China and Japan: Robust Trading Partners, Geopolitical Frenemies


It is hard to discuss China and Japan without mentioning the many geopolitical tensions that are plaguing the diplomatic relationships between the world’s #2 and #3 countries by nominal GDP. However, even diplomatic relationships that seem blocked can display signs of volatility, especially in light of the serious concerns both of these countries are manifesting with respect to the recent trade attitude of the United States.

Despite the United States and Japan being strategic allies since the end of World War II, concerns are starting to multiply in Japan over the shift in attitude of the United States, with a more protectionist approach to international trade and even strong signals being sent to Japan when it comes to its military protection benefits. Just like with many European nations, Japan is being asked to considerably increase its military spending rather than rely as much as in the present on the protection of the United States… or, of course, continue to rely on US support but pay considerably more.

It should therefore come as no surprise that Japan is being more flexible on the international front, as illustrated by the general attitude surrounding the 40-year anniversary of the peace treaty between China and Japan in August of 2018 and the conciliatory tone of Shinzo Abe during his October 2018 visit, where he committed to aim for a less tense-ridden geopolitical framework.

On top of the geopolitical dimension, we have the trade numbers between the two nations, which have pretty much always been quite strong. It is worth noting that the most important trading partner of Japan is China, with Japan exporting 19.5% of its products and services to China and depending to the tune of 23.2% on imports from China.

For these two reasons and quite a few more, there are conditions at this point for the China-Japan relationship to change for the better. However, this doesn’t mean existing roadblocks are gone, with there being no agreement between the two countries on the most pressing bilateral geopolitical portfolios, with Japan being perceived as the #1 competitor to the Belt and Road initiative of China and the list could go on and on.

What is likely to happen next?

While this is always hard to predict, it is fairly safe to assume that the future relationship dynamic between the two will depend on developments in the United States to a very significant degree. On the one hand, both nations stand to suffer if the protectionist trend continues in the US, yet on the other hand, both players would have to gain if their common fear of US policy-related hurdles drive them closer together in terms of trade.

As the title of this article states, the best snapshot of the China-Japan relationship at this point in time would be that while the two are robust trading partners, they will most likely continue engaging in a complex and pragmatic “frenemy” relationship on the geopolitical front, with US developments being a major wild card that is capable of significantly altering the status quo.

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