Japan wary of Hillary Clinton as new US Secretary of State

Updated December 4, 2008 21:39:27

The appointment of Hillary Clinton as Secretary of State in Barack Obama's upcoming US government has received a mixed response in Japan, with some commentators concerned about her focus on China. Last year, Hillary Clinton said China should be the main priority for the United States and some Japanese wonder whether the poor relations Japan had with President Bill Clinton might repeat.

Presenter: Liam Cochrane
Speaker: US president George W Bush; Masamichi Adachi, senior economist at JP Morgan Chase; Hiromichi Shirakawa, chief economist at Credit Suisse, Tokyo

COCHRANE: For the last eight years, Japan and the US have enjoyed close diplomatic ties, fostered partly on the friendship between outgoing-President George W. Bush and former Prime Minister Junichiro Koizumi. Those ties were never closer than on the front lawn of Elvis' estate Graceland.

BUSH: This visit here shows that not only am I personly fond of the prime minister but that the ties between our peoples are very strong as well. I knew he loved Elvis, I didn't realise how much he loved Elvis. He not only knows Elvis' history, he can sing a pretty good Elvis song.

KOIZUMI: Its like a dream. (sings)
BUSH: We'll go have some barbeque, thank you.

COCHRANE: But the days of Elvis sing-a-longs and barbeques are over, and some are viewing Hillary Clinton's appointment as the new Secretary of State as something of a concern. Japan's largest daily newspaper the Yomiuri Shimbun published an editorial this week saying, "If she puts greater emphasis on relations with China and plays down the importance of the Japan-U.S. alliance, it could be problematic in many respects for stability in Asia." Japan's sensitivity has as much to do with Hillary Clinton's husband as it does with her. In the early nineties, Bill Clinton was president while relations between Japan and the US reached their lowest ebb since the second World War. The US was concerned at its 60-billion dollar trade deficit with Japan and so forced the country to import certain quotas of American products, putting more stress on an already overwhelmed economy. On top of this, many Japanese felt their country was being overlooked in favour of China, a phenomonen that became known as "Japan passing".
Getting the balance right between Asia's financial giants is something that's still crucial, says senior economist at JP Morgan Chase, Masamichi Adachi.

ADACHI: "Currently, the momentum of the economy is much much stronger in China, compared to Japan, but the size of the economy is bigger in Japan compared to China, so the new administration probably will have to balance these two."

COCHRANE: Last year, Hillary Clinton said China was the most important bilateral relationship for the US, a line that was dug up this week in the Japanese press. But Mr Adachi says its not so much the new Secretary of State that's causing concern, but the prospect of history repeating and the US moving to protect its spiralling economy by imposing new restrictions on Japanese imports.

ADACHI: "The problem is that they may impose some tarrif or non-tarrif barriers on the imports, that's some kind of new regulations or some kind of new rules, such kind of things may be the first sign."

COCHRANE: But Hiromichi Shirakawa, the chief economist at Credit Suisse in Tokyo, thinks concerns about tarrifs are misplaced, saying that a strong manufacturing sector in Japan could actually benefit the US.

HIROMICHI: "Japanese companies have been kind of sanctioned by the yen's appreciation and if the yen's appreciation continues or sustains I think Japanese companies start to invest not in Japan but in the States or in Europe. So I don't think that protectionism is the right word to use in this situation. I don't think any major protections will happen. I think Japan will even contribute to the US employment."

COCHRANE: The Japanese concerns have been tempered somewhat by other appointments in Barack Obama's cabinet-in-waiting - in particular the rise of Timothy Geithner to Treasury Secretary. Mr Geithner was at the US embassy in Tokyo in the early Nineties and saw first hand the bursting bubble of Japan's economy. And in terms of the delicate global balancing act, it doesn't hurt that he speaks both Japanese But its a long way from the happy days of financial boom and Elvis singalongs, with these early reactions from Japan suggesting there could be a