The bilateral relations between the world’s two leading economies have seen a drastic paradigm shift in last couple of years; the issues of contention that long characterised the relations between China and Japan have been replaced with economic and trade interests. Both countries are apparently desirious of improving their bilateral relations which can ultimately help in bringing peace and prosperity to South Asia, South East Asia and East Asia. The diplomatic relations between the two countries were first established on September 29, 1972. After twenty-two years of formal relations, Japanese Prime Minister, , Morihiro Hosikawa, paid a visit to China. In the same year, the Vice President of China, Rong Yiren, also paid a visit to Japan. Since then various high-level visits have taken place and both countries developed political and economic relations. There are a number of divergences and convergences between China and Japan. The dispute on Sensaku islands is main divergence. Japan controlled it during pre-World War II period. Even the San Francisco Treaty which was signed between the U.S, Japan and other countries in 1951 indicated its attachment to Japan. Soon the islands became a dispute between the two countries when oil reserves were unearthed. Another divergence between the two countries is the nuclearization of North Korea. Japan and the U.S have denounced the nuclear program of North Korea and its nuclear armament. North Korea undertook nuclear test in September, 2017. On September 11, 2017, the United Nations Security Council adopted a resolution, condemning the nuclear test as flagrant violation of its resolutions. It was the twelvth resolution that the Security Council passed since 1993. It has also imposed sanctions on the country. China also condemned the North Korean nuclear explosion and urged it to comply with the UN’s resolutions. North Korea has also acquired missile technology. It has developed Inter Continental Ballsitic Missiles (ICBM) and Nuclear Delivery Vehicles. Japan views this as a threat to itself. The North Korean nuclear armament is perceived as a threat by the countries located in South East Asia. It is alleged that China is the main supporter of the present government of North Korea. The United States has also imposed sanctions on at least thirty-six entities and individuals for engaging in transactions with North Korea. In response, China has urged the U.S to immediately withdraw the sanctions on companies and individuals trading with North Korea. The policies of North Korea dates back to the era of the Cold War when it was in the communist block headed by the former Soviet Union whereas South Korea was in the capitalist block led by the United States. It seems that the Cold War has never ended on the Korean peninsula. Now, North Korea has no strong Soviet shield as witnessed during the Cold War. However, it does enjoy support from the anti-US quarters. China’s increasing influence in the South China Sea is also a matter of concern for Japan. The sea has an important energy route. According to a report, thirty-three percent of global crude oil and more than fifty percent of global liquified natural gas passes through this sea per annum. Japan is a resource-scarce country and relies on oil from the Persian Gulf which it has to import via this sea. On the other hand, China is ambitious to have an influence on Strait of Hormuz and Strait of Malacca. Despite these divergences, both countries enjoy warm economic and trade relations. Trade between the two countries grew to 340 Billion US dollars in 2014.Japan was leading source of Direct Investment in China in 2014 which reached more than $100 billion. Chinese investment in Japan touched 120 billion US dollars in 2015. Japan enjoyed economic relations with two main and important countries of South Asia i.e Pakistan and India even before the partition of the sub-continent in August, 1947. These relations have strengthened with the passage of time. The population of South Asia is more than 1.5 billion. It is a big market for the consumption of Japanese goods. More over, the Japanese companies have also invested billion of dollars in Pakistan and India. Japan would prefer to protect its interests at any cost. There are various factors that contributed to Japan’s changed stance towards China. These include emerging understanding between South Korea and North Korea, China’s increasing strategic influence in the regions of South Asia, Central Asia and South East Asia, China’s vision of building infrastructure in Asia for its own interests, diminishing importance of territorial dispute in bilateral relations vis-à-vis economic interest and the U.S policy of “America First” It seems that in the beginning, the Chinese initiative of One Belt One Road offended Japan. But as a clear picture of OBOR emerged and soon Japanese realized that China might not go back on its initiative, then it decided to change its approach. Now divergence of OBOR has been converted into convergence. Japan wants to develop close relations with China. China and Japan held a summit meeting on the sideline of Asia-Pacific Economic Cooperation in November, 2017 in Vietnam. The Chinese President appreciated the Japanese inclination for the improvement in the bilateral relations. Japanese Prime Minister reiterated the normalisation of relations under “mutually beneficial relationship based on common strategic interests”. On January 28, 2018, Japanese foreign minister, Taro Kono paid a visit to China and met the Chinese premier and his counterpart. Both foreign ministers agreed on improving people-to-people contacts and promoting the Regional Comprehensive Economic Partnership (RCEP) and the Japan-China-ROK Free Trade Agreement (FTA). The Japanese foreign minister stated that the East China Sea should be a “sea of Peace, cooperation, and friendship”. Japan is keen to mend its relations with China. The Japanese Prime Minister, Shinzo Abe expressed his desire, while addressing at Chinese Embassy in Tokyo in December, 2017, to visit China and invited the Chinese President to Japan. In Japanese Diet, he expressed “friendly relationship [with China] in a stable manner from a broad perspective.” There are various factors that contributed to Japan’s changed stance towards China. These include emerging understanding between South Korea and North Korea, China’s increasing strategic influence in the regions of South Asia, Central Asia and South East Asia, China’s vision of building infrastructure in Asia for its won interests, diminishing importance of territorial dispute in bilateral relations vis-à-vis economic interest and the U.S policy of “America First”. . Japan voted against U.S’ decision of shifting its embassy to East Jerusalem in the UN General Assembly in Janaury, 2018. The U.S President Trump, in his address at Union of State in early February, 2018, said that its decision was his country’s sovereign right. Moreover, Trump’s daughter headed the U.S delegation to closing ceremony of Winter Olympics in North Korea. This may be signal for Japan to think on the possible scenario of its security relations with the U.S. Both the countries signed Security Treaty in 1952. Article 1 of the Treaty provides that the U.S forces will be utilized to contribute to the maintenance of international peace and security in the Far East and to the security of Japan against armed attack from without, including assistance given at the express request of the Japanese Government to put down largescale internal riots and disturbances in Japan, caused through instigation or intervention by an outside power or powers. Japan may not continue to oppose China in view of the U.S defence guarantees. A country may not live with peace having confrontation with neighbouring countries or countries next to them. The air travel distance between the U.S and Japan is 10,173 km. Though the U.S has military bases inside Japan, it has also not kept Japanese confidence in tact. Japan is a mrine side neighboring country. The cordial and warm bilateral relations are in the interest of both China and Japan. The writer is an author and has a doctorate in Political Science Published in Daily Times, March 5th 2018.