Japan and China square up

Despite strong economic ties, political tensions have marred relations between China and Japan. Why is this happening and what might the consequences be?

How bad has it got

Relations between China and Japan are as bad as they have been since the two nations normalised diplomatic ties in 1972 and decidedly cooler than they were just a year ago. Political tensions have risen in recent months, as both countries seek to match their economic power with more assertive, nationalist stances. For example, last December Japan ditched its 58-year-old policy of pacifism, and officially adopted a more robust defence policy aimed at maximising Japan's role as a confident regional power and identifying China as a "grave factor of insecurity".

How has China reacted?

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With a surge of anti-Japanese feeling. In April, current tensions mixed with long-standing grievances when a new Japanese school textbook painted a rosy picture of Japan's 20th-century history, glossing over its imperialist aggression against China and Korea. The nationalistic textbook angered many in Japan, and has in practice only been adopted by a few school districts. But it still sparked anti-Japan protests across China, including an attack by students on the Japanese embassy in Beijing.

And since then?

Bilateral relations have worsened. First, China objected to Japan's bid to become a permanent member of the UN Security Council, citing its record of aggression. In August, China and Russia conducted joint military exercises in the Yellow Sea widely seen as a display of strength aimed at Japan and its key ally the US. And in mid-September, Beijing sent a fleet of five warships to a disputed, potentially resource-rich, area of the East China Sea and now intends to start producing gas there within weeks, despite strong protests by Tokyo. In a further pointed signal, the military move came just two days before Japan's general election. And the re-election of Junichiro Koizumi, who has pursued a robustly nationalistic foreign policy, will do nothing to calm the waters.

What is behind the tension?

A mix of historic grievances and geopolitical rivalry. The underlying source of rancour is the enduring legacy of the 1930s and 1940s. Between 20 million and 35 million Chinese people were killed after Japan invaded Manchuria in 1931 and went on to occupy large swathes of China up to 1945, including Beijing, Shanghai and Nanjing. Hundreds of thousands of Chinese were worked to death in labour camps and Japan used banned chemical agents on Chinese forces and civilians. An estimated 300,000 chemical weapons remain on Chinese soil buried by the retreating Japanese 60 years ago. According to the Japanese foreign ministry, Japan has apologised on32 separate occasions for its actions. But China believes these apologies have never been adequate, genuine or consistent.

Why not?

As they see it, Japan's actions speak louder than its words. In May, China's vice-premier Wu Yi refused to meet Koizumi after the Japanese prime minister once again visited Japan's controversial Yasukuni shrine. The Shinto memorial is Japan's national monument to its war dead, but it also enshrines 14 of the Japanese war criminals most despised by the Chinese. By appearing to honour Japan's past aggression, Koizumi infuriates the country's neighbours. Many Chinese genuinely fear the resurgence of Japanese nationalism, and it is certainly true that many people in Japan, fed up of apologising for a war that ended 60 years ago, are happy to embrace the new mood of national assertiveness. Beijing is happy to exploit people's fears in its drive to replace its defunct Communist ideology with a resurgent nationalism.

Why is geopolitical rivalry growing?

The end of the Cold War, the rise of China, and the East Asian region's economic success China and Japan are the world's second and third-biggest economies measured by purchasing-power parity mean that both countries are increasingly ambitious. As China rises, Japan which has arguably seen itself as a Western nation ever since the Meiji Restoration in 1868 is rapidly reassessing its own role as a regional and global power to counter China. There are now several hot issues that could trigger conflict. First is access to natural resources, which has always been Japan's most pressing strategic problem. (It attacked Pearl Harbour after the US imposed an oil embargo.) In the 1980s, China and Japan had a common enemy in the USSR; now they are competing for Russian energy resources. It is possible to envisage war over disputed gas reserves in the East China Sea. Second is Taiwan. Beijing has often threatened to use force to retake Taiwan, and is enraged by Japan's increasing defence co-operation with the Taiwanese. War between Japan and China is hardly imminent. But these issues are unlikely to be easily resolved in the current climate.

Could common interests ease tensions?

Japan is China's third-biggest trading partner, and has been a catalyst and model for China's rapid industrialisation, as well as an important source of foreign direct investment. In turn, China recently displaced the US as Japan's biggest trading partner. With two-way trade now worth $211bn, China's dynamic growth has played a key role in hauling the Japanese economy out of its malaise. But the two economies are not so interdependent that trade can't be hit by political tensions. Thousands of Japanese tourists scrapped visits after the April protests, and Beijing has put off its decision over who should build the new Beijing-Shanghai high-speed train link, despite the fact that Japan's bullet train system is the only realistic candidate.