China's Relations With Japan in an Era of Economic Liberalisation

by Dong Dong Zhang

The main purpose of this study is to explore the influence of reform on changes in China's economic relations with Japan after the late 1970s. There are three reasons for investigating the links between Chinese reform and bilateral economic relations at this particular juncture in history. First, in the past two decades reform has meant that China has enjoyed faster economic growth than Japan. This has transformed the pattern of bilateral economic relations, hitherto characterised by an industrial Japanese economy and a resource-based Chinese economy, a result of Japan's successful industrialisation and China's failure to industrialise in the previous hundred years. Second, reform has brought about the deepening of interdependence between the Chinese economy and the world economy. Through links with the world economy, the Chinese economy has not only come to rely on foreign countries for technology, capital, markets and management skills, but has itself become a growth pole, exerting a strong impact on world economic growth. In the reform era, economic relations between China and Japan have been woven into regional and global economic networks of trade and investment. Third, reform has transformed the management of China's domestic and external economic activities. As a centrally planned economy in the pre-reform era, the Chinese government set the agenda for and shaped the direction of economic relations with foreign countries. Market-oriented reform means that China's economic relations with Japan are now based on the comparative advantage of both countries rather than the Chinese, or Japanese, government's state plan.

215 pages, Hardcover

First published March 1, 1999