The islands between China and Japan named Senkaku(as per Japan) and Diaoyu(as per China) have been a main cause of disputes between the two countries, as shown below1.
The trade relationship between China and Japan has grown significantly over the period of forty years. The Japan-China relationship is one of the most important trade relationships in the world. This bilateral relationship promotes economic welfare and growth, security and peace in Eastern Asia and as a result, the entire world. The Japan-China economic relationship is however plagued by historical and political tensions and disagreements2.
One of the main factors that have greatly influenced the international trade between China and Japan is the convenience of the geography between these countries. The geographical proximity enables both nations to acquire what they need at a lowered price. China is a landlocked country on the West and is bordered by the sea to the East. China’s coast faces Japan. The ability to escape unnecessary warfare, reduced transport fees, the general ease of transportation is the main benefit the nation gains from its geographical position. China uses both the Pacific Ocean and its landlocked side for exportation through ships and freight trains. China participates in the mining industry. The presence of rare earth minerals mainly in the West makes it a lucrative trade partner for Japan, which uses these minerals in its widespread electronic industry3. The large electronic industry in Japan is one of the greatest contributors to the country’s economy. The terrain and climate in China facilitates its agricultural sector which is one of China’s main exports. Japan is not a resource rich environment, that is, the presence of natural energy resources and metallic ores is minimal. The country’s terrain and climate limit the agricultural sector. These geographical factors boost the country’s need to trade and import these resources and the relative