Tue, Apr 17, 2018 - Page 10 News List

China, Japan revive economic dialogue

FAIR AND FREE:Japan’s foreign minister said he asked China to ensure technology transfers, but denied that Beijing had asked Japan’s help regarding US steel tariffs

Bloomberg

Chinese Minister of Foreign Affairs Wang Yi, left, shakes hands with Japanese Prime Minister Shinzo Abe yesterday prior to a meeting in Tokyo.

Photo: AP

Japan and China yesterday held their first high-level economic dialogue in almost eight years against a backdrop of trade threats from the US.

Neither side is publicly linking the talks in Tokyo between Chinese Minister of Foreign Affairs Wang Yi (王毅) and Japanese Minister of Foreign Affairs Taro Kono to US President Donald Trump’s protectionist policies, but the meeting is a timely reminder of how much they both rely on the US market and how interdependent the two Asian nations have become.

Japan asked China to ensure fair and free transfers of technology and exchanges of intellectual property, Kono told reporters after the meeting with Wang.

The US is threatening tariffs on about US$50 billion on imports from China to address what it called “unfair Chinese economic practices” in intellectual property and forced technology transfers.

Japan also made requests of China regarding steel overproduction, Kono said, but denied an earlier report from Kyodo News that China had asked for Japan’s help on US steel tariffs, which have been imposed on both Japan and China.

Even before he was elected, Trump had criticized Chinese and Japanese trade and economic policy as unfair and damaging to the US. Recently, he has threatened tariffs on Chinese exports and limits on investment, and just last week took a shot at Japan, saying the nation “has hit us hard on trade for years!”

That trade might be on the table for discussion when Japanese Prime Minister Shinzo Abe meets with Trump later this week in Florida, but the rise of intra-Asian trade has weakened the power of US attempts to coerce nations.

China has replaced the US as the No. 1 trading partner for most nations in Asia, even those that have military alliances with the US, like South Korea, Japan and Australia.

China is not just a trading partner, but also an important source of investment and tourists, which give it added bargaining and coercive power against other Asian nations.

That being said, the US is still a more important overall economic partner for many in Asia. Japan, for example, has multiple times as much money invested in the US as it does in China, and even with the recent tensions, many Asian companies rely on the US market.

Trade tension between the US and China is not new. Even before Trump began railing against the persistent trade deficit, the US had complained to the WTO about Chinese actions more than about any other nation, and China has reciprocated.

However, the current situation is much more tense and Japan’s economy would be damaged if it gets worse.

Therefore, Japan will have to walk a fine line this week, balancing often tense relations with its biggest trading partner against the demands of its second-largest trading partner, which is also its military ally and guarantor of its security.

Kono on Sunday said that he and Wang agreed to improve ties by having their leaders pay mutual visits, starting with a visit next month to Japan by Chinese Premier Li Keqiang (李克強) for a trilateral summit involving South Korean President Moon Jae-in.

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