Japan still on guard against growing China

By Zhu Shanshan

Japan's administration may be constantly changing, but China's neighbor and competitor strengthened its relationship with the US last year while maintaining a tough defensive posture aimed at China, claims the Japan Blue Book, issued by the Chinese Academy of Social Sciences (CASS) today.

Analyzing major changes in Japan, the annual report argues that Naoto Kan's "politics-led"administration has been inadequate and incompetent in handling Sino-Japanese relations, which became tense during the Diaoyu Islands incident. It argues that the tough attitude towards China is likely to continue well into 2011.

The spat between the two nations showed the lack of strategic coordination in solving disputes, which uncovered the fragile state of bilateral relations, according to the report.

The tension between the two East Asian great powers also affected the business sector as Japan's investment to China shrunk by 0.5 percent last year, according to Zhang Jifeng, the report's co-author and the director of CASS' Japan Economic Research Institute.

Meanwhile, the book also noted that as part of the US "return to Asia"last year, Sino-American relations strengthened, which was visible in the recent relief work after the March 11 earthquake and tsunami.

Japanese GDP grew at a robust 3.9 percent, the fastest among developed nations, though it lost its former status as the world's second largest economy status to China by the end of the year.

The steady economic growth after the financial crisis can be attributed to both increasing demand from home and abroad, the report said.

But experts also argued that the country's economy this year is hard to predict, given the big blow of the twin natural disasters and simmering nuclear crisis.

The current administration will bear great responsibility for the upcoming rebuilding after the disaster, and it will be an unprecedented test for Japan socially, economically and politically, according to experts quoted in the report.