The People’s Republic of China in today’s life is experiencing massive changes, especially to economic and political aspects of life. Particularly referring to seven years back, the economic growth level of the People’s Republic of China showed a high growth level, for instance in 1994 the economic growth level reached 11.8 % and in 1995 it’s reached 10.0 %. On the eighth Five Year Development period, the level of Gross Domestic Product (GDP) touched the apex point in the Chinese history, both from the aspect of quantity and pace (growth). That advancement, besides several other advancements such as state revenue improvement to 18.6 % in 1995, compared with that of 1994. From the primary industrial products, it reached value of 1,136.5 trillion yuans, secondary industries amounting 2,827,4 trillion yuans and tertiary industries reaching 1,809,4 trillion yuans depicting growth rate of 4.5 % (if compared with outcomes of primary industries in 1994), 13.6 % (from outcomes of secondary industries in 1994) and 8 % (of tertiary industrial outputs). This is concerned with reform policy carried out by Deng Xiao Ping in 1978, in which he previously addressed a concept of responsibility system in many rural areas. Later, it spread to urban areas, as well as its economic structure, that is from agricultural sectors to industrial sectors, manufacturing sectors to trade and finance sectors, and also micro-management sectors to macro-regulation.

The advancement of economic development of the People's Republic of China (PRC) within the last decade depicts pessimistic views from Chinese leaders, as described by prime minister Li Peng before the National People's Congress in March 1991,

"While we welcome the changes caused by the relaxation of certain regional conflicts caused by the relaxation of certain regional conflicts and the prospects for their political settlement, the grim facts show that our world is not peaceful, that peace and development which people of the world over aspire to are still facing a severe challenge, and that hegemonism and power politics still continue to develop. The facts also show that certain hidden political, economical and national problems have come to the fore, that the disparity in the balance of strength has also triggered new contradictions, and that the difference between the haves and have-nots in the North and South has continued to widen. In fact, because of intertwining new and old contradictions, the world has become even more turbulent." (Defense Policy of the People’s Republic of China and Security in Asia-Pacific, 1995 ; page 7).

The view above exists because leaders and analysts of the PRC assume that -at least- there are three reasons of Chinese pessimism in identifying three main characteristics of today’s global politics, that is :

• no new international political structure yet, even though the existing bipolarity structure has collapsed. As described by the Secretary General of Chinese Communist Party in the 14^th Party Congress in October 1992.

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  the collapse of the Soviet Union, caused the United States of America perceived to be a single superpower. On account of the position, leaders and analysts of the People’s Republic of China consider the United States of America will not let a regional breakthrough in terms of power exist and threaten its national interests.
• that economic competition will increase and competition among nations to create more extensive comprehensive national powers are inevitable. Simply, if China wants to upgrade international bargaining position, it must be able to compete stiffly in augmenting comprehensive national powers. In a such situation and condition, Chinese leaders still perceive possibility of conflict among nations, as implicitly illuminated by prime minister Li Peng before the National People’s Congress in March 1991. Although the Chinese leaders welcomed the end of the cold war, yet today’s situation could be fathomed as a beginning of forming a more peaceful world. For instance, China mostly refers to Iraqi invasion to Kuwait and Gulf war as an evidence of instability and conflict which become characteristics of contemporary international relations. In a such situation and condition, Chinese anxiety in political and military fora exists, but not to economic aspects. China perceive optimistically, especially to Asia-Pacific region since 1980s. Normalization of relations between China - Indonesia , China - Singapore, China - Vietnam, China - South Korea successfully proceeded. As previously explained, economic development had reached about 10.0 % (in 1995) and development of state revenue reached about 18.6 % in 1995.

Chinese achievements in economic development is very likely driven by economic modernisation program within China, which was initiated by Deng Xiao Ping. This program made Chinese leaders become more realistic. It could be understood from the change of status/position, from position of donor in military and economic aid to be recipient of aid from the United States of America, Japan and other international institutions. The policies that were taken up by Deng Xiao Ping are highly recognized by other Chinese leaders to burgeon more effectively national capabilities, including military, for the sake of maintaining national security. Modernisation in the first three programs in the framework of "the Modernisation of Four" is modernisation in agricultural sectors, industries, science and technology , and it was hoped to support the fourth modernisation in military defense.

Chinese economic reform covers several stages, that is :

• initial stage, which was started in December 1978 - October 1984, by extending the application of responsibility system in urban areas.
• second stage, a continuation from previous stage of development which is marked by the Communist Party of China’s decision about reform system of economics, which is proceeding to urban areas. On this stage, Chinese government is doing adaptation to proprietorship structure, from state-dominated proprietorship to various proprietorship structure. Apart from that, the People’s Republic of China in the second-stage economic reform expanded freedom to decision-making process in state-owned corporations in their operations, in implementation of responsibility system of management contract, group organisation, pilot project implementation for output sharing. The Communist Party of China (CFC) also stipulates price reform, based on socialist-market economy.
• third stage of economic reform which was carried out by the Communist Party of China is to develop corporation reform and to boost corporations to market, focussing on mechanism transformation within period of October 1987 - September 1992. The efforts on this stage are aimed at increasing public economic efficiency under guidance of state-plan guidance.

On the other side, in East Asia, Japanese political economy will be more stable. Japanese real economic growth increased from 0.5 % in 1994 to 0.9 % in 1995, export rate in 1995 burgeoned to about 56,574.8 billion yen from 53,886.5 billion yen in 1994.

In industrial sectors, output distribution in 1975 was positive amounting 5.3 % (primary industries), 38.8 % (secondary industries), 55.9 % (tertiary industries) in 1975 to be 2.0 % (primary industries), 34.0 % (secondary industries), and 63.9 % (tertiary industries) in 1994. Japanese economic power is marked with its strong structure of private businesses amounting 6.6 million groups in 1994 and the involvement of individuals in business activities amounting 54.4 million people (Statistical Handbook of Japan 1996, page 43). In political aspects, Japan is a country who frequently undertakes changes of prime minister and undergoes high political dynamics (high ranking officials’ scandal, etc.). It is evident from the phenomenon of very frequent replacement of prime minister, especially from 1991 until 1996 in which has been four time replacement of prime ministers. As yet, the ongoing political dynamics does not influence a lot to Japanese economic sectors. It appears to have a splitting room between its political and economic life.

Two big powers (the People’s Republic of China in the reform era, especially after the demise of Deng Xiao Ping and the power of Japan) has influenced significantly to the new development on the regional (East Asian region) and international level. Patterns of much-anticipating new interactive development have been highlight to the writer to discuss further on this issue, by proposing a title :

Problem identification that needs to be perused is about the influence of the Japan’s policy to the People’s Republic of China in terms of its economic and political aspects of life. This reserach will apply Rosenau’s foreign policy (1976) in which employs variables in the PRC’s reform policy and accordingly will influence the PRC’s economic and political resurgence in today’s life

The People’s Republic of China’s reform policies are basically interaction outputs within several variables on the systemic, societal, governmental, and ideosyncratic (Rosenau, 1976 ; page 18).

On the systemic level, patterns of relations between the reforming China and Japan will be analysed to have affected on many aspects on the regional and international level. This could be peceived from increasing tendency in the economic co-operation among countries in the region (South Korea, North Korea to the People’s Republic of China) and also to out-of-the-region countries, for instance the closer relationship between the United States of America and China on the framework of Most Favored Nations (MFN), Sino-Soviet and other countries. The development of relationship between the two countries (the PRC and Japan) would also be highlighted by a number of classical anxiety toward the political and military revival in the People’s Republic of China and Japan. This anxiety is understandable, given the fact that the two countries have very sufficient capability and potentials to rise as big powers in terms of economics, politics, military in the international fora.

On the social level, relationship between the two countries have increased, driven by much similar roots of culture, opening People’s Republic of China to foreign cultural influences especially in the present times, would strengthen social relationship between the two countries. The pioneer of the Chinese reform movement, Deng Xiao Ping, had ever said, " China has to follow Japan in developing their nation" (Sayidiman Suryohadiprojo, Modernisation of the People’s Republic of China and the relationship between Japan and the China, Kompas daily 13 July 1985). Furthermore, on the governmental level, several efforts to involve China in the APEC economic forum, which is initiated by the United States of America and Japan will bind China itself more to the world economy and later could hamper China from approaching realpolitik because of its inaccurate and trivial nature. Some strides taken by big economies of APEC are to integrate Chinese economy to the market-driven world economy by liberalizing trade, institution formation and student exchange program. Incentive approach that becomes policy focus of the United States of America and Japan, is also on the involvement of the People’s Republic of China in the transparency of military capabilities (for instance, white defense paper policy, CBMs), arms control, multilateral approaches and loose regional defense regulations (Analisis CSIS, no. 1, 1997, hal. 125). The plan to involve the People’s Republic of China in the world economic and political forums -even though not enthusiastically responded by the PRC- could pave the way to interest China to engage more so as to keep its influence. Beijing believe that international organisations would not impede its interests to achieve economic and security goals.

On the ideosyncratic level, Deng Xiao Ping, as a pioneer of economic and to some extent also political reform was rcognized as pragmatic leader. He is the person who has put forward the last decision of the Modernisation of Four (reform era) in the third meeting of the eleventh central committee in 1978, covering agriculture, industry, national defense, science and technology. Outcomes from the third plenary session of the central committee of the Chinese Communist Party in December 1978 were recognized as a turning point of development trend from dogmatism with mass movements to pragmatism as well as a new era of Deng Xiao Ping’s leadership.

From the four level of analyses above, two components that were addressed in the part of problem identification, there are two level of analyses that would be chosen in this research, that is, systemic and government level, which are considered of having high explaining degree to the point of the influence of the resurgence of People’s Republic of China’s economics and politics within reform era, driven by Japanese policies to China.

The selection of the two levels are based on considerations that, on the internal level, the People’s Republic of China took a new policy, that is reform policy in the third plenary session of the eleventh central committee in December 1978. This policy actually depicted a remedial action for Big Leap to Future and Cultural Revolution from the eighth Chinese People Party’c congress in September 1956. On the level of government, the PRC’s reformist groups undertook corrective actions, both on the level of party organisation and state (government).

On the systemic level, relations between PRC and Japan focused more on pragmatical steps, not only on bilateral levels between the two states in economic sectors, but also on the region. This pragmatical approach was marked with realities of Japan to be the biggest trading partner of China since 1960s, covering 20 percent of the People’s Republic of China’s trade volume. Moreover, formal diplomatic relations proceded between the two countries in 1972.

The systemic and government levels are applied as analytical tools, the PRC’s reform policies and the Japan’s Policy to China are used as independent variables (explaining variables) whereas the influence of economic and political resurgence of the People’s Republic of China is employed as dependent variable (explained variable).

Based on problem identification and limitation as previously explained, this research is aimed to answer question, as formulated as follows :

"How did the reform policies carried out by the People’s Republic of China and Japan’s policy to China influence to the PRC’s economic and political resurgence ?"

This research is aimed to explain phenomenon of the PRC’s economic and political resurgence through the Chinese reform policies and Japan’s policy to China.

This research is intended to enrich reference for other researchers to research the same issue on the PRC’s economic and political resurgence and the the influence of Japan’s policy to China’s economics and politics. This research is also hoped to augment knowledge and horison for the concerned.

Form of thinking in this research is viewing components of a problem which share parts of creating the problem, in which happen in a system analysis. The system analysis or the so-called system approach attempt to simplify complex problems into easily understandable variables. The system approach is not only limited on the macro analysis level, but also on the application (Rusadi Kantaprawira, 1990, page : 1-2).

The system approach views components of international system to be national systems (McClelland, 1982: page : 33). National system includes political, economic, socio-cultural systems and so on and so forth, in which also function as national sub-systems. Meanwhile, national political sub-systems contain policy-making and national system functions as international sub-system.

System approach is adaptive in nature and focuses its attention, especially on the study of change nature and processes taking place between a national system and its environments. By exploring influences coming out from other system in which a system becomes part of bigger system, that is international system, we will find a crystal-clear frame of relations among variables in a problem (David Easton in Modern Political Theory, transl. 1992, page 276).

Identifying a policy will be more accurate if described in an input-output analysis (Mochtar Mas’oed, 1989 : page 119 - 120). An input-output analysis means analyzing effects available outside of system circles, which could take forms of constraints, opportunities, challenges and threats into conversion’s structure and function. Besides inputs stemming from outside of a system, input could also stem from inside, better known as "withinputs", this second input will be converted through conversion function of systemic approach. Based on capabilities belonging to a system, conversion function will generate output that is basically a policy and will be implemented into environment, and subsequently response and reaction from environment will be a feedback to policy system to introduce a next circle.

The concept of influence has a very close connotative meaning with power. The concept of influence is applied in two different meanings, that is : a non-coercive of power, in the sense that it could be analysed, in terms of capability and relationship. Second meaning, influence is identified as relation of power, rather than an alternative from the concept of influence. The so-meant relation of power is relation that generates imposers’ reaction onto targets. Within this second meaning, by viewing influence as a power failure, the concept of influence is identical with capabilities (The Dictionary of Politics, 1992 : page 142). In the development, the concept of influence focuses more on non-coercive aspects (reformation) rather than shifts of existing form of relations.

An international relation could take place peacefully (peaceful interrelation), interaction could take forms of alliance, coalition and so on. Forms of such relation require a highly sensitive response to the rising problems.

Shifts of relation pattern that could occur between the two moving back and forth poles of relation is : first, a shift that changed to be a hierarchical manipulative relationship, and a pseudo-anarchical manipulative shift.

Two forms of the above influence come out as this research analyze.

The word "reformation", perceived semantically and etimologically, stems from the verb "to reform" which means to amend something by eliminating broken parts of something (Oxford Advanced Learner’s Dictionary). An understanding on reform could also be employed by divergent-analytical way (next step is by doing convergence), in the sense that to firstly understand in a separate way so as to get a comprehensive understanding. Inspite of being possibly deviated, it’s also common to notify to be effective to fathom a concept (Rusadi Kantaprawira, 1988, page 2).

Differently compared with the concept of revolution, reformation is a process of change (change/major adjustment) that gradually forward without any victims. However, in a few cases, reformation also claimed casualties, such as reform process in the China.

Reformation as a gradual process is carried out on legal foundations as to legitimize a policy into effect. The legal foundations legally bind all individuals in the country within its national context and limitation. Reformation covers multilateral sectors, not only in politics (political reformation), but could also be combination from two or more sectors, for instance, economic and political reform, etcetera.

On the economic and political reform, the People’s Republic of China needs a solution of economic and political structures which overlapped one another. Reformation on economic structure basically deals with change in distribution process which is very close to political aspects, so that there is reciprocity between social and power relations with the change in economic relations occuring in the process of structural transformation.

In the perspective of international relations, behavior of state -in general sense- will be determined by development of external and internal factors that influence the state. The development is undertaken because of the active being that belongs to a state, in which it integrates and is dynamically involved in the environment. On the context of economic and political relations between the PRC and Japan, along with their influence, there are some economic and political calculations taken by decision-makers of both countries. For example, development of the PRC-Japan’s relationship in East Asia was driven by sense of antipathy of the PRC to Soviet Union (at the time) which has strategic-military forces in Europe and Asia. This is illuminated by :

• the missiles expansion of SS-20 in East Asia, backfire bomb fighters and a number of submarine ballistic missiles.
• development of Soviet ballistic force.
• Soviet’s invasion to Afghanistan and its potential threats that could disturb oil lanes in Parsi’s straits.
• development of closer military cooperation in Vietnam which was also followed by extension of Soviet’s military existence in Vietnam.
• consolidation of relationship which was carried out by Soviet and Kim Il-song from North Korea complicate the PRC and Japan in managing their relation with North Korea (Foreign Policy of the PRC, transl. 1991, page 167-168).

A policy applied by a certain country will closely deal with four factors, as formulated by Rosenau, that is systemic, societal, governmental, and ideosyncratic factors.

Economic reform is a combination of two concepts, that is economic and reform. These two concepts are combined on divergent analysis (later called convergent), in the sense to understand it separately so as to get a comprehensive united understanding. Inspite of being biased, the effectiveness most of the times proceeds very well. A massive change (contrasted with revolution as a sudden and rapid change) will also deals wih legal foundations such as decisions and policies which are underlying the reform process. Economic reform is dealt as solution from complex economic condition and its problems lie on the overlapping economic and political structures, in which could also be seen from concentration of economic and political sources at one side. This structural reform process leads to industrial society, in which happened at no vacuum process but at a certain socio-political configuration. Reform on economic structure basically deals with change of distribution. This economic distribution could not separated from social and power relations. There must be a reciprocity between social and power relations with the change of economic relations taking place in the process of structural transformation. The application of power and social interaction with its all details is a significant factor characterizing nature of economic system ; on the other side, economic process tends to redistribute power and propriety that change political systems and social systems (CSIS Analysis no. 1, 1996, page 36).

Politics -according to Joyce Mitchell in his book "Political Analysis and Public Policy" said that politics is collective decision-making or the making of public policies for an entire society.

Policy is mentioned as a decision or guide of an action stemming from various alternatives (Viotti Kauppi, 1993, page : 590).

Basically the People’s Republic of China’s reform policy could also be called political reforms because of dealing with power on the state/national level.

Reformation under Deng Xiao Ping can be also be perceived as a shift of grand policy taking place in the PRC, in lieu of policy of the Future Big Leap and Cultural Revolution, which was initiated by Mao Zedong.

A foreign policy is formulated by Rosenau as a totality of behavior and activities of well-organized national society such as a state, to settle problems and pick benefits from international environment (Rosenau, 1976 ; page 27). On the conceptual level, policy is differentiated on three conceptions, that is :

• a group of orientation
• a group of commitment and action planning
• a form of behavior

(Rosenau, 1976 : page 16)

As an output of policy, foreign policy strategy gets inputs from external and internal setting which later could be converted into output through conversion process, as perceived by political elites (Frankel, 1973 : page 65) and connected with goal formulation that will be achieved and mobilization of facilities for goal achievement, and last but not least, actual efforts to achieve desired goals (Lentner, 1974 : page 3).

Illustration 1.1 Theoritical Framework of Foreign Policy

external

internal

facility goal

feedback

(sources : Joseph Frankel, 1987, Contemporary International Theory and

The Behavior of State, Oxford University Press, London : p. 65)

Hypothesis forwarded in this research is as follows :

The resurgence of the People’s Republic of China’s economics and politics explained through the PRC’s reform policy and Japan’s policy to China within the aid program is assumed to have caused the interdependence of the People’s Republic of China to foreign economy, especially Japan and also caused an unreal development quality.

For th sake of this research, the research variables applied in this research are :

1. The People’s Republic of China’s reform is a reform movement applied in the People’s Republic of China through its reform policy that was formulated in the third plenary session of the eleventh central committee in December 1978, which covers reformation in agriculture, industry, knowledge, technology and defense.

Economic and political aspects in both countries (the PRC and Japan) have significant meanings regarding with policy formulation or political decision-making from respective elite and efforts to ameliorate welfare of respective economies.

1. The People’s Republic of China and Japan are well-known as two potential political and economic forces, owing to the China’s very potential capacity to develop and also Japan’s political and economic maturity. Simply, the change of the People’s Republic of China’s policy through its reform policy is expected to influence another big force in the region, that is Japan.

The set of research procedure that is applied is :

• problem formulation
• problem identification, analysis, and problem formulation
• arrangement of set of thinking, approach stipulation, conceptual framework, assumptions, forwarded hypothesis
• stipulation of research methodology and technique of data collecting
• data collecting
• analysis
• conclusion

The research methodology applied in this research is descriptive-analytical method, that is , amethod looking for solution of the problem through its analysis of reason-cause relations, by researching certain factors that are very close to the research problems.

Through this method of descriptive-analytical research, we would explain variables as follows :

1. Reform policy proposing economic and political resurgence in the People’s Republic of China.
1. Form of development of economic and political resurgence
1. The influence of Japan’s policy to China into the latter’s economic and political resurgence in the People’s Republic of China.

Data that is functioned in this research is secondary data that could be accessed through library research. Sources of such secondary data are books, journals, reports and printed media which deal with the research matters.

Location

This research will be carried out in several libraries, located in Jakarta, Beijing and Tokyo, such as :

CSIS library, Jakarta

Research and Development Agency of Department of Foreign Affairs, Jakarta

The People's Republic of China's embassy, Jakarta

Japan's embassy, Jakarta

China Institute of Contemporary International Relations, Beijing

Institute of Developing Economies, Tokyo

The research period will be on between March 1999 - March 2000.

Chapter 1 : This chapter discusses parts of the initial research problems, such as background of the research, problem identification, problem limitation, framework of thinking, conceptual framework, assumptions, hypothesis, operational methodology, data collecting, location and period of research.

Chapter 2 : This chapter expounds relevant theories and concepts with the research matters.

Chapter 3 : This chapter discusses research objects, that is reform policy of the People's Republic of China.

Chapter 4 : This chapter discusses influence of the People's Republic of China's reform policy and the

Japan's policy to China over the PRC's economic and political resurgence.

Chapter 5 : This chapter is closing part of the research, comprising conclusions and suggestions.