Assessing the effectiveness of Japan's ODA policy towards China: Whether Japan has realized its national interests

Qin, Qian Article Assessing the effectiveness of Japan's ODA policy towards China: Whether Japan has realized its national interests International Trade, Politics and Development (ITPD) Provided in Cooperation with: Department of International Commerce, Finance, and Investment, Kyung Hee University Suggested Citation: Qin, Qian (2024) : Assessing the effectiveness of Japan's ODA policy towards China: Whether Japan has realized its national interests, International Trade, Politics and Development (ITPD), ISSN 2632-122X, Emerald, Leeds, Vol. 8, Iss. 1, pp. 15-33, https://doi.org/10.1108/ITPD-06-2023-0015 This Version is available at: https://hdl.handle.net/10419/319588 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Assessing the effectiveness of Japan’s ODA policy towards China: whether Japan has realized its national interests Qian Qin UNSW, Sydney, Australia Abstract Purpose –This research explores the intricate dynamics of national interests realised through Japan’s official development assistance (ODA) to China. It aims to deepen the understanding of these mechanisms, detailing the extent to which Japan has accomplished its national interests. Design/methodology/approach –The paper applies the role theory and narrative analysis to elucidate Japan’s national role conception and its categories of national interests with regardsto its ODA policy. It utilises both qualitative and quantitative methods to examine the success rate in achieving Japan’s diplomatic objectives and how those interests have manifested over time. Findings –The findings suggest a mixed outcome. Whilst Japan’s ODA to China has helped in expanding trade and fostering mutual understanding and cooperation, it has been less successful in promoting democratic governance in China or effectively counterbalancing China’s regional power. Hence, the realisation of national interests through ODA is a complex process contingent upon numerous factors. Originality/value –This study stands out for its multifaceted approach in examining Japan’s ODA policy towards China, integrating both quantitative and qualitative methodologies and applying the role theory in the context of international development aid. It fills a significant gap in the literature by analysing the interplay between national interests and foreign aid, providing nuanced insights into the successes and challenges of Japan’s pursuit of its diplomatic objectives. The study’s findings have important implications for understanding the complexity of international aid dynamics and can inform future policy decisions in the realm of international relations and foreign aid. Keywords Foreign aid, National interests, Role theory, Sino–Japanese relations Paper type Research paper 1. Introduction Even though the Development Assistance Committee (DAC) of the Organisation for Economic Cooperation and Development (OECD) adopted official development assistance (ODA) as the “gold standard”of foreign aid in the 1960s, foreign aid is not a new word to the international politics. For instance, the foreign aid provided by France supported the United States of America in the Revolutionary War against the Great Britain in the 18th century, and Japan’s ODA policy towards China 15 © Qian Qin. Published in International Trade, Politics and Development. Published by Emerald Publishing Limited.This article is published under the Creative Commons Attribution (CC BY4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and noncommercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at http://creativecommons.org/licences/by/4.0/ legalcode The author extends his gratitude to Prof. Yamada Mitsuru from Waseda University who provided valuable suggestions on the article. The author’s appreciation also goes to Anzhi Jiang, Qiming Wu, Ruixi Wang, Prof. Bacon Paul Martyn, Prof. Okusako Hajime, Prof. Chester Proshan and the faculty of Graduate School of Social Sciences, Waseda University. Special thanks go to Chao Qin and Qin Rong, who provided financial support during the research process. Additionally, the author is grateful to other individuals and organizations that offered support for this research, including the journal editor and the two anonymous reviewers who provided valuable feedback. The current issue and full text archive of this journal is available on Emerald Insight at: https://www.emerald.com/insight/2586-3932.htm Received 6 June 2023 Revised 10 October 2023 Accepted 10 November 2023 International Trade, Politics and Development Vol. 8 No. 1, 2024 pp. 15-33 Emerald Publishing Limited e-ISSN: 2632-122X p-ISSN: 2586-3932 DOI 10.1108/ITPD-06-2023-0015 the Ming Dynasty’s provided direct military assistance to Korea in the 16th century. In other words, the history of foreign aid is even longer than the history of the Westphalian state system, established in 1648. Although there are different definitions of foreign aid, it is, in general, a voluntary transfer of resources, including but not limited to food, goods, money and expertise, from the donor country(s) to the recipient country(s) (Morgenthau, 1962;Riddell, 2008). According to OECD, ODA is concessional financial assistance provided by official agencies to promote economic development and welfare in developing countries (OECD, 2020). Though voluntary, neither donor nor recipient governments are uninterested in how and why their money, even if in the name of “aid”,isspent(Arase, 1995). There are scholarly debates on the motivation of donor countries. For scholars from the realism school, foreign aid is simply “an instrument of political power and policy”(Liska, 1960, p. 14). The core motivators for realists are political and strategic considerations (Morgenthau, 1962;Alesina and Dollar, 2000;Korb, 2008). Liberalism provides different perspectives on foreign aid, including globalisation, interdependency and international institution, where foreign aid is considered as a set of measures designed to enhance the socioeconomic and political development of recipient countries (Chenery and Strout, 1966;Hattori, 2001). For constructivism, ideological or moral considerations matter in foreign aid, and countries might mimic the aid behaviour of the traditional donors to be a “good”actor in the international society (Lumsdaine, 1993;Opeskin, 1996;Meernik et al., 1998; Brown and Gr€ avingholt, 2016). However, as a general proposition, foreign aid is highly politicised, and even humanitarian aid performs a political function (Arase, 1995). National interests play a crucial role in shaping foreign aid policies, with the role theory offering insights into how nations perceive their roles in international relations and understand their national interests. Japan’s aid policy, distinct from other major donors, is more economically focused and aids trade partners over countries with humanitarian needs. Japan’s ODA is a key diplomatic strategy, with China being a significant recipient. The objective of the paper is to demonstrate the history of Japan’s ODA to China, and more importantly, examine whether Japan’s ODA to China is a successful policy or in other words, realizes the national interests of Japan. 2. Beginning of Japan’s ODA to China With the rapid recovery of Japan’s economy, Japan became the most developed countries in Asia. In the 1960s, Japan achieved an average real gross domestic product (GDP) growth rate of 8% a year. In 1970, Japan’s GDP reached the level of 200 bn US dollars. Three years later, Japan’s GDP doubled, reaching 432 bn US dollars. The initial form of Japan’s foreignaid was the war reparations to several Asian countries, and then official development assistance in the 1960s. In the 1970s, Japan became one of the largest donor countries, and foreign aid also became one of the most important foreign policies of Japan. Since the beginning of the 1970s, the alteration in the relative strength of the United of America and the Soviet Union has undoubtedly affected the international situation, accelerating the multi-polarization of the world. China had also become a more important player in the global politics. In addition, Japan, as an emerging power, was trying to promote its political influence through economic diplomacy. Beginning in 1977, the Chinese Government explored the potential of using foreign capital and technology to develop the national economy. This led to market reforms initiated in 1978, officially known as China’s Reform and Opening Up. In August 1978, the Treaty of Peace and Friendship between China and Japan was signed. On 3 September 1978, Deng Xiaoping, the then leader of China, met with the delegation of the Japan–China Friendship Parliamentarians’ Union (Nitch uY  uk o Giin Renmei), led by Hamano Seigo, the President of the Union. Deng emphasized that Sino–Japanese relations were prior to any other bilateral relations, and China ITPD 8,1 16 was willing to cooperate with Japan on issues such as production techniques and market management (Kond o, 1978). In October of the same year, Deng visited Japan, where he was invited to visit several modernized factories and the high-speed railway. The experience in Japan is believed to inspire Deng regarding the economic reform in China, leading to the decision introducing Japanese investment and advanced technique (MoFA of China, 2022). On the other hand, the Government of Japan started to investigate the further cooperating potential with China. There were proposals in the Liberal Democratic Party even in the early 1970s that Japan might take the use of the OECF’s funds for exports to China, bypassing the limitation due to the Yoshida Letter (yosida syokan) (Jin, 2000). Since the normalization of the Sino–Japanese relations in 1972, the trade between two countries had been continuously increased. In general, MoFA, MITI and MoF are the three important governmental bodies that wield significant influence in various aspects of Japan’s economy and international relations. These agencies often find themselves in competition with each other as they pursue different priorities and goals. The bureaucratic complexities also result in competing definitions of the national interest in the context of Japan (Rix, 2010). The MITI, as the main agency responsible for promoting Japan’s international trade, represented the interests of the commercial and industrial community; the MoFA focused on promoting Japan’s diplomatic relations with other countries and ensuring its national security, which often involves negotiations and agreements on trade and economic cooperation, potentially clashing with the objectives of MOF and MITI; and the MoF is responsible for managing the country’s fiscal and monetary policies, seeking to maintain a balanced budget and stable currency. The private sector, especially the large-scale companies, were very interested in promoting the trade with China, and therefore became the most active actors trying to influence the government’s decisions on ODA to China. Amongst a number of associations and economic groups, the Japan–China Economic Association and the Japan Business Federation (Keidanren) are the most important and influential organizations. Their then presidents, Inayama Yosihiro and Dok o Tosio, visited China and met with Premier Zhou Enlai, Vice Premier Li Xianian, Gu Mu and other high-level officials several times, becoming a bridge between the leadership of two countries (Japan-China Economic Association, 2020). In the September of 1978,  Ohira Masayosi successfully completed his cabinet. He had to make the political decision on Japan’s ODA to China with a variety of opinions from his partners and opponents. Compared to his predecessor, he held a more positive attitude to China. On 1 March 1979, even during the period of Sino–Vietnamese War,  Ohira confirmed with K omoto Tosio as the Chairman of Policy Research Council of the LDP that Japan might provide yen loan through OECF if China requests (Takahara and Hattori, 2012). By theefforts on negotiation and cooperation made by  Ohira, the cabinet achieved consensus on the principles of ODA to China. It is believed that the loan-related issues was discussed in different governmental and diplomatic meetings before the end of 1978, when Li Qiang, the Minister of Foreign Trade of China, confirmed at a press conference in Hong Kong that China may consider accepting loan between government (Wang, 1978, pp. 864–865). On 5 December 1979,  Ohira visited China, officially informing China the final decision made by the Government of Japan, marking the official start of the Japan’s ODA to China. 3. From development to recession Japan’s ODA to China mainly includes the three types of assistance: (i) loan aid (yen loan or ensyakkan); (ii) grant aid and (iii) technical cooperation. Amongst these three types of assistance, loan aid is the largest and most influential one. The last loan aid was provided in 2007, but Japan decided to continue providing grant aid and technical cooperation. Anyhow, because the maturity of the yen loan to China was usually set between 20 and 40 years, a large amount of the loan has not been repaid yet. The author divides the ODA to China history into Japan’s ODA policy towards China 17 four periods: (1) Starting period (1979–1983); (2) Development period (1984–1988); (3) Conversion period (1989–2000) and (4) Recession period (2001–present). 3.1 Starting period (1979–1983) When Gu Mu visited Japan and met with  Ohira in 1979, he brought eight proposed loan projects as a formal request, two of which, related to the construction of the hydroelectric power station were rejected by the Government of Japan, making the total amount of the projects decrease from 5.5 bn US dollars to approximately 3 bn US dollars (House of Councillors, 1979).The six loan projects decided by the Government of Japan is shown as follows. Table 1 also shows the three grant aid projects provided in 1979. In the July of 1980, Suzuki Zenk o became the 70th Prime Minister of Japan. He did not change the policy to China during his term of office. From 1979 to 1983, Japan has provided 300 bn of yen loan to China, as the first round of yen loan. Besides, Japan also provided 17.461- billion-yen grant aid to China during this period. 3.2 Development period (1984–1988) From 1984 to 1990, the total amount of the yen loan to China was 693.424 billion JPY, as shown in Figure 1. In addition, Japan also provide 63.109 bn JPY of grant aid for 64 projects, mainly focused on agriculture, medicine, natural disaster and education institution such as Chinese Academy of SocialSciences, China Foreign Affairs University and Dalian University of Foreign Languages (MoFA of Japan, no date). Due to the rapid development of Japan’s ODA to China, China had become one of the largest recipients of Japan’s bilateral aid since the early 1980s. However, because of several negative diplomatic incidents, including the “Incident of K oka Dormitory”[1], Nakasone’s formal visit to the Yasukuni Shrine [2], and especially the Yanagiya Kensuke’s criticism against Deng Xiaoping [3], the Sino–Japanese relations probably had not been promoted as expected. The Prime Minister, Takesita Noburu, took the office in the November of 1987. To improve the bilateral relations, Takesita visited China with the third round of yen loan as a “omiyage” (gift) in the August of 1988. Two governments soon reached a consensus, and the size of the yen loan was nearly doubled. The package included 810 bn of yen loan for 42 construction projects, including fertilizer factory and the aviation control system, which are not included in the first and second round of yen loan. Besides, grant aid and technical cooperation were also No. Project Amount (JPY, 1979) 1 Shijiusuo Port Construction 7,085 million 2 Yanzhou–Shijiusuo Railway Construction 10,100 million 3 Beijing–Qinghuangdao Railway Expansion 2,500 million 4 Qinghuangdao Port Expansion 4,915 million 5 Hengyang–Guangzhoou Railway Expansion 3,320 million 6 Wuqiangxi Hydorelectric Power Station Construction 140 million Total amount of loan aid 28,060 million 7 China–Japan Friendship Hospital Construction 430 million 8 Machines for Micro Lab of National Beijing Library 50 million 9 Emergency Aid for Natural Disaster (via Red Cross) 200 million Total amount of grant aid 680 million Note(s): The no.5 and no.6 projects are suspended and transferred to commodity loan projects provided in 1979∼1980, according to MoFA’s website as cited Source(s): Table courtesy of MoFA of Japan, no date Table 1. Projects of the first round of yen loan and grant aid to China in 1979 ITPD 8,1 18 included in the package. The Chinese leadership expressed their thankfulness to Takesita, and Deng even commented that a “new era”of Sino–Japanese relations was coming [4]. 3.3 Conversion period (1989–2000) Although both China and Japan had strong willingness to make the bilateral relations better, the relations were suddenly frozen because of the Tiananmen Square Incident happened in 1989. The United States of America and the European countries soon decided to impose sanctions against China for violating human rights. On 3 June 1989, Uno S osuke, after the sudden resignation of Takesita, was placed as the Prime Minister. He was not an ideal candidate and had limited time and power to make any major change of policies. At the House of Representatives, facing the questions from the parliamentary members, Uno only described the incident in China as “a regretful situation” (ikanna zy osei), expressing his “concern”(y uryo) on the situation and willingness to provide medical assistance (House of Representatives, 1989). On 8 June 1989, the International Cooperation Bureau of the MoFA of Japan announced that all the ODA projects were forcedly suspended (suik o hun o) due to the chaos in China, and over 300 Japanese experts working in China were required to return [5]. At the G7 Submit held in July, Japan announced that the third round of yen loan would be suspended, and Japan would impose migration restriction to China for the safety of Japanese citizens. However, compared to other G7 members, Japan’s attitude towards China was ambiguous. While the United States of America had imposed sanctions against China, Japan seldom criticised the Government of China directly. Notwithstanding the ambiguous attitude of Japan, Zheng Tuobin, the Minister of Foreign Economic Relations and Trade of China criticised that even though Japan disagreed with the sanctions against China openly, Japan actually imposed heavier de facto sanctions against China (Zhang, 2016, p. 175). In 1992, the Japanese cabinet issued the Japan’s ODA Charter, officially confirming the four principles of Japan’s ODA, including environment-oriented, military-avoided and democratization promotion (MoFA of Japan, 1992). The 1992 ODA charter is a symbol of the conversion of Japan’s ODA policy. Japan intended to connect foreign aid to human rights and domestic politics of the recipient countries, making the foreign aid policy more strategy oriented. 0 200 400 600 800 1000 1200 1400 1600 1800 1984 1985 1986 1987 1988 yen loan grant aid Source(s): Figure by author Figure 1. Japan’s ODA to China, 1984–1988 (100,000,000 JPY) Japan’s ODA policy towards China 19 In addition, Japan had to reconsider the amount and efficiency of its ODA projects due to economic recession and financial difficulties. Thus, the negotiation regarding the fourth round of Japan’s yen loan to China moved slowly with difficulties. Domestically, some politicians and scholars proposed to decrease, suspend or end the ODA to China, especially when China continued its nuclear testing in the mid-1990s. As a result of the continuous negotiation, two parties decided to divide the fourth round of yen loan into two periods, and 580 bn JPY would be provided during the first period (1997– 1999). In 1998, after coordinating with China, Japan decided to provide another 390 bn JPY during the second period (1999–2000). The fourth round of yen loan is the last yen loan provided by the Japanese Government taking the form of “round”. 3.4 Recession period (2001–present) Since 2001, Japan decided to provide yen loan with the form of “single-year review”instead of “five-year round review”(JICA, 2002). The amount of ODA was also decreased by 25%. In the August of 2001, Yamasaki Taku, the then Secretary-General of LDP, publicly stated that “people from the South East Asian countries are thankful to Japan’s ODA, which is different with the Chinese people who know little about the assistance to China”, and proposed to reconsider the ODA to China policy [6]. However, the Japanese politicians had not reached a consensus on whether Japan’s ODA to China should be ended. As a contrary view, Kawaguti Yoriko, the Minister of Foreign Affairs, then stated that “ODA to China is still necessary”(mada hituy oda) [7]. The major division of the loan projects has also changed greatly from infrastructure to environment protection. For instance, six of the eight yen loan projects started in 2002 was directly related to environment, while other two projects were also somehow connected to environmental protection (MoFA of Japan, 2003a). As shown in Table 2, none of the projects were located in eastern China. Due to several diplomatic incidents including the Koizumi’s visit to Yasukuni Shrine, the Sino–Japanese relations became worse during PM Koizumi Zyun’itir o’s term of office. In 2004, Koizumi openly stated that it was the time when Japan’s ODA to China should be ended (sotugy o) [8]. On the other hand, Li Zhaoxing, the Minister of Foreign Affairs of China, then responded that China would be fine without Japan’s assistance and the Chinese people had the ability to develop their own countries with their own power, wise, determination and confidence. In the opinion of Japanese Government, it is understandable for one country to receive foreign aid while providing foreign aid to other developing countries, as Japan did before. However, hosting the Olympics might be a symbol for one country being more developed, and 2008 Beijing Olympics was considered as an appropriate event to end the yen loan to China, agreed by both Name of project Region Amount (100 million JPY) Atmospheric Environmental Improvement Henan 192.95 Atmospheric Environmental Improvement Anhui 185.58 Yichang Water Environmental Improvement Hubei 84.60 Nanning Water Environmental Improvement Guangxi 121.15 Afforestation and Vegetation Cover Gansu 124.00 Afforestation and Vegetation Cover Inner- Mongolia 150.00 Higher Education Project (Regional Vitalization, Market Economy Reform Support, and Environmental Conservation) Inland 275.04 Environmental and Living Conditions Improvement Human 78.82 Source(s): Table by the author Table 2. Yen loan projects in 2002 ITPD 8,1 20 China and Japan. On 1 September 2007, Yang Jiechi, the Minister of Foreign Affairs of China, then completed the final exchange of notes with K omura Masahiko, the Minister of Foreign Affairs of Japan for the last six loan yen projects (MoFA of Japan, 2007). The total amount of the yen loan is 46.3 bn JPY, approximately 22% of the amount of yen loan in fiscal year 2000. Even though no more yen loan projects have been proposed since 2008, the assistance for grass-root (kusa no ne enzyo), which aims to provide grant aid of no more than 10 m JPY to local and small-scale programmes, is still under operation. Even in 2016, a new technical cooperation project named Project for Environment Friendly Society Building was developed, which will be completed in 2021 as planned. On 28 January 2020, the Japanese Government provided emergency assistance to China for the pandemic of COVID-19, which is counted as grant aid (MoFA of Japan, 2020b). Therefore, even though the amount and number of ODA projects to China is limited, China continues to benefit from Japan’s ODA indeed. However, these projects are basically society-oriented cooperation rather than economic cooperation. Figure 2 shows the amount of Japan’ODA to China in 2000–2018 (MoFA of Japan, 2020a). 4. Japan’s role and national interests The diplomacy of any country is always aimed to realise the national interests, though in various ways. Even though foreign aid is somehow considered as the money given by rich countries out of charity, the governments thereof always have to inform their taxpayers how and why their money is used. It is therefore not surprising that the name of the ODA Review Final Report of Japan, published in June 2010, is “Enhancing Enlightened National Interest”. However, national interests refer to too many conceptions. According to Morgenthau (1952), national interest has two factors: rationally demanded and changeable, and to pursue the national interest is a necessity. The author agrees with the statement that “national interest has proven to be a very elastic concept with multiple meanings across time and space”(Hook, 1995, p. 5). The territory is obviously highly connected to the national interests; the economic benefit is also apparent. However, the reputation of one country, or the so-called soft power, smart power or sharp power, is more difficult to analyse, especially when some interests might be controversial. 0 10 20 30 40 50 60 70 80 90 Grant Aid Technical Cooperation Source(s): Figure courtesy of MoFA of Japan (2020a) Figure 2. Japan’s ODA to China, 2000–2018 (loan aid excluded; 100,000,000 JPY) Japan’s ODA policy towards China 21 Since Holsti (1970) systematically extending the concept of role in sociology to foreign policy analysis, many scholars have contributed to the development of the role theory. Walker (1987) suggests that the role theory has a descriptive, analytical and organizational value, and Wish (1980) comes up with the national attribute-role conception model, and conducts content analyses of speeches by 29 decision-makers from 17 nations. She concludes that the policymakers, who believe that their nations have larger influence domains are more active in the international system. Recently, Wehner (2020) introduces how interpretive narrative analysis allows the researcher to understand the change of role within a ruling narrative domestically and internationally, providing practical research methods for understanding the national roles. Through narrative analysis, we may realise how the Government of Japan and the leaders thereof understands their role and the interests of their country. Based on the role conception of Japan, the author examines the national interests and the realisation thereof. Japan is undoubtedly an economic power, and is sometimes described as “Civilian Power”. Maull (1990) suggested that a civilian power, for example Japan, would prefer to cooperate with other countries to promote the collective international goals; and realise the national goals and interests with economical method rather than the military method. Besides, some scholars also pointed out that group-orientation was a typical characteristic of the cultural norms as well as the national role of Japan. Narrative analysis is widely used in the field of foreign policy analysis. Narrative, as a terminology, refers to spoken or written text that describes and interprets an event or a series of actions that are connected within some sort of sequence (Czarniawska, 2004). The narration of the Japanese government regarding the ODA to China was not always consistent, but related to the change of domestic politics and international situation. In the 1970 and 1980s, trade, energy and friendship were the three priorities of Japan’s China policy. Firstly, as we discussed, the large-scale companies were very interested in promoting trade with China, which relied on a stable bilateral relationship. Most of the visits and meeting between two countries in the 1970s were also related to the trade. Secondly, energy security was a significant part of Japan’s comprehensive security policy, and Japan’s attention on mining and infrastructure during the negotiation for ODA projects proved the significance on Japan’s position. Thirdly, friendship with China, and importantly, Chinese people, was also important for the regional security. If China, as the biggest and high potential country in East Asia, could become a friend of Japan rather than an enemy, it would be a great success of Japan’s diplomacy. For better friendship, both parties tried to avoid discussing the disputed issues, e.g. the territory dispute regarding the Diaoyu Islands (or Senkaku Islands in Japanese), for not undermining the “friendship”, which is different with the situation in the later period that the territory dispute became a “weapon”of diplomats. In addition, considering that Japan’s aid to Southeast Asian countries started from war reparation, many Japanese in the 1970s might also feel guilty for the sorrow Japanese army brought to Chinese people, and Asian people, during the World War II. As Loutfi (1973) suggested, the Japanese Government might also hold the opinions that the problem of development in these countries is not merely an economic or social question, but a problem of building peace in Asia. Providing aid is not only a way to reduce the moral burden of Japanese citizens but also a way to heal the pain of the citizens of other countries, making a better national image in the recipient countries. Therefore, the role conception of Japan, during the starting and development period of the ODA to China, could be summarised as: (1) a trade promoter; (2) a regional power and security maintainer and (3) a normalising nation with the responsibility to support its neighbours in Asia. The role conception gradually adjusted in the 1980s, when Japan had become an economic giant and tried to extend its influence on international politics. In 1992, Nakasone was elected ITPD 8,1 22 improving bilateral relations, (4) winning kudos and international status; (5) diversifying diplomatic methods. As a conclusion, Japan has successfully promoted the trade and business between two countries, and somehow ensured the energy security as part of the comprehensive security agenda. Japan has also partly achieved the objectives of improving bilateral relations and diversifying diplomatic methods, though the frictions between two countries happened from time to time. However, Japan has failed to win kudos and international status through its ODA projects in China. In addition, the Government of Japan might hold the concept that aid produces economic growth, which in turn encourages political stability and the benefits to donor interests. However, as some scholars suggested, the premise itself is doubtful (Rix, 2010, pp. 17–19). The research has also proved that some of the cognition of the Japanese Government on the diplomacy of China as well as the understanding of Chinese leaders on Japan’s ODA might be incorrect, leading to some negative effects on the realization of Japan’s national interests. However, the cost of the Japan’s ODA was not that high as imaged. Japanese people were used to saving their money in their postal and banking system. The high savings rate therefore led to plenty of loan funds, which means the actual cost of the yen loan, though discounted, is not that high. The Government of Japan considered loans to be rational the system by which loans are repaid as economic benefits accrue to the borrower over a relatively long time (Akiyama and Nakao, 2005). In fact, due to the rapidly increasing of the exchange rate of Japanese yen, China might have to repay even more in the 1990s. The discussion in this paper also indicates something important. Firstly, the diplomatic objectives are constructed by the national role conception, sometime unconsciously. Secondly, foreign aid, whose initial objectives are usually connected with some specific national interests of one country, does not necessarily realise those national interests. Thirdly, the misunderstanding of the national role conception of the recipient country and the potential role conflict might negative affects the national interests of the donor country. The paper has not discussed, with a quantitative method, to exactly what extent has Japan realised its national interests. There are mainly two reasons for this situation: the percentage of the national interests realised by Japan through its ODA policy is impossible to quantify; and the percentage is not the main topic of the paper. The author believes that the paper has already discussed the main topics and made the conclusion based on both quantitative and qualitative methods. The author, therefore, made the final conclusion regarding the realisation of Japan’s national interests on Japan’s ODA policy to China that the policy in general has achieved some of the diplomatic objectives successfully, but failed to achieve all. The study’s results are meaningful not only for analysing Japan’s foreign policy but also for broader International Political Economy studies. The research links the field of international development with foreign policy analysis. The research method employed in this study could potentially be applied to other contexts, such as examining China’s foreign aid to Africa and South Korea’s foreign aid to Southeast Asia, thereby providing a framework Types of national interests Realisation Promoting trade Successful Ensuring energy security Helpful Improving bilateral relations Partly successful Winning kudos and international status Not successful Diversifying diplomatic methods Partly successful in long-term basis Source(s): Table by the author Table 6. Realization of the national interests Japan’s ODA policy towards China 29 for evaluating the effectiveness and impacts of foreign aid policies in various international contexts. The study provides a valuable foundation and tool for enhancing foreign aid policies and diplomatic strategies. Notes 1. Located in Kyoto, K oka Dormitory was bought by the Republic of China in the 1950s. The dormitory was involved in a case in 1967 (Taiwan vs eight Chinese students), but the situation got more complicated due to the normalisation of Sino–Japanese relations. The case had not been finally resolved until 2018. 2. Yasukuni Shrine or Yasukuni Jinja, a Shinto Shrine established to honour those died in the wars. However, the convicted war criminals died in the World War II, 14 of whom are the highest class, were also listed to be “honoured”. 3. Yanagiya Kensuke, the then Vice Minister of Foreign Affairs, stated that Deng had become a person above the clouds (absent-minded), and therefore cannot listen to others’opinions, in response to Deng’s criticism of Japan’s actions on K oka Dormitory. Yanagiya resigned 4. Asahi Shimbun, 25 August 1988. 5. Asahi Shimbun, 9 September 1989. 6. Asahi Shimbun, 24 August 2001. 7. Asahi Shimbun, 21 July 2002. 8. Asahi Shimbun, 21 November 2004. 9. 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