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Sino-Japan political strains are dampening bilateral trade, Minister of Commerce Bo Xilai has warned, citing Japanese leaders' repeated visits to the Yasukuni Shrine, a symbol of Japan's past militarism.

 

Such visits remain the biggest obstacle to the development of China-Japan relations, Bo said in an interview with Japanese media during his visit to the country to take part in a Japan-China forum on energy-saving from May 27-29.

 

Xinhua released details of the interview on Friday.

 

Paying homage to the Yasukuni Shrine, which honors convicted Japanese war criminals, has hurt the feelings of the Chinese people and damaged the political foundations for bilateral ties, Bo said.

 

Japan's aggression towards China back in the 1930s and 1940s led to more than 21 million deaths, he noted.

 

Japanese Prime Minister Junichiro Koizumi has visited the shrine each year since he took office in 2001.

 

Trade between China and Japan is still growing but there has been a slowdown in the growth rate.

 

Bo said Japan had a convincing lead in terms of both China-bound investment and trade in the 1980s and 1990s, but the European Union and the United States overtook it in 2004 to be China's top trading partners.

 

Bilateral trade grew by only 9.9 per cent in 2005, much slower than China-EU and China-US trade.

 

China-Japan trade accounted for 20 per cent of China's total overseas trade in 1994, but the figure dropped to 13 per cent last year. In 2004, South Korea surpassed Japan in terms of investment in China.

 

There are winners and losers on battlefields, but in the business world, more often than not, no one will emerge as the winner in trade terms, Bo noted.

 

However, he was optimistic about the prospects of trade improving once the obstacle in bilateral ties is eliminated.

 

China and Japan should draw up a plan and comprehensively strengthen their co-operation in trade and economy, he said.

 

He said Japanese companies had outstanding advantages in energy-saving and environmental protection, and China's development needs assistance in those fields.

 

With Japanese technology and experience coupled with China's vast market, the two countries can co-operate well in the two fields, Bo said.

 

If the two great countries were to co-operate better, their economic development would surely achieve synergies, he said.

 

In order to promote trade and economic relations between China and Japan, both sides should take steps to create a favorable political environment for bilateral trade and better conditions for the steady increase of investment.

 

When China and Japan established diplomatic relations in 1972, bilateral trade was only US$1.1 billion, but last year the figure climbed to US$184.4 billion, he said.

 

The statistics showed that the two economies are complementary to each other and their development is mutually beneficial.

 

(China Daily June 3, 2006)