China ‘can look to Japan for lessons in its trade war’ with the United States

10/30/2018

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Keegan Elmer, Wendy Wu | South China Morning Post

Japan’s handling of trade conflicts with the United States in the 1980s offers lessons for China, which needs to be more transparent to address the complaints of the US and other trading partners, according to a Japanese official who was involved in trade talks more than three decades ago.

In a seminar in Beijing on Friday to mark the 40th anniversary of China’s reform and opening up, Yoshiki Takeuchi, director general of the International Bureau at Japan’s Ministry of Finance, also said China should continue to liberalise its markets and carefully manage risks.

Washington and Beijing have been locked in a trade war since the summer, with signs that the conflict will escalate further. The US has signalled that it could extend trade tariffs to all Chinese products and has already tightened investment scrutiny, making it harder for Chinese investors to acquire US companies, especially in hi-tech sectors.

Diplomatic observers and economists have suggested that Beijing should learn from Tokyo, noting that US Trade Representative Robert Lighthizer was a key player in the talks at the time.

“In the 1980s, we had a difficulty with the United States, as China now faces,” Takeuchi said, who joined the ministry in 1983 and played a role in the negotiations.

“The Japanese trade surplus with the United States expanded very much … [that] invited criticism from the US that the cause of such surplus was the level of the Japanese yen exchange rate, and [the] depreciation of the Japanese yen was the product of the closed nature of the Japanese financial markets.”

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