Japan warns of economic fallout from China row
September 25, 2010, Saturday
TOKYO: Japan warned that a deepening territorial row with China could hurt both of Asias biggest economies, but declined to link the feud to the detention of four of its nationals on suspicion of entering a Chinese military zone.
The two sides are already locked in an increasingly heated dispute triggered by Japans detention of a Chinese fishing boat captain whose trawler collided earlier this month with two Japanese patrol boats in waters near islands both sides claim.
Finance Minister Yoshihiko Noda warned that worsening ties between the two countries would be bad for both economies.
A cooling of relations between Japan and China over the Senkaku problem would be bad for Japans economy, but it would also be a minus for China, he told a news conference.
Its desirable that both sides respond in a calm manner.
Sino-Japanese ties had improved after a deep chill in 2001 to 2006, but the latest feud has underscored the fragility of relations long plagued by disputes over wartime history and rivalry over territory, resources and mutual military suspicions.
I think this case presents the biggest obstacle for years in relations between China and Japan.
Both sides were on track with efforts to improve relations, but now they have clearly deteriorated, said Liu Jiangyong, an expert on China-Japan relations at Tsinghua University in Beijing.
Trade and economic ties could be damaged if Japan does not solve this problem, because mutual trust is at stake.
Japans sluggish economy has become increasingly reliant on Chinas dynamism for growth.
China has been Japans biggest trading partner since 2009 and bilateral trade reached 12.6 trillion yen (US$147 billion) in the January-June period, a jump of 34.5 per cent over the same time last year, Japanese data show.
The Japanese economys future performance seems to depend on whether the problem is solved quickly, Japanese Economics Minister Banri Kaieda told a news conference.
China has cancelled diplomatic meetings and student visits to protest against the trawler captains detention, and concerns are simmering that Beijing is holding back shipments of rare earth minerals vital for electronics goods and auto parts.
Trade Minister Akihiro Ohata told a separate news conference that Tokyo had confirmed there was no official export ban, but added that the ministry was still looking into the matter after hearing from traders that exports had been suspended.
Analysts say the trawler dispute is in part a row over sovereignty in an area with rich natural gas resources.
The islands are known as the Diaoyu islands in China and the Senkaku island in Japan.
The deadline for Japanese prosecutors to decide whether to charge the trawler captain is Sept 29.
Beijing also has territorial disputes with southeast Asian nations in the South China Sea, where Washington has come out in favour of a multilateral approach, raising Chinas hackles.
China is becoming more assertive and is finding out that everyone doesnt like being walked over, said Jeffrey Kingston, director of Asian studies at Temple Universitys Japan campus.
Japanese Chief Cabinet Secretary Yoshito Sengoku, commenting on the affair, said it was important for the two countries to foster strategic, mutually beneficial relations, a nod to the deep economic ties that would be at risk if the row worsens.
Sengoku also said Japan saw no link between the islets row and the detention of the four Japanese nationals.
Chinas Xinhua news agency said, The state security authorities in Shijiazhuang, capital of Hebei, have taken measures against the four people according to law after receiving a report about their illegal activities.
A spokeswoman for Fujita Corp said that five of its employees were missing in China, four Japanese nationals and one Chinese national.
But they had no firm information on their whereabouts.
She said the employees were in China in connection with a project to dispose of chemical weapons abandoned in China by the Japanese military at the end of World War Two.
Japan has been assisting in the disposal of chemical weapons left behind by its Imperial Army during World War Two as part of efforts to improve bilateral relations. Reuters