‘Historic turning point’ in Japan-China relations overshadows Abe-Modi summit


(A view of Mt. Fuji, Japan)

Hyping up the forthcoming annual India-Japan summit in Tokyo on Monday is a thankless job. Foreign Secretary Vijay Gokhale in his media briefing Friday performed optimally, even adding a touch of mystique to an informal lunch that Japanese PM Shinzo Abe will host for PM Modi at a hotel “in view of Mt. Fuji”, after which “they will take a stroll in the grounds of the hotel.”

But Modi’s photo-ops no longer excite Indians. They’re asking searching questions about his travels. Under the Modi government, India-Japan summits have become all foreplay. India’s exports to that great trading nation almost halved to the miniscule figure of $3.85 billion in 2017, from $6.81 billion in 2014. Strangely, Japan too is at a standstill pondering how to penetrate the Indian market – its exports to India also stand frozen in time hovering between $9-10 billion in the Modi era.

The legendary bullet train, nuclear and defence cooperation, Japanese investments in industrial zones and in development of northeastern states, connectivity projects rivaling China’s BRI, etc. remain ‘talking points’. India’s best friend among the advanced industrial countries is not overly enthused by ‘Make in India’, either.

Much time was lost fantasizing an India-Japan strategy against China. Fortuitously, thanks to Doklam, realism dawned on the Indian thinking and Modi finally took matters into his own hands to reset the calculus. The informal summits in Wuhan, China, and Sochi in Russia followed in quick succession. Modi used his famous speech at the Shangi La Dialogue in June to signal that India is not buying into the US-led “Indo-Pacific strategy” against China.

Of course, there is a lot of resistance within India from entrenched interest groups who have been put out of business overnight. They are now pinning hopes on a New Cold War between the US and China for a second coming. But if Modi returns to power after the 2019 poll, he will carry forward the ‘Wuhan spirit’.

India delinked from the US-led alliance system in good time. When Modi arrives in Japan, Abe would have just got back from Beijing after a 3-day historic visit, which has been extremely productive as well. Japan and China signed a bilateral currency swap arrangement on Friday, which takes immediate effect and lasts until Oct. 25, 2021, allowing the exchange of local currencies between the two central banks for up to $30 billion. The also signed a broad range of agreements on strengthening bilateral ties, pledging to step up cooperation in areas from finance and trade to innovation and securities listings.

A Reuters report assessed that “Asia’s two biggest economies looked to further build relations and trust against a backdrop of trade friction with the United States.” Abe said that the relations are at an “historic turning point”, marking the dawn of new Japan-China cooperation and that he expects new possibilities in industries such as infrastructure, logistics, healthcare and finance.

(Xi Jinping receives Shinzo Abe, October 26, 2018)

While receiving Abe on Friday, Chinese President Xi Jinping said, “With concerted efforts by both sides, China-Japan ties are back on track and gaining positive momentum. This is worth cherishing.” Xi added, “Under the new situations, China and Japan, increasingly interdependent in bilateral areas, also share more common interests and concerns on multilateral occasions… Thorough strategic communication should be carried out, and the two countries’ dialogue mechanisms should play a better role via diverse channels at multiple-levels, so that each side can precisely grasp the other’s development and strategic intentions.” Abe responded that his visit “will usher in a new era when “competition is transformed into coordination.”

Foreign Secretary Gokhale aptly summed up during his media briefing that Abe’s visit to China “will have no impact on our bilateral relationship” with Japan. It is a statement of fact. The point is, for both India and China, their respective relationship with China is far more consequential than their importance and relevance to each other. Equally, it was only an illusion that strong relationship with Japan would work as a hedge for India vis-à-vis China. Doklam showed that life is real.

What India needs to weigh in are two things. One, the two countries with which India has close relations in the “indo-Pacific” – Japan and Vietnam – are both galloping away ahead of India in adding content to their relations with China in the economic sphere. Whereas, the ‘Wuhan spirit’ is yet to show big results in the economic arena. Certainly, new thinking is needed from the Indian side. Modi’s conversations with Abe will be timely.

Two, India should not become starry-eyed once again – pinning hopes on a New Cold War scenario in Asia. Japan’s realism in moving forward in relations with China is striking. If Japan doesn’t seem to think much of the New Cold War, surely, there must be something to it? The fact of the matter is that the US simply lacks the gravitas to rally the regional states against China. The European countries will not want to disrupt their massive economic ties with China, either. Meanwhile, the entente with Russia gives China much strategic depth. Above all, China is an avid globalizer and there is no great ideological struggle in the contemporary world situation that separates China from the ‘rest’.

To be sure, Abe sees the writing on the wall. The good part is that Modi saw it at the same time as Abe.