China and Japan: Facing the Past and Forging the Future

Ryo Takahashi, CEO

Ryo Takahashi (MBA ’20) speaks with Harvard Professor Ezra Vogel.

As China celebrates its 70th National Day, Japan prepares in earnest to host the 2020 Tokyo Olympics, and the United States becomes increasingly protectionist, the coming decade presents unique opportunities and challenges for Sino-Japanese relations.

Professor Ezra Vogel at Harvard University is among those who seek more amicable relationships between Japan and China. He has written a new book released this year, China and Japan: Facing History, which provides a historical account of the two countries’ relationships as well as suggestions for deeper cooperation.

“I have the privilege of writing two books, Japan as Number One (1979), which became a bestseller in Japan, as well as Deng Xiaoping and the Transformation of China (2011), which became a bestseller in China,” says Vogel.

“I started writing China and Japan: Facing History in 2011 just after the Deng book—it was among the worst times in relations between China and Japan. In 2010, there was a ship incident where a Chinese boat rammed into a Japanese boat and the ship’s captain was detained, causing a huge reaction in both countries. Relations then were awful, so I thought I ought to do something.”

Professor Vogel’s book, China and Japan: Facing History, released earlier this year.

Facing the past: Cold politics, hot economics

Both the Chinese and the Japanese have described their relationship as “cold politics, hot economics (政冷経熱),” a four-character idiom that captures the dichotomy between the deepening economic relationship between Japan and China despite a lack of warm political relations.

“If you look at history, there probably hasn’t been as much conflict between Japan and China as European countries have had with each other,” says Vogel.

“But China and Japan did fight in the 660s in the Korean Peninsula. Then the Mongols invaded Japan in 1274 and 1281, Hideyoshi invaded Korea in the late 1500s on the way to Beijing, followed by the Sino-Japanese War, which broke out in 1894.

“Then there was World War II. World War II was a long bitter battle that left enmity on both sides.

“After the Tiananmen Incident in 1989, the leader of China, Deng Xiaoping, decided they had to increase patriotic education to ensure youth were on the side of the regime,” says Vogel.

“By far the most effective way of teaching patriotism was to revive memories of World War II. Within China, World War II movies were everywhere, and the Japanese were so hated, that there developed a terrific hatred of the Japanese.

“In Japan, the Japanese didn’t have a propaganda department, but NHK [the country’s national broadcasting organization] showed pictures of Japanese shops in China being trashed and Japanese in China being afraid to go out. It helped mobilize the Japanese population.”

The effect of such media was mutual feelings of enmity on both sides, with as much as 90% of Chinese and Japanese responding with negative impressions of each other.

“They really hated each other at that point,” says Vogel, “and yet economic relations went on. Perhaps this bears a lesson for the United States and China today: even though relations can be bad, it’s possible to have economic relations continue.”

Forging the future: Warm politics, hot economics

After a prolonged frost in high-level exchanges since then-Chinese head of state Hu Jintao visited Japan in 2010, in recent years there have been signs that relationships between Japan and China are improving.

High-level exchanges have increased, with Chinese Premier Li Keqiang visiting Japan last year in May, where he was received by Prime Minister Abe, which was reciprocated with a visit by Abe to China, the first bilateral visit to China by a Japanese Prime Minister in nearly seven years.

Then, earlier this year in June, President Xi Jinping met Abe in Osaka a day ahead of the G20 Summit.

Xi is reported by CCTV to have said that he wishes to “work together to build a Sino-Japanese relationship that meets the demands of the new era.”

For his part, Abe expressed his wishes for bilateral ties to shift to the “next level” and extended an invitation to Xi to visit Japan next spring during cherry blossom season, which Xi accepted.

“Japan and China have a chance to work together,” says Vogel. “We’re fortunate that we have two leaders who both have a solid base of public support in their own countries.”

The role of firms and individuals

There are also signs of warming relations at the individual and firm levels. Since reaching a recent nadir in bilateral relations at the start of the decade, the number of Chinese visitors to Japan has increased, rising from 1.4 million in 2012 to 8.4 million in 2018 (+34.3% annual growth). Many bright Chinese students are being educated in Japanese universities, and they play an important role in facilitating trade and understanding between the two countries upon entering the workforce.

In China, Japanese companies have deepened their understanding of China’s local politics and markets. Japanese trading companies continue to play an important role in forging a bridge between the two countries; Itochu has offices in 14 Chinese cities, and Mitsubishi, Mitsui, and Sumitomo all have offices in major Chinese cities.

“Japanese trading companies have Japanese working in China who speak Mandarin, and in some cases, even local Chinese dialects,” says Vogel.

“They have learned about local politics and markets and have made connections with local officials to learn how to operate in the Chinese environment.”

Towards a new decade

With just two months left until we welcome a new decade, questions linger. Will the 2020s represent a new era of warm Sino-Japanese relations? How will China and Japan respond to the increasingly protectionist stance of the United States and the rise of populism around the world? To what extent will China and Japan, the second and third largest economies respectively, be able to cooperate within the frameworks of international institutions, ranging from the International Monetary Fund and World Bank to the Asian Infrastructure Investment Bank?

As Xi and Abe look towards the end of the present decade, trees will shed their leaves, and before long, spring will come. Whether the two leaders will be able to walk in lockstep as they appreciate the cherry blossoms in Japan next spring remains a question for the coming decade.

Ryo Takahashi (MBA ’20), originally from Japan, is a management consultant and writer. Prior to Harvard Business School, he worked as a Project Manager at the World Economic Forum (WEF) and was a Senior Associate at McKinsey & Company. Prior to these roles he worked at the Economist and the Japan Times. His writing has appeared in Time magazine, the Economist, the Japan Times, and the World Economic Forum, among other outlets. He received his B.A. in Economics (with Distinction) from The University of Tokyo and was also a Rotary Scholar to the London School of Economics.