Recent Developments in Sino-Japanese Trade

Abstract

Trade between Japan and the People's Republic of China commenced in 1950, though commercial relations fluctuated greatly for a decade thereafter, reflecting the instability of political relations between the two countries. As China's relationship with the Soviet Union, a major trading partner, deteriorated in the late 1950's, Chinese planners began to increase trade with noncommunist nations. This led to the advent of the friendly trade' between Japan and China in 1960, which was formalized by Liao and Takasaki in a Memorandum in late 1962. That Memorandum initiated a period of stable expansion of Sino-Japanese trade, which has been interrupted only once-by the 1966 Cultural Revolution. Since the end of the Cultural Revolution, trade between the two countries has increased steadily. In 1972, the total amount of Sino-Japanese trade reached a record high of $1.1 billion2 including both imports and exports, an increase of 22 per cent over 1971. China imported Japanese goods worth $608,921,000, an increase of 5.3 per cent over the preceding year, while Japanese imports from China totaled $491,116,000, an increase of 52 per cent. The excess of Japanese exports over imports, which has existed since 1965, has gradually decreased from a high of $315 million in 1970, to $255 million in 1971, and to $118 million in 1972. In spite of its expansion, Sino-Japanese trade comprised only 2.1 per cent of Japan's total foreign trade for 1972. Japan's trade with other countries has expanded even more rapidly than its trade with China. 3 The Sino-Japanese trade in the first half of 1973 again increased significantly following the resumption of diplomatic relations between Japan and the People's