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Abe Tempers Japan Nationalist Plans as China Trade Revives

Photographer: Tomohiro Ohsumi/Bloomberg

Japan's national flags are held during a march hosted by a nationalist group near the Yasukuni Shrine in Tokyo on Aug. 15, 2013. Close

Japan's national flags are held during a march hosted by a nationalist group near the... Read More

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Photographer: Tomohiro Ohsumi/Bloomberg

Japan's national flags are held during a march hosted by a nationalist group near the Yasukuni Shrine in Tokyo on Aug. 15, 2013.

Prime Minister Shinzo Abe’s failure to secure summits with the leaders of China and South Korea has masked a scaling down of Japanese nationalist proposals that’s allowing a nascent recovery in business ties.

Abe, 59, came into office almost a year ago with plans to alter past apologies for wartime offenses and revise the U.S.- imposed pacifist constitution to more freely deploy military assets. With the first postwar national security strategy to be revealed next month, Abe hasn’t followed through on either idea, and has avoided a national shrine for war dead seen by many in Asia as a symbol of past Japanese aggression.

“There were preconceptions about him, but when he became the prime minister of a coalition government, he gradually overcame that image,” said Natsuo Yamaguchi, leader of Abe’s pacifist coalition partner, New Komeito. “He has run the administration in a very balanced and cautious way,” Yamaguchi said in an interview.

Abe’s approach of boosting military spending without adopting more contentious policies pushed by Japanese nationalists has coincided with a 3.7 percent gain in exports to China in the first nine months to 9.12 trillion yen ($91 billion). Last year sales to China, then Japan’s largest trading partner, slumped 11 percent after a territorial dispute in the East China Sea flared in September, prompting attacks on Japanese businesses that caused Honda Motor Co.’s sales to plunge 54 percent the following month.

Photographer: Scott Eells/Bloomberg

Shinzo Abe, Japan's prime minister. Close

Shinzo Abe, Japan's prime minister.

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Photographer: Scott Eells/Bloomberg

Shinzo Abe, Japan's prime minister.

Lesson Learned

The strategy contrasts with Abe’s abbreviated first term in 2006-2007, when he weakened Japan’s 1993 apology for the military’s use of foreign women as sex slaves before and during World War II and legislated making patriotism a key goal of education. He passed a measure to allow for constitutional change before his premiership was cut short by illness, scandal and a parliamentary impasse over his support for the U.S.-led “war on terror.”

In a reminder of his first term, Abe told the Sankei newspaper days after taking office he wanted to approve a new statement on Japan’s role in the war “appropriate for the 21st century,” revising a 1995 official apology for the “tremendous damage and suffering” caused by its militarism.

In practice, he has focused on reviving the stagnant economy rather than fanning nationalist flames. Abenomics, the premier’s mix of monetary and fiscal stimulus, has led to a 44 percent surge in the benchmark Topix stock index this year. Foreign Minister Fumio Kishida said Nov. 5 the government stood by all previous war apologies.

Flexible, Cautious

“He’s being very flexible and cautious” on security policy, said Katsuhiko Nakamura, executive director of Tokyo-based think tank Asian Forum Japan. “He’s learned from the mistakes of his first term.”

Tensions remain, with Japanese and Chinese coastguard vessels tailing one another around the disputed islands known as Senkaku in Japan and Diaoyu in China. Late in October, Japan sent up fighter jets after Chinese aircraft flew between its southern islands.

Japan’s purchase of three of the islands from a private owner in September 2012 sparked violent anti-Japanese demonstrations in China, where car dealerships were attacked and vehicles burned.

Japan is also embroiled in a long-running spat with South Korea over different islands, known as Takeshima in Japan and Dokdo in Korea, where bitterness over Japan’s former occupation remains a political issue. Mitsubishi Heavy Industries Ltd. was ordered in July by a South Korean court to pay compensation for using forced labor during Japan’s colonial rule.

No Summit

Chief Cabinet Secretary Yoshihide Suga today described as “not beneficial to relations” a joint project by China and South Korea to build a monument to a Korean man who assassinated a Japanese official ahead of Japan’s annexation of the peninsula more than a century ago. Ahn Joong Geun killed Hirobumi Ito, then Japan’s representative in Korea, in Harbin in 1909.

No summit has been held with China for 18 months, while South Korean President Park Geun Hye said on Nov. 4 “perhaps it would be better not to” meet Abe until progress is made on differences over historical perception.

Even so, Honda’s sales in China more than tripled in October from the year before, while Nissan saw a 78 percent rise and Toyota posted 81 percent growth. Improved business ties have spread to tourism, with Chinese visitors to Japan up for the first time in a year to 156,300 in September, according to the Japan National Tourism Association. Tokyo’s Sunshine City Prince Hotel saw a sevenfold increase in Chinese guests in October, Prince Hotels and Resorts said.

Tourists Return

“The tendency for Chinese tourists to avoid Japan has gone,” said Tomoko Kikuchi of Japan’s National Tourist Office.

A delegation of 178 Japanese business executives began a visit to China yesterday, an annual event that was scaled back last year amid the tensions. Japanese investment into China rose 6.3 percent to $6.46 billion in the January-October period, China’s Ministry of Commerce said today, while Chinese investment into Japan slid 37.3 percent in the same period.

Abe’s restraint may not please nationalists, who form part of the base of his Liberal Democratic Party and want to see Japan again assert itself in the region. Still, many Japanese embrace the country’s pacifism, and voters rewarded Abe with a landslide in upper house elections in July, giving him control of both chambers of parliament.

Abe Approval

Abe’s approval rating held at 66 percent in an Oct. 28 poll by the Nikkei newspaper. The survey also found that 54 percent of respondents approved of his “realistic” approach on expanding the role of the military, and 53 percent backed his avoiding Yasukuni.

“A lot of people -- even Mr. Abe’s supporters -- were worried about him making extremely strong statements,” Shotaro Yachi, an academic and foreign-policy adviser to Abe, said last week. Instead, “he’s driving safely on the issues people are a little concerned about.”

To contact the reporters on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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