CHINA FOREIGN POLICY TOWARDS JAPAN

East Asian consist several countries like China, Taiwan, Macau, Japan, North Korea,
South Korea and Mongolia. China is the largest country in this region and also the largest
population with 1.3 billion citizens where Beijing as the capital city. China once upon a time
were ruled by several dynasty but finally collapse when people of China launch The China
Revolution were lead by Dr. Sun Yat Sen on 12 February 1911.
China were practiced various foreign policy since her ruled by Communist party. China
before 1989 are not practiced open-door policy like other country and quite isolation from the
outside world. China and Japan relations appear to have a dual structure which is built into the
long history of exchanges and interaction between the two countries. This both of countries make
a friendship on 1972 after long time have each other. As we know, Japan during World War II
had been attacked and conquer China then ruled China with cruelly. After that incident, many
Chinese people hate Japanese so much and that feeling were inherited from one generation to
next generation.
Political agenda between Beijing and Tokyo has been dominated by three issue: the
legacy of Japans World War II invasion of China, the Taiwan Issue and human rights concerns.
The government of the China is very successful at manipulating and exploiting Japanese feeling
of guilt and remorse over wartime atrocities. During that time, China and Japan always make
statement to attack each other and raise the sensitive issues related with both this countries.

The Factors Driving Economic Integration Of China and Japan From China Foreign
Policy Towards Japan.

(1) Chinas spectacular economic growth, which stimulates demand for Japanese exports and
promotes Chinas exports to Japan:
Now, China is the top export customer for Japan. In 2007, bilateral trade between the two
countries reached $236.6 billion or 17.7% of total Japanese external trade. Such as machinery
and transportation related equipment has merged to become the largest export commodity for
both countries because the needs of the markets in produce vehicles and others. Besides that,
China promoting exports to Japan, has been given a high priority by the Chinese government and
firms. It shows Chinese exports to Japan grew 14.9% annually on average from 1990 to 2007 and
jumped to $127.7 billion. It create a huge market to each other for earn more money.It because of
combining their advanced technology, brand name and well-established global distribution
system with low production costs of China, Japanese MNEs are able to strengthen their global
competitiveness.
(2) Trade liberalization within the two countries and Chinas accession to the World Trade
Organization (WTO):
Sino-Japanese bilateral trade has evolved from inter-industry trade into intra-industry
trade. Sino-Japanese bilateral trade in the early 1990sexactly is the prediction of the theory of
comparative advantage. While China exported labor and resource intensive products to Japan,
Japan mainly exported capital goods to China. For instance, in 1990, the leading exports of
China to Japan were miscellaneous manufactured products (27.5%), fuels of mainly crude oil
(24%), and food and animal (15.7%). China can get more investment from Japan to build up

their countries and Japan also can make more profits by increase productivity of their products.
Production fragmentation, outsourcing and Japanese direct investment in China have been
driving the rapid growth in intra-industry trade from year 1980 until now.
(3) The massive Japanese direct investment in China, integrating the Chinese industries in
Japans global production chains, enhancing significantly intra-industry trade between the
two economies and reverse imports:
Japan is the second largest source of FDI in China because China has replaced ASEAN-4
(Indonesia, Malaysia, Philippines and Thailand) as the number one of the host of Japanese FDI in
Asia. Through direct investment and outsourcing, Chinese firms can use the global marketing
networks to selling out their products affected by the Japanese multinational enterprises (MNEs)
utilize Chinas cheap and productive labor force in labor-intensive segments of high-value added
manufactured products to strengthen their global competitiveness. It is because both of countries
firms have integrated production chains with the participation of the Chinese labor force for
more good quality in that firms. In this situation, Japanese FDI in China was export oriented at
2003 and China was merely become an export platform. If the Chinese economy continues to
achieve high growth rates, it will serve as a critical growth source for the Japanese economy.
China can overcome the problem of rising oil prices and environmental degradation because
China cooperation with Japan in energy and environmental protection technologies. It because
Japan is rich in capital and technology which are highly demanded by the rapidly growing
Chinese economy. China can get more investment, new information technology and others from
Japan.
(4) The complementarity nature of the two economies:
China and Japan are complementary nature because both of countries need different types of
ability and resources. In this situation, it wants to increase their market to create more goods and
advantage to each other. Such like, Japan needs a lot of labor and resources from China to

produce more goods like textile, automobiles things and others, so China needs more capital
goods like investment from Japan. Both of the countries will have more bilateral trade and
technology transfer to increase good relationship. China also can get new technology information
from Japan by helping Japan creates products. Japan also gets more profits in their products
because China has a huge market and is a one of the advantage to sell to other countries. In
market of China, it has a lot of investment from other countries and it can attract more investor to
do their business so Japans products can sells more in it.
(5) The geographic proximity between the two countries:
The geographic of China and Japan are closely because it just has small distance only. Trading
goods between them is easier to other countries such like Indonesia, India and others. Both of
countries can get their needs like resources, investment and others in very short time because it
just closes. Japan can get many of resources and labor in more cheap wages easily compare to
other countries because this country lacks of resources and labor to produce their products. China
also can get more capital of goods and this country become wealthier.

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