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Author: Editorial Board, ANU

Japan’s Fast Retailing CEO Tadashi Yanai, who runs the Uniqlo clothing chain, declared that his company wouldn’t be choosing between the United States and China in an interview with financial daily Nikkei Asia last week. ‘Japan can’t survive without being an open country’, Yanai said. Japanese companies caught between the United States and China ‘need to acknowledge that Japan has nothing. Japan has no choice but to make money in markets across the world’.

Yanai’s decision to make no comment on whether the company uses cotton from Xinjiang is emblematic of his approach to geopolitical affairs. ‘I want to be neutral between the United States and China’, he said. ‘The US approach is to force companies to show their allegiance. I wanted to show that I won’t play that game’.

When it comes to the economic crunch point, what’s good for Uniqlo is probably also good for Japan. But the Japanese government is yet to define a pathway through US–China rivalry and political assertiveness that might make Yanai’s posture a viable national strategy.

The Japanese prosperity that has come with globalisation and technological advancement has fundamentally changed the regional and global balance of power. The rise of China as the world’s second largest and soon to be largest economy poses a major challenge to the established global order.

The whole region is navigating these tricky changes, but Japan is in the cockpit.

The pressures on global markets and political and multilateral institutions and systems are unprecedented. China’s political system amplifies the uncertainty the region faces about how tensions with Beijing can be dealt with. Political and military power has followed China’s economic power, and the country is no longer hiding its strength and biding its time.

China is Japan’s and Asia’s largest trading and economic partner; Japan is the largest source of foreign direct investment for China. It is reasonable for China to have its power reflected in international efforts to shape global rules and for it to want to secure its interests in its immediate neighbourhood.

But the tip towards political coercion is a tip too far. China’s assertiveness in international dealings and its use of coercion, particularly in its immediate regional neighbourhood — earlier against Japan and recently more blatantly against Australia — have aggravated uncertainties about the nature of its rise. There is a growing attenuation of trust between China and other powers.

The United States’ responses to the rise of China have varied, grappling for a balance between engagement, competition and containment. In recent years, fears of the consequences of China’s challenge to US economic power have led to a trade war, technological decoupling and strategic competition and pressure on US allies and partners to make choices that favour the United States whatever the cost.

Although the rise of Japan in the 1980s was also met with a similarly confrontational American response, Japan was under the American security umbrella and had a political system that was a little less unfamiliar. The rise of protectionism in the United States, driven by an uneven recovery from the global financial crisis in 2008 and politically exploitable domestic socioeconomic disparities, has added to these pressures.

The pressure on US allies to decouple their trade and technology from China has grown. The multilateralism that helps to restrain and shape great power settlements and is essential to Japan’s prosperity and security, is harder to sustain.

At a time when strategic innovation is much needed to define a pathway through, Japanese political leadership is entangled in established ways of thinking from the past.

In our lead article this week, Ben Ascione observes that ‘unless [Japanese Prime Minister Fumio] Kishida can assert his control over the LDP after the July 2022 upper house election and build more than lukewarm public support he will find it difficult to exercise the levers of the prime minister’s office to strike a new policy course’.

‘Japanese democracy is at its weakest point in the post-war era’, Ascione laments, and there is no cut-through, hard-edged political debate about domestic or pressing foreign policy issues. Though he hails from a fine liberal tradition in Japanese conservative politics (the Kochikai faction which boasts former prime ministers Hayato Ikeda, Masayoshi Ohira, Zenko Suzuki and Kiichi Miyazawa) Kishida appears bound to the nationalist conservative party bosses who helped install him as LDP leader to avoid the more liberal Taro Kono.

‘On foreign and security policy, Kishida is following the Indo-Pacific vision set out by Abe and Suga. This means prioritising the US alliance and relations with Quad members such as Australia, which he visits this week’, says Ascione. ‘On China, Kishida walks a tightrope’. The Japanese Diet has shelved a resolution condemning China’s human rights record and refrained from a ‘diplomatic boycott’ of the Beijing Winter Olympics. But there’s no sign of any diplomatic initiative that might attenuate gathering strategic pressures in East Asia.

In confronting Japan’s contemporary diplomatic circumstance, Kishida and his aides might do well to reflect upon how his political ancestors like Ohira handled butting heads with the United States over Japan’s rise in Asia, with his bold multilateral Asia Pacific strategy that led to the formation of APEC and a cooperative framework that alleviated trans-Pacific tensions.

Buttressing the multilateral economic order to create space for China, the United States and other large rising countries in South and Southeast Asia is a priority for Japan today. But that’s unlikely to succeed without strengthening and building a security architecture around the US alliance framework that embeds mutual assurances about the use of political power across the region. The idea of such a comprehensive security framework is exactly what inspired Japan’s constructive and active diplomacy in the 1980s. It’s an idea that has also occurred to leading strategic thinkers in Indonesia, a crucial partner in any effort to build stronger regional architecture.

No one country, however big, ought to dominate the Asia Pacific or Indo-Pacific and multilateral principles can set terms of engagement that help to constrain the exercise of raw political power.

A comprehensive security arrangement that affirms commitment to multilateral economic rules and cross-regional sign-on to ASEAN Treaty of Amity and Cooperation (TAC) principles would help secure a free, open, inclusive, prosperous and politically stable region. It frames a vision for the region in which Japan could shape its future that references the principles of crucial importance to prosperity and security.

The present political scene in Tokyo might make the odds of fashioning an imaginative Japanese diplomatic initiative look very long, but hopefully the pressing circumstance that requires it may yet prove the mother of invention.

The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.

The post Japan needs to navigate a pathway between the United States and China first appeared on News JU.

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