Trade
China’s and Japan’s economies are respectively the world’s first and fourth-largest economies. In 2008, China-Japan trade grew to $266.4 billion, a rise of 12.5 percent on 2007, making China and Japan the top two-way trading partners.The bilateral trade relationship is the third-largest in the world, with a US$340 billion trade relationship in 2014. China is Japan’s largest trading partner, accounting for one-fifth of its trade, and Japan is China’s second-largest trading partner. Besides that, Japan is the largest investor in China, with a stock of direct investment at more than US$100 billion in 2014 or US$30 billion more than the next largest source, the United States. But even those massive trade and investment figures understate just how intertwined are these two Asian giants.
The two economies are deeply complementary, with different levels of industrial and technological capability that generate business and investment on a scale not matched in any of China’s other economic relationships, even that with the United States. Looking forward, with the shift to clean industrial technologies a top priority and Japan a natural partner in developing the new model of Chinese growth, the geo-economic potential of the economic relationship is enormous.
Yet the headlines about the China–Japan relationship are captured neither by its established scale nor by its geo-economic potential. Rather, political tensions and security rivalry dominate the headlines and frame a conception of the relationship that bedevils constructive, realistic thinking about its future. While huge trade and investment ties fuel the economies of both China and Japan, and the wider Asian region, their leaderships steadfastly look backwards to the unhappy periods in their history, not forward to the bright future that their economic development and their geo-economic circumstance has thrust upon them.Read more
So far the cold politics between China and Japan have not undermined the economic relationship to any significant degree. The hot economics seems to have restrained the cold politics. Indeed, following the frosty meeting between Xi and Abe at APEC in November 2014, the two leaders had a warmer meeting in April 2015 in Jakarta on the sidelines of the Asian–African Conference. Xi appeared before a Japanese delegation in May 2015, receiving a letter from Abe and declaring his intentions to improve relations. Resumption of the China–Japan–South Korea Summit meetings will provide another chance for Abe and Xi to meet and develop trust. See also
Tourism
The tourism from China is increasing each year, which contribute a big proportion of Japanese tourism income. In 2014, 2.4 million Chinese visited Japan, an 83 percent increase on the previous year. And last week the Japanese government announced that it was increasing Chinese consular staff to handle a surge of Chinese visa applications.
Why haven’t China’s travel plans seemingly been affected by its political views? It comes down to shopping — specifically, to the Chinese public’s penchant for shopping overseas. Given China’s frequent product safety scandals and the rampant forgeries of designer goods that flood its markets, Chinese often schedule shopping sprees when they’re outside the country. In 2014 alone, Chinese spent $164 billion abroad, making them the world’s biggest vacation spenders. And Japan is increasingly China’s favored shopping destination. In 2014, spending by Chinese tourists was up 10.3 percent over the previous year — amounting to almost $2,000 per visitor. During this past February’s Chinese New Year, Chinese tourists spent around $1 billion in Japan. Business has been so good that Laox, a Chinese-owned duty free chain that caters to Chinese tourists in Japan, has seen its stock rise 1,400 percent since 2012.
Increased tourism and trade between China and Japan can’t hurt relations between the two countries. But so far, at least, there’s little evidence that increased fraternization between Chinese tourists and Japanese duty free cashiers has contributed to a broader diplomatic or cultural thaw. Nor should anyone expect it to. Only 5 percent of Chinese citizens have passports, and they’re probably not representative of the country as a whole.
Still, judging from the experience of Chinese tourists who have already been in Japan, nationalism can sometimes be tempered by the experience of a good bargain. That’s no guarantee of peace. But it is reason to hope that China’s growing wave of outbound tourists will serve as a force for openness and tolerance — if only so they’ll have somewhere good to shop.