Share

Why China’s G20 is the moment of truth for the Asian giants

When the leaders of 20 of the world’s largest economies meet in Hangzhou (杭州), China, next month, political pundits, economic sages and newspaper columnists will leave no stone unturned in relaying, analysing and deciphering every last utterance that occurs over two days’ worth of meetings, debates and conferences.

But for those trying to grasp where relations between the leading Asian economies of China, Japan and South Korea are headed, just as important may be the meetings that fail to materialise, the things that are left unsaid.

Bonus holidays, free tolls and tickets galore: how Hangzhou residents are being lured out of town for G20

With each of the three countries investing great diplomatic effort in bringing their leaders together in a series of planned two-way meetings on the sidelines of the G20, the occasion could well be a tipping point for the countries’ delicate and complicated relationships.

Succeed, and a landmark three-way meeting beckons in Japan this year. Fail, and tensions are likely to fester. As Wang Sheng, a northeast Asia expert at Jilin University, puts it: “If the state leaders fail to meet, or their bilateral meetings don’t go well in Hangzhou, I’m afraid the trilateral meeting of the leaders later has no bright future.”

Hopes for a breakthrough between the three countries, that together account for a fifth of the world’s economy, were raised by the meeting of their foreign ministers in Tokyo on Wednesday. Together, they criticised a missile test by North Korea that day, reassured each other over the importance of cooperation for regional peace and vowed to push on with talks on a three-way free-trade agreement – talks that have already gone on for 10 rounds.

Little chance of thaw in Sino-Japanese ties at G20 summit

But despite the trio’s statement that they were “making efforts” to bring the leaders together at the G20, sceptics will not be holding their breath.

For China’s relations with Japan, one of the stumbling blocks will be the East China Sea – one of the central topics in the meeting between Japan’s foreign minister, Fumio Kishida, and his Chinese counterpart Wang Yi ( 王毅 ).

This month, hundreds of Chinese fishing boats and more than a dozen official vessels were found operating in waters near the Diaoyu Islands, referred to as the Senkakus by Japan, prompting protest from Tokyo.

On Wednesday, Kishida told Wang that China must stop such “intrusions” if it wanted to improve ties, while Wang downplayed the affair as normal fishing operations that had been “hyped by the media”. Despite this, there were positive signs, with the pair agreeing to launch “as soon as possible” a mechanism to prevent accidents at sea and air and begin a high-level maritime consultation.

Multimedia interactive special: historic G20 meeting in Hangzhou – the leaders, their agenda and the redrawing of the world’s economic order

Su Hao, professor at China Foreign Affairs University, said China’s more assertive activities reflected a power shift in the East China Sea, where Japan was no longer dominant. “But both sides are fully aware that neither one can afford the tension to escalate into direct confrontation or conflict between navies, or a war, so they will definitely seek ways to manage any incident,” Su said.

There are also positive signs in Japan’s proactive approach to seeking top-level talks with China.

While the foreign ministers were meeting, Prime Minister Shinzo Abe sent another representative to Beijing to set up the G20 meeting with Chinese President Xi Jinping ( 習近平 ). Abe has also made known his desire to bring about the three-way meeting in Japan.

Amid the overtures, however, Japan still sees China as a challenger and competitor to its leadership and influence in East Asia – while China views Abe’s efforts to “normalise” Japan’s military as an antagonistic move. This has locked the sides in an “ultimately structural contradiction”, according to Su.

Such competition takes place not only in the East China Sea, but even in the South China Sea territorial disputes – despite Japan not being a claimant there – and in the economic sphere.

It is often said the Sino-Japanese relationship is “politically cold but economically warm”, yet there are signs the economic relationship is cooling. Since disputes over the Diaoyus escalated in 2012, two-way trade has dropped for four straight years, while Japanese direct investment into China has fallen three years in a row.

Hangzhou G20: China determined to keep summit focus on economy

Li Mingjiang, an associate professor at the S. Rajaratnam School of International Studies at Nanyang Technological University in Singapore, said cooperation in trade, culture and people exchange between the two could more or less remain as it was, but hopes to advance such connections were thin. “It is almost impossible to discuss or implement any new major initiative or plan between China and Japan,” he said.

China’s economic ties with South Korea, on the other hand, have made significant recent advances. Beijing and Seoul signed a bilateral free-trade agreement last year, after a decade of 25 per cent average annual trade growth.

South Korea joined the China-led Asian Infrastructure Investment Bank (AIIB), but stayed out of the US-led Trans-Pacific Partnership and, as a gesture, President Park Guen-hye attended last September’s parade in Beijing to mark the anniversary of the end of the second world war.

But again there is a major stumbling block: North Korea. Pyongyang’s fourth nuclear test in January ended the short-lived “honeymoon” and hastened Seoul’s plans to deploy the US missile defence system known as THAAD (Terminal High Altitude Area Defence). China views the system as a threat to its strategic security.

China ‘working on economic growth initiative’ for G20 leaders’ summit

Wang, in his meeting with South Korean counterpart Yun Byung-se, reiterated Beijing’s opposition to the plan and called for it to be cancelled. But Yun insisted THAAD was intended only as a defensive measure against North Korea and said no single issue should affect the overall relationship between the two countries.

Their exchange follows months of subtle pressure from Beijing on the issue – such as its disposal of a South Korean official at the AIIB.

Additionally, China, as the only ally of Pyongyang, has different views from South Korea on the timing and path of the reunification of the Korean peninsula, said Su.

If China builds in Scarborough Shoal, it would come ‘after G20 summit’

This means South Korea must seek assistance from the US for its security, much as Japan does through the US-Japan Security Treaty, playing perfectly into the US government’s pivot to Asia policy, said Zhang Jifeng, a researcher at the China Academy of Social Sciences.

Despite such intricacies, when world leaders meet in Hanghzou, hopes will remain that, on the sidelines and beyond the stage, there can be some breakthrough.

“China has reacted with restraint because it still has hope in [President] Park. And the G20 is a precious opportunity for Xi and Park to discuss [THAAD],” said Wang at Jilin University. “If South Korea fails to compromise on the THAAD issue, bilateral relations will fall into a dangerous lose-lose trap.”