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Japan's new leader raps China's handling of territorial row but reaches out to SKorea

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TOKYO - Reaffirming his hawkish stance on China, Prime Minister Shinzo Abe said Friday that Japan will not negotiate with Beijing over a contested cluster of uninhabited islands, and that China was "wrong" for allowing violent protests over the territorial dispute.

Abe, who took office just over two weeks ago, had much warmer words for South Korea, despite strained ties with Seoul over a separate territorial spat and other issues. Abe said he hoped to establish a trusting relationship with president-elect Park Geun-hye as soon as possible.

"Both nations share liberal and democratic values, and have respect for basic human rights and the rule of law," said Abe.

He spoke as U.S. officials prepared to visit Japan and South Korea to ensure the key American allies are committed to mending their relationship.

Abe, who has declared economic growth to be his top priority, made the comments at a press conference where he announced more than 20 trillion yen ($224 billion) in new stimulus to jumpstart Japan's anemic economy.

The aim is to boost growth by 2 per cent and create 600,000 jobs, he said. Tensions with China — Japan's top trading partner — are likely to complicate that task.

A decision by the Japanese government to buy a group of tiny islands in the East China Sea from their private Japanese owners in September set off protests in China that damaged Japanese-owned factories and stores around the country.

Boycotts of Japanese products in China have hurt Japan's exporters and added to uncertainties over their extensive investments in mainland China. Toyota and Nissan have seen vehicle sales in China drop sharply in recent months.

Asked how he could maintain his staunch stance on the East China Sea islands, called Senkaku in Japanese and Diaoyu in Chinese, while protecting Japan's substantial business interests in China, Abe blamed Beijing for any deterioration in business ties.

"It was wrong for China, as a country responsible to the international community, to achieve a political goal by allowing damages to Japanese-affiliated companies and Japanese nationals that have made contributions to Chinese economy," Abe said. "I want to clearly state that."

Abe warned that such an approach would not only hurt bilateral ties but also negatively affect China's own economy.

"A relationship based on common strategic interests requires mutual respect," he said, referring to China. "It is that kind of relationship based on common strategic interests that I want to restore."

Abe's stimulus package includes plans a request to raise military spending for the first time in a decade — an increase partly aimed at beefing up monitoring and defences around the disputed islands. Chinese vessels have frequently ventured into areas near the islands.

The top U.S. diplomat for East Asia, Kurt Campbell, said Thursday the U.S. will urge "care and caution" in the East China Sea dispute.

Senior officials from the State Department, the Pentagon and the White House will travel to South Korea and Japan next week. Bumpy relations between the two U.S. allies are a source of concern for the U.S. as it makes a "pivot" toward the Asia-Pacific, shifting diplomatic and military attention from Iraq and Afghanistan.

In June, a planned intelligence-sharing pact between Japan and South Korea was derailed. Then in August, a visit by South Korea's outgoing President Lee Myung-bak to small islands claimed by both nations led to angry exchanges between Tokyo and Seoul.

Perceptions in Seoul that Abe wants to minimize or whitewash Japan's wartime past also threaten to undermine the relationship. Abe has suggested previously that Japan's landmark 1993 apology for the suffering of World War II sex slaves, many of them Korean women, needs revising.

Campbell said the visit by U.S. officials was to ensure both governments are committed to "rebuilding" their ties.

Signalling Tokyo's determination to expand its trade and investment with other Asia-Pacific nations, Abe dispatched his foreign minister, Fumio Kishida, on visits to the Philippines, Singapore, Brunei and Australia this week.

Abe himself will be making his first trip abroad next week to Southeast Asia, with plans to visit Indonesia, Vietnam and Thailand to strengthen ties already growing as Japanese manufacturers boost investments and marketing in the region.

"These three countries are engines for growth of the world economy," Yoshihide Suga, the chief government spokesman, told reporters Thursday. He deflected suggestions that Tokyo was seeking to counterbalance China.

"I don't view respecting relations with the rest of Asia as a countermeasure against China," he said.

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