China, Japan can come closer in business
Published: Jun 27, 2018 07:18 PM

Illustration: Liu Rui/GT

On Sunday, some Chinese and Japanese scholars along with former officials organized an event in Shanghai to commemorate the 40th anniversary of the signing of the Sino-Japanese Peace and Friendship Treaty. The scale of the activities is rare in recent years, reflecting a thaw in China-Japan relations.

After attending the event, former Japanese prime minister Yasuo Fukuda went to Nanjing to lay a wreath and pay tributes to the victims at the Memorial Hall of the Victims in Nanjing Massacre by Japanese Invaders. The news made it to Chinese mainstream media.

Are China-Japan relations turning over a new page?

Another instance may help observe a new breakthrough after 40 years. It is more than a return to relatively stable relations between the two countries in the 1980s.

A Global Times reporter recently interviewed Xie Guomin, chairman of Thai Charoen Pokphand, (CP), in Bangkok. He disclosed for the first time that Chinese and Japanese companies, helped by CP, are starting to find a way for cooperation on a development project - "Eastern Economic Corridor" - in Thailand.

Xie said that Thai companies are willing to join hands with Chinese and Japanese firms to build high-speed railways connecting the three airports in the "Eastern Economic Corridor."

Since 1978, when the first foreign-funded enterprise - Japan's Matsushita Electric Co - was established in China, Japanese companies have set up more than 20,000 factories and firms in China. China has become Japan's most important overseas market, investment destination, and source of profit.

In recent years, top-notch Chinese companies like Huawei have also started to set up factories in Japan. At the same time, some Chinese corporations have also acquired Japanese companies.

Many of the electronic and mechanical products exported by Asian countries to the US, Europe, and the rest of the world are inseparable from the kind of spare parts produced by China and Japan.

In the past, the factories established by Japanese companies in China were always headed by Japanese managers, and it was tough for Chinese personnel to enter the core management team. This was considered a big hurdle in the way of Sino-Japanese business cooperation.

However, some Japanese companies have begun to make room for more Chinese executives to take senior management posts. The management functions undertaken by Japanese representatives sent from Japan are being passed on to their Chinese counterparts.

Sino-Japanese companies already have a basis for cooperation on third-party projects. This is the inevitable result of globalization and also the outcome of 40 years of cooperation.

The Belt and Road initiative provides a new platform for further cooperation between Chinese and Japanese companies.

Japanese officials are still somewhat skeptical about accepting the Belt and Road. This is partly because the initiative was proposed by the Chinese government and interpreted by Western and Japanese media and experts as "China's political strategy for leading the world and Asia." 

The best way to address this concern is to start exploring the possibility of collaboration in specific projects, rather than sticking to the tag of Belt and Road.

CP has provided an excellent opportunity for Chinese and Japanese companies. Xie has a Chinese background. Just at the beginning of China's reform and opening-up in 1978, CP became the first foreign-funded enterprise to apply for registration in Shenzhen Special Economic Zone.

CP does not only have broad experience in years of cooperation with both Chinese and Japanese companies but also adequate funds.

This cooperation will indeed be difficult at first, but as long as there is pragmatism, both sides will accumulate trust.

Taking into account Japan's political concerns, China may adopt a low-key attitude to the project's ties with the Belt and Road initiative. Actions matter more than words.

Sino-Japanese cooperation will have a far-reaching impact on the direction of the future global order and Asia's political and economic structure. This, to a large extent, will depend on China's desire and ability to shape Sino-Japanese relations.

The author is a senior editor with People's Daily, and currently a senior fellow with the Chongyang Institute for Financial Studies at Renmin University of China. dinggang@globaltimes.com.cn Follow him on Twitter at @dinggangchina