VZCZCXRO4610
RR RUEHAG RUEHDF RUEHIK RUEHLZ
DE RUEHTC #0577 0790819
ZNR UUUUU ZZH
R 200819Z MAR 06
FM AMEMBASSY THE HAGUE
TO RUEHC/SECSTATE WASHDC 5117
INFO RUEHKO/AMEMBASSY TOKYO 1688
RUEHBJ/AMEMBASSY BEIJING 1917
RUEHMO/AMEMBASSY MOSCOW 1643
RUEHUL/AMEMBASSY SEOUL 1315
RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS THE HAGUE 000577 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL CH KN KS RS NL
SUBJ: OKAMOTO DESCRIBES DETERIORATING JAPAN-CHINA RELATIONS 
 
 
¶1. Summary: Yukio Okamoto, former foreign policy advisor to 
Prime Ministers Koizumi and Hashimoto, spoke in Amsterdam 
March 14 on Japan-China relations.  The talk, co-sponsored 
by the Japanese Embassy and the Japanese Chamber of Commerce 
and Industry in Amsterdam, drew several hundred Asian and 
European businessmen, diplomats and academics.  Okamoto 
painted a frightening picture of the chill in Japanese 
relations with China, as well as with Russia and the two 
Koreas.  End summary. 
 
¶2. He focused on China's quest for resources, its 
unsustainable economic development model, its military 
growth, and its increasingly aggressive diplomatic posture. 
He underlined the need for both China and Japan to address 
honestly the issue of past Japanese aggression.  Finally, he 
noted that Japanese companies had begun diverting investment 
from China to more hospitable countries, such as Vietnam. 
 
¶3. Answering a senior Dutch diplomat's assertion that he 
ignored the many positive aspects of the Japan-China 
relationship, Okamoto said, "I'll be frank.  We've been 
playing with superficial rhetoric of Japan-China friendship 
(since 1972 normalization), only to see that the 
relationship has (this whole time) been eroding."  He 
expected relations to continue to deteriorate for some 
years, even if the Japanese and Chinese governments took the 
very difficult steps necessary to improve them. 
 
¶4. Regarding natural resources, he said, "China's quest for 
world resources is almost insatiable."  "In Africa," he 
continued, "China's willingness to bear up with instability 
and corruption is resulting in a lockout of Japanese 
purchases."  By contrast, Japan's policies on nuclear 
proliferation posed a real risk that supplies from Iran 
would become more difficult to acquire. 
 
¶5. Okamoto dismissed claims that India posed an economic 
threat, noting that India has safety valves and has not 
embraced mercantilist policies.  "This is not the case with 
China," he noted.  "China is," he said, "seeking ... a 
suspension of the laws of scarcity."  Moreover, "the 
(Chinese) system is not diffusing the benefits" of economic 
growth to the interior "and is not creating an environment 
for sustainable investment led growth." 
 
¶6. "But the ultimate threat from China," said Okamoto, "is 
its military growth."  He pointed to Japan's deteriorating 
relations with all of its continental neighbors (PRC, ROK, 
DPRK, and Russia) and said that Japan must prevent a rift 
between continental and maritime Asia.  China's increasingly 
aggressive diplomatic posture, though, made this task 
difficult.  Its active lobbying against Japan's UNSC seat 
bid, as well as last year's anti-Japanese riots, had been a 
wake up call in Japan. 
 
Arnall