March 24, 1984
Cable from Ambassador Katori to the Foreign Minister, 'Prime Minister Visit to China (Summit Meeting – Economic Cooperation, Economic Exchange)'
This document was made possible with support from MacArthur Foundation
Primary: Asia and China
Sent: China 04:10 Year Month 24
Received: MOFA 05:34 1984 March 24
To: The Foreign Minister From: Ambassador Katori
Prime Minster Visit to China (Summit Meeting – economic cooperation, economic exchange)
Number 1324 Secret Top Urgent Q36RA
Wire 1322, Separate Wire 2
Prime Minister Nakasone:
Economic cooperation with China is a fundamental to our country, and so we would like to continue with economic cooperation. Regarding cooperation from 1984, if you find it suitable, we would like to provide approximately 470 billion yen in loans for 7 projects over 7 years. Specific amounts will be decided through yearly consultation. We hope to reach the goal of 470 billion yen loans in 7 years. We are in a financially difficult situation, but this amount is the best we could muster.
(Free Financial Aid)
The China-Japan Friendship Hospital will be finished this year. Regarding cooperation in fiscal 1984, there is an investigation in progress for a post and telecommunications center in Beijing and an integrated meat products center. We would like to add technological cooperation to these projects.
We want to continue strengthening technological cooperation conducted by our retired engineers.
I understand that eager discussions are being conducted between interested parties. We would like to cooperate with the promotion of Japan-China economic relations as much as possible. Regarding specific cases, we hope for discussions so that both sides can be satisfied with the results.
In order to develop economic relations between our countries, it is necessary to resolve issues regarding patents. We hope that China will join the Treaty of Paris and make reforms regarding patents.
(Nuclear Energy Cooperation)
We are glad that we were able to reach a mutual agreement regarding the export of machinery for the Qinshan nuclear power plant. We want to proactively pursue discussions to conclude agreements for nuclear power cooperation.
We want to conclude a bilateral investment treaty as soon as possible. Inter-governmental relations are important for economic cooperation, but private sector cooperation is also important. Therefore, it is desirable to develop joint ventures with Japan. We are uneasy with, among other things, China’s process for cost accounting, treatment of profit, and remittances. Regarding these, we hope for either our governments or the private sector to pursue discussions to resolve the matter.
Again, I express my gratitude to Prime Minister Nakasone for his idea to provide 470 billion yen in government loans for 7 projects over 7 years. I hold in high regard Japanese Government’s decision, despite its difficult financial circumstances, to conduct assistance projects for the 4 Modernizations. The 7 projects, all infrastructural projects, will proactively contribute to the 4 Modernizations, as well as to the development of friendly relations between China and Japan.
(Free Financial Aid)
We are very grateful for the free financial aid for the postal and telecommunications center in Beijing and the integrated meat products center. I want to delegate specific matters to be decided through consideration between our respective involved offices.
Furthermore, regarding the China-Japan Friendship Hospital that is being built with free financial aid provided from former Prime Minister Ohira [Masayoshi's] 1979 visit, I visited the site with Hu Qili the day before last and saw that construction is progressing and will be completed as planned.
We are also thankful for technological cooperation through Japanese retirees (Silver Volunteers). I hope for specific issues to be mutually discussed by our respective offices.
(Export Import Loan)
Regarding export-import loans, I want to express my thanks and high regard for Japan’s intention to cooperate as much as possible. The progress of projects using the first round of export-import loans is steady. $500 million has been used for petroleum development in the Bohai Bay, and the remaining $1.5 billion will be used by the end of the current year. Cooperation in energy development is mutually beneficial and a concrete representation of complementary relations. China and Japan ought to examine this issue over the long-term.
(Science and Technology Cooperation, Patent)
Compared to other fields, this field is comparatively weak. Therefore, we hope for mutual effort to attain significant results. The other day, the National People’s Congress discussed a patent law that is slated to come into effect next April. In regards to this, I believe this law will be useful to dispel Japanese corporation’s uneasiness about conducting technological cooperation with China.
(Nuclear Energy Cooperation)
Regarding our countries’ cooperation in the peaceful use of nuclear energy, our respective offices have settled many issues, but there are areas that are still unresolved. We hope that we can mutually strive to resolve these issues. Regarding cooperation in this field, I hope that we can reflect the level of our bilateral relations and not fall behind other countries.
Joint ventures are an important issue in economic and technological cooperation between our two countries. The field of joint ventures has only begun recently, and so I am greatly in favor of expanding this field. According to certain statistics, Japanese investments in China represent only 6% of total foreign investment in China, however, Japan-China trade is the largest of China’s bilateral trade relations. We are putting in much effort to dispel Japanese entrepreneurs’ uneasiness regarding investments and joint ventures in China by establishing measures, such as joint venture laws and patent laws. We hope that the Japanese Government will also support joint ventures.
I would like to touch on two topics regarding joint ventures.
(i) First, we are preparing to provide preferential treatment to some joint ventures in the coastal region. We plan for this policy to be in the form of a special economic zone that resembles the Shenzhen special economic zone. We are planning on applying such a policy in Dalian, and we welcome Japanese entrepreneurs to begin operating joint ventures or independent projects. We believe that by providing preferential treatment, Japanese entrepreneur’s uneasiness may be decreased.
(ii) Second, we welcome Japanese entrepreneurs to participate in energy and resources joint ventures in the southwest and northwest regions. We would like to cooperate with Japanese entrepreneurs to develop non-ferrous metals and rare metals. The format may be a joint venture or compensation trade (that is a system to export products to Japan). We believe that Japan requires non-ferrous metals and rare metals.
We would like to speedily conclude a bilateral investment treaty through the efforts of our respective offices in order to promote Japanese entrepreneurs’ joint ventures and investments in China. Furthermore, I will bear in mind Prime Minister Nakasone’s opinion regarding China’s participation in the WIPO. I would like to forward this to the related agencies. (End)
Zhao Ziyang and Nakasone Yasuhiro review the current state of Sino-Japanese economic relations, including loans, financial aid, and scientific and technological cooperation.
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