One of the more important consequences of the Trump Administration trade war against both China as well as Japan is the recent diplomatic and economic meeting between Japan’s Prime Minister Shinzo Abe and China’s President Xi Jinping in Beijing. Not only was it the first such meeting by a Japanese PM in seven years since the chill in relations over a group of disputed islands in the East China Sea. It also suggested a new political and economic strategy might be emerging across Asia’s largest economic sphere. Hours after leaving Beijing Abe hosted Indian PM Narenda Modi in Tokyo. Does this all foreshadow a new flank in an emerging multi-polar world or merely shrewd politics by Abe?
Showing he saw the meeting in Beijing as more than a photo-op, Abe brought a business delegation of some 1,000 top Japanese businessmen. China Prime Minister Li Keqiang announced that deals worth $18 billion had been signed during the talks. As well the two agreed to resume $29 billion worth of mutual currency swaps in event of future currency crises. Both leaders agreed to create a hotline to communicate in event of possible future tensions. Abe also invited Xi to come to Japan in 2019, a major step.
Less discussed in public media was the fact that Japan has agreed to include the China Renminbi in Japan’s foreign exchange reserves, a significant boost to the credibility of China’s currency. China for its part will allow the Bank of Japan to invest directly in Chinese government bonds.
What was not mentioned in the press accounts either in China or Japan was an historic offer of the Japanese Emperor conveyed through Abe to Xi. According to informed sources in Japan, Abe conveyed the wish of Japan’s Emperor Akihito to visit China before he abdicates next April to formally apologize to the Chinese people for the Japanese invasion of China during the 1930s. At the same time the Emperor extended an invitation to China’s Xi to come to Japan. According to the report, Xi accepted the invitation regardless the Emperor’s decision on his visit to China. Such a move by Japan’s Emperor would be seen by Beijing and the Chinese as more than symbolic.
Notably, Li formally invited Japan to reconsider its participation in China’s ambitious Belt-Road Initiative infrastructure project which has recently come under criticism from Malaysian,