wenxian chubanshe, 2015, p. i (Zhao 2015); U.S. Department of State, “New Silk Road ministerial,” September 22, 2011, http://www.state.gov/r/pa/prs/ps/2011/09/173765.htm.

  31. 31.

    Yuan Xintao, “‘Yidai yilu’ jianshe de guojia zhanlüe fenxi,” Lilun yuekan, no. 11, 2014, 7–8 (Yuan 2014); Liu Haiquan, “‘Yidai yilu’ zhanlüe de anquan tiaozhan yu Zhongguo de xuanze,” Taipingyang xuebao, vol. 23, no. 2, February 2015, 75 (Liu 2015). This was not the case, however, see: Nikolay Murashkin, “Japanese involvement in Central Asia: an early inter-Asian post-neoliberal case?” Asian Journal of Social Science, vol. 43, 2015, 50–79. (Murashkin 2015)

  32. 32.

    Wen Longje, “Anbei huanyou Zhong Ya, duikang Yidai yilu?” Ifeng.com, October 26, 2015, http://news.ifeng.com/a/20151026/45996093_0.shtml; Ren Yirong, “Anbei fang Zhong Ya suqiu hezai,” Zhongguo guofang bao—junshi tekan, October 29, 2015, http://www.81.cn/jwgd/2015-10/29/content_6744876.htm.

  33. 33.

    Zhang Monan, “Quanmian tisheng ‘Yidai yilu’ zhanlüe fazhan shuiping,” Hongguan jingji guanli, no. 2, 2015, 22. (Zhang 2015)

  34. 34.

    Xu Yuanrong and Zheng Niya, “Riben zenme kandai Zhongguo ‘Yidai yilu’,” Diyi jingcai, August 11, 2015, http://www.yicai.com/mnews/2015/08/4667855.html.

  35. 35.

    Biswa Nath Bhattacharyay, “Estimating demand for infrastructures 2010–2020,” in Biswa Nath Bhattacharyay, Masahiro Kawai, and Rajat M. Nag (eds.), Infrastructures for Asian Connectivity, Cheltenham and Northampton, MA: Edward Elgar Publishing, The Asian Development Bank Institute and the Asian Development Bank, 2012, p. 32. (Bhattacharyay 2012)

  36. 36.

    Lu Bingyang, “State-owned firm building high-speed cargo trains,” Caixin Online, December 17, 2015, http://english.caixin.com/2015-12-17/100889617.html.

  37. 37.

    “Xi Jinping huijian Yindunixiya zongtong Zuoke,” Renmin Ribao, April 23, 2015.

  38. 38.

    ‘Japan loses Indonesian high-speed railway to China, The Japan Times, September 30, 2015, http://www.japantimes.co.jp/news/2015/09/30/.

  39. 39.

    Zhong Nan, “Full steam ahead for Indonesia’s first high-speed railway,” China Daily, January 20, 2016, http://usa.chinadaily.com.cn/business/2016-01/20/content_23172283.htm; China Railway, “Construction of Jakarta-Bandung HSR starts,” February 14, 2016, http://www.china-railway.com.cn/en/internationalcooperation/.

  40. 40.

    “Ya-Wan gaotie kaigong—Zhongguo meng zhuli Yinni meng,” Xinhua, January 22, 2016, http://news.xinhuanet.com/world/2016-01/22/c_128656506.htm.

  41. 41.

    Robin Harding and Tom Mitchell, “Rail battle between China and Japan rushes at high speed,” Financial Times, December 20, 2015.

  42. 42.

    “Japan says bid for Indonesian railway rejected, China wins,” Channel News Asia, September 29, 2015.

  43. 43.

    Asian Development Bank, “Toward sustainable and balanced development: Strategy and action plan for the Greater Mekong Subregion North–South Economic Corridor,” 2010, pp. 6–7, http://www.adb.org/sites/default/files/publication/28005/gms-north-south-action-plan.pdf.

  44. 44.

    “Construction of railway to China set to begin,” The Economist Intelligence Unit, November 24, 2015; “China, Laos to kick start joint railway in December,” China Daily, November 30, 2015.

  45. 45.

    “China, Laos to kick start joint railway in December.”

  46. 46.

    “Japan to cooperate on Bangkok-Chiang Mai high-speed rail link,” The Japan Times, May 28, 2015.

  47. 47.

    “China, Japan and the case for Thailand’s railway,” The Economist Intelligence Unit, December 22, 2015.

  48. 48.

    “China, Japan and the case for Thailand’s railway.”

  49. 49.

    Sijia Jiang, “Not taking no for an answer, China Railway Group says high-speed project in Thailand ‘still on’,” South China Morning Post, April 18, 2016; Tan Hui Yee, “Thai China rail project ‘will continue’,” The Straits Times, April 6, 2016.

  50. 50.

    “Rail battle between China and Japan rushes ahead at high speed.”

  51. 51.

    “Rail battle between China and Japan rushes ahead at high speed.”

  52. 52.

    “Japan, China studied scope for bullet trains,” The Hindu, October 27, 2015.

  53. 53.

    “Deutsche Bahn to buy more parts from China,” Deutsche Welle, November 17, 2015, http://www.dw.com/en/deutsche-bahn-to-buy-more-parts-from-china/a-18856013.

  54. 54.

    Zhong Nan and Xie Chuanjiao, “Taking high-speed trains across borders,” China Daily, March 10, 2016, http://usa.chinadaily.com.cn/epaper/2016-03/10/content_23813667.htm.

  55. 55.

    Malcolm Cook, “Mugabe in Tokyo: The warping of Japanese foreign policy,” The Lowy Interpreter, March 30, 2016, http://www.lowyinterpreter.org/post/2016/03/30/Mugabe-in-Tokyo-The-warping-of-Japanese-foreign-policy.aspx.

  56. 56.

    “What Keeps Aso awake at Night: Abe,” The Wall Street Journal, April 21, 2013.

  57. 57.

    “Reluctant BoJ given deflation-beating role,” Financial Times, January 22, 2013.

  58. 58.

    Shinzō Abe, Utsukushii Kuni e, Tokyo: Bungei Shunjū, 2006, pp.152–3. (Abe 2006)

  59. 59.

    “Shinzo Abe talks to The Economist,” The Economist, December 5, 2014; see also: “Transcript of interview with Japanese Prime Minister Shinzo Abe,” The Washington Post, February 20, 2013.

  60. 60.

    “A More-Muscular Japan, Personified,” The Wall Street Journal, February 18, 2014.

  61. 61.

    Japan’s outward FDI towards China decreased from a 2012 peak of 13.5 billion US$ to 6.7 billion in 2014, while slightly increasing to 8.8 billion in 2015. JETRO, “Japanese Trade and Investment Statistics,” https://www.jetro.go.jp/en/reports/statistics/.

  62. 62.

    “Japan on brink of technical recession,” Financial Times, September 30, 2015; “China says needs to ensure economic risks don’t turn into social risks,” Reuters, July 31, 2015.

  63. 63.

    Toshiya Tsugami, Chūgoku taitō no shūen; conversation with Abe advisor.

  64. 64.

    JETRO, “Japanese Trade and Investment Statistics,” https://www.jetro.go.jp/en/reports/statistics/.

  65. 65.

    Richard Katz, “Why Chinese-Japanese Economic Relations Are Improving,” Foreign Affairs Online, December 30, 2013, https://www.foreignaffairs.com/articles/china/2013-12-30/why-chinese-japanese-economic-relations-are-improving.

  66. 66.

    Kitaoka Shinichi, Gurōbaru Pureyā to shite no Nippon, Tokyo: NTT Shuppan, 2010. (Kitaoka 2010)

  67. 67.

    Interview with European official formerly in charge of China aid policy.

  68. 68.

    Bart Gaens, “Teaching how to fish? The transformation of Japan’s development agenda,” EAJS Presentation, August 28, 2014.

  69. 69.

    “Japan to provide Vietnam patrol boats next year,” Philippine Daily Inquirer, March 31, 2014; “Japan to provide Vietnam patrol boats next year,” USNI, June 2, 2014. On Japan’s strategic ODA policy: Bart Gaens, “Teaching How to Fish?”

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Authors and Affiliations

  1. War Studies Department, King’s College London, London, United Kingdom

    Giulio Pugliese

  2. History Department, University of Hong Kong, Pokfulam, Hong Kong

    Aurelio Insisa

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  1. Giulio Pugliese
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Pugliese, G., Insisa, A. (2017). Money: Economic Rivalry and Economic Statecraft in Sino-Japanese Relations. In: Sino-Japanese Power Politics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-59554-6_5

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