Beijing welcomed the new Fukuda government and Japan’s new prime minister made clear his commitment to improving Japan’s relations with its Asian neighbors and building the strategic relationship with China. However, the new government in Tokyo soon became preoccupied with the passage of a new antiterrorism special measures law to reauthorize Japan’s refueling operations in support of UN operations in Afghanistan, Defense Ministry scandals, and the continuing pension fund imbroglio.
Despite repeated commitments by political leadership in Tokyo and Beijing to joint development of the oil and natural gas resources in the East China Sea, there is no tangible resolution of the issue in sight. At the end of the year, joint development remained an aspiration. Even as the prime minister prepared for his late December visit to China, government and diplomatic sources were downplaying expectations that the visit would produce agreement on the issue. Meanwhile, as underscored by the first meeting of the Japan-China High Level Economic Dialogue, economic and business ties continued to strengthen the foundation of the bilateral relationship.
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