China-Japan relations largely remained "politically cold and economically hot" in 2005. Bilateral trade volume reached US$184.5 billion, up about 12 percent year on year, but for the 11th consecutive year, China-Japan trade growth was slower than China's average foreign trade growth. Lower than that between China and the EU and the United States, the trade volume between China and Japan accounted for 13 percent of China's total in 2005, as compared to 24 percent in 1994.

The year 2005 marked the 60th anniversary of the victory of the World Anti-Fascist War and the Chinese People's War of Resistance Against Japanese Aggression. For China-Japan relations, it was an important yet sensitive year. China has called on Japan to handle appropriately compelling problems such as historical issues, visits to the war-related Yasukuni Shrine by senior officials and the Taiwan issue. However, what Japan has done over historical issues and the Taiwan issue in 2005 runs counter to its commitment, rendering shaky the political foundation for China-Japan relations. It has hurt the feelings of the Chinese and other Asian nations once victimized by Japanese militarists, triggered the indignation of people in these countries and made China-Japan relations tenser.

Both China and Japan are influential countries in Asia and in the world. The history of China-Japan relations shows that peace benefits, while fight harms, both sides. Discord in China-Japan relations is not only harmful to the two countries, but can also affect the stability and development of Asia. Despite the many problems facing current bilateral relations, China's position of developing cooperative relations with Japan remains unchanged. Against this background, the two countries must take concrete measures to break the current stalemate and facilitate the sound and stable development of their relations.

Chinese President Hu Jintao put forward a five-point proposal on the development of China-Japan relations in 2005. First, the three political documents--Sino-Japanese Joint Statement, Sino-Japanese Treaty of Peace and Friendship and Sino-Japanese Joint Declaration--should be strictly observed. Concrete action should be taken to develop friendly cooperation between China and Japan in the 21st century. Second, the principle of taking history as a mirror to guide the future should be earnestly adhered to. The aggressive war waged by Japanese militarists not only had grave consequences for the Chinese people, but also severely harmed the Japanese nation. A correct understanding of, and attitude toward, history calls for self-examination and a commitment to refrain from doing anything that may hurt the feelings of the Chinese and other Asian nations. It is hoped that Japan will deal with historical issues in a serious manner. Third, the Taiwan issue should be addressed properly. At the core of China's interests, the Taiwan issue affects the national feelings of 1.3 billion Chinese people. The Japanese Government has repeatedly announced to stick to the one-China policy and not to support "Taiwan independence." China hopes that Japan will honor its commitment in action. Fourth, the disputes between China and Japan should always be dealt with though dialogue and equal consultation. Both countries should actively explore ways of resolving differences, while protecting overall China-Japan relations from new hindrances. Fifth, bilateral exchanges and cooperation in a variety of areas, including people-to-people friendly linkages, should be stepped up so as to promote mutual understanding and expand common ground.