¹ Huiqin, Chen, “Preliminary analysis of the economic effect of technology imports in our country over the past 30 years,” Gonye jingi guanli congkan (Industrial Economic Management Journal), No. 6 (1981), p. 51.Google ScholarMaruyama, Nobuo, Chugoku no kogyoka to gijutsu shimpo (Industrialization and Progress of Industrial Technologies in China). Institute of Developing Economies, Japan, July 1988, p. 21.Google ScholarNichu keizai kyoryoku 1989 Nen (Economic Co-operation between Japan and China, 1989), Kyokai, Nichu Keizai (Japan-China Trade and Economic Association), Tokyo, April 1990, pp. 136–150.Google Scholar

² Kyokai, Nichu Keizai (Japan-China Association on Economy and Trade), Nichu keizai kyoryoku 1988 Nen (Japan-China Economic Exchange, 1988), Tokyo, April 1989, pp. 208–241.Google Scholar In the Sixth Five-Year Plan, which started in 1980, the Chinese Government selected 3,000 factories to be modified, and asked the Japan-China Association on Economy and Trade and the Japanese Government to provide cooperation so that some of the factories could be modified with Japanese participation. In accordance with this request, surveys on factory modification plans have been undertaken since 1981 by the Association and the Japan International Co-operation Agency.

³ Yokoi, Yoichi, “Present Status of China's Technological Introduction and its Problems,” JETRO Chugoku keizai (JETRO's China Economy), Japan External Trade Organization, June 1989, pp. 28–45.Google Scholar The Japanese share of plant and technology contracts has been far smaller in recent years than shares of trade and financial cooperation, as will be mentioned later, and has been even smaller than the direct investment share. The existence of such varying shares in different aspects of economic interdependence is unfavourable.

⁴ Cheng-san, Ma, “Foreign Loans and Technological Introduction Policies of China”, JETRO Chugoku keizai (JETRO's China Economy), April 1989.Google Scholar He argued that “the introduction of technologies and equipment in the 1970s should be revaluated as having had significant effects.” With this rather reserved judgment, he points to the following three effects: (1) It raised China's domestic technical level; (2) It increased China's export competitiveness; and (3) It increased supplies of consumer goods, thereby improving the country's living standards. China at present has adopted a conservative valuation of the effects of plant and technology contracts. The reason for this is the problems of the early 1980s. The problem for China is how to maintain a balance between plant and technology imports for the capital-intensive sector under the planned economy, and demands created by the activities of the market economy.

⁵ Ministry of Foreign Economic Relations and Trade, PRC, Duiwai jingji guanxi he maoyi nianjian 1988 (Almanac of Foreign Economic Relations and Trade, 1988) and Nichu Keizai Kyokai (Japan-China Association on Economy and Trade), Nichu keizai kyoryuku 1989 Nen (Economic Co-operation between Japan and China, 1989). In China's technological imports, the weight of software technology (licences and basic designs, technical consulting and technical services) grew in the 1980s. According to the Statistics by the Ministry of Foreign Economic Relations and Trade, whole plant and equipment accounted for 43.5% of the number of import contracts and 62% of the value, software imports represented 56.5% and 31.8% respectively. In 1986–88 software accounted for 54.5% and 20.2% respectively.

⁶ Ishikawa, Shigeru, “Sino-Japanese Economic Co-operation,” The China Quarterly, No. 109 (March 1987). pp. 1–21.CrossRefGoogle Scholar The “Japan-China Long-term Trade Protocol” is referred to by Professor Ishikawa. In my article I have examined the development of this in and after 1983, and have attempted to ascertain its significance in technology transfer in China, its relation to the adoption of the “reform and open-door” policy, and the changing trade structure between Japan and China. The Protocol played an important role in many plant and technology contracts and, thereafter, provided the framework for a stable, growing trade in oil and coal. However, although under China's “reform and open-door” policy the agreement lost its relative importance, it remained a stabilizing factor in relations.

⁷ Overseas Economic Co-operation Fund (Tokyo, Japan), OECF Annual Report 1989. The Yen Credits made to China by the Japanese Government are based on the commitment made by former Prime Minister Ohira on his visit to China in December 1979, assuring China of Japan's maximum co-operation, on the basis of the three Principles (of Japanese) Economic Co-operation with China. These are: (1) keeping pace with western nations; (2) giving consideration to other Asian nations, particularly ASEAN nations; and (3) providing no co-operation in military terms. Since 1980 Yen Credits have been provided almost every year. Up to March 1989 a total of ¥773,721 million credits had been provided. The Government's Overseas Economic Cooperation Fund accounts for 9.9% of the direct loans and China ranks second after Indonesia.

⁸ Japan-China Association on Economy and Trade, Nichu keizai kyoryoku 1985 Nen, (Japan-China Economic Exchange, 1985), April 1986, pp. 98–101.Google Scholar Overheating in China's trade in the 1980s reflects the shortage of effective controls, and the structures as well as the level of trade may be criticized because of the large imports of such durable consumer goods as motor cars, televisions and video recorders.

⁹ Association for the Promotion of International Trade, Japan, Kokusai boeki (International Trade) (26 September-13 October). Fertilizer exports from Japan to China peaked in the early 1970s at 3.08 million tons, and the figure for 1988 was a mere 16,000 tons. In the 1960s and 1970s Japan's chemical industry depended on exports to China for more than half of the fertilizer produced and was thereby affected by political and economic fluctuations in China. From this we learned a lesson that excessive interdependence does not always mean a better relationship even in trade; dependence should be maintained at an appropriate level.

¹⁰ Ibid. Nichu keizai kyoryoku 1986 Nen (Japan-China Economic Exchange, 1986), April 1987, pp. 75–77. The Japan-China Trade Expansion Council is a private organization set up to expand trade, particularly Japan's imports from China. The Council has 11 sub-councils: planning, trade transactions, investment, agricultural and fishery, livestock, fibres, craftwork, chemical and petroleum products, metal and mining products, machinery, and light industrial products. Its main activities include regular meetings with the Chinese (once a year), supply of Japanese specialists to China, acceptance of trainees from China, managerial and technical supervision of factories in China, visits to factories in Japan, surveys of the Japanese markets, seminars, exhibitions and trade meetings.

¹¹ Maruyama, Nobuo, “Economic relationship between Japan and China” and “International environment around China,” Gendai Chugoku (China Today), Iwanami Shoten, Tokyo, Japan, Vol. 6 (February 1990), p. 78.Google Scholar

¹² Japan-China Association on Trade and Economy, Nichu keizai shiryo (Materials on Japan-China Economies) January-December, 1988. Of the private city bank loans in 1988, 67% were finance for projects concerned with plant and technology contracts. This shows the great significance of plant and technology contracts for the development of economic interdependence. These figures are calculated from the above-mentioned materials.

¹³ Ibid. Nichu keizai kyoryoku 1989 Nen (Japan-China Economic Exchange, 1989), and Almanac of China's Foreign Economic Relations and Trade 1989.

¹⁴ Nikkei sangyo shimbun (Nikkei Industry Newspaper), 25 October 1989.

¹⁵ Mr Maruyama notes in ibid., “The activation of trade and distribution between Japan and China, to be established by a mutual supplementing relationship of division of work in the manufacturing industry, can be created by full-scale Japanese industrial investment in China, which would lead to the resolution of the issue of trade imbalance between the two nations and thereby create a stable interdependence.” I fully agree with this opinion.

¹⁶ Kamo, Takehiko and Yamamoto, Yoshinobu and others, Sogo izon no riron to genjitsu (Theory and Reality of Interdependence), Yushinodo, Tokyo, Japan, February 1988.Google Scholar Professor Kamo states in his book that the phenomenon of “interdependence” should therein be denned in terms of political dynamics in which quantitative mutual relationships between nations develop into qualitative ones (e.g. creation of foreign orientated rules between nations). No one can yet forsee what qualitative developments the present interdependence between Japan and China could lead to in the future. Most favourably, the relationship should be developed to the best benefit of the two parties. This will require steady, step-by-step advance.

¹⁷ Suzuki, Haruo, “Hopes for stabilized politics and economy in China,” Nichu keizai kyokai kaiho (Gazette of the Japan-China Association on Economy and Trade), August-September 1989, pp. 2–5.Google Scholar In this article Mr Suzuki suggests that while China should give consideration to foreign nations, Japan should also take adequate action. He notes that, “China should give priority to stabilization of its politics and economy to reassure foreign countries. Meanwhile, Japan should show, in its attitude, that it cares for China's stabilization with the spirit of love.” Mr Suzuki now serves in the post of Honorable Chairman of Showa Denko K.K. and is active and influential both in Japan and abroad, serving as permanent director of the Japan-China Association on Economy and Trade and member of the Japan-China Friendship Committee for the 21 st Century, Ministry of Foreign Affairs. He is also a former member of the Comité de s. Reflexion sur l'Avenir des Relations Franco/Japonais, Ministry of Foreign Affairs; and Chairman of the Japan-Southern U.S. Association.