China and Japan begin talks on building alliance By Julian Ryall in Tokyo and Malcolm Moore in Shanghai Published: 5:00AM BST 05 Oct 2009 Tokyo and Beijing are discussing plans to create an "East Asian Community," similar to the European Union, that would improve economic and political relationships in the region. Eventually, East Asia might even have its own common currency. The rapid pace of the apparent détente – since the election of the Democratic Party of Japan on August 30 – has come as a surprise given the generations of ill-will that has grown between the two nations. Efforts by the new Japanese prime minister, Yukio Hatoyama, to build new relationships with Japan's Asian neighbours – frequently strained by previous right-wing governments – is being seen as another sign that the administration is turning its back on Washington, Tokyo's staunchest ally since the end of World War II. The implications of an East Asian economic alliance for the rest of the world would be far-reaching. Japan is currently the second-largest economy in the world and China is in third place – although those two positions are expected to reverse in the next few years. Robert Dujarric, director of the Institute of Contemporary Studies at Temple University, Japan, said: "I think Japan is looking for a way to improve the atmosphere with China, show Japanese leadership and co-operation, as well as improve economic ties and resolve pending territorial issues." But Dujarric believes there are benefits that the West could reap from a closer relationship between Japan and the rest of Asia. "The US supports the 'stakeholder' theory, that China has to be given a stake in the world order, and this would help," he said. Tension between the nations dates back to 1894 when Japan invaded China and defeated the nation's military within nine months. In 1937, the Japanese emperor's army returned and initially swept all before it, capturing Shanghai, Beijing and Nanjing, where an estimated 300,000 Chinese civilians were slaughtered by Japanese troops. Some in Japan continue to deny the event ever happened, which has done nothing to build bridges between the two nations. In China, public resentment over Japan's colonial rule has proved a major obstacle to improved Sino-Japanese relations. A poll by the People's Daily newspaper suggested two thirds of people were in favour of further Asian integration but there is a sense the Communist leadership in China will not risk the wrath of the people by jumping into a hasty arrangement with Japan. Yang Jiechi, the foreign minister, said: "China will continue its receptive attitude on East Asian co-operation with relevant sides. China was among the first batch of countries to advocate and support the construction of an East Asian community and has actively engaged in East Asian co-operation and its integration process." The Chinese media has observed that it was the Japanese who wanted to revive the process, probably as part of a strategy to gain more influence in East Asia. Zhou Yongsheng, a professor of Japanese studies at China Foreign Affairs University, said: "Japan was not interested in the plan at first, but after the global financial crisis it realised that the impetus of its economy lies with China and some newly emerging countries in the region." There is also Chinese resistance to the idea of a wider coalition, possibly involving its other traditional rival India. Lu Yaodong, the vice-director of Foreign Affairs at the Japanese Research Institute at the Chinese Academy of Social Science told the 21st Century Business Herald newspaper: "The proposal of the East Asia union by the Japanese indicates that Japan establish a leading status in East Asia." Mr Hatoyama is believed to have put the proposal to Chinese President Hu Jintao at their first meeting, in New York on September 21, just days after taking office. The issue again came up when Foreign Minister Katsuya Okada met his Chinese counterpart, Yang Jiechi, in Shanghai last week, and will be on the agenda when the leaders of Japan, China and South Korea meet in Beijing on October 10.