On the night of December 16, 2012, a confident Abe Shinzo met with the Japanese press shortly after a convincing general election victory for his Liberal Democratic Party that would restore him to the role of prime minister after five years in the political wilderness. One remark by Abe, a noted foreign policy hawk, stood out: “China is an indispensable country for the Japanese economy to keep growing. We need to use some wisdom so that political problems will not develop and affect economic issues.”
Abe’s statement arose between two events that highlighted the “political problems” in Japan-China relations he was hinting at and the “wisdom” he intended to bring to those issues. In the summer of 2012, violent protests had broken out across China against Japanese commercial and diplomatic interests in response to an escalating tussle over disputed islands in the East China Sea. Then, two months after his election-night remarks, Abe made his first trip to Washington as new prime minister and gave a seminal speech at the Center for Strategic and International Studies (CSIS) in which he declared, “Japan is back.” He laid out a set of policies for ensuring that Japan did not become a “tier-two country” in regional and global affairs.
These events underscore both the ambivalence Japan feels as it contemplates the rise of China and the Abe administration’s determined strategy to address it. Tokyo is of two minds about the economic rise of China. On one hand, its large neighbor to the west offers Japan enormous economic opportunities: to serve the huge and growing Chinese consumer market, to provide technologies that China needs for its development, to create efficiencies in Japanese companies’ supply chains, and even to join Chinese state-owned enterprises (SOEs) in building infrastructure across the Indo-Pacific region. China is also an essential partner in addressing transnational challenges from health pandemics to climate change. And some Japanese feel drawn to China by wistful thoughts of regional economic community involving the major powers of Asia – and not the United States.
On the other hand, Tokyo is deeply troubled by the darker side of China’s rise. At a minimum, China is likely to be a formidable economic competitor that could overtake Japan in key industries of the future. Under President Xi Jinping, China has veered off the path of reform and opening, reinforced the role of the state in the marketplace, and doubled down on industrial policies, from massive subsidies to forced technology transfers. Beijing has used its growing economic clout to win influence in the Indo-Pacific region and beyond, and it has shown a troubling tendency to coerce its neighbors and trading partners. About one thing, Tokyo is clear: a Sinocentric order based on Beijing’s preferred rules and norms of economic behavior would be seriously detrimental to Japan’s interests.
Against these opportunities and risks, the Abe administration has adopted a strategy that combines three main lines of effort: enhanced diplomatic and economic engagement with Beijing; hedging and balancing, including deepening integration with other countries of the Indo-Pacific region and attempting to keep the United States engaged in the Indo-Pacific region; and leadership on regional and global economic rule-making. The main strands of this approach are likely to continue after Abe leaves office, though uncertainty surrounds them all.