China welcoming Japan companies but not Prime Minister Abe

[FOX80]

Japanese companies in October participated in the Western China International Fair, in Chengdu, Sichuan Province, after having skipped the show last year.
BEIJING -- After Japan nationalized the Senkaku Islands, which China also claims, more than a year ago, the political and economic relations between the two countries entered an ice age.

Now signs are emerging that the business relationship is beginning to defrost. Most of these signs are coming from local governments in China, which are again courting Japanese companies.

"The turning point was the Beidaihe meeting," one Communist Party insider in Beijing said.

The meeting, which takes place every summer, serves as an unofficial forum for party leaders and elders to exchange opinions on key future policies.

The meeting takes its name from the city in which it is held, Beidaihe, Hebei Province. The source observed a change in the direction of the party's Japanese policy after the most recent meeting, the first hosted by President Xi Jinping.

While China has not softened its stance on the Senkakus, the party is using economic and nongovernmental channels to send signals that it is looking to end icy trade relations with Japan, the party source said.

The party leadership has "started making moves to test the water by monitoring Japan's reaction," the source said.

Because local governments are sensitive to the party leadership's wishes, how they act on particular issues can offer glimpses into party policy; their courting of Japanese companies points to a policy shift.

The shift was evident a month ago, when roughly 70 Japanese companies and municipalities took part in the Western China International Fair, in Chengdu, Sichuan Province. The total was much higher than the previous year's.

A year or so earlier, Chengdu streets were hosting anti-Japanese demonstrations sparked by the Senkaku nationalization. Then, Japanese companies' booths were removed from the venue a day before the fair opened.
This year, the organizer was enthusiastic about Japanese companies' participation.

In addition, a meeting between Sichuan Gov. Wei Hong and Hiroyuki Ishige, chairman of Japan's trade promotion organization, led to an agreement to open a Jetro office in the province.

Also last month, a fair on trade and investment between China and Japan was held in Dalian, Liaoning Province, for the first time in two years.

The local government rolled out the red carpet for Japan's Yohei Kono, a former lower house speaker, and set up a dinner meeting between Kono and Tang Jun, the city's top official.

In July, Guangdong Province held an investment briefing for Japanese firms. It was followed by a similar briefing in Tokyo in October.

One reason China is working to warm economic ties with Japan is that it needs to grow its service industry and bring more sophistication to industries across the board. In other words, it needs to create jobs.

China is also showing strong interest in easy-on-the-environment and medical technologies, fields in which Japan is among the global leaders.

Let us look at one more sign of the two nations' warming trade relations: In late September, top officials of 10 major Chinese companies visited Japan to meet with business leaders and Chief Cabinet Secretary Yoshihide Suga. The mission had to submit its Japan itinerary to the Communist Party three times. It eventually received qualified approval: "You can meet whomever you want in Japan," the party leadership said, "except Prime Minister Shinzo Abe."

While China is looking to improve economic ties with Japan, the political tundra between the two countries is unlikely to thaw any time soon.

 

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Business is business, and politics is politics.