The first round of the China-Japan High-Level Economic Talks
will take place in Beijing tomorrow, signaling the "Sino-Japanese
relationship of mutual benefit based on their common strategic
interests" is gaining depth.
In October 2006, then Japanese Prime Minister Shinzo Abe made an
"ice-breaking" trip to China, followed by Chinese Premier Wen
Jiabao's "ice-thawing" visit to Japan in April this year, as
strategic dialogue between the two nations was resumed and
"constructing a relationship of mutual benefit based on common
strategic interests" became a consensus between them. The
China-Japan High-Level Economic Talks mechanism, as a spin-off of
the revived bilateral strategic dialogue, will provide the
institutional premise for the two countries to coordinate policies
as well as maintain and develop common interests.
The economic mutual-dependency between China and Japan has been
deepening along with the deepening of globalization in the new
century. The integration of industries centered on the traditional
manufacturing industry is spreading into logistics, circulation,
financial and information industries. The structure of
Sino-Japanese trade led by "goods trade" is gradually expanding
toward "services trade" and driving forward capital flow and
technology exchanges between the nations and the development of
securities trading.
The process of "services trade" usually takes place with
cross-border movement of personnel, technology, capital and
physical entities of economic organizations. For example, as sales
of Japanese-made automobiles grow in scale, the after-sales
services such as auto repair and technological support must move
into the Chinese market in matching strength to offer localized
services. Another example can be found in such services as
logistics, circulation, banking and finance, where market opening
has been gaining depth since the transitional period after China
joined the World Trade Organization (WTO) expired. Foreign banks
can now open their own branches in China to offer various services
in multiple currencies. Particularly noteworthy is that, as foreign
banks are now allowed to do renminbi business in China, the number
of Japanese bank branches is growing. Meanwhile, technology
exchanges and emersion are flourishing as well, as the movement of
Japanese enterprises' operations to China gains scale and speed and
China's import of complete plants expands.
The development of such high-end services trade inevitably
requires that the two countries' relevant policies and legal
systems allow interconnection and integration with each other in
nature. However, universal rules over investment and competition
and services trade agreement under the WTO framework are still
taking shape as we speak, leaving government agreement between the
two countries the only authoritative contract on market regulation
and negotiated rules. To facilitate the formulation of such a
mechanism, it is particularly important to have strategic dialogue
and policy coordination between the two countries.
Also, as the tide of globalization and regionalization continues
to surge ahead, non-traditional threats such as shortages of energy
and other natural resources, environment damage, crime, natural
disasters and the spread of infectious and communal diseases are on
the rise. The impact of these non-traditional threats have been
felt beyond national borders and directly threatening the social
stability of neighboring countries and even the surrounding region.
To deal with these non-traditional threats, a country or ethnic
group simply cannot pull it off on its own and close cooperation by
neighboring countries are therefore a must for them to set rules
and regulations to resist and neutralize their common threats and
protect their common interests.
Since the normalization of China-Japan diplomatic relations in
1972, despite the signing of an "investment protection agreement"
between the two nations to provide a safety net for Japanese
enterprises directly investing and operating in China, the two
countries have yet to work out a complete statutory system and
institutional safeguard for free movement of personnel, protection
of technology and intellectual property rights and the
establishment of financial institutions to conduct daily operations
and securities trading.
It is now an urgent task for both governments to agree on a
standard for mutual access to advance two-way investment and
economic fusion through policy coordination under strategic
dialogue between the two governments.
Regrettably, the Koizumi administration did not cherish the
five-year grace period China had after joining the WTO, nor did it
take this historic opportunity to gear up strategic dialogue and
conduct positive policy coordination with China, but rendered the
China-Japan ties barely alive by making the historical mistake of
repeatedly paying homage to the Yasukuni Shrine (which honors
executed Japanese Class-A war criminals among others killed during
World War II).
Because China and Japan could not conduct productive policy
coordination to facilitate negotiations over a China-Japan
investment agreement, an intellectual property rights protection
agreement, an agreement on free movement of technicians and on
"joint prevention and control of environmental pollution and access
to (each other's) environmental protection market" as well as
access to financial and IT service markets, the development of
China-Japan economic ties lagged behind the pace of globalization.
This sorry situation was the main reason why China's trade kept a
fast pace while Japan's share of the China trade shrank relatively
speaking.
The first round of the "high-level economic talks" between China
and Japan will not only help bring bilateral economic relations up
to date but also give the Sino-Japanese strategic relationship of
mutual benefit real substance. This is what our time requires and,
moreover, the culmination of the two countries' efforts to fulfill
their regional responsibility and maintain regional stability and
common prosperity. It can be seen as an institutional safeguard for
the two nations to produce interconnected and fusible policies and
a statutory system both sides can trust.
As for the participants of the talks, the Japanese side will be
represented by the minister of economy, trade and industry, the
minister of agriculture, forestry and fisheries and the minister of
internal affairs and communications; while the host country will be
represented by key members of the policymaking process such as the
minister of commerce, who is in charge of foreign trade and
investment, and minister of the National Development and Reform
Commission, who oversees economic reform and development and
industrial structure and layout. Also, both sides will feature
senior officials involved in decision making for financial
administration and foreign exchange policies, with their colleagues
in foreign affairs acting as organizational coordinators.
It is not difficult to see in the lineups the "China-Japan
High-Level Economic Talks" boasts the significance of an "all-round
economic diplomacy" maneuver.
China and Japan still have many issues to settle between them
and it is unrealistic to expect one round of talks will solve all
of them. Nevertheless, whether the two sides reach consensus on any
specific issue or not, the talks will serve as a starting block of
historical significance for the development of bilateral relations
in economic and judicial affairs.
The author is a researcher with China Institute of Contemporary
International Relation
(China Daily November 30, 2007)
