Opinion | Economic war with Japan won't serve China's interests

In recent years, whenever China's relations with another country took a turn for the worse, calls for a boycott of that country's products would ring out. So it has been with the Diaoyu Islands dispute.

Dozens of Chinese cities saw protests this month against the Japanese government's "purchase" of the islands. As bilateral ties deteriorated, many academics joined ordinary Chinese in urging Beijing to inflict economic pain on Tokyo, putting the bilateral trade relationship under strain.

Ordinary Chinese are free to voice their support for a boycott, of course, as long as they keep to the law. But a consideration of our national interests demands that we separate politics from economics, and cautions us against playing the "economic card" lightly. The demand of the minority of boycott proponents who resorted to violence to make their point should simply be ignored.

Over the past 40 years of diplomatic relations, China and Japan have repeatedly clashed over their differences on history and territorial issues. Yet this has generally not affected bilateral trade, which has steadily grown.

Last year, trade with Japan accounted for 8.5 per cent of China's total foreign trade, while Japanese investments in China grew by 50 per cent, with exports to China up 10 per cent. This year alone, at a time when foreign investments in China are shrinking, Japanese investments grew by 16 per cent. For Japan, China is its top destination for exports and its No 1 source of imports.

Any major disruption to bilateral trade would hurt both countries. Yet some scholars argue otherwise. They say Japan is more reliant on the Chinese economy than vice versa, hence if China were to "pull the economic trigger", it would cripple the Japanese economy and even cause it to suffer another "lost decade" or two.