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Gratitude and Resentment in China-Japan Relations: Japan's Official Development Assistance and China's Renunciation of War Reparations.

China and Japan celebrated the forty-fifth anniversary of their diplomatic relations in 2017. Their relationship is generally characterized by deep interdependence. Nevertheless, the relationship is severely affected by historical questions related to the Japanese war of aggression against China that ended more than seventy years ago. These historical questions continue to buffet Japan's relations with neighboring countries, hindering multilateral cooperation in East Asia and regional integration. Beyond questions of historical facts and interpretation lie deeply rooted, fraught emotional issues that, from time to time, intrude on Japan's relations with its neighbors. In this article I explore the connection between historically based emotional issues and economic interests in China-Japan relations by analyzing the linkage between China's renunciation of war reparations and Japan's official development assistance (ODA) to China.

In September 1972, when China and Japan normalized their diplomatic relations, China renounced its demand for war reparations. Seven years later, in December 1979, when Prime Minister Ohira Masayoshi visited China, he indicated Japan's intention to provide ODA to China. Japan's ODA was originally conceived as a form of intergovernmental economic cooperation, providing assistance to developing countries and multilateral institutions to promote economic development and social welfare in developing countries. However, was Japan's provision of ODA to China a substitute for war reparations renounced by China? The linkage between Japan's provision of ODA and China's renunciation of war reparations has frequently been asserted.

For example, on December 2, 2004, Chinese Foreign Ministry spokeswoman Zhang Qiyue told reporters, "It is well known that the Japanese Government yen loan to China is a kind of mutual cooperation with a special political and historical background" (Renmin wang 2004). Addressing Zhang Qiyue's statement, Dangzheng luntan (Party and government forum) extracted an article by Shi Hua published in Huanqiu shibao (Global Times), pointing out that this "included the background of China's renunciation of Japan's war reparations" (Shi 2004, 2005, 24). Tencent Network opened a Jinri huati (Today's topic) special column (no. 61) to discuss the linkage between economic aid and war reparations between China and Japan with the following remark: "Chinese people have long been furious at the way Japan successfully used Nationalist-Communist conflict and the international situation to obtain exemption from the war reparations for China." Another view is that, "Thanks to China's renunciation of war reparations, Japan has provided a large volume of assistance to China." This view also appeared in the Chinese press (Jinri huati 2012). However, so far, this issue has rarely been discussed in academic circles. For instance, Jin Xide, a researcher at the Chinese Academy of Social Sciences only mentioned that Japan's ODA to China "contains a sense of historical guilt about the past war of aggression and a psychology of compensation for China's renunciation of war reparations" (Jin 1999, 10; 2006, 31), but did not expand on this view. Lin Xiaoguang, a professor at the Central Party School, argued that Japanese who have a sense of conscience, justice, and historical responsibility regard Japanese aid to China as material and practical action "in place of war reparations" or "repentance and apology" (Lin and Sun 2005, 8). Sekiyama Takashi (2008), a Japanese scholar, has a similar view, but neither Lin nor Sekiyama has discussed their views in detail. What indeed is the linkage between Japan's ODA to China and China's renunciation of war reparations?

To answer this question, I first review the history of China's renunciation of war reparations, then I analyze why China decided to accept loans from the Japanese government, and, finally, I examine what main factors were behind Japan's decision to provide yen loans to China. I find that there are no legal linkages between Japan's ODA to China and China's renunciation of war reparations. Most discussions about the linkage between the ODA and reparations involve emotional arguments or entanglements surrounding "aid" and "history." In this article I examine this issue with attention to the policymaking process on both sides as well as to emotional factors.

On the normalization of Chinese-Japanese diplomatic relations and Japan's decision to provide ODA to China, the Diplomatic Archives of the Ministry of Foreign Affairs of Japan (MOFA) has declassified some diplomatic files in the form of Kaiji bunsho (Disclosure of administrative documents). Some relevant material from China's Ministry of Foreign Affairs archives, including biographical and chronological information on leaders, and many recollections and interviews of persons concerned, have also been published in China. Using archival data from China and Japan, I reveal some new facts and show the interaction between China and Japan.

The People's Republic of China Renounces Its Demand for Japan's War Reparation

In May 1950, the Ministry of Foreign Affairs of the People's Republic of China (PRC) convened several meetings on concluding a peace treaty with Japan; the fourth meeting on the afternoon of May 19 concerned economic and compensation issues (Zhang 2011, 9-12). While the San Francisco Peace Treaty with Japan was under discussion, on August 15, 1951, Prime Minister Zhou Enlai issued a "statement on the draft British-American Peace Treaty with Japan and the San Francisco Conference," in which the fifth article referred to the compensation issue. After the so-called Japanese-Chinese Peace Treaty was signed with the Taiwan authorities on May 5, 1952, Prime Minister Zhou Enlai, again on behalf of the Chinese government, issued a "statement on the United States' announcement of the entry into force of the illegal peace treaty with Japan," asserting that the PRC would never recognize the "peace treaty with Japan" concluded in San Francisco, resolutely opposing the "peace treaty" signed by Japan and Taiwan, and declaring that China reserved the right to demand compensation from Japan (Tian 1994, 20).

In July 1953, the Korean Armistice Treaty was signed, and the situation in the Far East eased. China and the Soviet Union began to adjust their policies toward Japan. On August 8, 1953, Soviet leader Georgy Malenkov stated at the Supreme Soviet that his government was ready to resume diplomatic relations with the Japanese government (RWWH 1955, 269). On September 28, Premier Zhou told Oyama Ikuo, chairman of the Japan Peace Committee, "China is willing to resume normal relations with all the countries of the world, especially with Japan" (ZEN 1997, 428). On October 12, 1954, China and the Soviet Union issued a Joint Declaration on Relations with Japan declaring that "the two governments expressed their willingness to take steps to normalize relations with Japan" (Renmin ribao 1954, 1).

In December 1954, on the establishment of the Hatoyama Ichiro cabinet, Foreign Minister Shigemitsu Mamoru announced that Japan was willing to restore normal relations with the Soviet Union and China. The Chinese Ministry of Foreign Affairs immediately analyzed and reported to the Chinese Communist Party (CCP) Central Committee on the "Hatoyama cabinet and the Japanese political situation," suggesting that the Chinese government "should consider expressing its willingness to take measures with the Japanese government on Chinese-Japanese relations" (CFMA No. 105-00156-02, 105-00156-03). On December 21, Zhou pointed out at the first meeting of the Second Session of the Chinese People's Political Consultative Conference (CPPCC) that "the Chinese government will be ready to take steps to normalize China's relations with Japan" (RWWH 1955, 143).

On March 1, 1955, the CCP Central Committee Political Bureau discussed and adopted "the policy and plan of the CCP Central Committee regarding China's policies and actions toward Japan" (Zhang 1998, 226-227). This is the most comprehensive and formal document adopted on this issue by the CCP Central Committee Politburo after the founding of the PRC. It fully explained the basic principles of the CCP's work on Japan and established the framework for the CCP's work related to Japan from the mid-1950s until the resumption of bilateral diplomatic relations. It cautioned that "it was too early to declare the end of the state of war and to announce that Japan would be excused from paying war reparations," and that "these issues could not be formally settled before the normalization of Chinese-Japanese relations, although our side is willing to resolve the issue." This is the earliest known CCP document on Japanese war reparations policy. It can be concluded that CCP leaders decided to forgo Japanese war reparations by the middle 1950s or earlier. Nonetheless, they agreed that this decision should not be declared prematurely. After this point, this was the basic (but undeclared) principle and policy of the Chinese government on Japan's war reparations until the normalization of Chinese-Japanese diplomatic relations.

In the early 1970s, the international situation changed greatly. In October 1971, the PRC replaced the Chinese Nationalist government in Taiwan as the sole legitimate government representing China in the United Nations. In February 1972, US president Richard Nixon visited China and agreed to the Shanghai Communique, US-China relations eased, and Chinese-Japanese relations took a turn for the better. On July 7, 1972, at his first cabinet meeting, Prime Minister Tanaka Kakuei said that normalization of diplomatic relations with the PRC should be speeded up. China responded quickly. On July 9, Premier Zhou Enlai welcomed Tanaka's positive attitude, thus hastening the pace of Chinese-Japanese diplomatic normalization. With this, the two countries again faced the war reparations issue.

China first spoke clearly to Japan on its willingness to renounce war reparations when Premier Zhou met in July 1972 with Takeiri Yoshikatsu, chairman of the Komeito Central Executive Committee. Zhou said it was possible to include the Chinese renunciation of the right to demand Japanese war reparations in a joint communique (Kaiji bunsho 1/01-298/1). Prime Minister Tanaka had been very worried about the war reparations issue and had asked Takeiri to sound out the Chinese side. In response, Zhou's answer was very simple: "The problem of war reparations has already been settled, and the Japanese side should just say thanks to the Chinese side." At the same time, Premier Zhou did not forget to state that "China does not demand Japanese war reparations, not because of the so-called 'Japan-Taiwan treaty' which had touched on the renunciation of war reparations. China never recognized the 'Japan-Taiwan treaty.'" The seventh item of the famous Takeiri Memo noted that, "for the friendship between the Chinese and Japanese people, the government of the PRC renounces the right to demand Japanese war reparations" (Tian 1997, 94). On August 4, Takeiri handed the Takeiri Memo to Prime Minister Tanaka and Ohira Masayoshi, who was then foreign minister. It prompted Tanaka's determination to visit China two months later.

Nevertheless, the war reparations issue remained a source of heated debate during formal negotiation of the resumption of diplomatic relations. In September 1972, Prime Minister Tanaka came to Beijing accompanied by his foreign minister Ohira Masayoshi and chief cabinet secretary Nikaido Susumu. At this time, Takashima Masuo, director of MOFA's Treaty Bureau, said that the issue of war reparations need not be mentioned in the joint communique because it had been legally resolved, the "Japan-China [i.e., Republic of China] treaty" had announced the waiver of the right to claim compensation, and one "cannot recognize two renunciations by one state." This immediately aroused the anger of Chinese negotiators and infuriated Premier Zhou. On the second day of talks, Zhou sternly refuted Takashima's statement, saying, "this is an insult to us" (ZEZ 1998, 2076). Prime Minister Tanaka responded, "I am very glad to hear your remarks about the renunciation of war reparations and express my appreciation. I am deeply grateful for China's attitude of overcoming vengeance" (Kaiji bunsho 1/01-42/1). In response to the Chinese position, Tanaka thus gave a positive oral appraisal conveying his political acceptance.

Even afterward, however, the war reparations issue continued to be a point of dispute in negotiations. In the draft of the joint communique, the Chinese side proposed to state that "China renounces the right to demand Japanese war reparations," but the Japanese side objected that "legally, the PRC government cannot again renounce a right that has already been renounced." At the third foreign minister's talk on the evening of September 27, Foreign Minister Ji Pengfei elaborated on the Chinese proposal: "The Government of the People's Republic of China declares that, in the interest of the friendship between the Chinese and the Japanese peoples, it renounces its demand for war reparations from Japan." Foreign Minister Ohira said that Japan "can agree," in consideration of "the kindness of the Chinese side" (Kaiji bunsho 1/0142/2). Thus, the word "right" was deleted, and "China renounces its right to demand" was changed to "China renounces its demand" for war reparations. In the end, the joint communique signed by the two governments on September 29 used this wording.

Japan's Decision to Provide ODA to China and China's Deliberation

Six to seven years later, China needed to decide whether to accept Japanese government loans. The Chinese decision was reached through a very cautious process, evolving from a decision to accept private loans to a decision to accept foreign government loans. This process coincided with the political process that led to China's new policy of reform and opening up.

In 1978, China's reforms gathered momentum. The Ten-Year Plan for Economic Development was announced in February of that year. A meeting to discuss theoretical questions was held by the State Council from July to September, a working conference of the CCP Central Committee was held in November and December 1978, and the Third Plenary Session of the Eleventh CCP Central Committee was also held in December 1978. During this period, China faced a serious shortage of funds. The Chinese leadership realized it was difficult to maintain the scale of capital construction without foreign low-interest loans.

In this situation, China decided to introduce foreign private funds in the first half of 1978. After signing the Chinese-Japanese long-term trade agreement in February, China and Japan exchanged views on private financial cooperation. From May to June, after Vice Premier Gu Mu led a delegation to Europe, Chinese leaders became determined to engage in economic construction with the assistance of foreign borrowing (Cao 2001, 5-6). In July, Vice Premier Li Xiannian said that China was interested in accepting Japanese private loans when he spoke with Ikeda Yoshizo, chairman of Japan's Mitsui Group. In August, the Bank of China officially expressed to a delegation of the Japanese Export-Import Bank its intention to accept the bank's loan. Although China had clearly decided to accept foreign private bank loans, nonetheless Li Xiannian still told Ikeda that China would not accept government loans (Asahi shimbun 1978, 9).

After the Chinese-Japanese Treaty of Peace and Friendship was concluded in August 1978, however, there was an unprecedented flurry of exchanges between Chinese and Japanese political and economic circles that would lead Beijing to rethink its position on government loans from Japan. For instance, from August 30 to September 5, Fujiyama Aiichiro, chairman of the Japan Association for the Promotion of International Trade, led an economic and trade delegation to China; from September 8 to 18, Hinata Hosai, chairman of the Kansai Economic Association, led a delegation to China; from September 11 to 15, Kawamoto Toshio, leading the Ministry of International Trade and Industry (MITI), visited China; and, from September 25 to 29, Inayama Yoshihiro, chairman of Nippon Steel Corporation, led a scheduled delegation of the Japan-China Economic Association to China. Indicating that China did not have to worry about economic colonization caused by foreign loans, Hinata Hosai said that the Japanese steel industry once relied on foreign loans--"during that period, there was no foreign interference at any time"--and urged China to "borrow money bravely from a well-intentioned country" (Kojima 1978). When Inayama Yoshihiro once again proposed to Liu Xiwen, China's vice minister of foreign trade, that the Japanese government's yen loans could be used, for the first time, the Chinese side did not clearly reject the idea. Subsequently, China asked Japan to provide information on Japan's Overseas Economic Cooperation Fund.

When Vice Premier Deng Xiaoping visited Japan in late October 1978, during a press conference, though there was no relevant question asked, Deng said, "I forgot to answer the question of the loan. We haven't yet considered the modality of a Japanese government loan [but] will study this question in the future" (Kaiji bunsho 18/04-1022/7). From November to December, the Working Conference of the CCP Central Committee, which lasted for thirty-six days, and the Third Plenary Session of the Eleventh CCP Central Committee, which lasted five days, established the policy of China's reform and opening up, inaugurating a new era. During this period, on November 26, Deng Xiaoping made clear to the visiting Sasaki Ryosaku, chairman of the Japanese Democratic Socialist Party, that China was interested in accepting government loans. In December, Li Qiang, minister of foreign trade, made a clear announcement at a press conference in Hong Kong that China was going to accept government loans in the future.

Starting in 1979, China embarked on the actual process of accepting Japanese yen loans, and intergovernmental consultations between China and Japan began. In March, Vice Minister of Foreign Trade Liu Xiwen visited Japan, asking the Japanese government "what amount of yen loan could be provided." In June, Yanagiya Kensuke, director of the MOFA Asian Bureau, visited China, and the two sides negotiated specific matters related to the Japanese yen loan. In September, Gu Mu visited Japan, requesting the Japanese government's support for eight projects, amounting to a $5.54 billion (1.2 trillion yen) loan application. In October, the Japanese government sent an investigation group, headed by MOFA's director for economic affairs Yanai Shinichi, to investigate the construction site of a loan project in the field.

In December, Ohira Masayoshi, who was then prime minister, visited China and formally announced the provision of ODA to China. On the evening of December 5, Ohira indicated Japan's intention to provide yen loans to China in his meeting with Premier Hua Guofeng. On December 6, in his talk with Deng Xiaoping, Ohira discussed specific loan conditions (Kaiji bunsho 16/04589/5). As a result, Japan became the first advanced capitalist country to provide government loans to China.

In the process of negotiating Japan's yen loan, the basic spirit adopted by China and Japan embodied reciprocity and international coordination. Reciprocity was reflected in the following aspects: First, both China and Japan avoided the word assistance, instead stressing "economic cooperation" between China and Japan. In meeting with Deng Xiaoping, on December 6, 1979, Ohira stressed bilateral cooperation, stating, "Our country has to discuss the issue based on the best possible cooperation toward the modernization of your country" (Kaiji bunsho 16/04-589/5).

Second, when selecting specific construction projects for Japanese yen loans, China fully considered the interests of both countries. The Chinese government had studied relevant information regarding Japanese government Overseas Economic Cooperation Fund loans and confirmed that the three areas of railways, harbors, and power generation were suitable targets for Japanese yen loans. The eight projects Gu Mu proposed to Japan were all infrastructure projects, of which two harbor construction projects and two railway construction projects were related to coal mining and transportation. Specifically, a loan would be used to support the transport of coal from the Yanzhou coal mines jointly operated by Chinese and Japanese coal enterprises to a port, with most of the coal exported to Japan (Xu 2014, 277-278).

Third, based on mutual benefit to China and Japan, Foreign Minister Okita Saburo emphasized repeatedly that Japan had achieved reciprocity in providing ODA to China. At a November 29, 1979, press conference, Okita stated, "The development of China's economy is beneficial to Japan, and this is not a unilateral loan. In the long run, it is beneficial to our country's energy policy. The Japanese yen loan to China is reciprocal. From the perspective of Japanese national interest, it is better to do something," meaning providing a loan to China (Kaiji bunsho 16/04595/13).

Fourth, during the negotiation process, the Chinese side stressed the importance of respecting the Japanese government's opinions. After listening to Prime Minister Ohira's statement on the yen loan on December 6, Deng Xiaoping made it clear that "the Japanese government's considerations should be respected" on the selection of construction projects and the amount of loans (Kaiji bunsho 3/01-1378/3), and Hua Guofeng made a clear expression to "respect Japan's opinion" at his second meeting with Ohira (Kaiji bunsho 3/01-1378/2).

International coordination was mainly reflected in three principles of Japan's ODA to China, which was stressed by the Japanese government during the decisionmaking process. In the course of the Japanese government's decision to provide yen loans to China, more energy was devoted to international coordination than to Japanese domestic politics. In response to Japan's prospective ODA to China, international doubts and even objections came mainly from three sources: First, the United States and European countries feared Japanese monopolization of the Chinese market and "Chinese-Japanese collusion." Second, Southeast Asian countries feared Japan's foreign aid would all but be soaked up by China, leaving aid to other countries much reduced. Finally, the Soviet Union expressed opposition to Japan's aid to China.

In the face of these international concerns, the Japanese government repeatedly stressed the three principles of Japan's ODA to China. As early as September 25, 1978, during the UN General Assembly, Foreign Minister Sonoda Nao put forward these principles in talks with Foreign Minister Huang Hua in New York (Yomiuri nenkan 1980, 151-152). In June 1979, Japanese MOFA Asia Director Yanagiya, in a meeting with Shen Ping, director of the Asia Department of the Chinese Ministry of Foreign Affairs, reminded Shen that "China understands this point" (the three principles of Japan's ODA to China) (Kaiji bunsho 3/01-1981/2). On September 3, Ohira emphasized this point in his talks with Gu Mu. On December 6, Ohira, in his talks with Deng Xiaoping, again made a clear reference to the three principles, as he also did in his speech December 7 in the CPPCC auditorium.

The three principles were to seek coordination with Western countries, to consider the interests of the Association of Southeast Asian Nations (ASEAN), and not to engage in military cooperation in China. On the first principle, in view of the concern of the United States that Japan not monopolize the Chinese market, Ohira's speech in the CPPCC auditorium especially stressed that economic cooperation between China and Japan was not aimed at Japan's monopolization of the Chinese market (NKKS 1993, 209-210). He noted that Japan had repeatedly stressed that Japan, the United States, and Europe should avoid competing with each other in relations with China on economic and trade issues (Gaiko seisho 1980, 381).

With regard to the second principle, in view of the concerns of ASEAN countries, the Japanese government stated that it would prevent adverse effects on ASEAN due to ODA to China by increasing Japan's total amount of foreign aid, and it repeatedly stressed that Japan continued to attach importance to its aid policy to ASEAN; when deciding specific conditions of its yen loan to China, the first-year conditions would follow conditions on ODA to Indonesia, and the interest and repayment period would be similar to the conditions on ODA to the Philippines and Thailand in 1979 (Kaiji bunsho 16/04-595/8).

The third principle reflected Japan's consideration of the Soviet request that Japan "not carry out military cooperation in China." A MOFA document dated December 1, 1979 ("About Summit Talks"), stressed that it would be dangerous for Japan to give the Soviet Union any reason to suspect "Japan-U.S.-China collusion" (Kaiji bunsho 6/02-1170/2). On December 7, at a press conference in Beijing, Ohira stressed that "there was no intention to confront a third country with 'Japan-China collusion'" and strongly pushed back against Soviet misgivings about a "Tokyo-Beijing alliance" (Asahi shimbun 1979, 1).

In its diplomatic consultations with China on Japanese yen loans, Japan repeatedly stressed its coordination with Europe and the United States, emphasizing, "There is a limit to what a country can do, and we will have to closely coordinate with Europe and the United States in the future" (Kaiji bunsho 18/04-1005/4). Furthermore, Japan asked China not only to request Japan's cooperation but also simultaneously to seek cooperation with European countries and the United States (Kaiji bunsho 18/04-1005/5). At this time, in Japan, it was widely believed that China's expectations of yen loans were very large, and the MOFA was concerned "not to let China have an unrealistic fantasy" (Kaiji bunsho 6/021170/2). Ohira also stated outright to Deng Xiaoping, "We welcome the extensive exchanges between China and Western countries" (Kaiji bunsho 16/04-589/5).

Although China had great expectations for Japan, it did not want to rely too much on Japan. When Ohira mentioned Japan's three ODA principles on December 6, Deng Xiaoping expressed his understanding on the spot. In fact, during this period, China signed foreign trade agreements with many other countries. In introducing foreign capital, China requested government loans from many countries and signed introduction of funds agreements with many other countries.

Considering China's decisionmaking process, the basic spirit embodied in the policy consultation between China and Japan, and the fact that China did not want to rely too heavily on Japan, China's decision to accept Japanese government loans was clearly linked to its reform and opening up and its concrete economic development needs. In contrast, Japan's decision to provide government assistance to China was largely concerned with the reaction of the international community. Based on available archival material, the linkage between aid and historical problems was not at issue in Japan's decisionmaking process. (1)

According to available material, Japan did not consider aid as a policy objective to "substitute for war reparation" or as "repentance and apology" when it decided to provide yen loans to China. The direct motive for its assistance to China was to provide financial support for the implementation of the Chinese-Japanese long-term trade agreement signed in February 1978, and, from the strategic point of view, it was to support China's reform and opening up, since Japan believed that this was also in accordance with Japan's national interest (Xu 2011, 150-155).

ODA and History Linked

In 1972, in the process of negotiating the normalization of relations, China declared it would no longer demand war reparations, and there was no related discussion about the hope that Japan would provide economic assistance to China. One day after the issuance of the Chinese-Japanese communique, at a September 30 press conference, Prime Minister Tanaka stressed that there was no trade of China's renunciation of war reparations for Japanese assistance when a reporter asked, "To pay for this [China's renunciation of its demand for war reparations], is the Japanese side spiritually ready to provide cooperation on China's domestic construction?" Tanaka said, "This was a pure decision 'to renounce war reparations' [and] 'not a trade and not a haggling over if you give us this, I'll give you that.' Our relations should be based on the basic stance and spirit most valued by Oriental peoples" (Takeuchi 1993, 224).

In fact, China did not hope for Japan's financial support at all when it renounced war reparations. After diplomatic relations were normalized, Japan mentioned financial assistance several times and suggested that China could take advantage of Japanese government loans. However, China firmly rejected Japan's offer (Lee 1984, 113). It was only at the end of 1978 that China decided to accept Japan's ODA, and in 1979 that China requested it, thus linking the acceptance of ODA to China's new reform and opening up policy. In other words, China never considered asking Japan for economic assistance as a reward for renouncing a war indemnity. And, from the available archives, Japan did not seek to implement a policy of providing economic assistance to China to repay China's renunciation of war reparations and atone for wartime acts of aggression (Kaiji bunsho 16/04-589/1-19, 18/041005/1-9, 3/01-1921/1-2, 6/02-1170/1-2).

There are several reasons why China renounced war reparations. One reason is based on morality and justice. Premier Zhou Enlai explained this reason during a meeting with former Japanese foreign minister Miki Takeo on April 21, 1972: "It is true that the Chinese people are the victims of Japanese militarism, but the Japanese people are also victims. For victims to accept money from [other] victims is 'immoral,' so we don't want it." Afterward, Kunihiro Masao, Miki's secretary, who attended the meeting, couldn't help thinking that Japan "failed completely on the level of morality and justice" (Kunihiro 1988, 47).

However, in fact, based on a feeling of morality and justice, there existed in Japan a deep appreciation for China's "adult" gesture and action in forgoing war reparations. There was a hope that China would become prosperous and a desire to make some contribution to China's industrialization (Ibayashi 1993, 157-158). Actually, at the time when Japan decided to provide assistance, there really existed a feeling that Japan should give some special consideration to China, which had renounced reparations. This sentiment began with Japanese policymakers' trying to convince some domestic opponents about offering yen loans to China. For instance, on December 1, 1979, on the eve of accompanying Prime Minister Ohira to China, during an interview with the Nihon keizai shimbun, Foreign Minister Okita Saburo said, "Some Japanese people do have such a feeling, that is, Japan should repay China because it has given up [war reparations]" (Nikkei 1979b, 4). This sentiment played a role in the Japanese policy process and can be confirmed at least in the following two aspects.

First, this sentiment played a positive role in the Japanese decisionmaking process regarding the provision of government loans to China. Considering the tremendous damage to China caused by the war, Japanese political, bureaucratic, financial, and media circles widely believed that Japan should cooperate in China's economic development (Story 1987, 3-11). So, there were basically no voices objecting to Japan's providing aid to China. However, when discussing the scale of assistance to China, inside the Japanese government there were voices objecting to providing more aid to China than to Indonesia, then the largest recipient of Japanese ODA. The MOFA advocated that, at least in the first year, the amount of aid to China should not exceed aid to Indonesia (Kaiji bunsho 16/04-595/6), but the MITI countered that Japan should positively cooperate with China, which had renounced war reparations (Nikkei 1979a).

Second, Japan adopted a multiyear framework for yen loans to China, which was unusual. Normally, Japan adopted an annual approach, that is, annual consultations with recipient countries to set the following year's aid amount. In providing yen loans to China, however, Japan adopted a five--or six-year cycle, thus allowing China to take projected Japanese loan amounts into full account as a supporting fund for its Five-Year Plan. On the question of whether to give China a hint or heads-up on the likely total amount of forthcoming loans, there was heated debate within the Japanese government, and a positive decision was finally made by the prime minister (Kaiji bunsho 16/04-595/16). The reason for this decision was largely due to "consideration for past issues" (Jin 2002, 198).

During the 1980s, this feeling of paying a debt of gratitude to China for renouncing reparations played a positive role in the decisionmaking process behind providing aid to China. For instance, on March 3, 1983, Foreign Minister Abe Shintaro stated at a Japanese House of Representatives Budget Committee meeting, "Because China renounced reparations, the normalization of Chinese-Japanese diplomatic relations became possible. Japan needs even now to consider and reflect on history. It is important that we positively cooperate in China's economic development" (Kokkai gijiroku 1983, 4).

In the Japanese diplomatic archives there is an interesting exchange between Chinese and Japanese leaders about Japan's ODA and China's renunciation of reparations. At the China-Japan Summit on March 24, 1984, CCP general secretary Hu Yaobang expressed gratitude for Japan's economic cooperation, and Prime Minister Nakasone Yasuhiro responded in a rather interesting way: "[Your] appreciation embarrasses me. Cooperation with China is an expression of our reflection on the great wartime damage we caused. This is as it should be" (Kaiji bunsho 18/04-1029/3).

In summary, there was no political or legal linkage between Japan's provision of ODA and China's renunciation of war reparations. But, subsequently, there has been a lot of discussion about linkage between the two, based on emotional entanglement.

Emotional Entanglement of ODA and History

There is complex emotional entanglement between China and Japan on the issue of linkage of Japan's aid to China and historical issues. This first became a Chinese-Japanese diplomatic issue in 1987. On June 4, 1987, the chairman of the CCP Central Advisory Commission Deng Xiaoping met with Yano Junya, chairman of the Komeito, who was leading a delegation to China. Deng asked Japan to suitably resolve the Guanghua Liao dormitory issue and then discussed his overall view of Chinese-Japanese relations. Deng commented that, "In historical perspective, Japan should do more for China's development. Frankly speaking, China is the country that Japan owes the most.... China did not demand war reparations at the time of Chinese-Japanese diplomatic normalization.... Frankly speaking, I'm discontented on this point" (DXN 2004, 1192-1193; NKKS 1993, 377). In general, Deng indicated that "because Japan owes China the most, Japan should make greater contributions to China." This was the first time in a diplomatic setting that this logic was enunciated--that since China had renounced its demand for war reparations, Japan owed China the most and should contribute more.

Around this Japan "owes the most" remark, a fierce confrontation ensued between China and Japan. A Japanese Foreign Ministry leader expressed his discontent over the comment that Japan "should make greater contributions" by replying, "Don't you know that Japan has already contributed greatly in the form of economic cooperation?" On the evening of July 4, a "MOFA leading figure" (2) said, "I feel that Chairman Deng is out of touch. Chinese-Japanese relations have been developing stably with economics at the core. This has become a major trend. I hope that Chairman Deng hears more about the real situation" (Asahi shimbun 1987a, 3; Nikkei 1987a, 2).

The comment about Deng Xiaoping's being "out of touch" by the MOFA's leading figure in turn engendered intense Chinese displeasure. On the evening of June 6, the deputy director of the Asia Division of China's Foreign Ministry, Tang Jiaxuan, summoned Japanese Embassy minister Yushita Hiroyuki, who was then serving as charge d'affaires ad interim, to lodge a protest, stating, "The MOFA high official in-service lacks any conception of even the minimum level of diplomatic courtesy, viciously attacking our country's highest leader. This is an important matter, and the Chinese government and Chinese people cannot tolerate it. [We] lodge a protest with the Japanese government." He demanded an explanation of the true meaning of the comment and adoption of "appropriate measures" (NCT 1987). On June 7, Sun Pinghua, president of the China-Japan Friendship Association, criticized the Japanese Foreign Ministry official for his arrogant remark, noting that "the relationship of two countries is not of one (China toward Japan) lowering its head and begging. If the MOFA thinks that we should keep our mouth closed because China is poor, and needs to borrow money, then I have to believe this is old Japanese concept" (Chugoku soran 1988, 137).

The MOFA rejected China's denunciation, responding that it felt Japan also needed "to say what it had to say" (Asahi shimbun 1987b, 2). On June 8, the MOFA director of Asian Affairs, Fujita Kimio, called Chinese Embassy minister-counselor Xu Dunxin to the Ministry of Foreign Affairs, explaining that Japan had not intended to slander and attack the Chinese leader, expressing deep regret for any unhappiness it had caused the Chinese side, but, at the same time, maintaining that the statement by the MOFA leader also had its reason. He continued that "recent statements by Chinese leaders about Chinese-Japanese relations are at odds with the real Japanese situation and Japanese conceptions" and that "openly criticizing Japan" was "'pouring cold water' on the feelings of those who sincerely hope to develop Chinese-Japanese relations" (Renmin ribao 1987b, 6).

The Chinese side again counterpunched. On June 10, the Chinese Foreign Ministry spokesman formally criticized the MOFA: "The Japanese mass media was purposely and wrongly blamed, leading to the distortion of Chairman Deng's remarks. We find this attitude hard to understand." The spokesman continued that Deng had "comprehensively explained the Chinese side's views, and had sincerely and earnestly given well-meaning advice aimed at problems between the two countries." He criticized "a certain leader of the MOFA who has openly made a vicious attack on Chairman Deng, not only hurting the feelings of the Chinese people, but also having a harmful effect on Chinese-Japanese relations" (Renmin ribao 1987c, 1).

This engendered fierce debate in Japan. The Japan-China Friendship Parliamentarians' Union and opposition parties criticized the government's and the MOFA's handling of the statement by the MOFA chief. The dispute finally wound down after Vice Minister for Foreign Affairs Yanagiya Kensuke openly expressed regret when he met with reporters at the MOFA press club on June 15 and then resigned on June 18.

In the midst of this controversy, the picture of attack and counterattack between the two countries is obvious, but the contents of their reciprocal denunciations differ. From this series of linked denunciations one can see a collision of "feelings."

First, on the Chinese side, the frame of mind was that, despite Japan's cruel invasion, China still had renounced compensation. For this, Japan should be grateful. Originally, Deng's statement was aimed at expressing dissatisfaction over the Guanghua Liao dormitory issue. But, in his anger, he had blurted out his thought that Japan "owes the most."

Second, on the Japanese side, the frame of mind was that Japan, through its economic assistance, had already made a great contribution to Chinese economic development, the Chinese leadership should know this, and the Chinese side should be grateful. This sentiment was reflected in the MOFA chief's response to China's rebuke.

Third, both Japan and China had an imaginary sense of frustration toward each other. From Chinese statements, one can detect a sense of Chinese economic inferiority toward Japan. In Chinese eyes, the MOFA's statement about Deng's being "out of touch" showed "paternalism" on the part of Japan, the aid-giving country. Sun Pinghua's aforementioned statement directly demonstrated this. President of the PRC Li Xiannian also expressed strong dissatisfaction, saying that some Japanese had the idea that if China required economic aid it must refrain from criticizing Japan. "We do not need economic assistance with strings attached," stated Li (Nikkei 1987b, 1). On the other hand, Japanese leaders were frustrated that they could not tell China exactly how they felt. The MOFA officials justified their counterattack, claiming that if they didn't say what they should say and counterattack as they should, it would "leave our people with the impression of being too compliant with China, and even encourage a form of pre-war nationalism" (Nikkei 1987c, 2).

Two years later, in November 1989, Deng Xiaoping met with a delegation to China comprising members of the Japan-China Economic Association (including senior consultant Saito Eishiro and head of delegation Kawai Ryoichi). Speaking of Chinese-Japanese relations, Deng said, "We wish Japan could reflect, not be arrogant; and hope that China strives to be stronger and not be self-abased" (DXN 2004, 1298-1299). From this angle, it can be said that China viewed the MOFA chief's remarks as an expression of Japanese arrogance that stimulated China's sense of national "inferiority."

This situation gradually calmed down after the resignation of the MOFA official, Yanagiya Kensuke. However, this kind of chain reaction of reciprocal, emotionally laden criticism would resurface on many occasions in Chinese-Japanese relations. For example, in 1995, the Japanese government decided to freeze its grant aid to sanction China after it carried out nuclear tests. China denounced Japan for taking ODA sanction measures by, in turn, bringing up "history." On September 19, 1995, Premier Li Peng met with Toyoda Shoichiro, head of the delegation to China from the Chinese-Japanese Economic Association, as well as the leader of the Japan Business Federation (Keidanren), stating, "The invasion by Japanese militarism greatly damaged China, and can't be mentioned in the same breath as Japan's loans to China" (CND 1995, A4). Here Premier Li compared ODA to war damage to criticize Japan's sanctions.

Later, from 1995 to 2005, Japan directly linked the idea of Chinese gratitude for Japan's ODA with historical issues. This showed Japan's strong hope that ODA could suppress "historical issues." It, in turn, furthered the intricately complex relationship among "Japanese assistance," "Chinese gratitude," and "Chinese-Japanese historical issues" (Xu 2011, 233-244). These sentiments gained intensity over time until, in the middle of the first decade of the twenty-first century, they became an important rationale behind Japan's intense debate on ODA to China in 2004-2006, which led to its termination for new projects in April 2008.


I have explored the existence and functioning of emotional factors in international relations through a concrete analysis of the link age between Japan's provision of government assistance to China and China's renunciation of war reparations.

The following conclusions can be adduced after examining the decisionmaking process: China's decision to accept Japanese government assistance came about through a gradual process, a link in China's establishment of its reform and opening up policy and not as a request to Japan to use government loans to replace war reparations. On the other hand, at the time of the Japanese government's decision to provide government assistance, there was no political motive to use aid to compensate for Chinese war reparations.

In the process of setting up Japan's ODA, China and Japan acted in a spirit of reciprocity and international coordination with no reference to inherently emotional historical factors. However, while there were no policy or legal linkages between Japan's ODA and China's renunciation of war reparations, many later discussions of bilateral relations principally addressed emotional entanglements.

In explaining China-Japan relations, there exists a "dual gratitude theory" related to "history" and "assistance." In 1972 China renounced war reparations when Chinese-Japanese relations were normalized. China's tolerance on historical issues then created a paired relationship: "Japan should be grateful, and China should receive gratitude." In December 1979, when Japanese prime minister Ohira visited China and announced that Japan would provide government assistance to China, Japan's magnanimity on economic assistance then created another paired relationship: "China should be grateful, and Japan should receive gratitude."

Behind this theory, there is also a "dual obligation and enmity theory" in explaining this relationship. China renounced Japan's war reparations even though it was brutally invaded by Japan, thereby "obligating" Japan. On the other hand, Japan generously provided ODA to China for almost thirty years, thereby "obligating" China. This can be seen in the responses of both China and Japan. When their expectation of repayment for kindnesses failed, a hearty dislike of each other's action of "returning enmity for kindness" ensued (Yokoyama 2005, 92). The hearty dislike was not just a result of the ODA dispute, but the ODA dispute itself was simply another facet of a broader deterioration in Sino-Japanese relations.

Between Japan and China, the emotions surrounding dual gratitude have become entangled, "easily generating a sentiment of reciprocal blame" over which side is ungrateful and treacherous (FAJ 2001, 12). In the first decade of the twenty-first century, the chain reaction of mutual recrimination between the two countries' peoples became increasingly awkward, seemingly continuing to the present day.


Xianfen Xu is professor of history at the Institute for Studies of China's Neighboring Countries and Regions (History Department), East China Normal University in Shanghai. Her research interests include contemporary Sino-Japanese relations, contemporary Japanese history, and international cooperation. She is the author of Nihon No Taichu ODA Gaikou (Japan's ODA diplomacy to China: The dynamism of interest, power, and value) (Keiso Shobo 2011) and Higashi Ajia Ni Okeru Futatsu No Sengo (Regional order in East Asia after World War II and the Cold War) (coedited, Kokusai Shoin, 2012). She can be reached at

The research and writing of this article have been supported by the Special Entrusted Project of National Social Sciences Fund (Document Collection and Historical Studies on China's Neighbors' Policies Toward China, project #15@ZH009) and by the Annual Project of National Social Science Fund (14BSS029).

This article draws heavily on archival material from the Japanese and Chinese foreign ministries. Declassified Japanese material includes extensive information about normalization negotiations, Japan's decision to provide government loans to China, and negotiations over these loans. Declassified Chinese material includes information about the Hatoyama cabinet and Japanese government, including estimations of the Hatoyama administration's foreign policy toward China.

Zhou Bin, who was the interpreter during Chinese-Japanese normalization negotiations, shared his views with the author. Also see Zhou Bin's interview with Japanese journalist Kunou Yasushi (Zhou 2013, 87-105).

Vice Premier Gu Mu explained China's lack of sufficient funds to Yanagiya Kensuke, director of the MOFA Asia Bureau (Kaiji bunsho 18/04-1005/9).

In addition to signing a long-term trade agreement with Japan in February 1978, a long-term trade agreement was concluded with the European Community in April, with France in December, and with the UK in March 1979.

For example, in August 1979, China indicated its intention to seek loans from the World Bank and forwarded requests for government loans to the United States, West Germany and other European countries, and Canada. By September 1979, China had signed loan agreements with many countries, including a $7 billion loan from France, a $5 billion loan from the UK, a $2 billion loan from Canada, and a $1 billion agreement with Italy. Please refer to date in Kaiji bunsho (18/04-1005/9).

(1.) Please refer to the available archival materials (Kaiji bunsho 16/04589/1-19, 18/04-1005/1-9, 3/01-1921/1-2, 6/02-1170/1-2).

Guanghua Liao, located in Kyoto, was a student dormitory leased for Chinese students by Kyoto University during World War II. In May 1950, the "Republic of China" delegation in Japan bought the property using funds from selling seized Japanese army property and registered the dormitory in the name of the Republic of China in June 1961. After normalization of Chinese-Japanese diplomatic relations, China proposed negotiations with Japan over the dormitory many times, asserting that the dormitory should be owned by and registered to the PRC. After several judicial decisions, on February 4, 1986, the Kyoto District Court awarded the Guanghua Liao to the Taiwan authorities. On February 26, 1987, the Osaka High Court dismissed China's appeal and re-awarded it to the Taiwan authorities. In response, the Chinese embassy in Japan and the Consulate General of China in Osaka held separate press conferences, pointed out that the court decision was in violation of the joint communique of the government of the People's Republic of China and the government of Japan and the Treaty of Peace and Friendship between the People's Republic of China and Japan, and expressed a strong dissatisfaction (Renmin ribao, 1987a).

(2.) Prime Minister Nakasone, attending a July 9, 1987, House of Councillors plenary session, said, "The statement by the Foreign Ministry principal was made by former Vice-Minister Yanagiya at an informal conference." Asahi shimbun (1987a, 3). A Nikkei report is slightly different: "The head of Foreign Ministry strongly criticized Deng on the evening of the 4th: 'Deng has no idea what is happening. Has the report reached the higher authorities? People get rigid once they grow old'" (1987a, 2).


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