THE IMPACT OF CHINA’S “ONE BELT AND ONE ROAD” ON SINO-JAPANESE TRADE RELATIONS.

THE IMPACT OF CHINA’S “ONE BELT AND ONE ROAD” ON SINO-JAPANESE TRADE RELATIONS.

INTRODUCTION.

Dubbed “Project of the Century” by the Chinese authorities, the one belt one road (OBOR) is a project by the government of China that seeks to upgrade China and boost its manufacturing complexity. This initiative aims to enhance the trade and boos the integration of China with different parts of the world. This is a commercial and economic development project that focuses on improving the connection and cooperation among countries in Europe, Asia, and Africa. In October 2012, China’s president, Xi Jinping, adopted this project as the main policy, but the official announcement was made in September 2013. This project has two parts. The “Silk Road Economic Belt” that aims at enhancing China’s connectivity with European countries and Central Asia through a network of railway lines and roads while the second part called “21^st Century Maritime Silk Road” that seeks to link China to Africa, Mediterranean, Africa, and  Central and South East Asia through a sea network. Sino-Japanese relations date back to the mid-twentieth century. Over the years, the Sino-Japanese trade has resulted in the development of business for both countries, political stability, and the industrial revolution. These two countries are major economic powers in Asia. Close economic cooperation and well-laid trade policies between these two countries could result in immense economic benefits. This, however, has not been the case. The enmity between these two countries that dates back to the Japanese war has been a significant hindrance to enhanced Sino-Japanese trade relations.

To examine whether this project influenced the Sino-Japanese relations, it is vital to check on the trade patterns exhibited by these two countries before and after the OBOR project launch. In most of the countries in the world, trade is a significant representative of the countries (GDP). International trade has had a considerable influence on the economic, social, and political relations of many countries. The East Asian production network has a triangular trade model. In 2002, countries from this region took part in the East Asian production network. This gave emphasis and significance to the regional trade of components and semi-manufactured goods (Ando & Kimura, 17). Japan is at the center, and China forms the export platform. Because of this, China has become a global export platform for a wide range of products (Li et al., 117).

However, in 2010, the growing tension between China and Japan heightened when Japan detained Chinese fishers, and the relations worsened in 2012 when Japan purchased China’s Diaoyu Island. This greatly hampered the bilateral trade between these two countries. In 2012, President Xi Jinping of China launched the OBOR project, which he adopted as a policy in 2013. This project’s primary role was to enhance China’s connectivity to the rest of the world through the earlier mentioned roads and rail network and the sea route. This project also consists of economic and non-economic elements. One of these elements is China’s commitment to invest widely in infrastructure to connect China’s western region to some of the nations which are part of the OBOR project (Swaine & Michael, 3). Has the OBOR project had an impact on Sino-Japanese trade relations?

DATA AND ANALYSIS.

Data from the United Nations International Trade Statistics Database has been used to analyze the possible impact of the OBOR project. This paper will take export and import data between the two countries over five years (2010-2014) as variables to analyze and check whether the OBOR project had a significant impact on Sino-Japanese relations. This paper will also compare export data of both countries to the world to check whether there is a change in trade trends within the same period. Import and export data are critical elements of international trade. The export and import data between these two countries will help determine if there was any change in business that could have been caused by the OBOR project.

Table 1. Import, export, and trade value data between Japan and China.

Trade data between China and Japan (2010-2014) is represented in the chart above. The chart indicates the exports, imports, and value of trade. China’s import from Japan and export to Japan increased, which is credited back to 2001 when China joined the World Trade Organization.  Within twelve years (2002-2014), China’s import from and export to Japan grew by 9.73% and 9.84%, respectively (Li et al., 119). As of the value of trade, China-Japan trade registers a decline in as of 2011. The exports to Japan increased as of 2010 but recorded a declining trend in 2013 and 2014, while the imports from Japan increased in 2011 before the declining trend started in 2012 and 2013.

From the chart above, Japan’s export to China incline in 2011 below the registering a declining trend in 2012 and 2013 while the imports record a rise in 2011 and 2012 before recording a decline in 2013 and 2014. The total value of trade rises in 2011 before recording a fall in 2013. It later showed an increase in 2014.  The OBOR project’s main aim was to connect China to the world to enhance its international trade and integrate it into world trade. This project was launched in 2012 and adopted in the year 2013. During the launch of this project, the diplomatic relations between these two countries had already worsened. This tension had already hampered with the bilateral trade between these two countries. The variables data analyzed in this paper (export, import, and trade value) value show a declining trend in 2012. To explain the decline in trade, Japan raised security concerns over the OBOR project. Japan has actively called Indian Ocean coastal countries to enhance its military presence in a bid to contain any issue that may arise from China’s OBOR project.  However, this cannot be directly linked to the OBOR project (Haiquan & Liu, 136). This is major because of the strained diplomatic relations between the two countries. This project, therefore, did not have a significant impact on Sino-Japanese relations.

Works cited.

Li, Ping, and Yongquan Liu. “An Empirical Research Paper on the Impact of China-Japan Relations on Chinese Export Quality.” Journal of China and International Relations 6.1 (2018): 117-129.

Kimura, Fukunari, and Ayako Obashi. “International production networks in machinery industries: Structure and its evolution.” ERIA discussion paper series 2010-09 (2010).

Swaine, Michael D. “Chinese views and commentary on the ‘One Belt, One Road’initiative.” China Leadership Monitor 47.2 (2015): 3.

Haiquan, Liu. “The security challenges of the “One Belt, One Road” initiative and China’s choices.” Croatian International Relations Review 23.78 (2017): 129-147.

United Nations Statistics Division – Commodity Trade Statistics Database (COMTRADE). (n.d.). Retrieved May 20, 2020, from https://comtrade.un.org/db/.