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While Sino-Japanese relations are quite stable presently, it was as recent as 2004–2005 that the two nations slid into the worst bilateral quagmire in decades. When in 2007 Japan was China’s third largest trading partner and China surpassed the US to become Japan’s largest trading partner, what is eating these two otherwise very pragmatic traders? History, nationalism and face, enabled by recent changes in the strategic environment, are the factors that have been most salient in bringing about the plunge in Sino-Japanese relations in 2004–05 and though Sino-Japanese relations have been much better since, these factors hang like a storm front over Sino-Japanese relations today. [ABSTRACT FROM AUTHOR]

The current state of China-Japan relations is characterized by two seemingly contradictory developments adjacent to each other: while economic and cultural relations have experienced an unprecedented and continuous improvement since the 1980s, Chinese and Japanese public perceptions of each other have been deteriorating. This raises interesting questions. How do we explain this discrepancy and what are the sources of the increasing public animosity in China or Japan toward the other country? Can China and Japan maintain amicable relations and continue economic cooperation in spite of the enduring mistrust between their peoples? What is the role of public perception and memory of history in the foreign policies of East Asia? This paper addresses these questions, focusing especially on the last one — the role of history and collective historical memory in international relations and the interaction between public sentiment and government foreign policies. Through a detailed study of recent events and the issue of Japanese textbooks, the author argues that public perception of history can and should be guided toward more positive directions. Otherwise, it will be increasingly difficult to maintain amicable relations between the two countries, especially when new nationalism is on the rise in both counties. [ABSTRACT FROM AUTHOR]