Japan Data

APEC Summit in Beijing Brings Minor Thaw to Japan-China Relations

Politics Economy

The first formal talks between Japanese and Chinese leaders in two and a half years took place on the sidelines of this month’s APEC summit in Beijing. Prime Minister Abe Shinzō and President Xi Jinping spoke for the first time since assuming leadership, marking an upturn for frosty bilateral relations. This article summarizes the key points of the latest summit and the 25-year history of APEC.

On November 10, Japanese Prime Minister Abe Shinzō and Chinese President Xi Jinping spoke together for around 25 minutes at the Great Hall of the People in Beijing, on the sidelines of the Asia-Pacific Economic Cooperation summit. They agreed to an early implementation of a “maritime communication mechanism” between their two countries, including a hotline linking their respective defense authorities. Abe described the meeting as “the first step toward improving Japan-China relations by returning to the starting point of a ‘mutually beneficial relationship based on common strategic interests.’”

Japan-China ties grew frosty in the wake of Japan’s nationalization of the Senkaku Islands, also claimed by China, and Chinese displeasure with Abe’s visit to Yasukuni Shrine, ruling out a summit between the two leaders for a considerable period. But on November 6, National Security Advisor Yachi Shōtarō traveled to China to meet senior bureaucrats in the hope of making a breakthrough. The two sides were ultimately able to produce a four-point document in which they “recognized that they had different views” regarding the East China Sea situation but agreed that “they would gradually resume dialogue in political, diplomatic, and security fields,” laying the groundwork for a summit meeting.

Abe also met with Russian President Vladimir Putin in Beijing. The leaders agreed to begin preparations for a visit by Putin to Japan “at an appropriate time next year.” Abe additionally spoke to South Korean President Park Geun-Hye during the APEC dinner.

Much interest currently centers on Trans-Pacific Partnership negotiations regarding the liberalization of trade and investment in the Asia-Pacific, as well as movements toward economic integration. A meeting of TPP leaders took place in Beijing to coincide with the APEC summit, but no details were announced regarding a target date for the agreement, leaving a sense of uncertainty over the present state of progress.

25 Years of APEC

APEC was founded in 1989, based on a suggestion by Australian Prime Minister Bob Hawke. Its 12 founding members included Japan, the United States, Canada, and South Korea. As market integration proceeded apace in Europe and North America, recognition of the need for a new framework for Asia-Pacific economic development spread, spurring the foundation of the organization. A proposal by the United States led to annual summits that took place beginning in 1993.

APEC membership expanded several times during the 1990s, reaching the current total of 21 countries and regions in 1998.

At the 1994 meeting in Bogor, Indonesia, the Bogor Goals were established targeting free and open trade and investment by 2010 for industrialized economies and by 2020 for developing economies. Initiatives are based on APEC’s three main pillars of activity: trade and investment liberalization, business facilitation, and economic and technical cooperation. Alongside its liberalization measures and economic and technological cooperation, APEC is implementing regional growth strategies. It is also further expanding the range of its activities to include such human security fields as food supply, health, disaster response, and counterterrorism.

A Loose Organization Based on Consensus

Unlike similar regional bodies, APEC is a loose organization based on consensus, in which member economies are not legally bound by the framework. This also allows for the participation alongside China of the regions of Taiwan (known within APEC as Chinese Taipei) and Hong Kong (known as Hong Kong, China). APEC sees “open regionalism” as one of its basic philosophies, adopting a system whereby liberalization measures taken within APEC can also be extended to other regions. In this way it clearly distinguishes itself from discriminatory economic blocs.

Despite this flexible approach, it has been difficult to transform the framework into a binding free trade agreement due to its mixture of industrialized and developing members, as well as its original “loose” nature. Some members, disillusioned by the slow pace of liberalization within APEC, have pressed for a new framework, and this is a factor in ongoing TPP negotiations.

Major Landmarks in APEC History

(Blue text indicates global events)

1989 APEC is founded.
The end of the Cold War. The US/Canada Free Trade Agreement comes into force.
1991 China, Taiwan, and Hong Kong join APEC.
Agreement is reached on the Maastricht Treaty on European Union.
1993 At the suggestion of US President Bill Clinton, the first APEC summit is held in Seattle.
The European Union is founded. Agreement is reached in the Uruguay Round of the General Agreement on Tariffs and Trade.
1994 The Bogor Goals, targeting free and open trade and investment in the Asia-Pacific region by 2020, are adopted.
The North American Free Trade Agreement comes into force.
1995 The Osaka Action Agenda, which provides a framework for meeting the Bogor Goals, is adopted.
The World Trade Organization is founded.
1996 The Manila Action Plan for APEC, targeting liberalization in member economies, is adopted.
The APEC Business Advisory Council is founded.
1997 APEC endorses a proposal for Early Voluntary Sectoral Liberalization in 15 sectors.
The Asian currency crisis begins.
1998 Russia, Peru, and Vietnam join APEC, expanding membership to 21, its current number.
A split develops over collective liberalization in the first nine EVSL sectors.
2001 China joins the WTO.
2004 ABAC proposes an APEC-wide FTA.
2005 The first East Asia Summit is held.
2006 The United States proposes a Free Trade Area of the Asia-Pacific.
The Trans-Pacific Partnership between Singapore, Brunei, Chile, and New Zealand comes into effect.
2008 Commodity prices boom. Global financial crisis begins.
2010 APEC outlines “Pathways to the FTAAP” at its Yokohama summit.
Negotiations begin to expand the TPP process.
2011 European sovereign debt crisis begins.
2012 Russia joins the WTO.
2013 Japan begins negotiations to join the TPP.
Comprehensive Economic Partnership.

(Originally written in Japanese on October 30, 2014, and revised on November 12, 2014. Banner photo: Prime Minister Abe Shinzō shakes hands with President Xi Jinping of China before their summit meeting on November 10, 2014, at the Great Hall of the People in Beijing. © Jiji.)

China Abe Shinzō TPP APEC South Korea Xi Jinping Vladimir Putin Park Geun-hye summit