China and Japan: Politics Versus Economics

In: The annals of the American Academy of Political and Social Science, Volume 519, Issue 1, p. 39-51

Abstract

Sino-Japanese relations suffer from the heritage of Chinese bitterness over Japanese expansionism and aggression. This has put a political burden on economic complementarity that places Japan foremost in China's economic modernization in terms of trade, loans, and aid, and second in investment. In addition to the political burden, the economic interdependence is highly asymmetrical, being far more valuable for China than for Japan. Since the Tiananmen massacre, however, economic pragmatism has prevailed in Beijing as a result of Tokyo's muting its criticism of the event and moving to lift sanctions imposed by the Western industrial capitals. Yet Chinese memory and suspicion, heightened by a dispute over islands in the East China Sea, remain.