366 { China’s Quest
Deng’s personal simplicity and apparent sincerity won Japanese sympathy.
After a long discussion with Prime Minister Fukuda, Deng gave the surprised
Japanese leader a bear hug (a habit Deng may have learned from Soviet lead-
ers). During a later, more intimate meeting with Fukuda and top officials,
Deng pulled out a pack of Panda cigarettes and offered them all around,
saying “For years I have been looking for an opportunity to visit Japan, and
finally I can realize it. I am very happy to have the chance to get to know
Prime Minister Fukuda.” When Fukuda later said that he knew China only
from before the war and hoped someday to visit it, Deng immediately replied,
“On behalf of the Chinese government, I invite you to visit at a time conve-
nient to you.”^29
While winning Japanese opinion to support China’s new modernization
drive, Deng’s tour of Japan “emancipated the minds” of Chinese audiences.
Not many Chinese as yet had televisions, but filmed news reports and pho-
tographs documenting Deng’s activities in Japan prominently displayed for
Chinese the advanced levels of technology in use in Japan. They also made
clear the friendly attitudes of many Japanese toward China. The point was
that China could draw on the advanced aspects of modern Japan’s economy
to facilitate China’s Four Modernizations.
Japan quickly emerged as China’s second most important trade partner,
ranking only behind Hong Kong. During 1978–1988, Japan accounted for
roughly one-fifth of China’s total trade. That was only about two-thirds of
Hong Kong’s level (28 percent), but double the share (about 10 percent) of
China’s third-ranking trade partner, the United States.^30 Japan also began
giving development aid in 1979, immediately after the peace treaty was
signed. Over the next twenty-five years, China was annually either the first-
or second-ranking recipient of Japanese ODA. China received approximately
3.13 trillion yen in concessionary loans, 145.7 billion in grant aid (which did
not need to be repaid), and 144.6 billion in technical cooperation. Japanese
aid to China averaged 150 billion yen (very roughly US$1.5 billion) per year,
equivalent to about 0.25 percent of China’s annual GDP. Japanese assistance
also supported, inter alia, the training in Japan of 37,000 Chinese special-
ists, the electrification of 5,000 kilometers of railway, construction of sixty
large harbor berths, the Baoshan steel plant outside Shanghai, three major
airports (including in Shanghai’s Pudong and Beijing), five trunk highways,
five power plants, three fertilizer factories, a number of pollution control
projects, and a major hospital in Beijing. China was second only to Indonesia
in terms of volume of Japanese development assistance.^31 Japan’s assistance
gave a strong boost to China’s modernization drive and integration into the
global economy. As Sino-Japan economic ties became closer, and as Beijing’s
fear of Soviet encirclement mounted, China’s assessment of Japan’s military
alliance with the United States also shifted. Beijing began to view Japan’s mil-
itary strength as a positive factor countering the Soviet Union.^32