VJ DAY REMEMBERED : China mutes the voices of victory

VJ Day in China was, above all, a carefully-scripted event. The Communist Party staged it in an attempt to stir nationalist pride and boost its historic claim to the nation's loyalty.

President Jiang Zemin made his way to Marco Polo bridge, on the outskirts of Peking, where the Sino-Japanese war began on 7 July, 1937, and declared the Anti-Japanese war "the first time in modern Chinese history that our people won absolute victory against foreign invaders". The People's Daily celebrated with a youthful picture of Chairman Mao and a long article on "The superb strategy of Mao Tse-tung in directing the Anti-Japanese war". China expressed appreciation for the apology made by Tomiichi Murayama, the Japanese Prime Minister, although it reiterated that some Japanese "are still unable to adopt a correct attitude", and that Tokyo must "face up to history".

Overall, there was little to offend Japan. The tone was set weeks ago; Peking wanted to settle historical accounts without jeopardising Japan's present-day economic role in China.China's leaders know they cannot afford to insult Tokyo. In the first quarter of 1995, Japan was China's biggest trading partner and bilateral trade is forecast to reach $50bn (pounds 33bn) this year; Japanese companies are key investors and providers of technology to China and Tokyo is the biggest aid donor, already providing 1,681bn yen (pounds 11bn) of soft loans - and promising more.

The leaders are wary of the assertion that Japan has replaced its former military might with economic clout. Among the older generation, the brutality of Japan's occupation is not forgotten. According to Peking's figures, 21 million Chinese were killed and 14 million injured in the 1937-45 Anti- Japanese War, and the economic loss to China was $500bn. The country suffered many of Japan's worst wartime atrocities: the 300,000 killings of the December 1937 Rape of Nanking the germ-warfare tests which murdered unknown thousands and barbaric medical experiments performed at the notorious Camp 731 in Manchuria, the north-east part of China which the Japanese occupied in 1931.

Yet 50 years later, both countries know that theirs is the most important relationship in East Asia. The potential strains, however, remain immense. The two nations are increasingly jockeying for position as the dominant Asian power.

For Japan, the big issues are China's military expansion and its nuclear- test programme. Tokyo is concerned about China's rising defence budget, military modernisation and claims to the South China Sea and the Spratly Islands. On nuclear testing, Tokyo has been unusually forthright. After the test in May, Japan reduced China's 7.8bn yen (pounds 51m) of "grant aid". On Thursday, Tokyo indicated further cuts in humanitarian assistance - but ruled out any impact on yen loans.

Peking has its own complaints. When Mr Murayama visited in May, the Chinese failed to persuade Japan to renegotiate interest payments on yen-denominated loans, which have soared with the strengthening Japanese currency. China protested strongly over the Dalai Lama's visit in April to Japan. And it has put pressure on Tokyo not to follow the US in upgrading links with Taiwan when Taipei is represented at a regional forum in Osaka in November.

Against this sensitive background, the Chinese government shied from Japan-bashing in the run-up to VJ Day. Since mid-June, when the anniversary season was launched, China's commemoration has become the focus of nationalistic "patriotic education". The emphasis has been on the West's under-valuing of China's role in defeating the "Fascists", and on the Communists' superiority to the nationalist Kuomintang in fighting the Japanese.

For some, the anniversary has been good business. At Jiaozhuanghu, outside Peking, up to 6,000 people arrive each day, mostly work-group outings, to view the defensive tunnels built by villagers during the Anti-Japanese war.

And just so they realise what war in China was like, there is an "Anti- Japanese lunch" of corn bread, gruel and pickled vegetables.