Should Japanese ODA to China be DOA?

5. The Government of the People’s Republic of China declares that in the interest of the friendship between the Chinese and the Japanese peoples, it renounces its demand for war reparation from Japan.

6. The Government of Japan and the Government of the People’s Republic of China agree to establish relations of perpetual peace and friendship between the two countries on the basis of the principles of mutual respect for sovereignty and territorial integrity, mutual non-aggression, non-interference in each other’s internal affairs, equality and mutual benefit and peaceful co-existence.

- Joint Communiqué of the Government of Japan and the Government of the People’s Republic of China, 29 September 1972

THAT JAPAN has more than faithfully upheld its part of the bargain outlined in the joint communiqué in the 38 years since its signing is beyond question. That Chinese leadership has never taken the agreement very seriously requires no explanation. The Chinese approach was apparent even before the fallout from the Senkakus Incident. Jiang Zemin, former General Secretary of the Chinese Communist Party and President of the People’s Republic of China, delivered a speech in 1998 while still in office to members of China’s diplomatic corps, in which he stated, “We should always emphasize the historical problems with Japan. We must continue to make this an issue for eternity.” The quotation came to light when it was included in a collection of Jiang’s writings published about five years ago.

In November that same year, Mr. Jiang became the first Chinese president to visit Japan. He left an unpleasant impression on the hosts. Observed freelance journalist Nonaka Tomoyo:

(D)uring his 1997 visit to the United States, President Jiang made a reference to “fascism in Asia,” criticizing a third country, one that was not even a party to the meetings. What the Chinese seem to be saying in effect is, “Japan is no strategic partner for us. The countries that move the world are China, the United States, and Russia. For Japan to try to exercise leadership in Asia is presumptuous.” Not only that, but in the talks with Japan I have the impression that there was more of a focus on the past than on working together to open up the twenty-first century, that the Chinese made highly annoying comments and took a stubborn attitude.

Japan paid substantial war reparations to all the countries on which it inflicted damage during the Second World War with two exceptions: North Korea, for obvious reasons, and China, for the reason shown in the excerpt from the communiqué. (They even paid The Netherlands reparations for Indonesia.) Nevertheless, Japan has provided roughly JPY 3.3 trillion in official ODA to China since 1978, which has been considered to be de facto reparations.

Most of the official ODA was supposed to have ended in 2008, but freelance journalist Aoki Naoto claims that Japanese tax yen are still flowing to China. An author or co-author of several books about Japanese-Sino relations, Mr. Aoki wrote a brief article for the 19 November issue of the weekly Shukan Post titled, End the JPY 910 Billion in Hidden ODA to China Now. Here it is in English.

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Most Japanese are probably unaware that Japan still continues to provide ODA to China, whose GDP has surpassed that of Japan and which has become an economic superpower.

On the surface, ODA was supposed to have ended to China after 2008 with the complaints from the Japanese public. But large amounts of hidden ODA still continue to flow to China in secret. The source of this money is, of course, our tax payments.

What ended in 2008 were the yen-denominated loans, which accounted for 90% of the amount. The remainder is gratis financial aid and financial support that continues today. In addition, each government ministry has categories in its budget designated as “Exchange with China” (交流), so they have acquired the funds to provide economic support. The aggregate amount provided to China in the three years from FY 2008 through FY 2010 was more than JPY 10 billion.

An even greater sum is the financial aid conveyed through the World Bank and the Asia Development Bank. The financial assistance provided by the World Bank to China in that three-year period was JPY 421.6 billion yen.

Japan has the world’s second-highest rate of contribution to the World Bank, so our country was liable for a substantial amount of that aid. Also, Japan is the largest contributor to the Asia Development Bank, from which China received JPY 480 billion in the same period. The person appointed as president of the ADB is customarily someone whose career began in the Japanese Ministry of Finance. As one MOF official put it, the ADB is a “Finance Ministry colony”. It is through these institutions that Japanese financial assistance flows.

Fifty-five percent of the financing provided by the ADB is used for roads, railroads, and airports. The People’s Liberation Army is given priority for the use of this infrastructure. Japan was supposed to have ended its ODA for transportation infrastructure to China in 2002 due to the expansion of China’s military and nuclear testing. But this is in fact still being provided through the ADB. That means there is no coherency to Japanese foreign policy.

Japan’s hidden ODA to China totals about JPY 910 billion. That is the amount of money they are sending to China without telling the people. It is also a sad fact that the Chinese people have no idea that they are receiving this aid.

The hidden ODA to China should be ended at once.

(end translation)
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Mr. Aoki seems to have a taste for the bludgeon; you’ve noticed that though he admits Japan is not on the hook for the full amount provided by the World Bank or Asia Development bank, he uses those figures to come up with the JPY 910 billion number. Nevertheless, Japan’s financial contributions are surely substantial.

Then again, he’s rather upset about the issue. He also has a website, and there he recently wrote about the response to his Shukan Post article, both positive and negative. Here’s a summary:

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Mr. Aoki reports that he has received rebuttals to his article from people who think Japanese aid should continue. He says the rationalizations for their position can be generally classified in four categories:

*Of course there should be financial assistance because Japan did not pay reparations.

*China pays the loans back and Japan is making a profit.

*Measures to combat the yellow sandstorms benefit Japan (which is affected by them), so we should continue the aid.

*Japanese companies are getting the business the aid generates.

Mr. Aoki has little patience for these arguments. He says that he’s used to hearing them (and dealing with them) in regard to a book he co-authored about his claim that Japan has given China a total of roughly JPY 6 trillion in hidden ODA.

He reports that when the yen-denominated loans which accounted for 90% of ODA ended in 2008, the Japanese Foreign Ministry asked the Chinese government for an accounting of how the 30 years of Japanese financial aid had been used, but got the brush-off. They don’t even tell the Chinese people that Japan gives them aid. “That,” he says, “is the true face of Japanese-Sino Friendship”.

The Japan Bank for International Cooperation spent public funds to pay for a notice in the Beijing Airport that the facility was built with the help of Japanese ODA. Japan contributed JPY 30 billion yen, or 1/4 of the total expenditure.

Mr. Aoki says it is standard practice for other countries to acknowledge on their own the foreign aid received for construction projects, and adds that Cambodia, Myanmar, and Indonesia have done so for Japanese ODA.

But China authorized the paid notice for only one year and denied an extension. They told Japan to take it down because it prevented them from making a profit from corporate advertising.

I would be happy to buy Mr. Aoki a drink for his next passage alone. He writes that Japan paid for the notice with public funds despite its large fiscal deficit, and now politicians want to raise the consumption tax to 10%. It is not a partisan issue for him; he writes that this occurred during the LDP administration. He is livid that no one in the Japanese mainstream media discusses the issue at all. He quotes a conversation with the former Yomiuri Shimbun bureau chief in Beijing:

“Reporting the actual circumstances would be a negative for Japanese-Sino relations, delight the anti-Chinese elements, and spur Japanese nationalism.”

This, he notes, was precisely the excuse the government gave for not releasing the videos of the Senkakus Incident. He also notes that the same media often wrote about “the unhealthy relationship between Japanese aid and dictatorial governments in South Korea, The Philippines, and Indonesia, yet they never talk about China.” He thinks this is deceitful.

If Japan really has freedom of speech, demands Mr. Aoki, then write the truth. He believes the self-censorship of the Japanese mass media is more of a criminal act than the suppression of free speech in a dictatorship.

He says that he has written extensively on the system of vested interests of the “Japanese-Sino friendship”, which accrue to politicians, business and the financial industry, bureaucracy, and the media, and that this is contrary to the national interest. The ODA to China, he claims, is only one example.

He concludes:

“The “journalists” who do not write the truth are eunuchs. Their articles lack realism and courage. They are restroom graffiti.”

The Japanese expression for mass media is masu komi, an abbreviation for “mass communications”. Employing the Japanese flair for wicked wordplay, some have taken to using the phrase masu gomi. The word gomi means garbage.

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Afterwords:

* Here’s another demonstration of the Chinese commitment to “mutual benefit and peaceful co-existence”: They can’t give Japan credit for its financial assistance, but they’ve had no trouble finding the money since the communiqué was issued to build more than 100 museums throughout the country dedicated to Japanese behavior during the Second World War.

In fact, they are also working to get UNESCO to declare the remains of Imperial Japan’s 731 chemical warfare testing facility in Harbin a World Heritage Site. The UN turned them down, but the Chinese say they will try again. Perhaps that is another aspect of “Japan-Sino Friendship”.

* In bilateral negotiations with Japan, it had been the trump card for both South Korea and China to bring up Japanese wartime behavior as a way to get what they wanted. It usually worked–until Koizumi Jun’ichiro took office. He told both countries privately that those days were over. Note in Mr. Aoki’s article that Japan officially ended ODA for transportation infrastructure in 2002 (Mr. Koizumi’s second year in office) because of the Chinese military buildup and nuclear testing.

And here you thought the reason China and South Korea were upset with Mr. Koizumi was his visits to the Yasukuni shrine.

* The current president of the Asia Development Bank is indeed a veteran of the Ministry of Finance: Kuroda Haruhiko. Here is his profile on the ADB website. Here is an article he co-wrote for The Guardian in Britain with Lord Nicholas Stern—the former Chief Economist and Senior Vice-President of the World Bank—urging that developed nations immediately give ‘lebenty billion dollars to Southeast Asian countries because climate change was going to make them disappear from the face of the earth any day now. Here’s a look at Lord Stern’s background on climate change claims.

And the credentialed elites of government and the media wonder why people are angry?

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It’s time for some fresh air from the East Wind, courtesy of the students at Waseda University.

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