Avoiding a zero-sum trap, Japan has signalled its intent to take advantage of the China-led Belt and Road Initiative (BRI), notwithstanding its high-profile engagement with India, as seen during Prime Minister Shinzo Abe’s India visit.
The multi-track diplomatic approach pursued by Japan became evident when its logistics giant Nippon Express signed a major cargo deal in mid-August with Kazakhstan’s state railway company. Under the agreement, the two companies will team up to transport goods from China’s east coast to Europe through Central Asia.
Nippon Express will be involved in aggregating goods from Japan, Korea and other parts of Southeast Asia. These items will be pooled together at the Chinese port of Lianyungang in the East China Sea.
Steel silk road
The agreement is expected to beef up cargo volumes along China’s Eurasian trains, which have been struggling to build sufficient container traffic, to reduce transportation costs between the two destinations.
The “steel silk road” — a reference to Beijing’s trans-continental rail enterprise — is one of the most visible symbols of the BRI, which has a sweeping land and maritime dimension of seamless connectivity between Asia, Europe and Africa.
Trains from Lianyungang will head towards the dry-port of Khorgos on the Kazakh-China border. Khorgos, on the Kazakh side of the border, will become a major point of trans-shipment of goods, which will be segregated for their onward transit to destinations in Central Asia, Europe and Caucasia.
“We can produce trans-shipment, processing and handling of goods on the dry port of the FEZ Khorgos – Eastern Gate, which significantly reduces the time of border operations and increase the speed of container trains,” said Arman Sultanov, vice president of Kazakh national railway at the signing ceremony in Astana.
In view of the new trade and investment opportunities opening up in the BRI zone, including Central Asia, the Japanese Chamber of Commerce and Industry has set up a liaison office in China. According to the Nikkei Asia Review, the office will share information among member companies and hold trade fairs and seminars, among other activities.
Japan’s mega banks, including the Bank of Tokyo-Mitsubishi UFJ and Mizuho Bank, have also looking for expanding their China operations, in view of the BRI.
Prime Minister Abe has already flagged his interest in the BRI, provided the plan follows the rules of transparency and fairness. However, Tokyo has so far desisted from participating in the China-initiated Asian Infrastructure Investment Bank (AIIB), which is expected to support BRI projects, which focus on Asia.
In tune with the commercial opportunities offered by the BRI, Japan is sending important political signals for reviving ties with Beijing. Last week, Mr. Abe paid a surprise visit at a ceremony marking China’s National Day — a step that no Japanese Prime Minister has taken in the last 15 years.
In reciprocation, China’s Foreign Minister Wang Yi — a former Ambassador to Tokyo — said in a follow-up meeting with Japanese Ambassador to China, Yokoi Yutaka that, “We look forward to more good news on China-Japan relations rather than bad news after the good news.”
Analysts point out that despite forging close ties with India, the Japanese have pragmatically recognised the economic realities of imultaneously re-engaging with China, especially after a new round of introspection began regarding Tokyo’s relations with Washington.
