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Teng was brutally frank about his country's backwardness. "If you have an ugly face, it is no use pretending you are handsome," he remarked at a press conference for Japanese journalists, his own face cracking into a wide smile. China's target date for modernization is the year 2000, he said, conceding that the goal would be hard to meet. Crucial to China's development will be the $20 billion trade agreement that Peking has already made with Tokyo. Even that arrangement, he declared, "must be doubled and redoubled."
Many Japanese businessmen are enthusiastic about what they see as a potentially profitable opportunity to link Japan's export-oriented economy to a China in desperate need to acquire modern technology and expertise. Still, the Japanese business community wonders how the Chinese will pay for their gigantic import program. Since the early 1970s, China has been making most of its major purchases from Japan on credit. Because Peking has inadequate foreign-currency reserves, the Japanese must either grant loans or buy Chinese oil. Both solutions present pitfalls for Japan. Peking has hinted it wants the type of cheap loans, repayable over 30 to 40 years at 2% to 4% interest, that Japan makes to developing countries as a form of foreign aid. The prospect of giving China such easy terms has alarmed many government officials. "It's foreign aid, pure and simple," said one bureaucrat, "and that's no way to finance a huge trade program with China."
The type of loan that Japan wants to extend to China could be repaid partly in the most liquid of China's assets, oil. The trouble with this scheme is that Chinese oil is waxy, heavy and, given its low quality, overpriced. Says the president of one Japanese oil company: "The men in the industry are in an angry mood. They were never consulted. They were simply told they would have to pay the price for Japan-China trade and finance Japanese exports by buying Chinese oil."
As Teng wound up his historic visit at week's end, it seemed that his mission had not been an unalloyed triumph after all. Echoing the sentiments of many Tokyo political analysts and wary businessmen, the Japan Times said: "Teng charmed many people here, but worries persist that China's warmth may not only reduce our foreign policy options, but also trap us in an economic quagmire, rather than grant us the benefits of a combined market of 1 billion Chinese people." Still, that may be the price that Japan will have to pay, as it joins its neighbor in the struggle against hegemony.
*In English, it is pronounced hegemony (literally, leadership); in Chinese, pa-ch'uan (overbearing power)