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Explore Yahuda’s argument that increasing Economic Essay

Economic interdependence does not necessarily spell political stability for China and Japan By provision Explore Hydra’s argument that increasing economic interdependence between China and Japan does not necessarily spell stability in the relationship. Through critical analysis of Hydra’s article, exploring the complex and paradoxical relationship of both China and Japan’s economic and political ties; there is an abundance of evidence suggesting the increasing economic relations between the two countries, whilst simultaneously addressing the declination of political ties.

Factually, Hydra’s article highlights the obvious economic interdependence of each country and he emphasizes the how China and Japan complement each other appropriately. We see evidence that each country is heavily involved with the other in terms of international trade – ‘Japan has emerged as China’s greatest trading partner and China second biggest to Japan'(Had 2001) [1]. Despite political events which have deterred ODD (Official Development Assistance) from Japan to China, as of the sass’s onwards, this Aid has progressively increased and therefore highlights the economic relations that unite both countries.

Had concludes by emphasizing that relations between China and Japan are indeed very volatile and gives examples of were there has been significant political upheaval, such as the political manipulation of the people

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of China by the Chinese government in order gain favorable domestic support and the lack of empathy from both nations regarding the other’s cultural, social and political views.

Had feels that the lack of interdependence will reveal a balanced, rivaled relationship in the future. However, in regards to the claim that economic interdependence has not serially resulted in improved political stability, I will draw on a vast quantity of academic sources to analyses the change in economic interdependence and political relations throughout history.

Through critical assessment of these sources and together with my own individual interpretations, I will affirm whether or not I am in accordance with Hydra’s statement and draw my own conclusion on China and Japan’s political and economic correlation. One of the greatest periods of economic growth within Japanese history is the era of Prime Minister Junior Osmium’s political rule of Japan (26/01/2002 – 26/09/2006). At the time of his election as Prime Minister, Japan had faced a period of economic austerity, featuring stagnant growth.

Tensions had risen between China and Japan, due to the emergence of China’s rapid growth – ‘A main reason for the rising friction between Beijing and Tokyo is the fundamental shift in the political economy of East Asia: China’s rise coupled with Japan’s stagnation’ (Lang Penn Ere 2005, 275) [2]. Despite this, Osmium himself actually interpreted China’s economic growth as a good opportunity to aid Japan’s recession – dynamic economic development presents challenges as well as opportunity for Japan’ (Prime Minister of Japan and His Cabinet, 2002). Wilbur: 5)[3] . Following an import duty dispute which emerged in 2001 as a result of Japan’s fears regarding China’s growth, both China and Japan agreed to cooperate in order to help boost economic bilateral ties – ‘Osmium and Chinese Premier GHz Ironing agreeing to set up the China-Japan Economic Partnership Consultation as a formal dialogue to manage trade issues at the first Boa Forum in April 2002’ (Microchip, 2004: 1 11). [4] Economic interdependence soon flourished, particularly in regards to Japan’s dependency on

China’s growing economy, where it made rational sense to operate in China in order to maximize output for the Japanese economy – ‘Japanese firms should transfer production sites to China, where they can make products suitable for Japanese demand at the lowest cost and conduct routine office work (Abe, 2003: 125-128). [5] Despite this promising advancement in the economic bilateral ties of both countries, Osmium made political moves which were counterproductive to the relationship. In order to gain voter popularity within Japan, he made promises to visit the Yakking

Shrine in Tokyo – ‘The shrine became a symbol of the nationalist state Shinto religion in 1879, and was used to enshrine the souls of those who had died in Japan’s wars’ (Nelson 2003: 72) [6]. The purpose was to show Osmium’s commitment to the pride and patriotism of his country by honoring those who had died fighting for Japan – ‘Besides promising an economic fix, Osmium is determined to renew Japan’s optimism and pride But Osmium is sure to infuriate Beijing and Seoul, who keenly remember Japan’s war-time past. ‘ (Bloomberg Business Week, 2001) [7].

The political maneuver had a detrimental effect to the bilateral ties of China and Japan. As a result of these visits, many citizens of Asian countries who had suffered due to Japan’s wartime aggression accused Japan of not showing the appropriate sentiments of regret towards their past acts – ‘protests from the Chinese government and public against a revival of Japanese ‘militarism’ (Wang 2005: 140) [8], due to a perception that the worship of dead war criminals reflects a lack of remorse for their wartime deeds’ (Was 2011: 72). 9] Eventual consequences of Osmium’s visits to the shrine once a year lead to severe negative implications to the diplomacy linking both countries, and Chinese officials suspended political meetings with Osmium for five years – ‘no senior Chinese government official would negotiate with Osmium directly, leading to a virtual freeze on high-level government diplomacy from 2001-2006. (Was 2011: 72) [10] Despite the significant increase in economic relations between China and Japan during Osmium’s political reign – ‘Economic interdependence between the two has continued to deepen, with bilateral trade reaching close to SIS$200 billion annually. More than 30,000 Japanese businesses have set up factories in China. ‘ [1 1] we see an increased declination in political ties.

The sensitivity surrounding Japan’s remorse over its past wartime aggression came under criticism due to Osmium’s visits to the Yakking Shrine. It is likely that had Osmium not visited the Shrine on multiple occasions, the relationship between the two countries would have been remarkably better – the burden of history which bedevils Sino-Japanese relations could have been lightened by half. ‘ (Lang Pang Ere, 2005: 275). 12] Here is a notable example thin Sino-Japanese history whereby there is no correlation between economic Relating to the theory of economic interdependence, it can be argued that both China and Japan may be perpetually linked together in terms of trade and investment, even at the expense of political stability. Economic interdependence dictates the concept that as a consequence of specialization and the division of labor, participants in an economic system are constantly dependent upon one another for production.

This also bears relevance to the ideas of power within liberalism – ‘The idea of interdependence as a source of power envisages that states, institutions are linked by their transactions’ (We 2011: 21) . [13] Within the context of China and Japan’s economies and relations, the theory of economic interdependence plays a very important role in understanding how reliant both countries are on one another, as specialization exists which ensures both countries gain from significant comparative advantage – ‘Sino-Japanese economies are highly complementary.

Japan with its resource poor and high-tech advanced economy should find a natural partner in China with its resource rich, more backward, but developing economy. ‘ (Had 2001) [14] A comparative advantage within economics is defined s – ‘The ability of a firm or individual to produce goods and/or services at a lower opportunity cost than other firms or individuals. ‘(landscaped) [1 5] Here because of Japan’s high technological skills and advanced economy, it can produce technological goods and services that are superior to China’s at a lower cost.

Likewise, the abundance of resources within China gives it a comparative advantage of being able to producing large quantities of goods, which Japan could not produce without higher costs. From this, we understand that it is the natural endowment of specific resources which gives each country its comparative advantage and ability to trade. The economic interdependence theory here allows for specialization, comparative advantage and thus mutual benefits from trade.

However the consequence of this is that both countries are highly dependent upon one another. Linking this theory to the concept of ‘spunkiness’, a Japanese term used to described the separation between politics and economics, some sources state that such a distinction can be achieved because of the importance of income within an economy – ‘Even if you have a variety of political conflict a place to talk about the Economy as basis for prosperity it is a cornerstone of stability within East Asia a relation in Economics is required. (Nippon. Mom 2012) [16] From this statement, relating to the schedule of the Easy Asia summit, it is clear that whilst political disputes exist between countries, because of the selfish interests of both China and Japan to ensure their economy prospers, economic ties can never be severed. -the extent and direction of their economic cooperation were inevitably contingent upon how much they would need each other for their respective economic interests. ‘ (Lee, Chase-Jinn 1976: 187). 17] Ultimately, it can be said that political ties could be left to worsen, as long as both China and Japan can still extract positive economic benefits from their relations.

However, the theory of International political economy and interdependence conflicts with the idea mentioned above. ‘International political economy (PIPE) is the study of political and economic links between a variety of actors based on liberal against the belief that China and Japan will simply extract the economic benefits from their relationship and let political ties become damaged – ‘PIPE theory suggests hat as the volume of trade and capital flows between economically liberal states has increased, the importance of trade in international politics has also increased’ (Strange 1996). 19] However another theory claims only because the volume of trade between China and Japan is so great in terms of currency value, that true economic interdependence exists – Where there are reciprocal costly effects of transactions, there is interdependence. Where interactions do not have significant costly effects, there is interconnectedness’ – (Keenan and Nee 2001 :8) [20]. The distinction which is made here differentiates China and Japan from simply being unconnected, from being mutually dependent on one another.

Looking here at the theories on the international economically interdependent relations between both China and Japan, there is clear dispute over whether economic interdependence and political stability are positively linked. However, a favorable amount of evidence does suggest that the China and Japan can indeed separate their economic and political ties, in accordance with ‘spunkiness’ for the purpose of self beneficial economic transactions. This does affirm Hydra’s view that the two factors of economic interdependence and political stability are not serially linked.

In contrast with the examples given which agree with Hydra’s view on economic interdependence and political instability. Within the past, Japan has made attempts at influencing the political governance of China through the use of economic intervention and suspension of ODD in order to manipulate the Chinese government. Initially the intentions of this ODD to China was to help the country develop economically and thrive – ‘Since the start of its official China aid program in 1979, Japan has used foreign aid as a key diplomatic instrument in dealing with China

The goal has been to steer China in an economically sustainable, socially stable, and politically liberal direction. ‘ (Taking 2002: 191). [21] The positive outcome of this program has undoubtedly promoted peaceful relations between China and Japan, but it is also apparent that Japan has placed importance upon donating ODD to China in the sass’s to prevent environmental problems in China that could also affect Japan – Worries about acid rain and dust blown in from China reflects Japanese anxieties about potential social instability in China that could also be damaging to Japan. Had 2001: 192) [22] Seemingly, Japan’s initial interest in helping China develop economically had diverted and became focused on preventing potential issues which could harm Japan. ODD was made available which China could use to address environmental problems and prevent the possibility of several Chinese citizens from leaving China and immigrating to Japan, creating potential issues of a population overspill.

Following key events that significantly affected the relationship between China and Japan during the sass’s, there was a surge in Japanese public views regarding a Seibel reduction in Japan’s ODD policy to China; this conveyed an obvious resentment towards the Chinese government from Japanese citizens – ‘Japanese citizens are increasingly demanding that public money not be provided to a country 2002: 198). 23] This refers specifically to the nuclear tests conducted by China during 1994-6 and the ‘Taiwan Strait Crisis’ which saw China intimidate Taiwan through firing missiles around their area in order to coerce them into reforming with mainland China. At the time, China unknowingly fired missiles that narrowly missed an island inhabited by several Japanese citizens.

We can see that through this specific period, owing to the key events mentioned, public perceptions about the other country rapidly declined – ‘Between 1986 and 1998 the proportion of Japanese having a favorable view of Japan-China relations decreased dramatically from 76% to 41%, while the proportion having an unfavorable view increased from 14% to 48%. ‘ (Taking 2002: 198). [24] The Japanese fears over the growing presence of China’s military power, stemming from the rapid economic growth that the country enjoyed from around the sass’s onwards induced the Japanese government to use

ODD as a strategy to deter any further development of Chinese implementation – three separate aid sanctions on China in order to protest against: (1) China’s successive nuclear weapons tests from 1994 until July 1996; (2) large military exercises by the Chinese army including the launch of missiles across the Taiwan Strait and (3) Chinese naval activities in disputed areas in the East China Sea, together with circumnavigation of the Japanese archipelago in 2000 by a Chinese warship. (Taking 2005: 440). [25] Ultimately, the responses from the Chinese government after the imposed ODD sanctions and suspensions failed to arouse a orientation on future planned nuclear and military activities, however what is apparent through this is that even with reduced economic interdependence (resulting from China not receiving aid from Japan), political instability declined along with it.

Through analysis of the several factors which contributed to why Japan’s strategy failed, one such factor that is highly significant is that due to China’s rapid economic growth towards the later part of the 20th century, it needed to strengthen military forces in order to protect oil reserves located around the Chinese coastal areas and the Persian Gulf. Despite China’s abundance of oil, fast economic growth meant that a potential scarcity could arise in the event that alternative sources were not protected – the demand for oil by its industries exceeded domestic supply in 1993.

Since then, China has become one of the world’s major oil importers’ (Yeah and Lewis 2004: 448), (Taking 2005, 443). [26] From this we can conclude that the ODD sanctions placed upon China by Japan in order to prevent further Ana and military expansion simply did not outweigh China’s need to invest within its military forces in order to protect energy sources, needed to fund its growing economic needs. China priorities its economic needs over the aid it was receiving from Japan and ultimately caused damage to bilateral ties.

Despite reasons stated for why Japan’s strategy was unsuccessful, my own interpretation of the cause of this failure is due to economic independence China has gained through its rapid growth towards the later part of the 20th century. Changes taking place during this period clearly indicate China’s development the spectacular growth of rural industry where employment rose from 70 million in 1985 to 96 million in 1991′ (China Statistical Yearbook 1991; Odd 1992). 27] China was experiencing phenomenal GAP growth rate from 4. % in 1989 to suspension began in 1994 after China began its nuclear testing projects during the first half of the sass’s the Japanese government warned China repeatedly that the continuation of its weapons testing programmer would have a negative effect upon bilateral relations, including the ODD programmer’ (Taking 2005: 445). [29] Only after continuous pressure both from Japan and international sources, as well as increasing reductions in the ODD with an eventual freeze, did China and Japan manage to engage within diplomatic negotiations.

The outcome caused China to simply make intentions to inform Japan about future plans for nuclear testing, as opposed to fully canceling them. China resumed testing shortly after. It is likely that China’s eventual compromise over the nuclear testing came as a result of international pressures applied to China through Japan asking other nations to become involved – ‘Japanese Foreign Minister Keno Hooey also asked the United States and the Russian governments to apply diplomatic pressure on the Chinese government to halt the nuclear tests’ (Yummier Shinbone, 19 May 1995. [30] It is likely hat using ODD as a sanction to deter the nuclear testing was only one factor amongst many in causing the Chinese government to negotiate. As only minor sums of money were involved in the ODD reductions, it is felt that China’s reaction was more a result of the historical and cultural sentiments attached to the ODD – t ‘China is the country that suffered most under Japanese aggression.

That is why our receiving of grant-in-aid has a special historical background’ (cited in Kate 2001 : 47). [31] Here China is seen again to exploit Japan’s past war time aggression in order o convey sentiments about Japan’s attempt at politically manipulating China. Clearly, in this example, the monetary value of the ODD had little influence; maybe due to China’s economic rapid economic growth during this period and the need for investment within military related projects in order to protect its economy.

It can be concluded that in actual fact the lack of economic interdependence did cause some political instability. China’s apparent lack of interest in the economic relations with Japan during this period may have caused the country to not be responsive to Japan’s requests and strategic sanctions. Possibly, had there been a greater interest and need for Japan’s ODD, China may have engaged in diplomatic negotiations sooner and therefore relations would have emerged much improved.

Through comparative assessment of the examples I have given as to how they have affected the relationship between China and Japan’s economic interdependence and political instability, I have effectively concluded on each occasion whether or not there is a link between the two factors and therefore whether it affirms the statement made by Had. My own response to the overall situation is that Had is correct n believing that economic interdependence does not in fact induce political instability.

Multiple examples such as the Osmium period and the theory of economic interdependence and ‘subtending’ concept allow us to see that there are certain times when economic prosperity has occurred despite the simultaneous declination of political ties. Despite opposing examples which show that possible closer interdependence could have actually promoted better political stability, the reality of China’s rapid economic prosperity coupled with Japan’s stagnation simply means that China is becoming more economically independent and therefore does not need to disputes.

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