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5 October 2023

Managing in the Middle: Japan’s Strategic Approach to US-China Rivalry

Ryo Sahashi

IN DECEMBER 2022, Japan revised its National Security Strategy and two other essential documents and introduced a major update to its security policy, including a significant increase in its defense budget and the introduction of a counter-strike capability. Prime Minister Fumio Kishida was considered a moderate, or so-called dove, in military affairs, but he inherited the security policy framework of former Prime Minister Shinzo Abe, who was assassinated six months earlier and was the architect of the new strategic approach.​1 Abe regarded it as necessary to preserve intra-party political balance and as a critical issue to be resolved under his leadership.

For Japan, the benefits of the alliance with the United States continue to outweigh the costs. This is due to the importance of ensuring traditional security through military alliances, with China and North Korea in mind, as well as the assessment that the continued involvement of the United States in the region is vital to the preservation of order.

Despite this, it is worth asking whether Japan will simply go along with US military vigilance, economic statecraft and criticism of China over its harsh treatment of its own citizens as Washington’s strategy toward China evolves. If not, what different approach could Japan take, and how might that play out? In this essay, I examine Japan’s response to these questions, but more broadly, I discuss how like-minded liberal democracies deal with China. As the US-China rivalry expands in scope and scale, economic interdependence shrinks and regional integration suffers; are US middle-power allies losing their agency? For them, what are the relative benefits and risks of doubling down on an alliance with the US?

THE IMPORTANCE OF THE US FOR TRADITIONAL SECURITY

The importance for Japan of its military alliance with the US has not changed. Like many US allies, Japan does not believe that there is any entity in the foreseeable future that can replace the role of the US, deploying its military assets in the region with a similar view of the international order. In its recent National Security Strategy, Japan underscored that “for the US commitment to the region to be maintained and strengthened, deepened co-operation between Japan and the US at a concrete level in the Indo-Pacific region is vital.”​2 The increase in the self-defense forces’ capability and budget should be understood primarily in this context. It is regarded as essential to underpin the US presence by providing more military capability and inter-operability.

Japan-US-South Korea relations are also rapidly evolving and taking into account the trilateral relationship not only on the Korean Peninsula but also in the Indo-Pacific region and beyond. A strong US lead in reorienting Asia’s security architecture toward an alliance-centered approach and the emergence of a conservative administration in South Korea are driving this trend. Advanced intelligence sharing and training on threats to the Korean Peninsula and increased preparedness for a possible conflict over Taiwan are positive for Japan’s security. Because of the heightened security awareness, Kishida is serious about building a new security platform for Northeast Asia that includes South Korea, even at the risk of taking some political hits.

But it is also true that the costs, risks and uncertainty of maintaining the alliance have increased. This is due to concerns about the high probability of military involvement in the event of an actual US-China conflict, as well as rational voices from domestic stakeholders who believe they have much to gain economically from maintaining the status quo. In a recent survey of Japanese citizens, 80 percent of respondents felt Japan would be involved in an armed conflict between China and the US over Taiwan, compared with 18 percent who said they had no views on the matter.​3

TROUBLING CHANGES IN US POLICY

Furthermore, the US plan to restructure the international economic order to focus more on security, as US National Security Advisor Jake Sullivan laid out in a speech on April 27, is not something that allies would embrace. Many Asian capitals already see a lack of American focus on free trade, with Washington’s priority now being to protect its own labor force. While many believe that a Plan B for the US alliance is unnecessary, if US internationalism continues to deteriorate, it will inevitably lead to a more autonomous strategy.

That the US approach to problem-solving has become too “strategic” and thus misaligned with the needs of countries in the region was also evident in the post-9/11 world. Regional institutions such as the ASEAN Regional Forum (ARF) and the Asia-Pacific Economic Cooperation (APEC) forum were securitized in response to the rising threats from transnational terrorism. In Asia, governments and scholars tend to expect inclusive multilateral institutions and norms to have some role in shaping the behavior of great powers. Still, it is difficult to shape the US diplomatic approach on this basis alone. After the US withdrawal from the Trans-Pacific Partnership (TPP) at the beginning of the Donald Trump administration, Washington never returned to the table and, instead, now promotes the Indo-Pacific Economic Framework (IPEF), which is not inclusive enough, not committed to economic liberalization and not as attractive for regional partners. The Joe Biden administration’s participation in these regional forums is also not very energetic, as shown by Biden’s absence from the East Asia Summit in Indonesia in September. Instead, Washington is showing more interest in bilateral and mini-lateral arrangements.

While it is important for Japan to keep US military power in the region and to use it to ensure regional stability, there is always a fear about the possibility of over- or under-involvement of the US. In addition, there is the fear that American techno-nationalism and protectionism in trade will intensify. There is a desire to manage this situation and the relationship with the US by shaping US policy.

CHINA AS A NEIGHBOR AND A CHALLENGER

Japan has profound economic and social ties with China. The importance of stable relations with Beijing remains unchanged for Tokyo. In addition to demands from industry, there has been a sense of balance in political and government circles that emphasizes relations with China in Japan’s Asian diplomacy.

Tokyo will undoubtedly maintain its willingness to build long-term relations with Beijing, as evidenced by Prime Minister Kishida’s speech in Washington in January 2023 and his efforts as G7 chair. With only a few exceptions, there is little belief in Japan that a third country can stabilize US-China relations by itself or that Japan should build a so-called bridge between them. Nevertheless, the Japanese government has demonstrated its hope that China will engage with the international community, as the G7 Hiroshima leaders’ statement shows. This reflects Japan’s characteristic as a stability-seeker in Asian diplomacy.​4 Japan’s vision of a free and open Indo-Pacific is being further realized under the Kishida administration, and it remains inclusive in character. It is an assertion of the rule of law as a principle of order.​5

The term “conditional inclusiveness” is also used in policy circles in Tokyo. Some policymakers emphasize that conditions are attached and that they want to insist that China accept the rules. This is not entirely wrong, but it is important to emphasize inclusiveness. It is not in Japan’s interest for the order not to include China. Therefore, Japan has insisted that the World Trade Organization (WTO) and international trade laws should guide China’s responses after Japan started to discharge treated waste water from the former Fukushima Daiichi nuclear plant.

Japan’s stance has been misinterpreted as an attempt to replace the Asia-Pacific with the Indo-Pacific and create a regional order that excludes China. In the first place, the free and open Indo-Pacific concept that was developed by the Abe administration coincides with the period of improvement in Japan-China relations. Given that the Asia-Pacific concept of the CPTPP and IPEF are being pursued simultaneously by Japan, it should be clear that Tokyo has not been obsessed with the geographical ranges of the two concepts.

POSSIBLE SOLUTIONS

Japan’s strategic thinking, like that of many other American allies, is based on two crucial facts: first, since there is no alternative to the alliance, it must seek a way to sustain the US presence and simultaneously mitigate the adverse effects from inward-looking American politics; second, the significance of socio-economic exchanges with China should be weighed with attention to the security implications. The second premise should not mean simply accommodating China. Avoiding the collapse of the existing order is of the utmost importance and consolidating it should be a priority. China already seems to be preparing for the collapse of the post-war international order and is even encouraging that process, but this is not in the interests of Japan and like-minded countries.

Hence, from Tokyo’s standpoint, Japan’s strategic approach to order-formation and regional stability should be thus:

1) Japan must understand the US emphasis on mini-lateralism and shape it from within by entering such arrangements. Japan encourages mini-lateralism through AP4, the IPEF and the QUAD, sometimes leading significant components (such as the IPEF’s supply-chain resilience agreement.) Co-operation with the US, Australia and South Korea is expected to co-ordinate approaches to Indo-Pacific affairs. It remains to be seen whether American mini-lateralism will have the same significance as ASEAN regionalism, but there is a realistic awareness of the need to shape the former. The political turmoil in the US and the possibility of a retreat from internationalism make such an effort necessary. Japan is trying to find a way to reconcile the US’s wariness of regionalism with the regional order and desired principles. In this context, the partnership with South Korea, Australia and other regional middle powers is crucial, since a coalition with such countries has the potential to push back on the US approach toward multilateralism.

2) Japan should make economic, diplomatic and other efforts with the US and Chinese governments, to the extent possible, to avoid a decisively contentious situation between Washington and Beijing. This is a relatively weak element today in Japan’s diplomacy, although it understands and collaborates with US diplomacy toward China, while pursuing bilateral negotiations with China.

3) Japan should co-ordinate with the G7 and the Global South and act as a bridge between them. It is crucial that Japan plays the role of connecting mini-lateralism and ASEAN-centered regionalism. With declining American power in mind, Japan needs to have a strategy to build a multi-layered rules-based order, where not only high standard and/or values-driven institutions are promoted, but where more inclusive and co-operative mechanisms flourish, and non-governmental actors also create other layers of co-operation. For this vision to be achieved, it is essential that Japan, realizing its role as a middle power striving to re-establish order, comes together with other middle powers in the international community.

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