- Working on a currency swap
There is an all-out improvement in Japanese-Chinese ties. This year saw many upward trends between the two nations. Marking the 40th anniversary of the signing of the China-Japan Treaty of Peace and Friendship, Japanese Prime Minister Shinzo Abe will visit China on 25 to 27 October. This is going to the first by a Japanese leader in seven years. This is going to be considered a major breakthrough in their bilateral relations. Chinese Premier Li Keqiang visited Japan this May — first of its kind in eight years. The ice is melting and diplomatic relations have seen a thaw. If this momentum continues, many positive outcomes are expected between the two countries.
Diayou Island/Senkaku is the main point of conflict since 2011 and Japan nationalised the Island in 2012. The issue spurred great conflict in their relations and until last year. The issue is alive and hit the bilateral ties more than anything else. Bilateral trade is one of the main sources of cooperation between the two nations.
China has even tried to send a delegation of the Belt and Road Forum in 2017 to Japan in a bid to seek its cooperation on the forum. Japan is taking to China and refraining from confrontation. President Donald Trump’s protectionism has been forcing Japan to talk to China.
Japan is a trading nation and gains much of its influence trough trade. China is the most lucrative trade destination and Japan could gain a lot. Bilateral trade crossed the barrier US$300 billion recently. It has the potential to increase the level of bilateral cooperation and other means of contacts. New interaction of bilateral cooperation is expected between the two nations and they are marching closer to this end.
A currency swap line between China and Japan, which may be agreed on during Japanese Prime Minister Shinzo Abe’s visit to Beijing, would be a much-needed move to ensure that trade between Asia’s two biggest economies remain intact despite the US’ xenophobic approach to trade policy. It is also clearly a significant step toward eroding the US dollar’s reserve status in the global financial system.
In case of any financial crises, both countries could also swap their currencies. This is a great message to Trump’s anti-trade drive against China. Japan is now China’s fourth-largest trading partner, behind the US, EU and the Association of Southeast Asian Nations, while China is Japan’s top trading partner. Bilateral trade grew 10.1 percent year-on-year to $302.99 billion in 2017.
Diayou Island/Senkaku is the main point of conflict since 2011 and Japan nationalised the Island in 2012
With normal and established trade practices being disrupted by the US government’s reckless, unilateral moves, the trade bonds of China and Japan will be at risk if they’re still denominated in the US dollar. If the two Asian giants can join hands in restarting the currency swap line, the regional trade scenario will be more promising and flourishing and the entire global trade system will get a boost rather than dying on a submissive note.
In a cooperative manner, ASEAN plus eight countries namely; Australia, China, India, Japan, New Zealand, Republic of Korea, Russia and the United States., participated at the 5th Association of Southeast Asian Nations (ASEAN) Defence Ministers’ Meeting (ADMM)-Plus. Chinese Defence Minister Fenghe Wei said in his speech that the Asian region is confronted with severe challenges in combating terrorism, and only concerted efforts would prove to be an effective way to cope with the situation. During recent years, the Chinese military has strengthened mutual trust and military exchange mechanism with relevant countries in the region, and will continue to do so in order to safeguard regional stability.
Chinese President Xi Jinping’s proposals of creating a community of shared future for mankind and of building an Asian community with shared future provide new ideas to tackle the security dilemma as well as to maintain regional and even global peace and prosperity, Wei added.
In this context, shelving disputes is an important means of promoting mutual political trust between the two Asian giants. Japan is an important country in the BRI and could massively contribute. Lack of unity between Beijing and Tokyo will only benefit the US’, said Zhou Yongsheng in Global Times on 17 October 2018. China provides good opportunity to Japan and it should take it.
