A Tokyo-based Chinese columnist and writer, Mo Bangfu has pointed out, “Until now Asia has traditionally been led by a single power. A long time ago, it was China. More recently, it was Japan. But now as China emerges as an economic giant, there are two regional leaders, China and Japan”. National interests of both the countries are constantly in conflict.

Japan is feeling uneasy over China’s success in concluding more `free trade agreements’ with the ASEAN countries than herself. Japan’s subsidies to farmers for rice have become a stumbling block to conclude FTAs without allowing free trade in agriculture sector. China is feeling uneasy over Japan’s success with India in developing economic relations with her on a better footing than herself. Koizumi went to Europe and told the Europeons not to lift embargo on arms sales to China, as Japan will be affected.

Japan has formed a block with the US to let Taiwan remain a separate entity against the wishes of China, which wants to integrate it as one of her provinces. Consequently, China has announced its opposition to Japan’s quest for permanent membership in the Security Council. China started exploration for natural gas resources in East China Sea. Japan filed a claim that this exploration is very close to Japan’s border and taking away Japan’s resources to China.

While continuing such tit-for-tat relationship, economies of both the countries have already become so much interdependent upon each other that both are bound to resolve some conflicts through negotiations and compromises at least on the economic front.

Japanese companies have made billions of dollars’ investments in China. For the first time since the end of World War II, China became a new leading trading partner of Japan.

China dethroned the United States in 2004 largely as a result of burgeoning production by Japanese companies in China. Two-way trade with China and Hong Kong amounted to 22.2 trillion yen, accounting for 20.1 per cent of Japan’s overall trade in 2004. Trade with the United States came to 20.48 trillion yen, representing 18.6 percent of total trade, down from 20.5 percent in 2003. Exports to China and Hong Kong rose 17.2 per cent year on year to 11.83 trillion yen, while imports also rose 16.7 per cent to 10.37 trillion yen. Many exports to Hong Kong eventually wind up in mainland China.

According to projections by the Japan External Trade Organization (JETRO) for Sino-Japanese trade last year, it is estimated that even though overall foreign direct investment by Japan tends to be decreasing, its direct investment in China has shown an increasing trend since China joined the WTO (World Trade Organization) in 2001.

Since 1990s, Japanese companies, primarily manufacturers, have shifted production sites from Japan to China, where there are already more such production sites operated by Japanese firms than in the US.

In fiscal 2003, Japanese investment in China totalled 355.3 billion yen, tripling the figure from three years earlier. Automakers, consumer electronics and machinery makers accounted for a significant portion of this outlay. Shiseido Co. is one of those making a big play on the mainland. Facing a saturated market at home, the nation’s leading cosmetics maker is targeting annual sales of 100 billion yen in China in 2008, five times the current figure.

Auto sales in China are expected to more than double to 10 million units a year by 2010, according to some estimates. Toyota Motor Corp. has taken its time gearing up in China. Mass production started in 2002 with sales of 50,000 units in an alliance with China FAW Group Corp. Japan’s leading automaker is now getting into its stride, with plans to start production of high-end models as early as 2005.

Moreover, exchanges between the peoples of the two countries are intensifying. The number of Chinese people who legally entered Japan increased from slightly over 380,000 in 2000 to a little under 530,000 in 2003, with more than half being newcomers. In 2003, the total number of foreign students in Japan was more than 100,000, of which about 65 per cent were Chinese.

In reverse, more than three million Japanese visit China annually. Joint ventures between Japan and China and international marriages are becoming ever more numerous, and reciprocal exchanges have already reached the stage where nobody can stop them. Citing these figures a professor of Waseda University in Tokyo has urged that we must mutually exert efforts to somehow ameliorate existing emotional confrontation.

The Chinese writer, Mo Bangfu, suggests that Japan should stop its restrictive policies towards Chinese tourists. They go back with a good impression of Japan after seeing its good public order in the trains and the clean streets, even in rural areas. Last year, 3.3 million Japanese visited China while only 610,000 Chinese were granted visa to visit Japan. He claims that so far only 0.39 percent of all Chinese tourists have overstayed while visiting Japan.

China also realizes this economic interdependence and is keen to develop better relations with Japan. Therefore it took strong measures to stop all anti-Japanese demonstrations, which had erupted nationwide spontaneously. In the beginning, the demonstrations continued with the connivance of the Chinese government. But later on, the Chinese government realized that their economic interests demand to develop good relations with Japan.

On the sidelines of an international conference, Chinese Premier Wen Jiabao had held a meeting with Koizumi in October 2003. It was a smooth sailing between the two and both had agreed on several common issues. Wen did not even raise objection over Koizum’s Yasukuni shrine visits. But when he went back home, he had to face fierce criticism for it. Here lie the deeper roots of the China-Japan rivalry.

That was the reason, despite resolving some conflicts through negotiations, Chinese government had to remain, albiet temporarily, a silent spectator when anti-Japanese demonstrated erupted nationwide. It is not a matter of government-level negotiations. At grassroots level, somehow, a deep hatred has developed among the Chinese people against Japan. Unless it is rooted out, smooth relation between the two countries will not be possible on a long- term basis.

One of the causes is that people in both the countries are getting intoxicated with their own brand of nationalism and are becoming prouder of their own national identities. Young generation of an emerging China is not ready to accept their past humiliation under the Japanese. They do not even want to learn Japanese language. They prefer to learn some other foreign languages. The Japanese nationalists are not ready to face their past and the Chinese nationalists are not ready to forgive and forget all that they have undergone during the Japanese occupation.

Chinese are recollecting the past atrocities Japan inflicted on them, as they are taught in their textbooks. The new generation has also been hearing stories of these atrocities from their elders who were either the victims themselves or who are the living witnesses of all those sufferings they had undergone during the 15-year (1931-1945) war.

While Germany completely separates itself from its Nazi past and condemns it whole-heartedly. Chinese feel Japanese do not have that kind of repentance. Rather they are paying respect even to class A war criminals by visiting Yasukuni shrine, where they are all enshrined.

At the end of the war, the International Military Tribunal for the Far East was set up by the victorious allies. It convicted 25 Japanese leaders as class A war criminals including former Prime Minister Hideki Tojo and six others who were executed. An Indian Judge of the Tribunal, Radhabinod Pal, insisted that Japan was innocent. But Japan chose to settle the issue by accepting the verdict regarding its wartime responsibility.

The San Fransisco Peace Treaty incorporated the issue in Article 11, welcoming Japan back into international society. But Japanese nationalists, even in high and responsible positions, do not accept it now.

A recent example is a statement by Masahiro Morioka at a meeting of the ruling Liberal Democratic Party Lower House members. He is a Lower House member and the parliamentary secretary of the Ministry of Health, Labour and Welfare. He said, “The Tokyo War Crimes Tribunal was a unilateral one that invented crimes against peace and humanity.”

Asahi Shimbun refuted Morioka statement in its editorial. The Opposition, Minshuto, demanded Morioka’s dismissal and Koizumi brushed it aside as his ‘personal views’. But it is not just the view of lone individual. The very shrine, which is visited by Koizumi and the Japanese lawmakers has similar views. In its brochure, the Yasukuni Shrine still justifies the last war in the following words: “Japan had to fight to defend its independence and grow with other Asian countries.”

It defines war criminals as “people who were unilaterally and falsely accused of being war criminals in the token tribunal held by the allies.” This is the shrine where the Prime Minister of Japan is visiting and blaming China that it is meddling in the internal affairs of Japan. One can imagine how the Chinese, who have suffered heavily and subjected to inhuman atrocities due to this war, can amicably accept such provocations, instead of getting feelings of deep regret or penitence from Japan to heal their wounds.