East Asia

, Volume 36, Issue 4, pp 271–290 | Cite as

Contemporary China-Japan Relations: the Politically Driven Economic Linkage

  • Min-Hua ChiangEmail author


This article presents the importance of political factors in the development of China-Japan economic relations over the last four decades. The China-US reconciliation and the rise of the pro-China Japanese Prime Minister Tanaka Kakuei (1972–1974) led to the normalization of China-Japan relations in 1972. The bilateral political rapport was further consolidated in the face of the common threat in the Soviet Union. With the strengthening political relations, the bilateral economic exchanges were gradually developed. Nonetheless, following the collapse of the Soviet Union, mounting Sino-US tension, China’s growing assertiveness, and rising nationalism in both China and Japan, the Sino-Japanese bilateral political relations have been deteriorating. The escalating political tensions have impacted bilateral economic relations, including declining Japanese investment in China, weakening bilateral trade, and decreasing Japanese visitors to China. Despite improving bilateral political relations in recent years, it is uncertain how long these friendly gestures by the leaders of the two countries may last given several unsettled territorial and historical issues. The growing tension between the United States and China further adds uncertainty to China-Japan relations in the future. Without strong political relations, weakening economic ties cannot be easily restored.


China-Japan relations Japan's investment in China China-Japan tourism exchanges China-Japan trade exchanges 



The author would like to express her gratitude to the two anonymous reviewers’ insightful comments and Mr. Philip Wang for reading the first draft.


  1. 1.
    Akio, Takahara. (2017). Forty-four years of Sino-Japanese diplomatic relations since normalization. In Lam Peng Er (Ed.), China-Japan relations in the 21st Century: Antagonism despite interdependency (pp. 25-65). Singapore: Palgrave Macmillan.Google Scholar
  2. 2.
    Aoyama, Rumi. (2018). Commentary: China and Japan, a blossoming thaw after a decade of glim. News Article. Channel News Asia. Accessed 20 February 2019.
  3. 3.
    Arlt, Wolfgang Georg. (2006). China’s outbound tourism, London and New York, Routledge.Google Scholar
  4. 4.
    Arlt, Wolfgang Georg. (2015). China’s outbound in 2015: another year of resilient growth and new trends. News Article. Forbes. Accessed 20 February 2019.
  5. 5.
    Bajpaee, Chietigj. (2016). Japan and China: The geo-economic dimension. News Article. The Diplomat. Accessed 20 February 2019.
  6. 6.
    Bank of Japan. (2018). Accessed 20 February 2019.
  7. 7.
    Banri, Ito. (2012). How should we understand the economic impact of the soured relationship between Japan and China? Research Institute of Economy, Trade and Industry. Accessed 20 February 2019.
  8. 8.
    Blanchard, Ben. (2016). China, Japan more upbeat on ties but challenges remain. News Article. Reuters. Accessed 20 February 2019.
  9. 9.
    Burns, Katherine G (2011). China and Japan: Economic partnership to political ends. Stimson Center. Accessed 19 October 2019.
  10. 10.
    CEIC data company Ltd. (2018). Accessed 20 February 2019.
  11. 11.
    Chanlett-Avery, Emma and Rinehart, Ian E. (2016). The US-Japan alliance. CRS Report for Congress. Accessed 20 February 2019.
  12. 12.
    Chia, S. Y., & Sussangkarn, C. (2006). The Economic rise of China: Challenges and opportunities for ASEAN. Asian Economic Policy Review 1, 102–128.Google Scholar
  13. 13.
    Dreyer, June Teufel. (2014). China and Japan: hot economics, cold politics. Orbis, Summer, 326-341.Google Scholar
  14. 14.
    Editors of East Asia Forum (2017). Japan opens the way to cooperation on China’s belt and road initiative. East Asia Forum. Accessed 19 September 2017.
  15. 15.
    Fan, Ying (2017). Growing interdependency between China and Japan: trade, investment, tourism and education. In Lam, Peng Er (Ed.), China-Japan Relations in the 21 stCentury: Antagonism despite Interdependency (pp.67-82). Singapore: Palgrave Macmillan.Google Scholar
  16. 16.
    Felker, G. B. (2003). Southeast Asian industrialisation and the changing global production system. Third World Quarterly, 24 (2), 255–282.Google Scholar
  17. 17.
    Green, Michael J. and Self, Benjamin. (1996). Japan’s changing China policy: from commercial liberalism to reluctant realism. Survival, 38(2), 35-58.Google Scholar
  18. 18.
    Hagström, Linus. (2008). Sino-Japanese relations: the ice that won’t melt. International Journal, 64 (1), 223-240.Google Scholar
  19. 19.
    Harding, Robin, Mitchell, Tom and Peel, Michael. (2017). China and Japan vie for control of Asia trade deal. News Article. Financial Times. Accessed 20 February 2019.
  20. 20.
    He, Yinan. (2013). Forty years in paradox: post-normalisation Sino-Japanese relations, China perspectives 4, 7-16.Google Scholar
  21. 21.
    Hilpert, Hanns Gunther. (2002). China and Japan: conflict or cooperation? what does trade data say?. In Hilpert, Hanns Gunther and Haak, Eene (Eds.), Japan and China: Cooperation, competition and conflict (pp.52-71). New York: Palgrave.Google Scholar
  22. 22.
    Hughes, Christopher W. (2009). Japan’s response to China’s rise: regional engagement, global containment, dangers of collision. International Affairs, 5(4), 837-856.Google Scholar
  23. 23.
    Hurst, Daniel. (2018). Abe wants new era in China-Japan relations. News Article. The Diplomat. Accessed 20 February 2019.
  24. 24.
    Ikenberry, G. John. (2004). American hegemony and East Asia order. Australian Journal of International Affairs, 58(3), 353–367.Google Scholar
  25. 25.
    International Monetary Fund. (2016) World Economic Outlook Database. Accessed 20 February 2019.
  26. 26.
    Ishikawa, Shigeru. (2011). Sino-Japanese economic co-operation. In Caroline Rose (Ed.), Sino-Japanese relations: History, politics, economy and security (pp. 125-145). New York: Routledge.Google Scholar
  27. 27.
    Japan External Trade Organization (JETRO). (2016). FY 2016 JETRO survey on business conditions of Japanese companies in Asian and Oceania. Accessed 20 February 2019.
  28. 28.
    Japan External Trade Organization (JETRO). (2017). FY 2017 JETRO survey on business conditions of Japanese companies in Asian and Oceania. Accessed 20 February 2019.
  29. 29.
    Japan External Trade Organization (JETRO). (2018). Japanese trade and investment statistics. Accessed 20 February 2019.
  30. 30.
    Tomoo Kikuchi and Wang Z (2016). The AIIB and shifting economic dynamics in Southeast Asia. News Article. Brink News. Accessed 19 September 2017.
  31. 31.
    Kim, Eunseo. (2018). The C PTPP and its implications for Japan. News Article. The Diplomat. Accessed 19 October 2019.
  32. 32.
    Kokubun, Ryosei, Soeya, Yoshihide, Akio, Takahara and Kawashima, Shin. (2017). Japan-China relations in the modern era, London and New York: Routledge.Google Scholar
  33. 33.
    Koo, Min Gyo (2009). The Senkaku/Diaoyu dispute and Sino-Japanese political-economic relations: cold politics and hot economics?. The Pacific Review, 22(2), 205-232.Google Scholar
  34. 34.
    Lam, Peng Er. (2017). China-Japan paradox: antagonism despite interdependency. In Lam Peng Er (Eds), China-Japan relations in the 21 stcentury: Antagonism despite interdependency (pp. 1-22). Singapore: Palgrave Macmillan.Google Scholar
  35. 35.
    Maizland, Lindsay and Xu, Beina. (2019). The US-Japan security alliance. Backgrounder, Council on Foreign Relations. Accessed 18 September 2019.
  36. 36.
    Ministry of Commerce of People’s Republic of China. (2011). China foreign investment report. Beijing: Economy and Management Publishing House.Google Scholar
  37. 37.
    Ministry of Commerce of People’s Republic of China. (2013). Report on foreign investment in China. Tianjin: Nankai University Press.Google Scholar
  38. 38.
    Ministry of Internal Affairs and Communications (Japan). Japan Statistical Yearbook, various years.Google Scholar
  39. 39.
    Ministry of National Defence of the People’s Republic of China. (2015). China’s military strategy. Accessed 20 February 2019.
  40. 40.
    Mochizuki, Mike M. (2007). Japan’s shifting strategy toward the rise of China. The Journal of Strategic Studies, 30 (4-5), 739-776.Google Scholar
  41. 41.
    National Tourism Administration of the People’s Republic of China. (2015) The Yearbook of China Tourism Statistics. Beijing, China Travel and Tourism Press.Google Scholar
  42. 42.
    Nester, W.R. (1990). Japan’s Growing Power Over East Asia and The World Economy. London: The Macmillan Press Ltd.Google Scholar
  43. 43.
    Rose, Caroline and Sýkora, Jan. (2017). The trust deficit in Sino-Japanese relations. Japan Forum, 29 (1), 100-124.Google Scholar
  44. 44.
    Schaller, M. (2002). The United States and China into the Twenty-First Century. New York: Oxford University Press.Google Scholar
  45. 45.
    Siripala, Thisanka. (2018). Japan’s defense budget swells to counter China’s growing military threat. News Article. The Diplomat. Accessed 20 February 2019.
  46. 46.
    Smith, Paul J. (2009). China-Japan relations and the future geopolitics of East Asia. Asian Affairs: An American Review, 35(4), 230-256.Google Scholar
  47. 47.
    Source. (2010). China limits outbound travel to Japan. News Article. Travel Daily. Accessed 20 February 2019.
  48. 48.
    Source (2012). Japanese Car Sales Plunge in China After Islands Dispute. News Article. The Guardian. October 9. Accessed 20 February 2019.
  49. 49.
    Source (2015). Japan Eases Visa Requirements for Chinese Applicants. News Article. China Daily, Accessed 31 October 2016.
  50. 50.
    Source (2016). Japan eases visa rules for Chinese tourists to encourage return visitors. Asian Correspondent. Accessed 21 December 2016.
  51. 51.
    Source. (2016). Japan’s government approves record military spending. News Article. Reuters. Accessed 20 February 2019.
  52. 52.
    Source (2017). Tokyo Olympics fueling expectations of an economic boom and fear of a bubble. News Article. The Japan Times. Accessed 20 February 2019.
  53. 53.
    Source (2018a), Principles of Japan’s Indo-Pacific strategy align with Singapore, ASEAN priorities: PM Lee. News Article. The Strait Times. Accessed 20 February 2019.
  54. 54.
    Source (2018b). China says Xi-Trump phone call quite positive. News Article. The Strait Times. Accessed 20 February 2019.
  55. 55.
    Takada, Kazunori. (2014). Discretion pays for Japanese brands in China amid territorial dispute. News Article. Reuters. Accessed 20 February 2019.
  56. 56.
    Takeuchi, H. (2014). Sino-Japanese relations: power, interdependence, and domestic politics. International Relations of the Asia-Pacific, 14 (1), 7-32.Google Scholar
  57. 57.
    The Genron Non-Profit Organisation. (2016). The 12th Japan-China joint opinion poll analysis report on the comparative data. Accessed 20 February 2019.
  58. 58.
    Wallace, Corey. (2018). Leaving (north-east) Asia? Japan’s southern strategy. International Affairs, 94 (4), 883-904.Google Scholar
  59. 59.
    Wan, Ming. (2006). Sino-Japanese relations: Interaction, logic and transformation. California: Stanford University Press.Google Scholar
  60. 60.
    Whiting, Allen S. (1992) ‘China and Japan: politics versus economics. The Annals of the American Academy of Political and Social Science, 519, 39-51.Google Scholar
  61. 61.
    Yahuda, Michael. (2014) Sino-Japanese relations after the Cold War: Two tigers sharing a mountain. Oxon and New York: Routledge.Google Scholar
  62. 62.
    Yang, Lijun. (2017). A clash of nationalism: Sino-Japanese relations in the twenty-first century. In Lam Peng Er (Eds.), China-Japan relations in the 21 stcentury: antagonism despite interdependency (pp.83-101). Singapore: Palgrave Macmillan.Google Scholar
  63. 63.
    Zhang, Dong Dong. (1998). Negotiating for a liberal economic regime: the case of Japanese FDI in China. The Pacific Review, 11(1), 51-78.Google Scholar

Copyright information

© Springer Nature B.V. 2019

Authors and Affiliations

  1. 1.East Asian InstituteNational University of SingaporeSingaporeSingapore

Personalised recommendations