Geo-strategic considerations of Japanese ODA to China, 1979-1994

Abstract

China and Japan, as two superpowers in the Asian region, have one of most complicated foreign relations in centuries. Since the Chinese economic reform in 1978, Japan has provided financial assistance to China, making China the second largest country (behind Indonesia) to receive Japanese foreign aid in years. On the one hand, Japan has clear goals for its foreign aid programs based on geo-strategic considerations with respect to China. On the other hand, Japanese yen credit has often become a 'souvenir' to soothe Sino-Japanese relations manipulated by both Japanese politicians and bureaucrats. Because of the both complicated geopolitical and geoeconomic relations between two countries, certain scholars have mistakenly concluded that the Japanese government does not rely upon predetermined motives when providing aid. This research, however, illustrates that Japanese yen credits to China have been a major geo-strategic tool of Japanese foreign policy of promoting Chinese economic reform.