China’s attempts to repair ties with Japan might augur well for Japanese car makers

March 20, 2013
March 20, 2013

Since China and Japan began trading fierce insults in the spat over who owns a group of uninhabited islands in the East China Sea, Japanese auto makers have seen a serious slump in Chinese sales as nationalist fervor prompted consumers to boycott their vehicles.

But now it appears that China’s new president, Xi Jinping, thinks it is time for the island spat to stop.

Reuters reports that China’s new foreign minister, Wang Yi, is a “smooth and urbane diplomat” who will “be in charge of repairing ties with Tokyo.”

And in another encouraging development, China’s new premier, Li Keqiang, did not mention the islands—known as Senkaku in Japan and Diaoyu in China—in his first public address.

The Chinese military—which does not always play ball with politicians—is also sounding conciliatory. Senior Peoples’ Liberation Army officer General Liu Yuan has warned that war with Japan would be dangerous.

Still, shareholders in Honda, Nissan or Toyota should not rejoice too early.

There are ominous signs that the Japanese public remains angry enough about the long-running dispute over the islands for Japan’s new leader, Shinzo Abe, to continue to use jingoism to sustain popular support.

A recent report in the Japan Daily Press castigated Chinese broadcasters for showing an increasing number of anti-Japanese dramas and reminded readers the Chinese view the Japanese as “devils.”

Wang Yi’s intentions toward Japan are also not yet clear. Although he speaks fluent Japanese and is one of China’s foremost experts on the country, he has also been described as a staunch Chinese nationalist.

And Xi Jinping’s apparently forgiving stance towards China’s most powerful neighbor does conflict with much more hawkish comments he has made vowing to “win battles…and protect national sovereignty and security.”

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