The Impacts and Roles of Canada in China-Japan Row - Research Paper Example

? The Impacts and Roles of Canada in China-Japan Row The Impacts and Roles of Canada in China-Japan Row Introduction The current tension currently being witnessed between China and Japan is arguably the geopolitical tension ever witnessed in the world. Park (2012) argues that the tension is boiling up over a tiny Senkaku Islands, which had been bought by Japan several years back. The purchase put the full control over the island on Japan. However, with politics at play, China has showed an interest over the island again claiming that the island rightfully belongs to them, an argument that Japan is not willing to listen to according to Zhao (2012). In fact, pundit argue that the two countries may end up engaging in of the deadliest fights after the World War II if nothing is not done to ease the tension between the two neighboring countries. As a result, Canada is one of the countries that have been proposed to negotiate a cease-fire between these two countries at war, following the fact that Canada is not seen to have any inclination both economically or politically with the two nations. This paper will explore the tension brewing up between China and Japan and the involvement of Canada on the issue. China and Japan are two economic giants in the Asian region and the world at large. These two neighboring countries had had close relation between each other for a very long time until recently in 2010 when an issue arose between the two nations over uninhabited island. Initially the issue appeared very little that it did not attract much attention of the international community until recently when a war of words and military surveillance began over the island. In this regard, Chinese warships and airplanes have been surveying the island over the past few years with a view to taking it away from Japan. However, Japan has always maintained its position that the island has traditionally and rightfully belongs to them, and any attempt by Chinese government to take the island will be met with the strongest force possible, a statement, which has signaled that war is in the offing (Tanaka, 2013). The tension has indeed affected the strong bilateral trade between these two countries since the beginning of the tension. Bloomberg News (2013) reported that some discontented Chinese consumers have been boycotting Japanese products in protest over the island. This scenario has led to a sharp fall in Japanese autos sales in China, something that is negatively affected the economy of Japan, taking into consideration the fact that China has been one of its biggest auto market in the world. In fact, Japan has not yet recovered from such a huge decline in sales in Chinese market witnessed in the recent past. Bloomberg News (2013) reveals that many Chinese factories have shifted their loyalty to South Korean component suppliers. At the same time, China has also experienced a significant decline in the export market due to the tension between it and Japan. This has become costly for the Japanese government since China has been its long time largest export market. Bloomberg News (2013) reveals that currently the U.S. has overtaken China as the largest export market for the Japanese products. Bloomberg News (2013) also noted that as China continue with its territorial claim over the island, the bilateral trade between the two countries, which tripled from 2000 to over $300 billion, is likely to decline significantly. The latest flare-ups had been reverberated by Xi Jiping of the Chinese Communist Party when he criticized the move by Kunioki Kurihara, a Japanese developer to sell three of the disputed islands to the Japanese government for just $23 million, calling this a farce according to Bloomberg News (2013). The dispute between the two nations is reported to have resulted in a decline, in Japanese growth, by about one percent. Meyer (2011) argues that this percentage decline has the potential of keeping the economy in recession up to September this year. The fall out is also projected to have caused a declined in the Japanese gross domestic product by about 0.5 percent since September 2012 as reported by Bloomberg News (2013). Japan’s shipment to China has also declined significantly. This has seen Japan’s industrial output fall by 1.7 percent in November 2012 the lowest ever since the earthquake of 2011. Report indicates that the dispute over the two islands Senkaku in Japan and Diaoyu, in China, have been over politicized by the two nations with none willing to back down over the matter (Meyer, 2011). This is evident from the fact that both governments have put the matter at the hands of political players, which is only making matters worse. What people know is that the islands under dispute are not inhabited, yet the two nations are strongly at friction with each other, which is likely to result in war. Certainly one cannot deny that there is a political game being played over the island. Political pundits have argued that China is trying to have a strong influence over Asian region due to the economic growth and military power it has built over the years. This is because Japan has had a strong influence over the region, something that China is not happy about. For instance, Japan is part of the G8 that form the top decision making organs in the region and beyond. Therefore, pundits feel that the only way to snatch Japan of its influence over the region is to test it using the island. However, despite the fact that war appears to be so eminent between the two countries, experts do not see the possibility because the two nations appear to fear each other in terms of military capabilities. This makes it uncertain about which country is likely to emerge as a winner in case they go into war. China is said to have developed weapons of mass destruction in the recent past that makes it a military power nation. Nevertheless, experts say that China’s military capability may not go beyond waters. This implies that in case a war erupt between these two countries, then it is most likely to be fought on waters (Drifte, 2012). Political analysts argue that the fallout over the islands has been based on the fact the waters around these islands are rich in fish and has the potential of producing oil according to a feasibility study conducted on the islands. Furthermore, China also wants control over the island because of its strategic military outpost in the waters between China and its neighboring countries such as Japan and Taiwan. These claims appear to have overshadowed the economic implications being that China has become an economic giant and want to place itself a head in terms of military capabilities (Blanchard and Shao, 2013). Recently flare-ups broke out between China and Japan following a collision between a Japanese Coast Guard boat and a Chinese fishing vessel in the contested waters. This prompted China to cease granting Japan export licenses for automobiles, rare earth metals, and electronic industries. However, the issuance of the licenses were resumed a week after Japan released the Chinese captured vessel and its crews. However, the fallout appears to increase by the day as this year has also seen angry Chinese have been continuing to boycott Japanese products and even going to the extent of smashing their shops in China (Blodget and Szoldra, 2013). Impacts and roles of Canada in the row Certainly, this dispute has changed the economic and political landscape between Japan and China. As a result, economists predict that China is now more likely to seek direct exchanges between renminbi and some major currencies in the world so as to continue stabilizing its economy (Sisodia and Krishnappa, 2009). It is from this perspective that Canada is most likely to benefit from the fallout between China and Japan. This is because it is projected that China is most likely to seek a direct exchange with Canadian dollar. Research indicates that China has been a strong trading partner with China and has become the second-largest trading partner with Canada. At the same time, it is the third largest export market of Canada. Zhao (2012) reported that the Chinese enterprise investment in Canada has totaled over C$16 billion from 2009 to end of 2011 fiscal year and is anticipated to increase to C30 billion in the event that the Chinese National Offshore Oil Corporation moves to acquire Nexen is successful. At the same time, since China has been experiencing an increasing demand from energy and resources, it is more likely that China will continue investing in Canada if its currency can be traded directly, which will, in turn; make Canada an attractive investment destination for many Chinese investors. However, with the fallout between Japan and China, this is likely to be the case in the near future in which China will most likely seek from a direct exchange with Canada’s dollar. This implies that Canada is likely to benefit much from the fall out which is now quite eminent. This is because it will improve trade between Canada and China (Martina, 2013). China is currently seeking for internationalization of renminbi business. Therefore, with the dispute currently going on between China and Japan, it is highly probable that China will consider developing renminbi business in Toronto, which will benefit Canada’s local financial industry. Zhao (2012) projects that Toronto will create more investment opportunities for its local financial industry while at the same time strengthening its globalization capabilities once renminbi internationalization takes effect. In fact, the Canadian prime minister went recently in China in the wake of China’s fallout with Japan in a bid to strengthen Canada’s financial co-operation with China, which saw China pledge to carry a feasibility study of Sino-Canadian free trade pact. The close relation between Canada and these two warring South Asian countries has prompted a call for Canada to mediate a cease-fire that can see an end to the conflict. Canada has been reputed for having negotiated a number of cease-fires between protagonists in the past such as during the Kashmir conflict between India and Australia, as well as the Suez Canal cease-fire that saw an end to the conflict. Therefore, it can also be seen that Canada might be directly involve in the matter as a negotiator for an end to the war, which is threatening the stability of the Asian continent (Zhao, 2012). Conclusion The current tension between Japan and China is purely geopolitical fallout surrounding the eight uninhabited islands between the two neighboring countries. However, the fact of the matter is that the tension is adversely affecting the economic and political stability in the Asian continent. Therefore, there is an urgent need for a ceasefire so as to avoid the imminent war between these two countries. In this regard, Canada is one of the countries that can play a leading role in brokering a ceasefire between the two countries following its close relations between the two nations. Doing this will certainly see an end to the row and restore stability in the region. References Blanchard, B. & Shao, X. (2013) “China says tensions with Japan likely to hurt trade.” Reuters. Retrieved from http://www.reuters.com/article/2012/09/13/us-china-japan-idUSBRE88C04620120913. Blodget, H., & Szoldra, P. (2013). “BREMMER: The Japan-China crisis is the most significant geopolitical tension in the world.” Business Insider. Retrieved from http://www.businessinsider.com/japan-china-crisis-is-a-huge-geopolitical-problem-2013-1. Bloomberg News (2013). “China-Japan dispute takes rising toll on top Asian economies.” Retrieved from http://www.bloomberg.com/news/2013-01-08/china-japan-dispute-takes-rising-toll-of-asia-s-top-economies.html. Drifte, R. (2012). Japan's security relations with China since 1989: From balancing to bandwagoning? Manson, OH: Routledge. Martina, M. (2013). “China, Japan engages in new invective over disputed isles.” Reuters. Retrieved from http://www.reuters.com/article/2013/02/08/us-china-japan-idUSBRE91704220130208. Meyer, C. (2011). China or Japan: which will lead Asia? New York, NY: Hurst Publishers. Park, S.J. (2012). “Limits of the China-Japan Tension over the Senkaku/Diaoyu Islands.” International Affairs Review. Retrieved from http://www.iar-gwu.org/node/434. Tanaka, H. (2013). “The Senkaku Islands and Japan–China relations.” East Asia Forum. Retrieved from http://www.eastasiaforum.org/2013/03/19/the-senkaku-islands-and-japan-china-relations/. Sisodia, N. S., & Krishnappa, V. (2009). Global power shifts and strategic transition in Asia. Hoboken, NJ: Academic Foundation. Zhao, G. B. (2012). “Diaoyus fallout sees China refocus RMB push to Australia, Canada.” South China Morning Post. Retrieved from http://www.scmp.com/comment/insight-opinion/article/1066539/diaoyus-fallout-sees-china-refocus-rmb-push-australia-canada. Read More