How China and Japan’s brotherhood of steel – forged by Deng Xiaoping – ultimately corroded

Even to the casual observer, the streets of China look very different compared to a few short years ago.

This is perhaps nowhere more evident than in the status of Japanese models; though they commanded a third of the market at their peak, they now account for fewer than two of every 10 vehicles currently in use.

Symbolic of this seismic shift, the Japanese metals giant Nippon Steel – citing those dwindling sales figures – has announced the end of its 20-year joint venture with Baosteel, the Shanghai-based state steelmaker.

At the venture’s start, China’s steelmakers received substantial technical assistance. Decades later, the country has grown into the world’s largest steel producer; once reliant on foreign technology and expertise to develop its indigenous industries, it is now charting its own path and expanding overseas.

Most projects in the early reform era were joint ventures, which shortened the time needed for China to advance up the value chain – and, in the long run, diminished its need for overseas investment and know-how.

One of the most pivotal moments of the trip, featured in reports and documentaries about the visit from both countries, was his tour of Japanese steel plants. These set the tone for China’s economic transformation, as at that time steel was seen as a bedrock sector, particularly where manufacturing was concerned.

Notably, his time at Nippon Steel’s Kimitsu plant ignited an ambition to replicate the company’s success, setting the stage for the birth of Baosteel and laying a foundation for bilateral ties.

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