Why did China renounce right to war reparations from Japan in a 1972 treaty?

Question

What was the rationale in Mao Tze Dong's decision to renounce such a right?

Was this decision due to the belief that Japan would pay off its reparations at a very slow rate and that it would be better to renounce the right to reparation and receive substantial loans instead?

Note that reparations are non-repayable, whereas loans constitute are paid back with interest.

other than normalizing Sino-Japanese relations, what did Mao have to gain?

can anyone show me a specific treaty that stipulates a specific value for reparations from Japan to China? not counting repatriation of Chinese assets stolen by the occupying Japanese.

thank you Gromm for your insightful answer.

personally i agree that Mao did not have his country in mind when signing the agreement, he was only concerned with his legacy. same thing goes with the cultural revolution which handicapped Chinese economical, intellectual capital for 2 decades.

i am aware of the negative effects of reparations but fact of the matter is many countries in past wars have paid indemnities and still managed to make up for it. (Notable case being Carthage) I think reparations on Weimar Germany were manageable, the depression was the main cause of Germany's failure to revive and consequently Hitler's rise.

as for Japan's loan program to China, wasnt most of that money given to Japan by the US?

Answer 1

According to the Foreign Ministry of Japan, Japan held overseas assets of 238 billion yen in Manchukuo, China in Aug 6 1945 (still WW2 was going on). Manchukuo was a territory of Japan at that time.
Fixing exchange rate was very difficult at this era. However, after Japan surrendered, the exchange rate between US$ of GHQ and Japanese JP¥ were US$1=JP¥15. If we used this rate, 238 billion yen would be about US$ 16 billion.

If China demanded reparations, they also had to adjust the balance International legally. However, probably they didn't have enough money, and needed lots foreign currencies at that time. Because Mao Zedong founded PRC (People’s Republic of China) in 1949, and advanced the reforms of China and Chinese people with his communism beliefs.
China had been in chaos with their Cultural Revolution and the "Down to the Countryside Movement".
It was an era of the "Cold War" between the west (USA, West Europe and Japan) and communism (Soviet, China and East Europe). So Japan proposed another way of support.

In 1972, Japanese prime minister Kakuei Tanaka visited China and met Mao.
http://i89.photobucket.com/albums/k228/_files/mao_and_tanaka_19720928_n.jpg
After the "Joint Communique between Japan and China" on Sep 29 1972, Japan started to pay lots of money to China as the form of ODA (Official development assistance). The amount paid to China reached over US$30 billion until present day, and 20 billion of them became pure donation (China don't need to pay back the 20 bil).

Chiang Kai-shek's Taiwan took the same strategy first in 1952. They renounced the reparations from Japan but he didn't allow Japanese people who lived in Taiwan to bring their properties, including cash (freezed bank account), out of Taiwan. Japan and China used this type of solution.

You know the relationship between Japan and Taiwan or China (Manchuquo) before WW2 were very different from the colonies of Western countries. They were actually not a colony. Japan assumed those territories were real parts of Japan (like a province) and invested and developed those areas as much modern as Japan.
Both leaders (Mao of China and Chiang of Taiwan) knew the infrastructure and local economy which Japan left was very useful.

Manchukuo, China; 1932-1945
http://flickr.com/photos/37332502@N00/sets/72157594437286053/
Taiwan after 1895 (to 1945)
http://flickr.com/photos/94337686@N00/sets/72157600181512877/

Local elder people remember the time of Japanese rule. This is why Taiwan people and Da lian (ex-Manchukuo) people are friendly to Japanese and don't take anti-Japan attitude even now (opposite from other Chinese and Korens).


Japan paird for Burma, Indonesia, the Philippines, and Vietnam. Cos Japan didn't develope and leave important assets in these countries.
Japan paid US$200 million for Burma (former nation of Myanmar) with the treaty on November 5 1951.
To Phillipines, Japan paid US$550 million along with the compensation agreement of May 9 1956.
To Indonesia, Japan paid US$223 million along with the compensation agreement of January 20 1958.
To Vietnam, Japan paid US$3.9 million along with the compensation agreement of May 13 1959.).

Answer 2

Japanese War Reparations

Answer 3

it relatively is a fascinating, and recurrent factor... and that i think of it relatively is in all probability good that there could be a public apology for jap behaviour in WWII, to boot as a results of fact the previous Sino-jap conflict. it may advise lots, and help to calm animosity against the jap in Asia... I advise, it relatively is not too severe, in spite of the undeniable fact that it may nonetheless advise lots. some chinese language as an occasion nonetheless evaluate that the jap at the instant are not to any extent further valuable than animals, and that's surely no longer authentic. in basic terms for the checklist although, my father replaced right into a jap POW after being captured at Singapore... in his existence he replaced into in no way compensated, yet I even have won a scholarship risk in Japan, and my mom has won a largeish money payout, which replaced into nicely won. the main mandatory factor for me is that i be responsive to dad forgave his former captor after the conflict, or maybe met and talked with a number of them. a number of the studies he lived by using have been awful, and he had terrors interior the evening for years after coming residing house. If he would desire to forgive, it relatively is adequate for me. it relatively is authentic although, Japan would desire to do greater to know its destructive function in Asia 1931-40 5. on the comparable time, who in Japan will lead this if no longer the government? It desires to be sturdy apologies and reparations if in any respect... i think of there are some jap NPOs that attempt to handle conflict guilt, yet i'm getting the sensation that they at the instant are not making lots headway. Germany confronted as much because it relatively is previous so effectively as a results of fact German little ones studied the Nazi previous at school... it would not ensue in Japan interior the comparable way, and it will take an energetic, liberal government to alter that.

Answer 4

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Answer 5

Mao actually thanks Japan 1972 publicly for the invasion because they wiped out the military force of the ruling party so they could repel them and took over China 4 years after WWII.

Answer 6

I think that we have to get inside Mao’s mind. It wasn’t a trial lawyer’s mind or an accountant’s mind. To persons of those persuasions – and probably to most of the rest of the world – the potential claim for huge $ reparations from Japan for all of the damage and the atrocities that it had inflicted on China from the 1930’s onward would have been irresistible.

But Mao always played a long game. And Mao was neither an accountant nor a lawyer. What Mao wanted most was security for – and recognition for the legitimacy of - his regime in China. Even when his peasant farmers were (literally) eating grass because they had nothing else left, Mao continued to send FREE food to Communist regimes in Europe. Economics did not interest him. The suffering of the Chinese people did not interest him. Power interested him. And world recognition that MAO was the power in China.

So, with that as background, here are the facts as I understand them: -

[1] Japan and China had actually signed a Peace Treaty back in 1952. The problem (from Mao’s point of view) was that the WRONG China had made peace with Japan: Chiang Kai-shek’s regime in Taiwan. But, in a way, that 1952 Treaty set the precedent for what followed 20 years later: because Chiang waived any reparations from Japan (despite the fact Japan agreed to pay reparations to Burma, Indonesia, the Philippines, and Vietnam). Chiang waived reparations because he wanted something that was, for him, even more important than $ from Japan: he wanted recognition.

[2] But 20 years later, relations between the USA (under Nixon) and Communist China (still under Mao) began to improve. Very quickly, the American attitude toward China changed: now the idea was no longer to freeze China, but rather to do business with China. Encouraged by their American allies, but also pushed on by their own business interests (with an eye to the enormous market potential of China), Japan’s political leaders followed suit.

[3] Tokyo and Beijing established diplomatic relations in 1972. To the pleased surprise of the Japanese diplomats, Mao waived any demands for WW2 reparations from Japan. Why would he neglect such an obvious goldmine? Because, as I say above, Mao wanted something much more than just mega-Yen. Mao wanted security. He did exact one immediate political price: Japanese recognition of Beijing as the legitimate government of ALL China, including Taiwan.

[4] Remember ... by the 1970’s, Mao’s patron in the Kremlin, Stalin was long dead. And since his death, China’s relationship with the USSR had spiraled inexorably downhill. Mao no longer saw eye-to-eye with the leaders of the USSR. Indeed, he had come to view himself as the true leader of the Communist World, in rivalry against the Kremlin. But this posture left Mao isolated, with no dependable allies.

[5] Moreover ... Mao was not getting any younger. He desperately wanted to secure his legacy, his timeless stamp on China, before he died. Above all, that meant that he must leave China secure, with its slate cleared, and no significant threats on the horizon. And that required not just “peace” with America, Japan and the West. It required the establishment of mutually beneficial, lasting arrangements that could actually deter conflict: certainly not make conflict more likely.

[6] The problem with reparations – as with damages in a law suit, or alimony in a divorce (both of which they resemble) – is that they breed ill will. If you doubt that, look at how the Nazis made hay over the Versailles Treaty.

[7] Mao understood the negative effects of reparations. He was by no means a forgiving sort of man: in fact, he was a master of spiteful revenge. But Mao had no personal quarrel with Japan. On the contrary, but for Japan’s aggression in the 1930’s that distracted Chiang from destroying the Communists, Mao could never have become master of China. If anything, Mao owed a personal debt to the Japanese warlords.

[8] But the point is that Mao wanted and needed recognition, peace and trade with the Americans, Japanese and Europeans much more than he needed a trillion Yen and a continued cold shoulder. And he knew it.

[9] So Mao, as ever, played the long game. He waived reparations. By that apparently magnanimous gesture, he made the Japanese feel indebted to him. And the Japanese responded with grace and enthusiasm. Six years later, in 1978, a permanent settlement between Tokyo and Beijing followed the 1972 peace and recognition: the new Treaty of Peace and Friendship.

[10] No lawyer. No economist. But more far-sighted by far. By denying himself reparations, Mao won 3 trillion Yen in Japanese aid for China. These Japanese loans formed the bedrock on which China’s new post-Soviet economy was built. China’s new prosperity, its resumed role as a Great Power, rest on Mao’s foresight in settling the Japanese problem.

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Epilogue:

You might not know it from the above. But I think that Mao was a monster. Worse in many ways even than Stalin.
And yet ... credit where credit is due.
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EDIT: To Asker's recent comments.
[a] Yes, reparations have frequently been demanded and paid. But they are always resented. For example, Carthage paid ... but then fought again.
[b] Yes, Japan's post-WW2 recovery and wealth was courtesy of the USA (and huge efforts of Japan's citizens). US built up Japan as a bulwark against Communism, from time of Korean War.