At the very beginning of Heisei, in the late 1980s, the Cold War structure of the world had not yet collapsed. Japan-China relations had made great progress since the end of the 1970s. Despite the debate within China about its reform and opening policies, Deng Xiaoping's idea of development as top state priority prevailed, and this matched with Japan's prime focus on advancing economic relations with China. Some problems had started to emerge or increase its weight, such as the issues of history, security and Taiwan, but they remained comparatively minor. Rather, China's developmental path remained unstable, as demonstrated by the June 4th Incident of 1989. Japan led the developed world in engaging China, with a symbolic display of good will and friendship in the Emperor's 1992 visit to China.
Then a gradual, tectonic change in Japan-China relations started in the early years of the Heisei Era. The USSR disintegrated at the end of 1991, which constituted a fundamental change in the international environment. Domestically, the Japanese economic "bubble" burst, and the single-party rule by the Liberal Democratic Party came to an end in 1993. In China, Deng Xiaoping led a decisive victory in the struggle against the opponents of marketization and opening of the economy. The Soviet Communist Party had demised the previous year and the Chinese Communist Party (CCP) faced little external, ideological opposition to formally discarding planned economy in 1992. Up to the early 1990s, Japan was rising, while China was stagnating. After then, however, China rose, while Japan stagnated in terms of economic growth. Such dynamic shift in the balance of national power constituted a basic factor in the development of the bilateral relationship.
In the rest of the 1990s, new trends emerged in Japan-China relations. While there was a boost in economic exchange due to China's acceleration of reform and opening, sharp frictions emerged in the areas of history and security. 1990s saw the surfacing of historical revisionism in Japan and the strengthening of patriotic education by the new generation of leaders in China. They were concerned about the social tide of westernisation and CCP's legitimacy to rule. China promulgated the Law of the Territorial Sea and Contiguous Zone in 1992 and gradually accelerated its maritime advancement into the East and South China Seas. China's nominal GDP was growing rapidly, but in 2001 it was still less than one-third of Japan's. In those days it was still the Chinese side that sensed a bigger threat, faced with a democratizing Taiwan, the 1996 redefinition of the Japan-US alliance and confrontation with ASEAN in the South China Sea. It is true that Japan-China relations were strained at times by a combination of factors such as Taiwan, nuclear testing and history, but we should not overlook the fact that the benefits of cooperation were substantially large and conciliatory policies were generally upheld towards each other.
The factors that initiated changes in the final decade of the 20th century were amplified in the first decade of the 21st century. China joined the WTO in December 2001, which further boosted the economic exchange between the two countries. The resultant surge in China's economic development lifted its international status, but also exacerbated its social contradictions despite the attempt by the Hu Jintao administration to create a "harmonious society." Much of Hu's first five-year term overlapped with the Koizumi Junichiro cabinet in Japan. Koizumi pushed for economic liberalization and succeeded in maintaining a strong relationship with the US, but his repeated visits to the Yasukuni Shrine disrupted the political relationship with China. The US and China cooperated in their anti-terror activities in the wake of the 9/11 terror attacks in the US and Barak Obama became President in 2009 with hopes to build a global partnership with China. However, he was soon engaged in a re-balancing policy in Asia as China increased its assertiveness in the wake of the 2008 World Financial Crisis and caused much friction with its maritime neighbours, including Japan.
Because of China's maritime advancement, amply displayed in the 2010 trawler collision incident and the 2012 clash over the Senkaku Islands, the Japanese felt the military threat of China for the first time. However, not all in China were fully confident, either, despite the fact that the size of its GDP exceeded that of Japan's in 2010. Assertive and even aggressive language and behaviour emerged out of the revival and strengthening of big power mentality, combined with the remaining victim mentality and the anxiety among the leadership about losing their legitimacy. Heightened level of economic interdependence and cultural exchange between Japan and China provided the resilience in the bilateral relationship, but that was not sufficient to prevent the increase in tension and competition in the realms of politics and security.
Xi Jinping and Shinzo Abe came to power almost at the same time, in November and December 2012, respectively. Then the bilateral relations were at its lowest since normalisation 40 years before. Four years before in December 2008, vessels of the Chinese Coast Guard had entered the territorial waters around the Senkaku Islands for the first time to claim sovereignty. When the Japanese government purchased three islands of the Senkakus from a private landlord in September 2012, preventing the nationalistic governor of the Tokyo Metropolitan government, Shintaro Ishihara from buying them, the Chinese government seized the opportunity and started sending their vessels to the Senkaku Islands in a massive scale in an attempt to change the status quo by physical force.
The bilateral relationship gradually improved, however, due to four major factors. First, both sides were willing to develop their economic ties. China remained to be Japan's largest trading partner, and for China, with the slowdown of their growth rate, Japanese investment and technology increased their value. Second, an important condition for China to introduce a friendly policy towards Japan was to have a strong leader with a solid power base. Xi Jinping met this condition and was able to make up with Japan without worrying too much about domestic criticisms. Third, China's relationship with the United States, the largest factor in the international environment, deteriorated. China's proposal to establish a "new type of major country relationship" with the US fell through, after it became clear that strategic rivalry could not but intensify between the hegemonic power and the rising power. In such a situation, China finds great value in developing its relations with Japan. And fourth, Chinese people's perception of Japan showed a remarkable improvement. According to a joint, annual survey conducted by the Genron NPO and the China International Publishing Group, the percentage of the Chinese people who have a good image of Japan rose rapidly from 21.7% in 2016 to 31.5% in 2017, and then to 42.2% in 2018. Such a change in mood has facilitated the adoption of friendly policies towards Japan, especially at a time when nationalistic sentiments run high.
In contrast, however, there has only been a slight increase in the percentage of Japanese who have a favourable image of China, from 8.0% in 2016 and 11.5% in 2017, and then to 13.1% in 2018. According to the same survey, the largest reason for the negative perception is China's assertive actions around the Senkaku Islands. In fact, the largest stumbling block to the sustainable development of Japan-China relations is the security factor. The strategic goals of the two countries are not identical. With the development of China's military might and Japan's response to it, therefore, it is not easy at all to build trust and avoid the security dilemma.
Through the successful summit diplomacy in 2018, both sides have come to state that relations have returned to their normal track. When Prime Minister Abe visited Beijing in October 2018, 52 MOUs on cooperation in third country markets were signed between companies and business organisations on the two sides. This suggested that Japan's Free and Open Indo-Pacific Vision and China's Belt and Road Initiative could overlap and co-prosper. However, security remains a major issue and the bilateral relations require constant fine tuning. The two leaders seem committed to implementing defence exchanges, cooperating in the economy and non-traditional security, and promoting intellectual and youth exchange. Exchange is especially important since the perception gap, based on the information gap between the two peoples is dangerously wide.
Top leaders' mutual visits have played an important role in developing a positive trend in bilateral relations. From the Japanese perspective, the stability of Japan-China relations for the time being depends much on whether all the related departments of the Chinese government will follow the instructions of the top leader.