[an error occurred while processing this directive]
BBC News
watch One-Minute World News


Introduction

Economic competition

Japan emerged in the post-war period to become the unquestioned giant of Asia, and today remains the world's number-two economic power after the US. But since the early 1980s Chinese growth has soared - and it shows little sign of slowing. While China sprints forward, Japan inches along - and Japan is now feeling China's breath on its neck.

In many ways China's growth benefits Japan. Last year, China overtook the US to become Japan's main trading partner. The two economies are in many ways complementary, with China offering cheap goods and labour and Japan dominating the hi-tech industries.

But it is China's unquenchable thirst for resources that has Japan worried. The two nations are now the world's second- and third-largest oil consumers, and the race is on to secure access to energy and other resources.

In 2004, the two clashed over the route of an oil pipeline from large oilfields in eastern Siberia, with Japan bidding for it to go to the eastern port of Nakhodna for shipment to Japan, and China urging it to end in the Chinese city of Daqing. Japan won that battle.

Both sides dispute the route of maritime borders in the East China Sea, where there are thought to be reserves of oil and gas. They both also claim islands within this disputed zone. A two-day chase was sparked in late 2004 when a Chinese submarine strayed into Japanese waters close to the islands.

The need to secure access to energy has also led to frantic diplomacy further afield, in such places as Iran, Africa, and Latin America.

Chinese gas drilling platforms

PRODUCTS AND SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific