In our lead piece this week, Yoichi Funabashi and Harry Dempsey suggest that we may be witnessing a game change in the China–Japan relationship.
In a speech in Tokyo on 5 June, Japanese Prime Minister Shinzo Abe declared that ‘Japan is ready to extend cooperation’ with China’s Belt and Road Initiative (BRI). This represents a dramatic shift in Japanese policy. Since 2014, Japan — along with the United States — has steadfastly opposed signing up to new Chinese international economic organisations like the Asian Infrastructure Investment Bank (AIIB) or endorsing the BRI. Japan has viewed these initiatives as a challenge to its own leadership of the Asian Development Bank and to the US-led international economic order more generally, and has criticised the AIIB for its governance processes and lack of transparency.
But in May, the Abe government made the decision to send Toshihiro Nikai, Secretary-General of Japan’s Liberal Democratic Party, to the Belt and Forum in Beijing, a decision that was lauded by the Chinese government. In comments made during his meeting with Nikai, Chinese President Xi Jinping welcomed Japan’s endorsement of the initiative, explaining that ‘The Belt and Road Initiative can be a new platform and an “experimental field” for China and Japan to achieve mutually beneficial cooperation and common development’.
Then, on 5 June, Abe delivered an important speech in which he outlined his ‘dream’ for Asia’s future. He argued that the world stood at a crossroads: in one direction was a closed, protectionist and declining economic order, in the other was a ‘free, open, and fair economic zone’ in which ‘high-quality rules’ could link the Pacific and Eurasia. Abe argued that instruments like the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP), and the Japan–European Union Free Trade Agreement could be used to build this free, open, fair and high-quality economic order.
But Abe did not stop there. Instead, he honed in on the significance of the BRI not only for China, but also for strengthening Asia’s role as a global economic hub connecting East and West. As Abe argued, ‘This year marked the first time that the city of Yiwu, China and the United Kingdom were connected by a freight train, which crossed the English Channel. The “One Belt, One Road” initiative holds the potential to connect East and West as well as the diverse regions found in between’.
Funabashi and Dempsey suggest that US President Donald Trump has helped to motivate this shift in Japanese policy in two ways. First, since Trump’s election, the US–China relationship has ‘struck upon a kind of high risk, fragile reframing, mainly because Trump is prioritising a solution to the problem of North Korea through Beijing’. Yet Tokyo is well aware that long-term management of the Korean peninsula cannot be solved only by the US and China. Instead, it will require a high degree of coordination between Tokyo and Beijing, and thus an improvement in the bilateral relationship.
Second, and more importantly, Trump’s policies and behaviour to date signify deep uncertainty about the future US role in Asia, and US security and economic commitments in the region. Funabashi and Dempsey explain that ‘Tokyo has begun serious contemplation of a clean-slate foreign policy absent US primacy. In the case of a recalibration like this, no relationship would be more important to stabilise than that with China’.
It is far too soon to tell whether Tokyo will continue to contemplate, or act upon, a ‘clean-slate foreign policy’. But a Japan that envisages the absence of US primacy in Asia would represent the most significant strategic shift in the region since the end of the Cold War.
Funabashi and Dempsey make clear that there are important challenges still facing the China–Japan relationship.
First, Abe’s offer to cooperate with BRI remains ‘tentative, informal and critical’. Japan’s engagement will depend on whether the infrastructure funded through BRI is ‘open to use by all’, is procured through transparent and fair processes, is economically viable, and causes no harm to debtor nation’s finances. It also remains to be seen whether the economic visions being pursued by Tokyo and Beijing will be mutually compatible.
Second, while Sino–Japanese cooperation on economic matters is an important starting point, it is unclear whether economic cooperation can translate into cooperation over a host of pressing bilateral and regional security tensions. Japan’s security posture is premised upon US primacy in Asia, and it is this that explains so much of China’s discomfort with Japan’s military modernisation. The two countries face unresolved maritime and territorial disputes in the East China Sea, and Japan remains profoundly concerned about China’s behaviour in the South China Sea. And the nature of the US–China deal over North Korea will have profound implications for Japan. As Funabashi and Dempsey argue, ‘On one hand, a breakdown would raise the possibility of military conflict that would hugely complicate China and Japan relations. On the other hand, success would likely see Japanese and South Korean concerns bypassed’.
Third and finally, government or business-to-business cooperation through the BRI is unlikely to transform the overwhelmingly negative anti-Japanese and anti-Chinese sentiment that plays a powerful role in both societies. Funabashi and Dempsey argue that ‘meaningful reconciliation’ between China and Japan requires ‘a long term process of strategic alignment and compromise, not just sudden realpolitik play without grassroots groundwork’.
Despite these significant challenges, Abe’s decision to contemplate engagement with the Belt and Road Initiative represents a turning point in the China–Japan relationship. It may be the first sign that uncertainty over the US role in Asia is prompting fundamental strategic reassessments in the region.
The EAF Editorial Group is comprised of Peter Drysdale, Shiro Armstrong, Ben Ascione, Amy King, Liam Gammon, Jillian Mowbray-Tsutsumi and Ben Hillman, and is located in the Crawford School of Public Policy in the ANU College of Asia and the Pacific.
Totally unnecessary detour.
Back in 2010, had Japan adequately handled the Diaoyu Islands dispute, or as some had suggested back then (I think was on economist.com comments) to resolve the issue by joint consultations and perhaps sovereign sharing, the downward spiral of China-Japan relationship would not have happened but perhaps even ushered in a new era of Sino-Japanese relationship.
If anyone remembers, Japan’s response was there was no dispute, the islands are Japan’s alone, despite plenty of information to the contrary. This pretty much ensured the subsequent nationalism head-butting in both countries. Japan then threw itself whole into US security architecture and when the critical US “pivot” to Asia occurred, US was forced to reaffirm its treaty to “defend” “Japanese administration” of the islands, which in turn inflamed Chinese nationalism towards US. Then 6 years passed, from that detour we now arrive basically at the same path forward but years behind with unnecessary luggage picked up along the way.
Past is past, history is history. Now this new initial thaw in relations brings in hope all sides can adequately work out the situation and undo the damage done, and oh believe me there’s plenty of damage to be undone in both countries.
I hope China will not do the sovereign sharing thing. Diaoyutai (Diaoyu islands) are clearly China’s historically. Japan simply doesn’t have a case. Japan should be happy that they got to keep annexed Ryukyu (Okinawa). If Japan wants to do the right thing they should let Ryukyu independence.