Transcript: Wang Huiyao at Roundtable Japan
March 18 , 2025On March 22, Chinese Foreign Minister Wang Yi will attend the 11th China-Japan-ROK Trilateral Foreign Ministers’ Meeting in Tokyo, Japan. During his visit, Wang and Japanese Minister for Foreign Affairs Takeshi Iwaya will co-chair the Sixth China-Japan High-Level Economic Dialogue. This would be the first by the Chinese minister handling foreign affairs to Japan in more than four years.
On March 18, 2025, Wang Huiyao, Founder & President of the Center for China and Globalization (CCG) was invited to a panel at the 20th Roundtable Japan in Tokyo.
The session, focused on the theme “Resetting the economic relationship with China despite the divide on security and geopolitical issues?” also convened
Aoyama Rumi, Professor Graduate School of Asia-Pacific Studies & Director Waseda Institute of Contemporary Chinese Studies, Waseda University
Hiroe Toshio, President, Member of the Board, Chief Executive Officer, SCREEN Holdings Co., Ltd.
Xiang Bing, Dean, Cheung Kong Graduate School of Business
The moderator of the panel discussion was Claude Smadja, President of Smadja & Smadja Strategic Advisory, Switzerland.
The following is an excerpt from the transcript featuring Wang Huiyao’s speech and Q&A session.
Claude Smadja, President, Smadja & Smadja Strategic Advisory, Switzerland
Our discussion is about how to respect the economic relationship between Japan and China, despite the divide between the two countries on security and geopolitical assumptions. It is quite clear that in the last period, we have seen a number of official meetings between the two foreign ministers and other senior officials, which have shown that there is the beginning of an easing in the political and diplomatic relationship between China and Japan.
However, we both realise that there are a number of very serious issues and disagreements, which are still very much acute. So, it is at this time, too difficult, if I may put it that way, to consider that we can have what I would call a full normalisation of a relationship between the two countries.
But at the same time, Japan and China have had for a very long time a very fruitful economic and business collaboration. The trade between the two countries last year was at about $288 billion. And each of the countries is one of the top three economic partners for the other countries. So, this dimension of the relationship cannot be ignored, and if it were to be ignored, it would be to the detriment of both countries.
At the same time, we have seen that for various reasons, whether political reasons or risk shaping of global supply chains, Japanese investment in China has declined by 60%.
So today, I think it would be important to address some key issues. For instance, how to insulate the business economic relationship from the disagreements and frictions which exist in the geopolitical and security domains. How do the shocks created by the Trump policies impact, or could impact the Japan-China relationship in the coming period?
What is the potential? Is there a potential for complementary collaboration between the two countries? And if so, in which form?
In the end, of course, we see that for various reasons, whether environment, efficiency, or the impact of COVID, there is this reshaping of the global supply chain, and how could this impact the relationship?
So, let me first turn to Dr. Wang. Dr. Wang, you are the Founder and the CEO of the Center for China and Globalization, which I think everybody considers as the most important, the most influential private think tank in China. It would be quite interesting to hear from you how it would be possible to continue to insulate or even insulate more the relationship in view of the geopolitical context.
Wang Huiyao, Founder & President of CCG
Thank you, Claude, and thank the organisers for inviting me. It’s really a great occasion to attend the 20th Roundtable Japan. I think the topic we are having today is quite relevant, and I was very stimulated by the discussion this morning.
But about the changes we’re facing right now — they really are, in the words of the Chinese, “changes unseen in a century.” Somehow, they are now affected by major geopolitical factors and uncertainty.
I think certainly, probably, we can do our best — we certainly can, absolutely. What I think is that you know, China and Japan are neighbours. We cannot relocate each other. That’s a fact. We’ll stay here forever, neighbours for thousands of years. That’s a fact.
Second, I think that China and Japan, even though we face many difficulties, still share significant trade and investment opportunities. For example, Japan is currently China’s second-largest trading partner, second-largest export destination, and third-largest source of imports. Conversely, China is Japan’s largest trading partner and source of imports, as well as its second-largest export market.
Japan has done many good things in China, as I remember well in the ’80s and ‘90s. Actually, Japan established 58,000 enterprises in China, with a cumulative direct investment totalling 131 billion USD, making it perhaps the third-largest investor in China.
Chinese investment in Japan has also been growing significantly. We see many Chinese people here. So, that’s an economic issue.
On the people-to-people exchange front, I noticed that more Chinese are now coming to Japan. There are large tourist groups visiting Japan, and that’s amazing. Additionally, China has unilaterally provided Japanese citizens with a free one-month travel visa to China. As a result, you can see that traffic is heavy. I came from Shanghai last night; it’s just a two-and-a-half-hour flight. It’s so close, and the plane was full—it was loaded.
So I think there’s enormous opportunity for China and Japan because of the close neighbourhood status and the economic linkage we share. Sometimes we talk about diversifying the supply chain, but the supply chain here is so convenient, effective, cheap, and productive. It would be really difficult to replicate that elsewhere. So, it’s really important to maintain that. That’s the first point.
Second, I think we should ensure the integrity and security of the supply chain. That’s why the supply chain has been so productive. We should continue to invest in each other, but also prioritise the security of the supply chain, and go beyond that. It doesn’t really make sense to double efforts or expenses doing it elsewhere if we can do so effectively together.
As many people know, China has one of the most efficient supply chains in the world. For example, out of the 10 largest container ports, seven are in China. China also has 70% of the world’s high-speed railway, and 4.5 million 5G stations, whereas Europe doesn’t have 400,000. As you can see, all this infrastructure is superb. Every year, China produces about 13 million college graduates, half of whom are in engineering and science-related fields. Moreover, China contributes about 40-50% of global AI talent, with at least 30% of AI talent based in the United States. So, I believe there’s great potential in this.
Thirdly, I think we should really manage regional economic cooperation. For example, both China and Japan are members of the RCEP, which is the largest free trade agreement in the world. Given this, with the rising trend of anti-free trade and increasing tariffs, China is taking the opposite approach. China wants to join free trade agreements. China wants to join the CPTPP, which is led by Japan and Australia, and now the UK is also part of it. So, we should do more to boost regional collaboration and expand trade. ASEAN is a good example of this. We could really strengthen the CPTPP and potentially build on the Digital Economy Partnership Agreement launched by Singapore, New Zealand, and several others. We could use that as a bedrock to help stabilise the economy.
Furthermore, I think, as you mentioned, the Foreign Ministers of Japan and China have met, and we could really continue this. The China-Japan-South Korea summit should continue, and the trilateral free trade agreement should be strengthened. That would be very helpful.
We share many similarities in many ways, especially in key sectors. For example, China is eager to learn from Japan. You have an ageing society; China is ageing too, with about 300 million people over the age of 60. So, China is welcome to learn from Japan’s experience in many areas. This kind of collaboration could be very beneficial in helping each other.
Finally, I would like to say that every time I come to Japan, I find it very, very friendly and welcoming. You see the country, and you recognise many familiar places. I think the culture, Confucianism and Buddhism, is something we share — all those good things. In the end, I believe the world will be truly drawn to our cultures. We all use chopsticks, and so on. It’s quite interesting, and we should continue this connection.
Also, I think we should start talking about the integration of Asia, including ASEAN and the CPTPP. We often discuss the idea of an Asian Union, right? I see that President Trump’s influence has spread so widely, across many countries. He has even discussed the possibility of bringing Canada, the US, and Greenland together. I had a Danish Foreign Minister visit my office a week ago, and he mentioned that during Mike Pompeo’s time, when he was his counterpart, there was already talk about incorporating Greenland into the US. And of course, Mexico is also involved, so they have consolidated their efforts. There could be an American Union in the future. As we see countries coming together, why can’t we Asians do the same? We could become more integrated, creating a “Romance of the Three Continents” in the future with a more trilateral structure.
So, I think there’s a lot we can do together. Japan and China are two key players in the Asian region, and we should really collaborate. Of course, South Korea and many others, including ASEAN, also have a significant role. There are many things we can try to contribute to a greater cause. Over the next 20 years, Asia will be the booming region, leading the global economy. So, I’m cautiously optimistic.
I think what Trump is doing now is less ideological and more business-oriented. So, let’s focus on that — let’s do business together and create prosperity. That would be my comment. Thank you.
Audience
I would question the idea that capitalism and unencumbered free markets are completely interchangeable. In fact, last year’s Nobel Prize-winning economist, Daron Acemoglu, argued that, yes, protection of capital is important, but in order to have long-term sustainable growth, you have to have successful institutions, which include, yes, state centralisation of some description, pluralism, and also rule of law, which ensures the protection of capital. Do we think that there’s a future for China with this type of more robust institution that can give rise to long-term sustainable growth?
Wang Huiyao
China has a system that has been in place for thousands of years: meritocracy. For example, this year, 15 million high school students took the college entrance exam, and 13 million of them were admitted to universities. This is how elites are selected. Additionally, 3 million people apply for 200,000 jobs through a competitive examination process. Again, this has been practised for thousands of years. So, that system is in place. For government officials, promotions are based on performance, from county level to cities and up to the central government. This is also important. This system is how China is making progress.
So, I think that while China has the stability of a one-party system, there are also many elements of democracy, such as governance by meritocracy, consultative democracy, and the use of big data technology. These days, there are many ways to make checks and balances. The government has to respond quickly and act efficiently while maintaining stability. It’s not about changing prime ministers frequently or having governments based at the local level. I believe China has been able to avoid this kind of inefficiency and achieve significant progress.
Claude Smadja
Let me, let me address an issue that we have not discussed. In fact, would you agree that one of the issues, which is, in a way, hampering the China-Japan relationship, is what you might call the trust deficit? And if we recognise that this is one of the big problems in your relationship, how can you address it? I would like each of you to give your opinion about that. Dr. Wang , do you want to start?
Wang Huiyao
Thank you. I think this is exactly the problem, and I think there are several ways to address it. First, I truly think we need to strengthen people-to-people exchanges because what we hear from the media or see in videos is often very different from the reality when you actually visit China or come to Japan. I believe this would be really important. So, I think the government’s decision to grant visa-free access for Japanese citizens to visit China is a very positive step.
Second, we need to increase young people’s exchanges because they are the future. We could encourage more young people to come to Japan, and more young Japanese people to visit China. I remember when China and Japan first established diplomatic ties, we invited 3,000 Japanese to Tiananmen Square. That cultivated a great start for Sino-Japanese relations.
Thirdly, I think Japan, and to some extent, other countries, should not be overly affected by the U.S. unilaterally pulling out of international organizations, such as the Paris Agreement, the WHO, the Human Rights Council, and many others. We should really work together to save these institutions. Even with the WTO, let’s collaborate. I had the President of the Peterson Institute on my panel at the WTO Public Forum, and he said “WTO minus one,” and that we should not wait for the USA to continue reforming the WTO. Pascal Lamy said that too. So, China and Japan could quickly work together.
Finally, one of the best things we can do is really focus on making the CPTPP work. China is very interested in joining the CPTPP, and my think tank has been advocating for this for many years. If China joins, it will operate in an environment with strong intellectual property rights, data flow regulations, and many other shared standards. This would create a similar foundation for cooperation. There are many opportunities here.
And of course, culture. Culture is very important, too. When relations are tense, it’s easy to overlook the idea of having a “year of culture” or a “year of tourism” between China and Japan, but many things can be done. We are so close, we are neighbours, and now economically intertwined. If we work together, we could form the largest economy in the world. Why not?Let’s set aside ideological differences because that’s really how the narrative goes—autocracy versus democracy. I don’t think Trump will continue to push that narrative. What really matters is substance and performance. And let’s also return to the culture and Confucian values, which could truly bring us all together.
Audience
One thing I’d like to stress is that human relations, as Professor Xiang mentioned, has a strong business foundation. But at the same time, everything related to business sentiment is now affected by the National Security Law that has been imposed. It is quite a huge mental concern. For example, many now cannot bring their laptops when doing business because they are worried about the security of information, as well as their own personal security. So, I really hope the Chinese government will consider this issue very seriously.
Claude Smadja
And this is a comment that I have heard also from other business leaders from other countries, to be honest.
Wang Huiyao
Well, maybe I could add that there’s a reinforcement of these actions. In the past, many Chinese who went to the U.S. were often questioned in small rooms, sometimes even sent back. Of course, their phones and laptops were checked and sometimes taken away. And, in response, China probably took similar actions. This kind of situation is really not good. I’ve heard that President Xi will visit President Trump, possibly in June, and I hope things will improve after that. I think that’s the logic, right?
Many people have asked, “Okay, China’s navy was near Australia and New Zealand for a time.” But historically, Australia’s navy has been near China, along with the Philippine and U.S. navies, many times. So, we see this kind of retaliation or tit-for-tat behaviour. However, I think China is still much less comparable to the U.S. in this regard.
I hope that, through better exchanges, the relationship will improve and these issues will be resolved. Because these are just symptoms. The root cause is the containment of USA on China. There is a lack of good relations between USA and China, as well as between West and China. We, too, are victims of this bad relationship.
