GREGORY CLARK (The Australian, Tokyo Bureau, April 1971)

'Our country's present China policy is this. On the one hand we recognise the Nationalist Government in Taiwan as the government representing China. We have signed a peace treaty and have conventional diplomatic relations with that government. On the other hand we have had historical and geographical relations with the Chinese mainland which has six hundred or more million people. It is an essential fact that we must have relations of all kinds with the Chinese mainland. In this respect our position differs basically from that of the U.S. which is geographically distant from the Chinese mainland and which has absolutely no need to have relations."1

1 Statement on Japanese Foreign Ministry's Attitude to the China Question, March , 1964, included in Basic Materials on Japanese/Chinese Relations (Nichu Kankei Kihon Shiryoshu), Kazankai, Tokyo, 1970.

The state of Sino-Japanese relations can be described quite simply. Both Peking and Tokyo claim to be the victim of the other's hostile behaviour. Both sides insist that it is the other side which blocks any move towards better relations. In seeking to establish who, if anyone, is right I look first at the historical record of Sino-Japanese relations and then try to assess how Tokyo and Peking actually judge the many factors involved in their relations.

Any survey of Sino-Japanese relations must begin with the fact that it is Tokyo, rather than Peking, which refuses diplomatic recognition. Tokyo, moreover, maintains diplomatic relations with the Nationalist Chinese regime in Taipei. The refusal of recognition by one government for another is usually seen as an unfriendly act; the unfriendliness is compounded if recognition is given to a rival government.

Japanese Government and Liberal-Democratic Party leaders deny firmly that Japan is hostile to Peking. They have frequently stressed the historical background to their recognition of Taipei - that Japan concluded its 1952 Peace Treaty with Chiang Kai-shek's government as the government of China and as the government against which the Japanese invasion of China had been directed. Hence, it is claimed, Japan has a continued 'moral obligation' towards the Nationalist government which would be betrayed if recognition were now extended to Peking.

In addition, Tokyo can and does argue that it has made concessions to Peking which modify significantly the hostility usually implicit in the refusal of recognition. These include:

(i) the growth of mutual trade (estimated to have reached $800 million in 1970), and the approval for semi-official agreements to boost this trade - the Liao-Takasaki agreement of 1963, replaced in 1968 by the annually negotiated memorandum trade agreements.

(ii) permission since 1964 for the establishment of trade liaison offices in Peking and Tokyo, for Chinese government personnel to enter Japan to staff the Tokyo office, and for Chinese correspondents to enter Japan. (iii) official reference since 1970 to the Communist Chinese govern- ment as the 'Peking Government'. Since January 1971, Peking has also been referred to by its correct title of 'Government of the People's Republic of China'.

(iv) the Prime Minister's December 1969 offer of ambassadorial level talks on relations between the two countries, repeated since then at frequent intervals.

Peking, in accusing Tokyo of hostility, however, can and does point to other moves which suggest that Tokyo's relations with Taiwan go well beyond anything required by any sense of moral obligation. Two Japanese Prime Ministers have paid official visits to Taiwan - Nobusuke Kishi in 1957 and the present Prime Minister, Eisaku Sato, in 1967. Both occasions involved statements and speeches recognising 'close and friendly relations' between the two governments. Japan has extended two long-term low- interest credits to Taiwan - a US$150 million credit offered in 1965, and the 1970 promise of credits on a project by project basis to a total of US$250 million. Japan has also refused Export-Import Bank credits for plant exports to China, ostensibly on the basis of a promise to Taipei - the so-called Yoshida Letter.'

In addition, Tokyo itself contradicts, or at least greatly weakens, its 'moral obligation' argument when it also justifies its non-recognition policy in terms of the Japanese national interest. The quotation which heads this article is from one of the more 'forward-looking' statements of Japanese government policy. It continues as follows:

Provided the National Government in Taiwan and the Chinese Com- munist regime in Peking both claim the position of being sovereign over all China, it is not possible in reality for Japan to have diplomatic relations with both at the same time . . . Hence, if Japan was to have conventional diplomatic relations with the Chinese Communist regime it would not only mean the immediate breaking of diplomatic relations with the National Government, it would also mean the breaking of economic and all other relations with Taiwan itself. This would clearly result both in threatening the stability and peace of Asia and in harming the solidarity of the Free World. The adoption of such a policy by Japan in the present circumstances would be contrary to the national interests of Japan.

2) In May 1964, the former Japanese Prime Minister Shigeru Yoshida sent a letter to Chang Ch'un, Secretary General of the President's Office within the Nationalist Government, which is understood to state that the Bank would not be allowed to extend credits to China. In June 1968 President Chiang Kai-shek claimed that letter was intended to supplement the 1952 Peace Treaty. The Japanese Government has recently stated that China letter was personal and that it will consider Export-Import Bank credits for China on a casi-by-case basis. In all cases so far, however, it has refused credits.

Japan's continued sponsorship of the 'important question' resolution blocking Peking's entry to the United Nations also raises doubts about its eagerness to find ways to come to terms with Peking. Finally, Peking can and does point to steps which link Japan with U.S. policies hostile to China. Japan cooperates in COCOM restrictions on strategic exports to China. Following the 1967 Washington talks on Okinawa, Mr Sato joined President Johnson in stating that China was 'a threat to Asia'. Japan has provided the U.S. with bases for its Far East military strategies which aim at pre- venting by force Peking's recovery of Taiwan and at preserving anti-Peking governments in East and South-East Asia. And in the November 1969 Sato-Nixon joint communiqué on the return of Okinawa, Tokyo endorsed, and also gave the appearance of joining in, the U.S. defence commitment to Taiwan when it stated that it would regard the security of the Taiwan area as 'very important' to Japanese security.

Taken together, the record of moves by Tokyo which cause harm to Peking's interests is fairly substantial. Peking's claim to be the victim of hostile policies from Tokyo would seem to have some basis in fact.

However, Peking has also adopted hostile attitudes towards Tokyo and this could in turn help to explain some of Tokyo's hostility. In 1958, follow- ing the Nagasaki flag incident,3 Peking broke almost all trade relations with Japan, causing severe economic difficulties to existing exporters. More recently, and particularly since the onset of the Great Proletarian Cultural Revolution in 1966, Peking has shown open contempt for the Japanese Government. It has completely ignored Tokyo's offer of ambassadorial level talks. It has long conducted a strong propaganda campaign against Mr Sato personally, and openly encourages elements in Japan seeking to replace his government. Chinese leaders have made it clear they see no hope for an improvement in Sino-Japanese relations while Mr Sato remains Prime Minister. Any judgement of Sino-Japanese relations thus comes down to balancing the scale and sequence of the various moves both govern- ments have made against each other. In retrospect, it seems clear that a crucial period in the development of Sino-Japanese relations was 1964/65 - at the end of the Ikeda administration and the beginning of the Sato administration.

3)Right-wing ultra-nationalists removed the Chinese flag from a Nagasaki trade exhibition; Peking claimed that the Japanese Government was to blame for not taking security precautions.

Prime Minister Hayato Ikeda had succeeded the conservative Nobusuke Kishi who had resigned after the 1960 anti-Security Pact disturbances. The move was widely inter- preted as a change from high-posture to low-posture policies, including a willingness to improve relations with China.

The first substantial move to better relations was the signing in November 1962 of the Liao-Takasaki agreement providing a semi-official channel for trade between the two countries. This was followed by a series of moves which appeared to confirm that a genuine improvement was under way. They included:

(i) approval by the Japanese government for the deferred-payment

export of the Kurashiki Rayon vinylon plant (August, 1963);

(ii) establishment of the China-Japan Friendship Association with Liao Ch'eng-chih as Chairman and Kuo Mo-jo as Honorary Chairman (October, 1963);

(iii) the signing of a fisheries agreement between the two countries (November, 1963 - no agreement had existed since the rupture of talks in 1958);

(iv) the holding of Japanese industrial exhibitions in Peking and Shanghai;

(v) the return to China of Chou Hung-Ch'ing, a defector from an October 1963 industrial mission to Japan (January, 1964);

(vi) the holding of a Chinese economic and trade exhibition in Tokyo, opened by Nan Han-chen, Head of China's International Trade Pro- motion Council (April, 1964);

(vii) agreement on the opening of reciprocal offices under the Liao- Takasaki trade agreement, and for a mutual exchange of journalists (April, 1964).

On 9th November, 1964, Mr Sato replaced Mr Ikeda as Prime Minister. Just three weeks earlier China had made its first successful test of a nuclear device. On 25th November, Peking's People's Daily published a strong attack on Mr Sato accusing him of numerous anti-Chinese moves in the half month since coming to power. These included: unreasonably refusing per- mission for a Chinese delegation headed by Peng Chen, the mayor of Peking, to enter Japan to attend the 9th General Congress of the Japan Communist Party; attacking China's nuclear testing; opposing Peking's representation in the United Nations; developing the thesis that ownership of Taiwan was undecided; deciding to grant a $150 million credit to the Nationalist Chinese Government.

The article concluded that Mr Sato, for all his brave words about wanting to handle the China question in a forward-looking manner, was in fact hostile to China. This was followed on February 12, 1965, by a further article strongly attacking Mr Sato and his government for using the Yoshida Letter to refuse Export-Import Bank credits for the export of two vinylon plants to China.

From this time on, the record of Japan-China relations was one of steady decline. Mr Sato on February 8th confirmed publicly that Export-Import Bank credits would not be allowed for plant exports to China. Peking on February 14 announced the cancellation of an order to purchase ships from Hitachi Shipbuilding, and this was followed immediately by the cancellation of a urea plant contract. On February 20 the treaty restoring Japanese and South Korean relations was signed provisionally and on February 24 formal negotiations for the extension of the $150 million credit to Taiwan were commenced.

As relations worsened, Peking's propaganda began to include the alleged revival of Japanese militarism as a major theme. This was linked to the earlier theme of Japanese plots to take control of Taiwan through its Two China policy. The beginning of the Cultural Revolution, Mr Sato's visit to Taiwan in September 1967, and the Sato-Nixon joint statement of November 1969 finally set the current pattern of relations - violent propaganda attacks by Peking and waning interest by Tokyo in maintaining even the appearance of seeking better relations.

From this account it seems clear that if Peking in 1964 was in fact anxious to improve relations then Mr Sato's failure to follow up the initiatives made during Ikeda's Prime Ministership was a serious check to these relations. Several Japanese sources have suggested that this was the case, and their argument deserves some attention.

The most significant source was a series of two articles entitled 'The Posture for opening up Sino-Japanese Relations', and published in the Nihon Keizai Shimbun of May 22 and 23, 1970' They claim that Mr Sato had impressed the Chinese early in 1964 by his criticisms of Mr Ikeda's China policy as 'luke-warm' and his verbal promise to Nan Han-chen (during the latter's visit to Japan in 1964) to accept the inseparability of politics and economics in Sino-Japanese relations. Sato was seen as a man of decision better able to promote relations with China than the well-intentioned but politically-handicapped Ikeda. True, Ikeda had made a number of moves to improve relations. And Peking was impressed by the way Ikeda was open to proposals from the pro-China LDP faction led by Kenzo Matsumura. But the issuing of the Yoshida Letter as a sop to Taiwan following the sale of the Kurashiki Rayon plant, and permission for visits by U.S. nuclear submarines to enter Japanese ports, had shown the limits to Ikeda's decision making power.

4) The articles describe in detail the attitude of the Peking authorities in 1964 and quote statements by them verbatim. Although the articles were unsigned, it seems likely that they originated with the Nihon Keizaj's correspondent in Peking in 1964/65, Mr Keiji Samejima, who was subsequently detained for eighteen months by the Chinese authorities before being expelled in 1969.

When Ikeda stood down in the autumn of 1964, the senior Chinese official handling Japanese affairs is quoted as saying officially: 'We have no demands at all [to Mr Satol. If he follows the rails laid by Mr lkeda that will be fine.'

As soon as Sato took office, however, the Yoshida Letter became basic policy, and credits were extended to Taiwan. Then came the decision to visit Taiwan in 1967, not as part of a South East Asian trip as had been the case with Kishi's earlier visit, but for the specific purpose of talks with the Taipei government. These moves undermined the position of the pro-Japan elements in Peking and made inevitable their removal during the GPCR purges. The absence of these moderate elements, together with the November 1969 communiqué on Okinawa, has guaranteed the continuation of Peking's hostility to Tokyo.

This account is largely confirmed by the correspondent for the Mainichi Shimbun also in Peking in 1964 - Mr Churo Nishimura. In a recent article,5 he identifies Liao Ch'eng-chih as the pro-Japan official making statements on Sino-Japanese relations in 1964, 6 and attaches greatest importance to Sato's refusal of plant export credits. According to Nishimura, Mr Sato's lack of 'sincerity' had so angered Peking that he was rated as even more anti-China than his predecessor, Mr Kishi.

The view that Mr Sato should take the blame for the impasse in Sino- Japanese relations hinges on several vital assumptions. In the first place it needs to be shown that in the period before Peking's anti-Tokyo propaganda barrage got underway, Mr Sato's position on the two major issues involved - Taiwan and export credits - was markedly more hostile to Peking than that of Mr Ikeda. (Under Ikeda's administration Japan had begun sponsor- ship of the 'important resolution' formula.7 The Yoshida Letter also dates from Ikeda's time. On the other hand, Mr Sato's move to give economic assistance to Taiwan represented an important and significant departure from previous policy, and could be seen as placing him to the right of Mr Ikeda.) Again, it is possible that Mr Sato would have eventually moved to improve relations with Peking had he not been the subject of violent propaganda

5) 'Make the anti-China hawks retire', Chuo Koron, November, 1970.

6) Liao was educated in Japan and speaks Japanese fluently. According to Nishimura, Liao met with Japanese correspondents monthly and gave frank briefings on the state of Sino-Japanese relations.

7) I.e., the resolution that the seating of the Peking Government in the U.N. was an 'important question', requiring a two-thirds majority, introduced at the 16th UNGA meeting in 1961. The resolution was then dropped and revived in 1965.

attacks.8 Or it is possible that Peking would have eventually turned hostile to Mr Sato regardless of his China policy: that any conservative Japanese government which actively pursued a pro-Western foreign policy would incur Peking's anger.

No one, I would suggest, apart from those actually involved is in a position to give a definite answer to these questions. We can, however, try to analyse the factors influencing both sides when they make decisions affecting their mutual relations, and on this basis reach some conclusion as to the real reasons for the Sino-Japanese impasse.

Both Peking and Tokyo face gains and losses from any normalisation of relations. By recognising Peking, a conservative Japanese government risks the following losses.

(i) the extension of Peking's control over Taiwan. Apart from the moral pain which Tokyo claims it would feel from abandoning the Chiang regime, it would also suffer the loss of (a) Japanese trade and investments in Taiwan;9 (b) the security which Japan attaches to the island's strategic position; and (c) any political role which Japan may see for itself in Taiwan in the future.

(ii) the weakening of Japan's defence and political alliance with the U.S. The extent of this loss will vary with the eye of the beholder, but to the extent it might jeopardise the return of Okinawa any Japanese government would suffer a very real loss. For Mr Sato, who has publicly stated the return of Okinawa to be the main aim of his Prime Ministership, the loss would be even greater."

8 Mr Sato's sensitivity to these attacks has been stated by several sources, the most recent being the Chief Cabinet Secretary, Shigeru Hori, in a NHK television discussion on January 31, 1971.

9 Trade in the first ten months of 1970 totalled US$775 million both ways. The current value of Japanese investments in Taiwan is almost impossible to estimate. However, it is probably in excess of the $70 million given by official Nationalist sources for direct Japanese investment in Taiwan.

10 There is some evidence that concern over Okinawa led the Japanese Government unwittingly into what is by far the most serious anti-China move taken in the course of Sino-Japanese relations, namely the 1969 joint statement linking Japanese security with the preservation of Taiwan separate from China. According to one interpretation of the negotiations leading to the joint statement, the U.S. side initially did not expect Japan would be willing to join in any declaration over the future defence arrange- ments for Taiwan or even South Korea. The U.S. believed such a declaration, even if unilateral, to be important, however, since the communist side might interpret a U.S. withdrawal from Okinawa as a weakening of the U.S. commitment in East Asia. Japanese Foreign Office officials, fearing that the U.S. could prove reluctant to return Okinawa on terms acceptable to Japan, considered that some Japanese concession to the U.S. position was needed. They proposed, therefore, that Japan endorse the declaration formally. However, to remove the offence to China implicit in endorsing the U.S. position over Taiwan, the Japanese deliberately chose to describe Taiwan as very important while South Korea was said to be essential. This difference of wording, it was believed, would be apparent to Peking, together with the fact that the statement called for better relations with China (as opposed to the Sato-Johnson statement of 1967 which had described China as a threat). According to this interpretation, the Japanese Government was genuinely surprised by the strength of the Chinese reaction.

(iii) the weakening of Japan's international role if and when China is recognised internationally. China's past exclusion from certain world markets, the U.S. in particular, and U.S. backing for Japan as part of its anti-China strategy have assisted Japan's advance from postwar defeat and poverty to its current international position. Peking's entry to the United Nations Security Council would probably make it more difficult for Japan to gain entry. A stronger Chinese presence in South- East Asia would check the growth of the Japanese economic and political presence in the area."

(iv) a possible demand for war reparations. Peking has often mentioned the figure of $4000-$5000 million as the amount of Japanese war destruction in China, and the likelihood of the claim being pressed has long been debated in Japan. Pro-Peking sources claim Peking reserves the right to make a claim, but would not in fact make one.

(v) the strengthening of the Japanese left-wing which would follow if Peking gained ready personnel and propaganda access to Japan.

By failing to recognise Peking, a conservative government risks:

(i) intense criticism both within and outside the conservative party. Pro- Peking sentiment in Japan may be less than the image given by the press and academic circles. Nevertheless, the fact it exists and that it carries some political weight is clear from the efforts made by con- servative candidates for political leadership to avoid being labelled as anti-Peking.

(ii) some loss of access to the Chinese market.

(iii) being left behind if and when most other countries, and possibly even the U.S., move to recognise China. This risk has long been recognised by Japanese government leaders.

As compared with Tokyo, Peking would seem to have faced a much less complex balance of gains and losses from any normalisation of relations. On the plus side there has always been a very substantial gain since U.S. anti- China diplomacy would be gravely weakened if Tokyo recognised Peking. Against this are relatively minor hypothetical losses:

(i) a weakening of the Japanese bogy as an element in Peking's domestic and international propaganda, and

(ii) a possible weakening of Peking's relations with left-wing opposition groups in Japan, and their chance of using the China issue to attack Mr Sato's Government (though as already suggested Peking also gains through easier access to these groups once relations are normalised).

11 These last two points were frankly admitted by the former Japanase Ambassador to the U.N., now retired, Mr Toshikazu Kase, writing in the Nikkan Kogyo Shimbun of 28th January, 1971.

Nevertheless, many observers are impressed by the difficulties which Peking imposes on contacts with Japan. They compare this with Tokyo's readiness for contacts, and conclude that Peking is less willing than Tokyo to normalise relations.

This argument is important, and deserves study. I would suggest, however, there is a major difference between normalising relations and initiatives to normalise relations, and that both sides are aware of the gains and losses involved from taking initiatives which may or may not result in normalisation. In making such initiatives Tokyo risks worsened relations with Washington and Taipei, particularly since the latter is quick to threaten economic retaliation whenever it suspects Tokyo of making some concession to Peking. However, and as already suggested, by failing to make initiatives a con- servative Japanese government risks a strengthening of its domestic opposition, plus discrimination in the Chinese market. The one step forward, one step backward behaviour towards Peking by post-war conservative governments reflects awareness of these conflicting interests.

Peking faces different problems. It does not have to worry about the reaction of other governments if it appears to move closer to Tokyo. But it does have to worry greatly about a weakening of its diplomatic position over Taiwan.

Peking's official position is that contacts with the U.S. must be refused until the latter ceases its 'aggression' against Taiwan. The implication is that the U.S. position over Taiwan is so detrimental to Peking's interests that any contact whatsoever might imply tacit recognition of the U.S. position. (The U.S. for a long period also refused contacts for fear of seeming to imply any recognition of Peking.) Peking, it is true, agrees to hold ambassador-level talks with Washington, but these are justified as necessary for negotiating the U.S. withdrawal from Taiwan and the Taiwan Straits.

The direct threat to the Chinese interest represented by the Japanese over Taiwan is presumably less than in the case of the U.S. This, again pre- sumably, is why China is prepared to allow some trade and personnel contacts. Even so, the Japanese position is clearly far more important to the future disposition of Taiwan than, say, the Australian or the West German position. It would not be surprising if Peking felt obliged or entitled to restrict contacts which could imply tacit recognition. Hence the need for such unwieldy formulas as the inseparability of 'economics and politics', or the Chou En-lai four principles of 1970 prohibiting trade with firms which maintained contact with Taiwan. Hence also, it could be suggested, Peking's reluctance to enter ambassadorial level talks without some guarantee that they would in fact lead to normalisation of relations.

So far, in listing the various factors involved in Sino-Japanese relations it has been assumed that these factors are judged objectively by the respective governments. Some account needs also to be taken of the ideological (sub- jective) bias among those who must judge these factors.

Bias in decision-makers may not always be all-important: where the balance of objective factors clearly points to a gain from normal relations, then all but the most extreme will approve recognition, or moves to recognition. But where the balance is unclear or marginal, then the subjective bias can be decisive. For example, assuming that Mr Ikeda and Mr Sato in 1964 faced an identical set of factors in deciding relations with China, then the fact that Mr Ikeda moved towards China while Mr Sato appeared to move away from China was presumably the result of their differing assesss- ments of these factors - Mr Ikeda being influenced by conciliatory sentiments, Mr Sato by less compromising sentiments. For convenience, these sentiments can be contrasted as moderate and hardline.

Japanese sources frequently claim that the Japanese Foreign Ministry is split on the China question, with the Ministry's China section opposed by the more pro-Western, pro-U.S. alliance attitudes within the United Nations and North American divisions.

Within the parliamentary Liberal-Democratic Party a similar split is evident. The strength of the hardline anti-Peking faction is variously estimated at around 60-70, but it has the advantage of including the influential Nobusuke Kishi, a former Prime Minister and half-brother to Mr Sato. The pro-Peking faction can claim the 95 LDP members who in December 1969 registered as members of the Dietmen's League for the Restoration of Relations with China. The remainder of opinion within the parliamentary party appears generally to favour some move to Peking while seeking guarantees for Taiwan.

Identifying moderates and hard-liners in Peking on policy to Japan is more complex. The fact that China has displayed such caution in relations with Japan, although the balance of objective factors would seem to favour a Chinese decision to work more actively for better relations (or at least to restrain propaganda attacks), suggests that hard-line attitudes predominate.

And while the evidence seems to indicate that Liao Ch'eng-chih - the man directly handling Sino-Japanese relations in the crucial 1964-65 period - was pro-Japanese, it may well have been that even at the time he was opposed by hard-liners above him. In any case, the Cultural Revolution and Liao's downfall during the ensuing purges would almost certainly have meant a strengthening of the hard-liners in decisions on Sino-Japanese relations. But before concluding that the blame for the Sind-Japanese impasse lies at least partly with these hard-liners, one point needs to be noted.

Most observers accept that Russian fear and concern over West German 'revanchism' was a genuine, even if irrational, factor in Soviet diplomacy, and that it severely hampered the establishment of a working relationship between Moscow and Bonn during the period of conservative government before Herr Brandt came to power. Some even accept that the connections which some of these conservatives held with openly anti-Soviet organisations, together with their pre-war background, justified Soviet concern.

China, and the Chinese Communist movement, suffered almost as severely from Japan's past aggression as the Soviet Union and the CPSU suffered from German aggression. (If the period of aggression is considered, China's suffering was greater.) The Soviet Union emerged from World War Two with its territory expanded, its western frontier protected by buffers and its former enemy weakened and divided. The Chinese Communists emerged from their war with their territory divided. Their former enemy actively supports a hostile U.S. military presence close to Chinese frontiers, and is closely involved in support for the rival Chiang Kai-shek regime.

Today Japan has outstripped West Germany in economic strength; China's economic and military strength relative to Japan is much less than that of the Soviet Union relative to West Germany. And Peking's grounds for suspecting the ideological bias of some within the LOP and close to Mr Sato are at least as strong as those Moscow has vis-à-vis conservative elements in Bonn.

Many Japanese moderates are aware of these subjective reasons why Peking may be cautious in relations with Japan. They have urged strongly that Japanese decision makers take them into account in making policy: that it is up to Japan to make the first concessions as a proof of its sincerity. I would suggest that Tokyo has failed to make these concessions, at least fn the period that Mr Sato has been in power, and that Mr Sato and his cabinet possibly do not believe it to be in Japan's interests to make such concessions.