Japan wants more access to the Chinese market – and the US-China trade war might help

Japanese officials will hold talks with Beijing this weekend to demand more access to the Chinese market, and their case could be aided by pressure from US President Donald Trump.

The delegation headed by Japanese Foreign Minister Taro Kono will meet China’s top diplomat, Wang Yi, for a high-level economic dialogue in Beijing on Sunday.

A diplomatic source involved in planning the meeting said its timing could work in Tokyo’s favour. They said protracted trade talks with the US had put China under more pressure to offer concessions to other powers – like Japan and the European Union – that shared similar concerns to Washington over market access but did not support Trump’s protectionist approach.

Beijing also needs support from the EU and Japan as it seeks to diversify its markets and take on a leadership role in pushing global trade. The source said that as the China-led Regional Comprehensive Economic Partnership (RCEP) had stalled over differences with India, Beijing was pursuing a plan to set up a separate free-trade agreement for the Asean Plus Three (China, Japan and South Korea) grouping.

“The Chinese side has been more forthcoming and more willing to discuss issues such as intellectual property protection, forced technology transfers and further opening up of the Chinese market,” said the source, who requested anonymity because they were not authorised to speak publicly on the matter.

In a sign of China’s new willingness to discuss such issues that have long been seen as off the table, Beijing and Tokyo held their first bilateral meeting on intellectual property protection earlier this month. Although there was no mention of intellectual property in the name – it was referred to as the “Sino-Japan innovation dialogue” – the source said Chinese officials at the meeting were more open to discussing the issue, and forced technology transfers, than in the past.

A top priority for Tokyo at the talks on Sunday will be to press Beijing to lift its import ban on food from 10 Japanese prefectures that was introduced after the Fukushima nuclear disaster in 2011. Japan has repeatedly urged China to ease or lift the ban without success.

apan will be hoping that thawing ties with China after years of tensions over maritime and historical disputes will make Beijing more willing to compromise during the talks. And after Brussels took a hardline approach to talks with China last week, resulting in breakthroughs in areas such as market access, Chinese analysts say it could be tempting for Tokyo to take a leaf out of the EU’s book.

“The European Union was emboldened by the United States – they now think that only by taking a tougher line can they extract more concessions from China,” said Shi Yinhong, an adviser to China’s cabinet and international relations professor at Renmin University.

“Now Japan is probably worried that what it will be able to gain from China will be less than the gains of the US or the EU.”

But Shi said a major concession China is about to offer the United States meant there was a limit on what it could offer Japan.

“With the worsening China-US relations, Beijing needs to improve its relations with neighbouring countries,” he said. “But as China is about to significantly increase imports from the United States, it has limited resources to offer – how much money does China have?”

Meanwhile, Tokyo has had its own share of pressure from trade frictions with Trump. As Washington and Beijing near a deal to end their trade war, Trump is expected to turn his attention to Japan’s US$69 billion trade surplus with the US, and the two countries are expected to start talks of their own in Washington this week.

Japanese officials have been trying to avoid steep US import tariffs or quotas on its cars, which could deal a blow to the export-reliant economy.

Liu Jiangyong, a professor of Japanese studies at Tsinghua University, said Japan’s tensions with the United States and its lack of progress on ties with other countries like Russia and North Korea meant it needed to maintain good relations with China.

“Japan won’t take an approach that’s too extreme when it is dealing with China,” Liu said. “As [Japanese Prime Minister Shinzo] Abe’s Liberal Democratic Party will face an upper house election in July, he will need to show some achievements on the diplomatic and economic fronts.”

The Japanese delegation in Beijing will include Hiroshige Seko, the economy and trade minister, Takamori Yoshikawa, agriculture minister, and Keiichi Ishii, the transport and tourism minister. They will be joined by a Chinese team including Zhong Shan, the commerce minister, Han Jun, agriculture vice-minister, and Zhang Yong, vice-chairman of the National Development and Reform Commission.

Source: South China Morning Post