12.    CHINA/JAPAN/US

12.1   Relations between China, Japan and the US are a major determinant of the strategic framework of the Asia-Pacific region, and thus of New Zealand's strategic environment. While China does not share a common security outlook with the US and Japan the three countries are linked in many different ways.

• The US/Japan economic relationship is rivalled only by that between the US and Europe but both Japan and the US are also significant trade and investment partners for China. Both are important sources of technology; both provide education and training for many thousands of Chinese students. Together they took, in 1998, 37% of China's exports and supplied 32% of China's imports. Japan has negotiated WTO accession with China and the US administration is currently seeking the requisite permanent normal trade relations from congress. While China's economy is nowhere near the size of Japan's, let alone the US, it is becoming a significant ingredient in regional economic policies. China's restraint at the time of the Asian economic crisis in not devaluing its currency was welcome; it was also a signal that China's economic clout was waxing. It is not inconceivable, particularly once China becomes a member of the WTO, that it could in some way become associated with the G8.

• All three countries are members of APEC, which helpfully provides their leaders with an occasion at which to meet at least once every year, regardless of what difficulties may have arisen between them in the meantime. The Clinton-Jiang summit in Auckland in September 1999 demonstrated the value of this contact, forcing the two sides to break the logjam created by the bombing of the Chinese embassy in Belgrade, which might otherwise have festered for many more months.

• All three have common interests in regional security. Some but not all of these interests are on the agenda of the ARF, of which all three are members.

• As permanent members of the UN Security Council and declared nuclear powers the US and China have increasingly found that they have common interests in the maintenance of non-proliferation regimes.

• China and Japan, with South Korea, are regularly associated with the 10 members of ASEAN in a number of Asia only forums for example on the Asian side of ASEM (the Asia-Europe Meeting) and in the ASEAN+3 summit, which now meets annually. China, Japan and South Korea have also met as a group of three on their own, and there have been some suggestions that there may be more such meetings.

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