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Japan and the G20: Ambivalence and the China factor

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In Brief

The emergence of the G20 as the premier body for international economic coordination represents a major challenge for Japan. It was not immediately obvious that Japan would embrace this new forum which calls into question and has officially usurped the role of Japan’s preferred body for economic cooperation, the G8.

Rather, Japan is attempting to keep the G20 as the de facto junior partner to the G8. Japan’s chief but not sole concern is that the G20 will place China in a position which is not just formally equal in terms of status to that of Japan but actually equal in terms of influence too.

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The G8 holds a special place in Japan’s international relations in general, and foreign economic policy in particular. Because Japan has not been able to secure a permanent seat on the United Nations Security Council, the premier body for international security cooperation, the G8 was a symbol of Japan’s global leadership (and even rehabilitation in the postwar period). This global leadership role was (and to an extent still is) predicated on Japan’s being a ‘bridge between East and West,’ and its representing Asia at the global level, but how effective Japan played that role remains debatable. Part of this has involved successfully championing Chinese participation (but not membership) in the G8, with the 2008 Toyako summit formalising Outreach-5 (including Chinese) observer status. This system suited Japan as China could be engaged in a way that gave Japan institutional advantage and influence.

The creation of the G20 initially also suited Japan’s basic interests, including with regard to China. At the outset the G20 was very much a creature of the G8, indeed its membership was hand picked by the G7 Finance Ministers in 1999. The expectation was that G20 meetings, at the Finance Minister’s level, would not take major decisions and would for the most part be directed by proposals from the G8. This view is held among Japanese bureaucrats and also by the political leadership, with PM Hatoyama observing after the Pittsburgh Summit that the G8 was still needed because coordination with the expanded membership of the G20 was likely to be difficult.

The G20 has not been useful in Japanese bilateral approaches to China thus far. The territorial dispute which broke out between Japan and China in September of last year might have been an issue which could have been discussed on the sidelines of the G20, but it was not. Although there were bilateral talks at the previous G20 Summits in London and Toronto, the opportunity for a Sino-Japanese informal leader’s summit to deal with this major issue at the G20 Summit in Seoul, November 2010, slipped by. China insisted that talks at the G20 would be too early and instead preferred to meet later in the month in Japan at the APEC Summit — and even then China took pains to emphasise domestically that Japan as APEC host had requested the meeting. As a body focused on economic issues, the G20 is unable to address a major strategic issue amongst its membership in a way that the G8 was able to.

Japan has struggled to carve out a leadership role for itself in the G20. Despite the fact that it has offered to host both the second and third G20 summits, Japan has yet to play anything more than a guest role. This is especially frustrating given the prominent role that Korea has played in the G20 both as host and as co-chair at Toronto.

Japan has therefore moved cautiously on deepening the capacity of the G20. At the Seoul Summit Japan was against the creation of a dedicated G20 Secretariat, at least in the short term. This implies Japan’s negative interest in the G20 becoming more institutionalised, which is all the more remarkable because China came out in support of the proposal. Instead, Japan has been interested in widening the membership of the G20, ostensibly due to concerns about its perceived lack of legitimacy. Japan has been a major supporter of the G20 Outreach program called the ‘Global Governance Group’ (3G). Japan’s interest in expanding the number of voices heard at the G20 through the 3G, viewed cynically, could be seen as an attempt to weaken the G20 as an institution vis-à-vis the G8.

Japan remains deeply ambivalent about the G20. But while this ambivalence might moderately weaken the G20 process, it is unlikely to threaten the G20’s primacy in governance of the global economy. And if Japan wants to recover its influence on the world stage, constructive leadership at the G20 would be the best place to reclaim that.

Joel Rathus holds a PhD from the University of Adelaide and is a member of the East Asia Forum team at the Australian National University.

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