Chinese President Hu Jintao’s visit to Japan on May 6-10 was the first in a decade. While promoted as a “warm spring” tour to improve mutual relations, the underlying tensions between the two countries were evident during the visit.

Japanese Prime Minister Yasuo Fukuda has continued the policy of mending relations that soured badly under former Prime Minister Junichiro Koizumi. Koizumi’s appeals to the traditions of Japanese militarism, including his annual public visits to the notorious Yasukuni shrine, provoked an angry response in China and Korea, both of which suffered under Japanese wartime rule. Beijing added more fuel to the fire by encouraging xenophobic, anti-Japanese protests in 2005.

Beneath these tensions lie growing rivalries in North East Asia. Backed by the Bush administration, the Koizumi government aggressively asserted Japanese interests in the region. It also dispatched troops to support the US occupation of Iraq—the first overseas deployment of the Japanese army into an active battle zone since World War II. Increasingly, China and Japan are competing for energy resources in East China Sea and the Russian Far East.

A tactical shift away from Koizumi’s antagonistic stance began in 2006 under his successor Shinzo Abe who immediately visited Beijing. Chinese Premier Wen Jiabao returned the visit in April 2007 and Fukuda made a trip to China last December. A great deal is at stake economically for both countries.

The two economies—Japan is the world’s second largest and China the fourth biggest—are more integrated than ever. China replaced the US as Japan’s largest trading partner in 2007, with two-way trade of $236.6 billion. Japan is China’s third biggest trade partner after the EU and the US. Japan’s investment in and trade with China, which is now the hub of Asian manufacturing, has generated a huge demand for capital goods and components from Japan—a major factor in Japan’s limited economic recovery in recent years.

Both leaders also had strong short-term reasons for making the trip a success. Hu has been facing international pressure over China’s crackdown on Tibetan protests in March. Just three months before the Olympic Games, Beijing is determined to use the opportunity to showcase China as go-ahead, progressive, investor-friendly and ready to play a greater role in world affairs.

Fukuda is desperate for any kudos to prop up his failing government. After losing control of the upper house last year, the ruling Liberal Democratic Party (LDP) has faced a series of challenges from the opposition Democratic Party of Japan (DPJ) over Japanese naval support for the occupation of Afghanistan, the nomination of a new central bank governor and most recently, the budget. Amid widespread opposition to growing social inequality and Japan’s support for US militarism, Fukuda’s public approval rating has slumped to less than 20 percent. Commentators are speculating that he will be forced out after the G-8 summit in Japan in July.

When Hu had breakfast with former Japanese prime ministers, Koizumi was notably missing. A Japanese government source told Reuters it was Koizumi’s decision to stay away. As a political figure who still commands a significant political following, Koizumi’s snub indicates that sharp differences continue within the LDP and Japanese ruling circles over relations with China.

An uneasy reconciliation

Fukuda and Hu issued a formal joint statement that was not essentially different from previous statements between leaders of two countries. It emphasised the importance of “common strategic interests” and cooperation on everything from climate change to the territorial disputes in the East China Sea. However, no concrete measures were announced.

Hu welcomed Japan’s intention to play a greater international role, but stopped short of endorsing Tokyo’s ambition to obtain a permanent seat in the UN Security Council. Likewise, Fukuda repeated Japan’s standard position on Taiwan as being part of China, but made no statement opposing any Taiwanese move toward independence. Hu acknowledged the importance of Tokyo’s calls for cuts to carbon emissions after 2013, but did not mention specific quotas. The only specific outcome was China’s proposal to loan two panda bears to Japan.

The two leaders agreed, in principle, to yearly visits to cement closer ties. Unlike US and European leaders, Fukuda avoided exploiting the Tibetan protests to exert pressure on Beijing and raised the issue only very cautiously. With Fukuda standing alongside him, Hu told a press conference on May 8: “We are opposed to activities that lead to the break-up of our country as well as any action to destroy or interfere with the Beijing Olympics. We will continue the dialogue [with the Dalai Lama].”

Despite the efforts of the Fukuda government to make the trip a success, Hu was welcomed not just by the Japanese emperor and senior officials, but also by protests. Japanese authorities deployed 6,000 riot police to counter a demonstration of some 1,300 people organised by the Save Tibet Network to mark Hu’s arrival. The pro-Tibetan protesters were joined by others, including at least some from Japan’s hardcore militarist right-wing groups.

Public opinion inside Japan is becoming increasingly polarised. Sections of the Japanese media and political establishment have exploited the issues of Tibet and “unsafe” Chinese imported food to whip up anti-Chinese sentiment. That has been fuelled by concerns created by Beijing’s encouragement of Chinese patriotism, most recently displayed at the chauvinist anti-Tibetan rallies in a number of international cities during the Olympic torch relay, including in Japan. A survey conducted by Mainichi on May 1-2 found that more than 50 percent of Japanese respondents back a tougher stance toward China—compared to 26 percent who support a friendlier attitude.

At the same time, however, anti-militarist sentiment has a long history in Japan going back to the bitter wartime experiences of the working class in the 1930s and 1940s. During Hu’s visit, the film Yasukuni, made by Chinese director Li Ying and critical of Japan’s militarist past, was showing in Japanese cinemas to packed audiences. A poll by Asahi Shimbun in April found that 66 percent of people oppose any change to Article 9 of the Japanese constitution, which renounces war and bans the use of military force in settling international disputes. The figure was up sharply from 49 percent last year.

In 1998, during his trip to Japan, Chinese President Jiang Zemin put particular emphasis on Japan’s wartime crimes, contributing to the subsequent friction between the two countries. However, Hu deliberately played down the questions of history. In a speech on Sino-Japanese relations at Waseda University, Hu stressed that remembering the Japanese invasion of China was “not to nurse hatred”, but to learn the lessons from the past. “Cherish peace, safeguard peace, let Chinese people and Japanese people be friends generation by generation,” he said.

Within China, the state media avoided anti-Japanese remarks. The Financial Times noted on May 8 that most Chinese Internet users had been barred from making online comments about Hu’s trip. Nevertheless, Tong Zeng, a leading figure in the 2005 anti-Japanese protests, told the newspaper that his fellow activists had been disappointed that many issues were unresolved, thus “the tendency of strong hatred against Japan will remain and could explode again”.

Hu declared at Waseda University that Japan had nothing to fear about China. “We will not become a military threat to any country and we will never assert hegemony or be expansionistic,” he said. But the ruling elites in both countries are well aware that China’s explosive economic expansion is upsetting the previous balance of power in North East Asia.

Japan’s economy, measured at $4.3 trillion in 2007, is now just $1 trillion larger than China’s $3.25 trillion. Standard & Poor’s Rating Services last month predicted that China could overtake Japan in five years. The two countries are in competition for raw materials, particularly oil. As its demand for resources expands, China is developing its naval capacity to defend shipping routes. Although still technologically inferior to Japan, China’s military spending of $60 billion in 2008—an increase of 17.6 percent from the previous year—is significantly higher than Japan’s $45 billion.

Hu concluded his visit to Japan last Saturday by declaring it a “success”. However, as prominent Chinese strategist Men Honghua wrote in the CCP paper Study Times last week: “Distrust persists in the political and security spheres. Japan worries about China emerging to dominate East Asia.” So while the visit ended with warm smiles all around, there is the potential for a rapid and dangerous deterioration of relations between the two economic giants of North East Asia.