In September, 1972, Japan normalized its relationship with the People's Republic of China. Before this, the Japanese business community had already changed to a more pro-mainland China political attitude, and this change created a favorable domestic environment for normalization. The core question here is why this change occurred and how the business community reached a consensus between 1970 and 1972. The existing literature points out three main factors: 1) success of China's pressure policies toward Japan; 2) structural change in the international system, indicated by improvement in Sino-US relations in 1971; 3) the supporters of normalization became powerful within Japan, as the so-called “Panda huggers” who continually pursued improved Sino-Japanese relations after WWII succeeded in involving the “interdependence diplomacy” supporters in the pro-mainland camp. However, the international economic environment was not considered as a factor influencing the policy preferences of Japanese business community.
My first point is that Beijing's policies toward Japan, although they are described as “strategic” by early research, were not highly coherent. There is new evidence to show that these policies were separate outcomes and had different origins, including Japan policy and foreign trade policy of China. The change in attitude toward China was not produced by Beijing's policies directly and happened before the structural change of the international political system.
Second, this change was basically based on Japanese actors own views of China's significance, which was influenced by their perception of the change of international economic system. This perception can be traced to the end of 1960s when Japanese economy was experiencing high growth. Increasing tensions between Japan and the US on economic issues, such as the revaluation of the Yen against the US dollar in 1971, signaled a major change in the international economic system. The Japanese business community realized that they have to actively adapt to the new order, and then they begun to stress the significance of improving international cooperation. The attitude change toward China was a large step in expanding Japan's international cooperation.
Through this case we can find that the Japanese business community was sensitive to the international economic environment as social economic actors. At the same time, in the consensus formation process, there existed significant differences between these actors, such as so called Zaikai (including the major business associations and their leaders) and the big companies. The former considered the national economic strategy of Japan, but the latter basically prioritized the interest of their industry and their company. This new perspective helps us to understand the current Sino-Japanese relationship.

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Liberal Democratic Party (LDP) is one of major actors in the policy making process in Japan. Many students of Japanese politics have pointed out that LDP is a coalition of factions whose leaders are candidates for the presidency of LDP. They also emphasize that portfolios are allocated to each Diet member of LDP not on the basis of their ability needed Cabinet member, but in simple proportion to the size of each faction to which qualified members belong.
Three major factions such as Tanaka faction, Kouchikai and Fukuda faction, however, have acquired much more portfolios and top-leadership in LDP than others. In adition to this fact, these factions have accumulated much influence over the different policy arena from each other. This is so because leaders of these factions have had the different policy concerns. They demand not only the some amounts of portfolios, but also the kind of them over which they desire to have influence. As a consequence, there is a kind of the division of labor among factions in the Japanese policy making process. Therefore, factions of LDP should be the essential subunits in that process while many students still underestimate a role of policy making which factions have performed.

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