Japan has long head start in plying trade with the Chinese
Peking — China's thirst for industrial development and Japan's restless search for raw materials, combined with close geographic and cultural ties, have helped Japan become China's largest trading partner.
In 20 years, a Japanese trade official exuberantly predicts, trade with China may be as important to Japan as is trade with the United States, accounting for perhaps a quarter of Japan's overseas trade.
Meanwhile, Japanese businessmen are more numerous in Peking than their counterparts from any other country. They have taken permanent rooms in leading hotels like the Peking, the Xinqiao, and the Minzu. The Bank of Tokyo and Japan's Export-Import Bank have become the first foreign banks to set up representative offices in Peking. Toyotas and Datsuns vie with home-built Shanghais as the mainstay of Peking's taxi fleet.
Last year, more than one-fifth of China's trade was with Japan. Out of China's exports of $14 billion, $2.8 billion, or 20 percent, went to Japan. China's imports from Japan came to $3.5 billion -- 22 percent of all Chinese imports. American trade with China, by comparison, was only one-third of this amount. China exported $500 million worth to the US and imported $1.7 billion worth.
At the same time, Chinese leaders have frequently repeated their determination never to become as dependent on a single trading partner as they were on the Soviet Union in the 1950s. This determination, plus the constraints on China's export capacity caused by inadequate infrastructure, exploitation of natural resources, and the strain of industrial development, limits the immediate growth of Chinese-Japanese trade.
Oil is the largest item on Japan's import list from China. Last year Japan took 7.6 million tons of it from China. This year Tokyo expects to import somewhat more.
China's oil production, however, is not rising at the 20-percent-a-year level of previous years. Thus there is some doubt as to whether its oil exports to Japan can reach the 15 million tons a year agreed to for 1982.
Daqing oil field in the northeast seems to have reached a plateau. Offshore oil looks promising, but will require an intensive development effort and large injections of foreign loans and technology. New discoveries reported from remote Qinghai must grapple with problems of access as well as of technology.
At the same time, the Qinghai strike highlights another reason for China's attractiveness to prospective Western partners and to Japan. A great deal of China has never been properly explored in terms of modern geology. Experts say there is a good possibility of discovering up to 140 nonferrous metals in this enormous country.
But China requires a huge investment in infrastructure as well as in the actual exploitation of resources. The Japanese have made a decision to go outside the normal framework of trade and to offer direct government-to-government development aid, as it and Western countries do to a large number of developing countries around the world. Japan is the first industrialized nation to extend this aid to China.
During Premier Masayoshi Ohira's visit to China last December, the two nations agreed on an aid package that commits the Japanese to $200 million for the first year, and that could total $1.5 billion over a five- to eight-year framework.
The aid, offered at a concessional interest rate of 3 percent a year, will meet the foreign-exchange costs of six development projects -- expansion of ports and handling facilities at Shijiusuo in Shandong (Shantung) Province and Qinhuangdao due east of Peking on the Bohai gulf; the building or expansion of three railways; and the construction of a hydroelectric plant.
Power, rail transport, ports -- improvements are sorely needed in all these areas to push forward China's industrialization drive.
Coal mined in inland provinces cannot reach ports because of inadequate rail systems, while ports cannot accept the large carriers that are the modern economic way to ship bulk cargoes. Expansion of Japan's trade with China depends greatly on expansion of coal exports. So it is in Japan's own interest to promote these infrastructure projects.