Japan's "China Dilemma"

Japan faces a dilemma that it helped to create. The dilemma is simple to describe, but not so easy to resolve, and it is one that all countries in the Indo-Pacific share. Jason Young, from the New Zealand Contemporary China Research Centre in Wellington, takes a closer look at Japan’s China dilemma. 

Since the 1970's Japan has welcomed China’s new development strategy and international engagement by providing valuable technical assistance and foreign direct investment, helping fuel China’s rise as an economic power.

That rise has created economic opportunities for Japanese companies and nurtured a growing market for Japanese goods as well as a steady flow of students and tourists. At the same time, China’s economic growth has transformed the country into not only a more prosperous society, but also a more militarily powerful nation, and one still controlled by a single dominant political party.

In short, China’s rise creates opportunities for Japan, but has also led to a deep sense of insecurity.

Various countries have approached this shared dilemma differently. In recent years, scholars in the US have increasingly viewed China as a peer competitor and adopted a mindset of strategic rivalry. Washington has pivoted militarily to Asia, and applied unilateral pressure through a trade war that is reshaping the Chinese economy and its linkages to the United States.

US commentators have increasingly come to regard engagement with China as detrimental to US interests, even when that contact holds tangible commercial or diplomatic value.

There is little doubt that Japanese analysts share concerns expressed in Washington, and are wary of what growing Chinese power and influence mean for Japanese interests.

Japan is doing all it can to balance China’s growing military influence by strengthening commitments made under the Japan-US Security Treaty.

They have sought and received confirmation that treaty provisions extend to the Senkaku Islands (referred to as Diaoyu and Diaoyutai in China and Taiwan) with then US Secretary of Defense, Jim Mattis, stating in 2017, “the U.S. will continue to recognize Japanese administration of the islands and as such Article 5 of the U.S.-Japan Security Treaty applies”. Japan has conducted its own ‘pivot’ of coastal defences to the south, and stepped up coast guard activities.

The Japanese Government has also responded carefully to Chinese economic engagement in Asia. Chinese strategies like the “Belt and Road Initiative” (BRI) and the uptick in state and private sector efforts to move up the value chain clearly compete with Japanese companies and investors.

Japanese enterprises however, unlike a growing number of US companies, remain in China, and some are still making good profits- even as they face stiffer local competition and complain of lax intellectual property enforcement and subsidies for Chinese competitors.

The ‘deep freeze’ in diplomatic exchanges with China also appears to be over. There has been an increase in high-level visits such as the Japan—Korea—China summit in China late last year, the signing of more than 50 MOUs,  and an invitation for President Xi to visit Tokyo in 2020.

Early messages of support, private donations of medical masks and a level-headed Japanese government response to the COVID-19 outbreak have elicited praise from the Chinese foreign ministry and online Chinese community alike, something almost unthinkable even two years ago.

Even with this new modus operandi, Japan’s China dilemma remains. To try to go some way to resolving it, Japanese officials have continued to try to shape China’s rise.

Japan presents a highly attractive model of modern Asian democracy, and has remained open to Chinese students and tourists. Public debate has not  dwelled on Chinese influence, and the country appears confident it can positively influence the roughly 10 million annual Chinese visitors to Japan. This is true even as public opinion polls like the Pew Research Center’s "2019 Global Attitudes" survey show record high numbers of Japanese viewing China ‘unfavourably’.

Japan has also engaged in a smart form of diplomacy regarding China’s efforts to be a major player in Asia’s infrastructure and connectivity plans. Japan’s response to the BRI is a case in point. Here there are concerns about the BRI’s potential to undermine Japan’s commercial interests and influence in Southeast Asia, and to water down the quality, rules and standards of infrastructure projects in the region.

Japan’s vision for a “Free and Open Indo-Pacific” (FOIP) also promotes connectivity through infrastructure development, has both land and maritime dimensions and uses a mixture of state and private sector funds and knowhow.

Differing from BRI, however, FOIP puts forward principles of openness, transparency, rule of law, and maritime enforcement as well as economic viability.

The Japanese Government has stated it is open to cooperating with countries to realise what ASEAN bureaucrats call ‘connected connectivity’. For example, in 2017 Prime Minister Abe welcomed cooperation with China on the BRI with the caveat that critical infrastructure is open to all, procurement is transparent and fair, and projects are economically viable and financed by debt that can be repaid so as not to put financial stress on debtor nations.

The million-dollar question is whether such strategies can shape Chinese external engagement.

President Xi Jinping did refer to many of the same principles in his countering of criticism of the BRI at the 2019 BRI forum in Beijing. It will take a combined regional effort to ensure China’s BRI projects consistently adhere to them.

Japan’s relationship with China shows countries can manage the dilemma posed by the rise of China if not resolve it. But it also shows Chinese foreign policy can be responsive, especially when presented with a unified vision of the principles underpinning orderly competition in Asia.

The author visited Japan with the help of the Ministry of Foreign Affairs of Japan in December 2019.

- Asia Media Centre