Japan and Russia Move Closer as Both Eye China

The Wall Street Journal, 27.04.2013

Prime Minister Shinzo Abe visits Moscow beginning Sunday, the first trip to Russia by a Japanese leader in a decade, as both countries look for ways to counterbalance their increasingly powerful neighbor: China.

Among the initiatives expected to be announced will be an "investment platform" of up to $1 billion involving the Russian Direct Investment Fund, the Japan Bank for International Cooperation and Russia's state-run development bank, Vnesheconombank, officials in Moscow said.

"We believe the amount of investment from Japan can be increased by 10 times in the next two to three" years, said Kirill Dmitriev, chief executive of the Russian Direct Investment Fund.

Stronger ties with Russia are becoming increasingly important for Japan as tensions grow with China over a territorial dispute and relations with South Korea suffer from historical enmities.

For Russia, Japan is becoming an increasingly important commercial partner.
Moscow is seeking additional funds to help build up its eastern regions while staving off an increasingly powerful China. Russia also wants to expand energy sales to offset declines in its main markets in Western Europe.

The overseas trip is Mr. Abe's fourth since taking office in late December. Much of his traveling has been aimed at trying to shore up support as the dispute with China remains unsettled.

Japan unveiled steps Friday to boost security around its remote islands, including stronger cooperation between its thinly stretched coast guard and navy.

"It's important for Japan to have a good relationship with Russia when conditions with neighboring countries are not favorable," said Shigeki Hakamada, a Russia expert at the University of Niigata Prefecture.

Russian President Vladimir Putin also wants to tap into Japanese technologies to help diversify the economy, which currently relies on energy.

A potential stumbling block exists, however, in another territorial dispute dating back to the end of World War II over four islands known as the Northern Territories in Japan and the southern Kurils in Russia.

Japan has been seeking the return of the islands, which were taken by the Soviet Union in the final stages of the war. The dispute has kept the two countries from signing a peace treaty.

Takashi Mochizuki in Tokyo and Lukas I. Alpert in Moscow