Obama's loss of balance, his Diaoyu Islands vow 'may backfire'

US president barack obama may have congratulated himself in private for apparently pulling off a difficult balancing act, but if so, he is being a little too hasty.

He offered his anxious Japanese host the reassurance Tokyo was so desperately begging for: The confirmation that the territory it stole is covered by the US-Japan security treaty.

Then, so as not to infuriate the attentive owner next door, he stated that this "is not a new position", nor one of his making, as the US-Japan treaty preceded his birth, and he reconfirmed that Washington takes no sides in the sovereignty dispute over the islands.

However, swaying to and fro on the tightrope he was walking, Obama's balancing act was lopsided at best, because it was conspicuously biased in favor of the troublemaking Japanese prime minister.

By deliberately ignoring the Cairo Declaration, the Potsdam Proclamation, and the terms of surrender Japan agreed to at the end of World War II, Obama has betrayed the postwar international order and endorsed Japan's de facto control over the Diaoyu Islands, which should have been returned to China under the terms of these legally binding agreements.

Extending the US-Japan security treaty to those islands is both morally and legally wrong.

Obama should not expect Chinese connivance in his turning a blind eye to Japan's thievery and its claims of innocence.

It was the Japanese government that unilaterally changed the status quo. The dispute over the Diaoyu Islands had cooled down until Japan poured kerosene on it and set a match to it by "nationalizing" the main islands.

Obama's praise of "Japan's long-standing commitment to international peace and security" is grating on the ear - and not just to China - because he once again chose to ignore the elephant in the room, saying nothing about Japan's denial of its militarist past and rightist present. By tacitly endorsing Japan's actions, he is giving Shinzo Abe carte blanche to continue destabilizing the region.

That Obama has cast aside the strategic ambiguity others have tried hard to preserve may be good in one sense - it helps to relieve some of the wishful thinking that Washington doesn't condone the antics of Japan's right-wingers.

But since he has voluntarily bound his country to Abe's war chariot, instead of breathing a sigh of relief that he has completed his balancing act, he might want to start considering how he is going to untie the knots and tame the adventurous Japan under Abe, or prepare to be dragged into an unwanted conflict.

Diaoyu Islands vow 'may backfire'

The PLA is fully capable of safeguarding China's Diaoyu Islands, says spokesman

US President Barack Obama's promise of military cover for Japan's claim on the Diaoyu Islands faces the potential of backfiring, observers said.

Obama stated in a press conference in Tokyo on Thursday that the US-Japan mutual security treaty covers China's Diaoyu Islands.

"We do not believe that they should be subject to change unilaterally, and what is a consistent part of the alliance is that the treaty covers all territories administered by Japan."

The forthright remarks from Obama are widely interpreted as a display of Washington's strong commitment to its Asian allies designed to dispel suspicion of weakening US clout in the region.

Obama is on a four-nation tour that was postponed seven months ago because of the US government shutdown. He faced flak at the time for postponing the trip, both in the US and overseas, amid criticism that the US was preoccupied with domestic affairs at the expense of its international commitments.

Responding to Obama's comments, Defense Ministry spokesman Yang Yujun said that the Chinese army will continue military patrols in "relevant waters" in the East China Sea.

The Chinese military is "fully capable of safeguarding the Diaoyu Islands, and it is unnecessary for other nations to go to extreme lengths to provide a so-called security guarantee," Yang said, adding that China will firmly safeguard territorial sovereignty in the face of provocation from Japan.

Ruan Zongze, vice-president of the China Institute of International Studies, said Obama's remarks may lead to unforeseen problems because the military commitment — directly naming specific islands — could "sabotage US strategic initiatives in the region" and undermine its strategic flexibility.

"As a result, Tokyo is keeping Washington in check in this regard, and, honestly, the ruling Japanese cabinet is very unpredictable," Ruan said.

Ruan noted that Obama's remarks about the islands "also harm the credibility of the US", because instead of taking an honest broker's viewpoint the US is firmly backing one side and this has the potential to cause problems.

With Japanese Prime Minister Shinzo Abe beside him, Obama told reporters that he had not drawn any new "red line" over the islands, and he emphasized the need to resolve maritime disputes peacefully.

"The treaty between the US and Japan preceded my birth, so, obviously, this isn't a red line that I'm drawing," Obama said. Li Haidong, a researcher of US studies at China Foreign Affairs University, said Obama's visit to Japan aimed to boost Japan's status as a "pillar" of Asia-Pacific security and as a key player in containing China.

But, Li said, the two allies have different agendas.

"The US seeks stability in the big picture of its relationship with China, yet Japan is not afraid of fanning the flames of a conflict with China," Li said.

The US-Japan defense treaty requires Washington to come to Japan's defense if it is attacked.

Experts said Washington believes that backing Tokyo will have long-term benefits.

Lyu Yaodong, an expert on Japanese diplomacy at the Chinese Academy of Social Sciences, said Obama is "determined to see tangible progress in his rebalancing strategy" during his Asian trip, and "to achieve this goal, satisfying demands from Japan regarding the islands is necessary".

Abe told reporters on Thursday that "the Japan-US alliance is more robust than ever before."

"The US pivot cannot succeed without strong support from important allies such as Japan," Lyu said.

Ruan noted a shift in the US-Japan military relationship, and one example is that the US is "outsourcing" more defense duties to Japan.

"Washington believes that its promise on the islands is a feasible way to strengthen its influence over Japan, and accordingly Washington wants Japan's self-defense forces to play a greater role, which is very dangerous," Ruan said.

Yang, the Defense Ministry spokesman, also confirmed what Chinese Navy Commander Wu Shengli said on Wednesday about a worst-case scenario.

Wu told reporters on the sidelines of the Western Pacific Naval Symposium that the possibility of a military conflict remains between China and Japan, and the priority is to "prevent the outbreak of a conflict".

Yang also said the PLA will continue military patrols in waters near a tropical Japanese island close to Taiwan, days after Tokyo announced it would break ground on a new radar base in the area.

The radar station on Yonaguni Island, just 150 km from the Diaoyu Islands, marks Japan's first military expansion at the western end of its island chain in more than 40 years.

"We are paying close attention to Japan's military trends," he said.

"China's military will continue to carry out battle readiness patrols, military drills and other activities in the area," Yang said.

- By Zhang Yunbi, China Daily

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Asia future at risk if Obama sends wrong signals to Japan

US President Barack Obama steps from the Air Force One as he arrives in Tokyo, Japan on April 23, 2014. Obama began a four-country trip...

Asia future at risk if Obama sends wrong signals to Japan

US President Barack Obama steps from the Air Force One as he arrives in Tokyo, Japan on April 23, 2014. Obama began a four-country trip through the Asia-Pacific region on Wednesday. (Left)

Future hangs in the balance

The US president should persuade Japan's right-wingers of the error of their ways during his trip to the region to ensure stability.

After undergoing nearly seven decades of development since the end of World War II, Asia has already taken on a new look, witnessing not only the rise of a group of industrialized countries and regions during the latter part of the 20th century, but also the emergence of a number of economies that have grown to be the engine of global economic growth in the new century.

However, Asia's development is still unbalanced.

First, Asia's political cooperation is out of step with its economic dynamism. Political trust, particularly in East Asia, is still severely lacking. The actions and comments of Japanese right-wingers, who go so far as to complain of injustice when it comes to the Tokyo Trials and try to strengthen the country's control of territory it annexed illegally during its imperialist past, have undoubtedly sown the seeds of deep mistrust among East Asian countries.

Second, in the context of the strained relations between some countries in the region, some Western media have been hyping speculation that the Asian economy might slow further. It is true economies in East Asia have recently experienced moderate or medium-speed growth after years of high-speed expansion. But this tendency is in line with the law of development, and also is connected to the fatigued global economy. Even so, the development speed of Asia's emerging economies still far exceeds that of Western developed countries, and their momentum is increasingly reshaping the global landscape.

Because of the existence of various rifts and the lack of mutual trust, the region is in desperate need of candid dialogue. The trust deficit in Asia has affected the progress of regional economic cooperation, but at the same time it also suggests that there is great potential for further economic, investment and trade cooperation in the region, including the construction of regional free trade areas.

Asia needs to accumulate constructive positive energy, give full play to the spirit of countries being in the same boat, and effectively alleviate regional tensions to change the negative factors into positive elements. Moreover, Asia should oppose any shortsighted actions to set up small cliques.

Currently in Asia, there are serious differences between those countries adhering to unity and cooperation to benefit all and those trying to form cliques and factions to benefit themselves. It is Japan that is leading such divisiveness, as it has tried to piece together an Asian version of NATO, and antagonized its neighbors by clinging obstinately to its denial of historical facts and even embarked along the road of glorifying aggression.

Any responsible power must go all out to contribute to regional peace and stability based on human morality and justice. As a great power with tremendous economic and military presence in the region, how the United States sets out its Asia-Pacific position will make all the difference to Asia's stability and development. Whether Washington will offer constructive cooperation to Asian countries' efforts to enhance mutual trust and erase the doubts of its intentions has a direct bearing on regional peace, as well as the US' own strategic interests.

Thus the eyes of the world are focused on US President Barack Obama's four-nation trip to Asia that began in Japan on Wednesday.

If the US can aim high and think big and cooperate sincerely with countries in the region to establish a common security and trust mechanism that is suitable to the characteristics of the Asia-Pacific region, it will surely receive a share of Asia's peace dividend and be genuinely welcomed among Asian countries.

However, if the US is unwilling or unable to contribute to Asia-Pacific stability, and instead takes sides in the region's various historical and sovereignty disputes, it will be hard for the country to become the kind of responsible power that can benefit Asia. If the US only looks at short-term interests and sits watching Japan turning its military ambition into reality step by step, not only will the troublemaker's interests be ultimately damaged, but also those of the US.

History has repeatedly shown us that a country that employs a policy of appeasement will eventually shoot itself in the foot.

The author is a professor and associate dean of the Institute of International Studies, Fudan University.

Contributed by Shen Dingli  China Daily

Japan reassured over Diaoyu

U.S. President Barack Obama (R) waves next to Japan's Prime Minister Shinzo Abe after dinner at Sukiyabashi Jiro restaurant in Tokyo, April 23,2014  (left)

US President Barack Obama started his four-nation Asia tour on Wednesday by overtly supporting Japan over its disputed territory with China, which experts say will exacerbate the already tense situation in East Asia.

In a written interview with The Yomiuri Shimbun published on Wednesday, Obama stated that the Diaoyu Islands in the East China Sea fall under Article 5 of the Japan-US Security Treaty, which obliges the US to protect Japan if there are conflicts over Japan-administered territories. He also supported moves by Japan to ease self-defense limits in his remarks.

"We oppose any unilateral attempts to undermine Japan's administration of these islands," Obama said, adding that the US engagement with China "does not and will not come at the expense of Japan or any other ally."

While Japanese Prime Minister Shinzo Abe has been seeking to ease the restrictions on its collective self-defense rights prohibited by Japan's Pacifist Constitution, Obama welcomed Japan playing a greater role in international security.

"I commend Prime Minister Abe for his efforts to strengthen Japan's defense forces and to deepen the coordination between our militaries, including by reviewing existing limits on the exercise of collective self-defense," Obama said, requesting Japan's Self-Defense Forces "do more within the framework of our alliance."

This is the first time that an incumbent US president has made such open remarks in support of Japan.

"Abe, more than any of his predecessors, has made headway on what Washington has long wanted from Japan, to become a more assertive partner in regional security," Jeff Kingston, director of Asian Studies at Temple University Japan Campus, told the Global Times.

Obama, who is making the first full state visit to Japan by a US President since 1996, is expected to assuage worries by Tokyo and other allies regarding his commitment to their defense, without hurting vital US ties with Asia's biggest economy - China.

Such assurances are likely to be high on the agenda when Obama meets Abe at a symbolic summit on Thursday.

"If Obama intends to improve relations with China, he is likely to antagonize the ally. To the extent that he improves relations with the allies, he'll antagonize Beijing," Kingston said, adding that Obama is on a "mission impossible."

"Obama wants a better relationship with Beijing, but he thinks that Beijing also needs to think about modifying its behavior," Kingston noted.

Shi Yinhong, director of the Center on American Studies at the Renmin University of China, said the remarks are intended to warn China while reassuring Japan and other US allies of its security guarantee, which has been under suspicion due to the way the US has dealt with the Ukraine issue.

"Japan will be very satisfied this time. But this will encourage Tokyo to step up its confrontation with Beijing," Shi told the Global Times, adding that it will further strain tensions in Asia and even damage Sino-US relations.

Japan has ramped up its military surveillance capabilities on its westernmost island of Yonaguni, which is close to the Diaoyu Islands, by starting construction of a radar unit on Saturday.

Reiterating that the Diaoyu Islands are an inherent part of China's territory, China's foreign ministry spokesperson Qin Gang said China is strongly opposed that the islands being part of the security treaty, which was reached during the Cold War and should not damage China's sovereignty and rightful interests.

Obama and Abe are also keen to show progress on a two-way trade pact. This is seen as critical to a broader regional deal that would be one of the world's biggest trade agreements and is central to Obama's "pivot" towards Asia.

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China monitors US bombers in defense zone

 China's defense ministry spokesman Geng Yansheng on Wednesday said the country has observed US B-52 bombers flying in the newly established air defense identification zone over East China Sea.


http://english.cntv.cn/program/newsupdate/20131128/102355.shtml

Geng said the US aircraft flew south and north along the eastern border of the East China Sea Air Defense Identification Zone from 11:00 a.m. to 1:22 pm Tuesday, about 200 km to the east of the Diaoyu Islands.

The Chinese army monitored the entire process, carried out identification in a timely manner, and ascertained the type of aircraft.

"We need to stress that China will identify every aircraft flying in the air defense identification zone according to the country's announcement of aircraft identification rules for the air defense identification zone," Geng said.

"China is capable of exercising effective control over this airspace," Geng added.

China announced the East China Sea Air Defense Identification Zone on Saturday. The US State Department and certain officials expressed concern after the announcement.

Pentagon spokesman Colonel Steven Warren said Tuesday that the US conducted a training exercise that had been planned for a long time. It involved two aircraft flying from Guam and returning to Guam.- Xinhua

US B-52 bombers challenge China's new ADIZ

China's latest move in defending its sovereignty is facing opposition from other countries. Two US B-52 bombers have flown over the Diaoyu Islands in the East China Sea, in defiance of the air defense identification zone set on Saturday. China is taking a measured response, while stressing that it has the ability to manage and control its airspace.

http://english.cntv.cn/program/china24/20131128/100592.shtml

Just days after China announced the establishment of an air defense identification zone, or A-D-I-Z. The US sent two B-52 bombers through the zone and over the Diaoyu Islands

China’s defense ministry asserted it has the ability to control the airspace. It says it identified the aircraft and monitored the entire two hours and 22 minutes.

The US said it was a long planned training mission, and put its own spin on the matter to fault China.

"This unilateral action appears to be an attempt to unilaterally change the status quo in the East China Sea. This will raise regional tensions and increase the risk of miscalculation, confrontation, and accidents. We have made this case to China." US State Department spokeswoman Jen Psaki said.

Japan, which claims the Diaoyu Islands as its territory, was quick to join its ally.

“Our stance is that China’s move cannot be accepted, and so I think the US is also dealing with the issue with the same stance.” Japanese defense minister Itsunori Onodera said.

Aircraft flying through an A-D-I-Z must report a flight plan, maintain two-way radio contact and respond to identification inquiries, or face defensive emergency measures.

More than 20 countries and regions use such zones, including the US and many of China’s neighbors.

The Foreign Ministry called for calm, saying the zone does not target any country.

"China’s establishment of an air defense identification zone over the East China Sea is a legitimate exercise of the right of self-defense. It’s not aimed at any particular country or target. So we hope that the countries concerned will not overreact or panic over the event." Chinese Foreign Ministry spokesman Qin Gang said.

China has also lodged protests over US and Japanese criticism. The country says the establishment of the zone has a sound legal basis and is in accordance with common international practice.

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China sets up air defence zone over East China Sea, a strategic move

China sets up air defence zone over East China Sea, a strategic move

The Chinese government on Saturday issued a statement on establishing the East China Sea Air Defense Identification Zone.

The move, however, provoked anger in Japan, which accused China of "one-sidedly" setting up the zone that covers the disputed Diaoyu islands, and described the zone as "totally unacceptable."

Having no intention to generate tensions, China's move is to uphold its own legitimate rights and safeguard what has always been its own.

As pointed out by many military experts, the establishment of the air zone is a necessary, rightful and totally legitimate measure taken by China in protecting its sovereignty and providing air security.

Actually, the establishment of the air zone is not only perfectly legitimate, but also in line with current international practice.

An air defense identification zone is established by a maritime nation to guard against potential air threats. Since the 1950s, more than 20 countries, including the United States, Australia, Germany and Japan itself, have successively established such zones.



China's Defense Ministry spokesman Yang Yujun has stressed that the zone "has no particular target and will not affect the freedom of flight in relevant airspace."

Since the zone is both in line with the UN Charter and in respect of relevant international laws and customs, China has every right to decide on its own whether to set up such zones, without getting permission from any other countries.

And Japan should know better than to continue its overreaction and learn to accept the "unacceptable."

On Saturday, US Secretary of State John Kerry also voiced concerns over the zone, fearing it might "constitute an attempt to change the status quo in the East China Sea," and increase tensions and risks in the region.

But is it China to blame for upsetting the status quo over the islands?

The status quo of the Diaoyu islands, which had lasted for decades under the principle of shelving the dispute, has already been broken more than one year ago when the Japanese government launched a unilateral move to "purchase" and "nationalize" the islands.

The farce of "buying" the Chinese territories is a sign of Japan's expanding nationalism and growing belligerence, which should be identified as the real danger in the region.

Instead of "increasing tensions and creating risks," the setup of China's air zone could contribute much to regional peace and security by curbing the increasing rampancy of Japan's right-wing forces, as well as the continuous and dangerous provocations of Japanese politicians, which even Washington should be vigilant against.

The White House has repeatedly said that the United States does not take a position on territorial disputes between China and Japan, a neutral stance the Chinese government has appreciated.

But keeping a blind eye to the dangerous tendency in Japan could prove to be risky and might even jeopardize the US national interests.



Air defense identification zone a strategic decision: experts

The establishment of the East China Sea Air Defense Identification Zone is a strategic decision in accordance with China's current national security situation, experts said.

"Setting up the air defense identification zone can effectively safeguard national sovereignty and security," said Zhang Junshe, a military expert, adding that the move conforms to the fundamental spirit and principle of international law.

The Chinese government issued a statement on Saturday morning on establishing the East China Sea Air Defense Identification Zone. It also issued an announcement on the aircraft identification rules and a diagram for the zone.

According to the announcement, China will take timely measures to deal with air threats and unidentified flying objects from the sea, including identification, monitoring, control and disposition.

"The move also accords with common international practices as the United States and Canada took the lead around the world in setting up such zones starting in the 1950s," said Xing Hongbo, a military and legal expert, adding that more than 20 countries have set up air defense identification zones since then.

"Various aircraft with high altitude and high-speed flying capabilities have been broadly used around the world with the development of aviation technology, and it's hard for China to identify an unidentified flying object and adopt countermeasures immediately," said Meng Xiangqing, a military expert.

The establishment of the zone can help set aside early warning time to ascertain an aircraft's purpose and attributes and adopt measures to protect air defense security, Meng said. - Xinhua

China heaps scorn on Abe remarks to boost US alliance (against China)

Washington (AsiaNews/Agencies) - Japan's new Prime Minister Shinzo Abe is in the United States to forge a new and closer alliance with the Unit States in opposition to China. Elected in December, the hawkish Abe arrived in Washington yesterday. Today he is scheduled to meet US President Barack Obama. The timing of the visit is not accidental, given rising tensions with China over a group of islands and North Korea's ever-dangerous threats

.In an interview with a US paper ahead of his trip, Abe voiced hope that the US alliance - and the presence of 47,000 American troops on Japanese soil under a security treaty - would send a message to China. "It is important for us to have them recognise that it is impossible to try to get their way by coercion or intimidation," Abe explained.



VIDEO: CHINA REJECTS ABE’S ACCUSATIONS CCTV News - CNTV English

 The Chinese foreign ministry on Friday continued to slam Japanese Prime Minister Shinzo Abe, who pointed the finger at China on a slate of domestic issues during an interview prior to his visit to the US.

The ministry accused Japan of playing up the "China threat" with ulterior motives.

"China is strongly dissatisfied with the Japanese leader's comments that distort facts, attack and defame China and stir up confrontations between the two countries," Hong Lei, spokesman for the foreign ministry, told a press briefing.

Hong's comments followed others from Thursday and came in response to Abe's accusations, which claimed China had a "deeply ingrained" need to spar with Japan and neighboring countries to "maintain domestic support," according to the Washington Post.

Echoing the Chinese side's requirement for immediate clarifications, Japanese Chief Cabinet Secretary Yoshihide Suga explained Friday that the newspaper misquoted Abe's remarks and had caused a misunderstanding.

Suga said the prime minister has repeatedly emphasized the Japan-China relationship and would push forward strategic and mutually beneficial relations.

Despite the explanation, the transcript of the exclusive interview published by the Washington Post on Thursday showed that the hawkish Japanese leader lambasted China's political and education systems among other issues.

During the interview, Abe said that under the one-party rule of the Communist Party and having introduced a market economy, China needs to maintain high economic growth by seeking resources through coercion or intimidation while teaching patriotism mirroring an "anti-Japanese sentiment."

"Obviously, Abe tries to tarnish China's image in the international community and hype up the 'China threat' before talks with Obama in order to win US sympathy and support," Lü Yaodong, a researcher of Japanese politics at the Chinese Academy of Social Sciences, told the Global Times Friday.

Hong said that only Chinese people have the right to speak about whether China's political system and development strategy are suitable.

"Only those with political bias and ulterior motives would maliciously interpret and blame them," he noted.

Huang Dahui, director of the Center for East Asia Studies at the Renmin University of China, told the Global Times that this reflected the "value-oriented" diplomacy Abe has been adopting to "flatter" the US, adding that the hawkish Japanese leader has also stressed propaganda throughout his political career.

Abe was scheduled to meet Obama on Friday. During a press conference on Thursday, White House Deputy National Security Advisor Ben Rhodes said the meeting is a "further symbol of the President's commitment to the US-Japan alliance as a cornerstone of US economic and security policy, and as a cornerstone of the US-Asia policy."

Danny Russel, senior director for Asia at the National Security Council, said the two leaders are expected to discuss maritime security issues and territorial claims both in the East China Sea and the South China Sea.

In his interview with the Washington Post, Abe also warned that without changing its current policy, China would lose the confidence of the international community, which will result in a loss of foreign investment.

"The logic is ridiculous. It is Japan that has stirred up provocation by 'nationalizing' the Diaoyu Islands. It should rethink its own policies," said Lü.

Regarding such remarks, Russel said Obama would listen to Abe's assessment and views on the current situation in the East China Sea and the consultations between Tokyo and Beijing. He added that the US opposition to coercive actions or unilateral steps threatening the stability of the region has been "clear."

A commentary carried by the Xinhua News Agency on Friday said the US should not be "hijacked" by Japan over the territorial dispute with China, as the US support for Japan on this issue "would not only damage Washington's credibility as a constructive superpower, but also as an important partner of China on many pressing global issues."

Huang said in terms of China-related issues, the US would show its support to Japan as an ally, but would not be led by Japan to sacrifice the China-US relationship.

Sources: AsiaNews.it/Global Times

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Japan's smear campaign, trade bards with China over radar incident near disputed isles

Japan's smear campaign, trade bards with China over radar incident near disputed isles

Beijing accused Tokyo Thursday of mounting a smear campaign after Japan said a Chinese frigate had locked its weapons-targeting radar on a Japanese warship in a “threat of force.”

 Japan Maritime Self-Defense Force destroyer Yuudachi is seen in this undated handout photo released by Japan Maritime Self-Defense Force and obtained by Reuters on February 5, 2013. A Chinese vessel pointed a type of radar normally used to help guide missiles at a Japanese navy ship near disputed East China Sea islets, prompting the Japanese government to lodge a protest with China. Image by: HANDOUT / REUTERS

The world’s second- and third-largest economies are at loggerheads over uninhabited Japanese-controlled islands in the East China Sea, known as Senkaku in Tokyo and Diaoyu by Beijing, which claims them.

The radar incident, which Japan said happened last week, marked the first time the two nations’ navies have locked horns in a dispute that has some commentators warning about a possible armed conflict.

Asked to respond to Japanese Defense Minister Itsunori Onodera’s description of the radar targeting as a “threat of force”, Beijing foreign ministry spokeswoman Hua Chunying said: “Recently Japan has been hyping up crisis and deliberately creating tension to smear China’s image.

“This move is counter to the improvement of relations,” she told a regular briefing.

“The current problem is not China being assertive but about Japanese ships’ and airplanes’ repeated illegal activities in the airspace and waters of the Diaoyu islands, which undermine China’s territorial sovereignty.”

The long-running row over the islands intensified in September when Tokyo nationalised part of the chain, triggering fury in Beijing and huge anti-Japan demonstrations across China.

Beijing has repeatedly sent ships and aircraft near the islands and both sides have scrambled fighter jets, though there have been no clashes.

Play Video

The Chinese Defense Ministry has denied that a Chinese navy vessel aimed weapon-targeting radar at a Japanese navy ship in the East China Sea. It’s also called on Japan to stop violating China’s territorial sovereignty.



The Ministry says the vessel was conducting normal training on January 30th, when it detected a Japanese naval ship following it. The Chinese vessel used normal radar to monitor, contrary to Japanese claims.

The Chinese Foreign Ministry also says Japan is provoking tension over the Diaoyu islands by intentionally stirring up a crisis. It says Japan is continuously sending its ships and aircraft into the waters and airspace around the Diaoyu Islands to carry out illegal activities.

China and Japan engaged on Friday in a fresh round of invective over military movements near a disputed group of uninhabited islands, fueling tensions that for months have bedevilled relations between the two major Asian powers.

China’s defense ministry rejected a Japanese allegation that a naval vessel had aimed a weapons-targeting radar at a Japanese military ship in the East China Sea, its first comment on the week-old incident. It said Japan’s intrusive tracking of Chinese vessels was the “root cause” of the renewed tension.

A Japanese official on Friday dismissed the Chinese explanation for the Jan 30 incident. He said Beijing’s actions could precipitate a dangerous situation in waters around the islets, known as Diaoyu in China and Senkaku in Japan, believed to be rich in oil and gas.

China’s defense ministry, in a faxed statement issued late on Thursday, said Japan’s remarks “do not match the facts”. The Chinese ship’s radar, it said, had maintained regular alerting operations and “did not use fire control radar.”

The ministry said the Chinese ship was tracked by a Japanese destroyer during routine training exercises. Fire control radar pinpoints the location of a target for missiles or shells and its use can be considered a step short of actual firing.

Japan, it said, had recently “made irresponsible remarks that hyped up the so-called ‘China threat’, recklessly created tension and misled international public opinion.

“In recent years, Japanese warships and airplanes have often conducted long periods of close-range tracking and surveillance of China’s naval ships and airplanes. This is the root cause of air and maritime security issues between China and Japan.”

In Tokyo, Japan’s Chief Cabinet Secretary Yoshihide Suga told a news conference on Friday: “We cannot accept China’s explanation.”

Japan’s allegations, he said, had been “a result of our defense ministry’s careful and detailed analysis. We urge China to take sincere measures to prevent dangerous actions which could cause a contingency situation.”

Defense Minister Itsunori Onodera said this week that the incident could have become very dangerous very quickly, and that use of the radar could be seen as a threat of military force under U.N. rules.

Hopes have been rising in recent weeks for a thaw in ties after months of tension, sparked, in part, by Japan’s nationalisation of three of the privately owned islets last September.

Fears that encounters between aircraft and ships could degenerate into an accidental clash have given impetus to efforts to improve links, including a possible summit between Abe and Chinese leader Xi Jinping, who takes over as head of state in March.

China’s premier-in-waiting Li Keqiang, meanwhile, urged marine surveillance staff on Thursday to intensify law enforcement in China’s sea territories, according to the official Xinhua news agency.

“Supervising and governing seas under the jurisdiction of China is the main responsibility of Chinese marine surveillance staff,” Li, who is expected to take over as China’s premier next month, was quoted as saying.

It is believed the island chain—which is also claimed by Taiwan (a province of China)

Sources: AFP/Japan Todayh/Reauters/CCTV

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Would the 3 Japanese wise men invited by China help ties with Japan?

SINCE last month, tensions over the disputed islands in the East China Sea, known as Diaoyu to China and Senkaku to Japan, have noticeably declined, largely as a result of conciliatory words and actions by Japanese political figures visiting China.

The first was by Yukio Hatoyama of the opposition Democratic Party of Japan, who was prime minister in 2009-2010 and who had advocated closer ties with China while in office. Hatoyama took issue with Japan's position of denying that there was a territorial dispute, saying "if you look at history, there is a dispute".

The former leader also visited a memorial in Nanjing honouring those who were killed in 1937 and apologised for "the crimes that Japanese soldiers committed during wartime".

Hatoyama's visit was widely publicised in the Chinese media, which published pictures of him and his wife at the Nanjing Massacre Memorial bowing in silent tribute to the dead.

The normally nationalistic Chinese newspaper Global Times declared editorially: "Hatoyama's words and deeds these days show that in spite of the tough environment, forces which are friendly to China have not disappeared."

Shortly after Hatoyama's departure from China, Natsuo Yamaguchi, leader of the New Komeito Party -- a coalition partner of the ruling Liberal Democratic Party -- arrived in China, carrying with him a letter from Prime Minister Shinzo Abe for Xi Jinping, the new leader of the Communist Party of China.

Yamaguchi was received by Xi on Jan 25, and, aside from passing over the letter from the prime minister, he also suggested that the territorial dispute be shelved for now and to let future generations deal with the issue.

Xi no doubt knew that the Japanese politician was paraphrasing the late Chinese leader Deng Xiaoping who, while visiting Tokyo in 1978, famously said, "Our generation is not wise enough to find common language on this question. Our next generation will certainly be wiser. They will certainly find a solution acceptable to all."

Alas, no solution is yet in sight and the best policy is to put the dispute back on the shelf.

Yamaguchi also suggested a summit meeting between Abe and Xi, and the Chinese leader responded that he would consider it seriously if there was a "proper environment".

Xi also said that China wanted to promote a "strategic relationship of mutual benefit" with Japan.

Soon, a third influential Japanese political figure arrived, another former prime minister, Tomiichi Murayama, whose visit, like the other two, contributed to the establishment of an improved environment.

It was Murayama who, while in power, issued an apology on historical issues that was widely hailed in Asia.

The visits by these three Japanese figures have contributed to a lowering of tensions, making it possible to envisage a thaw in China-Japan relations.

What is significant is that these three men were all invited by Beijing, which of course had a good idea of what they were likely to say and do. That is to say, without denigrating their contributions to the lessening of the impasse, the improved atmosphere of the last few weeks was largely the result of initiatives taken by China.

Japan, too, clearly wants to keep tensions low. Abe has now made it clear that he endorses the Murayama's statement, although there is still some talk of making a new statement "suitable to the 21st century". But there is unlikely to be any backtracking.

It is imperative at this stage that both Japan and China recognise the delicate political environment in the other's country. Each should rein in its own aggressive nationalistic forces.

It is also necessary for each side not to say or do anything that may be humiliating or embarrassing to the other side. Threatening to fire "warning shots", for example, is not helpful.

A lot of damage has been done to China-Japan relations. It will take time for the relationship to heal.

When Abe became prime minister for the first time in 2006, he went to China on his first overseas visit to mend relations damaged during the premiership of Junichiro Koizumi, who insisted on visiting the Yasukuni Shrine each year.

This led to a dramatic improvement in relations, with Premier Wen Jiabao making an "ice-melting" visit to Japan in 2007, followed by a presidential visit by Hu Jintao the following year.

Another China-Japan summit will be indispensable if ties are to be rebuilt.

This, however, cannot take place until the necessary groundwork has been laid. Both sides will have to work hard at this. And flexibility should be the watchword.

The row over the disputed islets, known as the Senkaku in Japan and the Diaoyu in China, are seen in this file handout photograph taken on a marine surveillance plane B-3837 on December 13, 2012, and provided by the State Oceanic Administration of People's Republic of China. A long-simmering row over the East China Sea islands, has noticeably declined, largely as a result of conciliatory words and actions by Japanese political figures visiting China. Reuters pic 

By Frank Ching New Straits Times

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Illustration: Liu Rui

Shinzo Abe's election has pushed the Diaoyu Islands crisis into the edge of all-out confrontation between China and Japan.

 While Japan's high-profile move on the Diaoyu Islands is a direct confrontation against its neighbor, its actions in Myanmar are a secret detour against China.

As the Diaoyu Islands dispute gripped the attention of China and the whole world, Japan's newly appointed Finance Minister Taro Aso visited Myanmar to write off its debt of 500 billion yen ($5.58 billion), followed by major financial groups covertly pushing into Myanmar's economic field.

In fields where China is also involved, Japanese financial groups, with their advanced technology, strong capital and national support, are in a race with Chinese enterprises.

They do not aim for profits at the moment, and some would rather suffer a loss.

This is not a healthy competition, but a vicious economic war which aims to drive out Chinese companies, control Myanmar's economy, and finally, cut off China's energy passageway to the Indian Ocean.

Soon after the US focused on hedging against China in Myanmar, Japan immediately started annihilating Chinese enterprises under the umbrella of the US' strategy.

China has three grand strategic projects in Myanmar - the Myitsone hydropower project, which has been forced into a total shutdown, the Monywa-Latpadantaung copper mine, where several public protests have taken place, and finally, the construction of an oil and gas pipeline between China and Myanmar, where recent signs have become increasingly disturbing.

Myanmar joins sea and land in the US' C-shaped encirclement of China, which includes the Pacific Ocean, the Indian Ocean, East Asia and South Asia.

After the US decided on an eastward strategic shift centered on encircling China, an East Asian alliance, with Japan, the Philippines and Vietnam as the axis, promptly came into being and endangered vast areas in the East China Sea and the South China Sea.

It is a fatal threat to China, which relies heavily on the sea for its trade and energy. Under such circumstances, Myanmar's vital strategic position is evident, which is why the US and Japan have concentrated on the country.

Due to the strong US-Japan alliance, it is very difficult for China to achieve a decisive breakthrough in the East China Sea and the South China Sea issues, while a westward focus may be the best solution.

However, Myanmar, one of the four westward passages, was seized initially by the US and Japan, which have launched a strategic offensive in what seems like a showdown posture.

Through the powerful intervention of the US and Japan, great changes have taken place in Myanmar's political situation, and Myanmese military forces' large-scale attack on the Kachin Independence Army is only one event that shows this. 

Thus, Myanmar has become the arena where China, the US and Japan play out a strategic game. We hope China can develop a proper strategy to deal with the situation in the new century.

After the US' public announcement of its eastward strategic shift, some Chinese have given up their fantasies about the US.

 A number of Chinese have another fantasy of China uniting with Japan to isolate the US, as Japan's national strategy aims to keep abreast with China and the US in its politics.

But the US' usefulness is much greater than China's, and will be for quite some time. Japan will align with the US strategic direction in this period, rather than move closer to China.

I suggest strategy planning departments deploy unified strategic actions with regards to Myanmar and the Diaoyu Islands from the perspective of the overall Sino-Japanese duel.

On the issue of Myanmar, China should support the normal economic activities of Chinese enterprises with State power, as Japan has done. As for the Diaoyu Islands, China must leave Japan in a defensive position by regaining the initiative instantly.

By Dai Xu
The author is director of China Institute for Marine Security and Cooperation Studies. opinion@globaltimes.com.cn

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China sends fighters to counter Japan's war planes

Play Video

China’s Ministry of National Defense has denounced Japanese military aircraft disrupting the routine patrols of Chinese administrative aircraft.

At a press conference, an official with the ministry confirmed that China sent two J-10 fighters to the East China Sea, after a Y-8 aircraft was closely followed by two Japanese F-15 fighters. The Y-8 aircraft was patrolling the southwest airspace of the East China Sea oil platform on Thursday.

According to the official, the two J-10 fighters were sent to monitor the Japanese fighter jets tailing the Y-8 as well as another Japanese reconnaissance plane spotted in the same airspace. The official said Japanese military aircraft have been increasingly active in closely scouting Chinese aircraft.

The official said the Chinese military will be on high alert and China will resolutely protect the security of its air defense force and uphold its legitimate rights. The official also called for the Japanese side to respect relevant international laws and to prevent security disputes by taking effective measures.

Chinese Foreign Ministry:
 
China reaffirms routine military flights over East China Sea
Foreign Ministry spokesman Hong Lei made the comments at a press briefing on Friday, responding to media reports that Japan deployed fighter jets to head off a number of Chinese military planes over the East China Sea on Thursday. Full story >>

China urges Japan to pursue peaceful development
Chinese Foreign Ministry spokesman Hong Lei has urged Japan to draw lessons from history and pursue a path of peaceful development. Hong Lei made the remarks at a regular press conference on Thursday, expressing China’s stance towards Japan’s plan to raise its defense budget in 2013. Full story >>

Japan responsible for plight with China
A spokesman for China's Foreign Ministry on Friday urged the Japanese government to "face reality" in Sino-Japanese relations. Spokesman Hong Lei said at a daily press briefing that Japan single-handedly pushed Sino-Japanese relations into a difficult situation. Full story >>

Ministry of National Defense:
 
Japanese military aircraft disrupting the routine patrols of Chinese administrative aircraft

At a press conference, an official with the ministry confirmed that China sent two J-10 fighters to the East China Sea after a Y-8 aircraft was closely followed by two Japanese F-15 fighters as it patrolled the southwest airspace of the East China Sea oil platform on Thursday. Full story >>

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 Japan tracer bullets will bring war closer

According to Japanese media, the Japanese government is considering permitting Japanese self-defense forces' fighter jets to fire tracer bullets as warning shots against Chinese surveillance planes which have "infringed" upon Japan's "territorial airspace" over the Diaoyu Islands.

A Chinese foreign ministry spokesman said yesterday that China has consistently opposed Japan's infringement upon China's sovereignty over the Diaoyu Islands. China "remains vigilant against attempts to escalate the tensions."

The Chinese spokesman's statement is not enough to express the Chinese people's strong determination to fight back against Japan's unscrupulous action.

We believe that if Japan starts using tracer bullets, it will definitely trigger a military confrontation between China and Japan. Chinese people will certainly ask the government to send naval and air forces to retaliate.

Tracer bullets were used by Japan to warn Soviet Union surveillance aircraft above the Okinawa Prefecture in 1987. However, the relationship between the Soviet Union and Japan was one of war and invasion. The Diaoyu Islands are a typical disputed area.

We believe that China is carefully assessing plans to deploy combat aircraft to the Diaoyu Islands due to the imbalance between China's surveillance aircraft and Japan's fighter jets. If Japan uses tracer bullets, Chinese fighter jets are bound to be sent to the Diaoyu Islands.

China's replacing surveillance aircraft with fighter jets does not mean they will conduct military operations there. These are upgrades of China's ability to defend its sovereignty in the face of Japan's provocations. All of East Asia would face tension in that scenario, but we have no choice. We do not wish to begin a war with Japan. However, if Japan insists on provocations, we will follow it through to the end.

If the Chinese government does not earnestly prepare for it, it will certainly suffer huge political losses. The public wouldn't understand that and they would not accept any interpretations by the government.

China may fall into military conflict with Japan eventually. We hope we can continue our peaceful development, but our risk management strategies are more complex due to various pressures.

There is little room for concessions. Therefore, let us abandon all hesitation and seriously prepare for mutual warnings and confrontation with Japan over the Diaoyu Islands. If the situation goes awry, we must make Japan pay more of a price than China.

The Diaoyu Islands dispute will test the Chinese government's leadership for a long time. But we should have confidence: our rival is a bully which can even bear US military occupation. As long as we keep tough, we will not lose this test of wills. - Global Times



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Dispute with China takes toll on Japan

The last time a dispute between Japanand China blew up in 2010 over eight uninhabited islands, the economic fallout lasted less than a month. This time, the spat is prolonging a recession in the world’s third-largest economy.

Chinese activists carrying Chinese and Taiwanese national flags walk on Diaoyu Islands

Four months after Chinese consumers staged a boycott of Japanese products over the islands in the East China Sea, sales of Japanese autos in China have yet to recover, Chinese factories began to favor South Korean component suppliers, and the U.S. has displaced China as Japan’s largest export market.

“The spats have become increasingly costly as Japan’s dependence on China as an export market has risen,” said Tony Nash, a Singapore-based managing director at IHS Inc., which provides research and analytics for industries including financial companies. “Nationalism around the issue has resulted in lower demand for Japanese products in China and even Chinese firms sourcing products from Korean suppliers.”

As China’s confidence in asserting its territorial claims has grown, and trade between the two nations has tripled since 2000 to more than $300 billion, the commercial cost of failing to resolve the dispute keeps rising. The latest flare-up came after property developer Kunioki Kurihara sold three of the islands to the Japanese government for 2.05 billion yen ($23 million) in September, a transaction Xi Jinping, the new head of the Chinese Communist Party, called “a farce.”

Growth Cut

The fallout from the sale may have cut Japan’s growth in the latest quarter by about one percentage point, JPMorgan Chase & Co. estimated. That would be enough to keep the economy in recession after two quarters of contraction up to Sept. 30. Gross domestic product may have shrunk an annualized 0.5 percent in the final three months of 2012, according to the median forecast in a Bloomberg News survey.

The standoff over the islands known as Senkaku in Japan and Diaoyu in China contributed to declines in Japan’s shipments to China for six months through November. Japan’s industrial output fell 1.7 percent in November, to the lowest level since the aftermath of the 2011 earthquake.

With each round of political disputes, the economic effect has grown. When then-Japanese Prime Minister Junichiro Koizumi visited a Tokyo shrine where war criminals are among those honored in 2005, Chinese people and politicians protested. Yet trade between the two rose more than 12 percent that year.

Things got worse in 2010, when a Chinese fishing boat and a Japanese Coast Guard vessel collided in contested waters. China stopped granting export licenses to Japan for rare earth metals, necessary for automobile and electronics industries. The licenses were resumed about a week later after Japan released the detained captain of the vessel.

Biggest Effect

This year’s row has had the biggest effect so far, said Professor June Teufel Dreyer, a specialist in Chinese politics at the University of Miami in Florida. After the Japanese government bought the three islands, angry Chinese boycotted Japanese products and smashed Japanese shops in China.

“This has really changed things, unquestionably; it is not a blip,” said Dreyer. “China will continue to push its claims to sovereignty until Beijing gets what it wants.”

The islands offer the prospect of rich fishing grounds, potential oil reserves and a strategic military outpost in the sea between China, Japan and Taiwan. That’s overshadowed economic ties that Jesper Koll, head of equity research at JPMorgan in Tokyo, called “a match made in heaven.”

“Japan has intellectual property, brands and capital, while China has people, markets and purchasing power,” said Koll, in an interview.

Ishihara’s Offer

The latest spat began in April when then-Tokyo Governor Shintaro Ishihara said he planned to use public money to purchase Kurihara’s islands. Ishihara, 80, is a longstanding critic of China, so the national government stepped in to buy the islands instead, in a failed attempt to defuse Chinese anger.

China’s official Xinhua news agency on Dec. 2 criticized the U.S. Senate’s approval of an amendment to show the islands fall under a U.S.-Japan defense treaty, calling it a “disturbing message” to the world that the Senate is seeking an escalation of tensions between China and Japan.

“The row has changed the landscape of China-Japan relations,” said Taylor Fravel, a professor at Massachusetts Institute of Technology who specializes in Chinese politics. “As a territory dispute, it’s prone to spirals of escalation.”

Election Win

The election victory of Shinzo Abe’s Liberal Democratic Party, which returned to power in a landslide victory in December, has further stoked the conflict. In its manifesto, the LDP proposed strengthening the nation’s military and said it would consider stationing officials on the islands, prompting an editorial in the China Daily newspaper on Nov. 26 that described the manifesto as “dangerous.”

Two days before the election, China sent an 11-page report to the United Nations arguing that the geology of the continental shelf makes the islands a natural part of China.

Japan yesterday said the government summoned the Chinese ambassador to protest the presence of four surveillance ships near the islands. China responded that the ships were conducting normal duties around Chinese territory, Foreign Ministry spokesman Hong Lei said at a briefing in Beijing.

Japan’s Defense Ministry made a budget request Jan. 7 for extra PAC-3 missile interceptors and upgrades for F-15 fighter planes, and will seek to raise next fiscal year’s defense budget by about 120 billion yen, reversing the downward trend of the last decade.

Economies Lose

“As Japan’s politics turn decisively to the right, more and frequent spats between Japan and China are expected,” said Liu Li-Gang, chief economist for Greater China at Australia and New Zealand Banking Group Ltd. who used to work for the World Bank. “Both economies will lose in the end. Japan will lose a big market, and China will not be able to leverage on Japan’s technology and investment for growth.”

Japanese automakers’ share of the Chinese market slumped to 14 percent in November from about 23 percent before September, Xu Changming, a director at China’s State Information Center, said on Nov. 29. Toyota Motor Corp. (7203), Japan’s biggest carmaker, said in November that output in China fell the most in at least a decade, while Nissan Motor Co. (7201) reported the biggest output decline since at least 2009.

All Nippon Airways Co. (9202), Japan’s largest airline, had 46,000 seat cancellations on flights between September and November because of the dispute, spokesman Ryosei Nomura said. The carrier forecast the row will cut sales by about 10 billion yen.

Uniqlo Stores

Fearing attacks from anti-Japan protesters, Fast Retailing Co. (9983), seller of the Uniqlo casual wear brand, temporarily shut 60 of its 169 stores in China from Sept. 14-24, according to spokeswoman Yukie Sakaguchi.

“We closed stores in areas that could have been dangerous, such as near the Japanese embassy in Beijing,” she said.

Anti-Japan protesters attacked three department stores in Hunan province run by Heiwado Co. (8276), a supermarket operator based in Shiga prefecture, central Japan, forcing the company to close its stores there for more than a month and incur losses of around 500 million yen, according to spokesman Tomoharu Tsuda.
“They smashed windows, broke shutters and wrecked products in the stores,” Tsuda said. “This could well happen again.”

Oil Resources

While Japan has administrative control over the islands, they were largely ignored from the end of World War II until 1969, when a United Nations commission said the surrounding seabed may be “extremely rich” in oil. That brought sovereignty claims in the following years by China, Japan and Taiwan.

“As existing resources are exhausted, the importance of oil and gas resources in the South China Sea will increase and that’s one of the key reasons why this issue is not going away,” said Hao Hong, managing director of research at Bank of Communications Co., China’s fifth-largest lender by assets. China is “stronger than Japan militarily and economically.”

Underlying the border dispute is a history of strained diplomatic ties between the two countries dating back to the Japanese invasion of China in 1937 and atrocities carried out in the country by some Japanese troops.

With political capital to be gained by both sides from courting nationalist fervor -- Abe visited the same shrine as Koizumi in October -- lawmakers may manipulate the row to fit their agendas despite the economic costs, said Ding Xueliang, a professor at Hong Kong University of Science and Technology, who teaches contemporary Chinese politics.

Chinese Anger

“Japan is always a convenient target for the Chinese government to use to divert domestic anger,” Ding said. “Compared to the political values, the trade values with Japan are secondary.”

China would be willing to accept a 30 percent reduction in trade with Japan before it would back down, whereas Japan’s pain threshold is about 20 percent, Ding estimated.

One possible course follows the policy proposed by the late Chinese leader Deng Xiaoping, said Martin Schulz, a senior economist at Fujitsu Research Institute in Tokyo.

“China knows it will never get the islands, and Japan knows that China will never let go,” said Schulz, who has done research for the Bank of Japan. “Deng Xiaoping’s stance from the 1970s, to keep it quiet until joint economic cooperation in the area becomes possible, remains the only solution.”

U.S. Relations

As the current stand-off pushes Japan and China to reduce reliance on each other, U.S. relations with both sides could benefit, according to Liu at ANZ Bank.

“The U.S. will become more important to both China and Japan and will play a big balancing role between Japan and China,” Liu said. “Japan may increase its investment in Vietnam and other economies” in the Association of Southeast Asian Nations.

Exports from Japan to 10-member Asean grew nearly 50 percent in the decade through 2011, according to finance ministry data.

“Japanese investors will accelerate their strategy of diversifying investments to the rest of Asia,” said Tao Dong, head of Asia economics excluding Japan at Credit Suisse Group AG in Hong Kong. “We see increased cases of Japanese investment in Vietnam and the Philippines and there’s lots more to come.”

Acquisition Spending

Japanese companies have spent or plan to spend more than $10 billion since January 2011 on acquisitions in the Asean bloc, data compiled by Bloomberg show. In November, Kirin Holdings Co. bid $2.2 billion for Singapore-based Fraser & Neave Ltd.’s food and beverages unit.

China, which also has disagreements with Asean nations over islands in the South China Sea, was warned last month by Vietnam not to apply economic force to settle disputes.

“Japanese business influence in China will start to decline” as China invites more European and U.S. investment, ANZ’s Liu said in an interview in Tokyo. “Japanese firms’ space in China could be limited in the future.”

Still, the legacy of decades of investment in China make it unlikely that Japanese companies will withdraw, said Nash at IHS.

“This is not an either-or issue,” Nash wrote in an e- mail. “Firms will stay in China and they will invest in Southeast Asia and other places. It’s hard for Japanese exports to move totally away from China and it’s hard for Chinese OEMs to move totally away from Japanese components.”

Japanese companies such as Nissan employed 1.6 million people at subsidiaries in China in the fiscal year ended March 2011, according to the Japanese trade ministry.

As Richard Koo, chief economist at Nomura Research Institute Ltd., wrote in a Dec. 11 report: “No matter how unpardonable China’s behavior over the issue of Senkaku Islands may be, as a practical matter Japan needs to proceed carefully given the magnitude of its Japanese investments in the country.”

Bloomberg

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