How Japan Can Navigate Growing US-China Tensions

By Regina Robbins-Codera

Original post can be found on the Rising BRICSAM Blog.

US-China tensions have emerged to dominate the geopolitical space. How is this rivalry affecting states, particularly in the Asian context? Japan, a long-standing ally to the US, and at the same time a key economic partner to China, finds itself, as do other states in the region, in a difficult position. Still the US-China rivalry alone fails to fully define the foreign policy challenges Japan faces currently. With the Olympics just recently completed in Japan, and COVID-19 numbers on the rise, vaccination numbers still relatively low, continuing cool relations with South Korea, nuclear tensions with North Korea, and finally a looming national election, it is important to recognize that there are a variety of serious issues that Japan’s current political leadership faces.

The US provides Japan with defence and security, but China boosts the Japanese economy, with 22% of Japanese exports going to China in 2019 alone and increasing another 5.1 percent in 2020. Japan is wary of losing its status as a major power but understands that choosing between the two superpowers is surely a lose-lose proposition.

Territorial Disputes

Territorial disputes are a long-standing issue for Japan. Between 2010-2012 tensions began escalating with China over the Senkaku Islands in the East China Sea. However, while the Senkaku Islands remain an area of contention, the question of Taiwan is a cause for even greater concern. Japan’s southernmost island, Yonaguni, is just some 111km east of Taiwan, and in recent months, China’s presence around Taiwan has grown. Threats have increased. In April 2021, when Prime Minister Suga visited President Biden in Washington, their joint statement on the renewal of the US-Japan partnership mentioned “Taiwan” for the first time since 1969: “We underscore the importance of peace and stability across the Taiwan Strait and encourage the peaceful resolution of cross-Strait issues.”

Beijing responded harshly to the statement and accused the US of interfering in “internal affairs”. For a country like Japan, a response of this nature raises concern: China’s been known to utilize economic means to retaliate against countries that condemn their actions. Therefore, while it may be important for Japan to collaborate and work with the US on matters relating to Taiwan, Japan is treading quite carefully with China.

Former Japanese Prime Minister Yukio Hatoyama argued that the US-Japan Joint Statement’s mentioning of “Taiwan” was counterproductive to seeking cooperative relations with China. However, various US military officials in the Indo-Pacific have argued conflict between China and Taiwan is highly probable in the next six years. Given Japan’s proximity to Taiwan and the US’s presence in the region, Japan must consider the wider geopolitical implications.

Emerging Technologies & Supply Chains

Escalating US-China tensions also raises concerns for Japan surrounding emerging technologies. The US-Japan Joint statement in April explicitly discusses the protection of “sensitive supply chains, including semiconductors” as a means for cooperation. Japan specializes in semiconductor manufacturing equipment (SMEs). Production includes wafers, fabrication tools, and assembly, testing, and packaging (ATP). Furthermore, Japan is a leader in the manufacture of advanced lithography equipment, extreme ultraviolet (EUV) scanners, and argon fluoride immersion scanners, areas that the Chinese semiconductor market lacks.

The Chinese government is making moves, however, to ensure a dominant position over the semiconductor market. But, the US is also a leader in the global semiconductor supply chain, specializing in chip design and SME. With semiconductors at the centre of securing global technological dominance, there are concerns about the creation of two rival camps – US and China – for semiconductors, which puts pressure on countries like Japan, Taiwan, and South Korea to maintain a competitive edge.

The Japanese government has been vocal about the need to diversify supply chains to reduce economic dependence on China and has even provided subsidies to Japanese companies in China to move elsewhere. Major Japanese companies in China, to this point, have yet to show serious interest in relocating. However, the Japanese government is showing more of a commitment to ensuring economic security for Japan given the detrimental impacts of COVID-19 on the economy and concern over “sensitive technologies” being leaked in China.

The Quad, Cybersecurity, and the Digital Space

China’s attempts to dominate the digital world is a growing concern for Japan. As a member of the Quad – a strategic partnership between the US, Japan, India, and Australia – it has become increasingly clear that curbing the growth of Chinese firms is a priority. On March 21st, members of the Quad met to create a new working group centered on emerging technologies, telecommunications and coordinating standards for the digital space. While the Quad members are in agreement that China poses a threat to digital freedom and moved to ban Chinese applications and Huawei from 5G trials, rifts exist between Quad members. In particular the members disagree as to how best to share technology and data between them. Experts suggest that more cooperation with the private sector and CEOs is required for the Quad to have an impact. The Quad will also need to find alternatives to Chinese platforms that they can agree upon and develop standards and compliance mechanisms for data-governance to make strides against China’s cyberspace and digital ambitions.

Japan-South Korea Relations

Another area of contention for Japan is its relationship with South Korea. In the last few years, the Japan-South Korea relationship took a turn for the worse, when in 2018 the South Korean Supreme Court ruled that Japanese companies should pay reparations to the victims of forced labour during Japanese colonial rule. Japan saw this ruling as a breach of the 1965 Normalization Treaty. As a result of the Court’s action Japan launched a tit-for-tat trade feud between the two countries, which at one point jeopardized their intelligence-sharing and security pact. Prime Minister Suga and his cabinet have maintained a “cold and stubborn” attitude towards Seoul, raising public speculations both within South Korea and Japan about the future of the bilateral relationship.

Tensions between Japan and South Korea also makes it more difficult for the US to organize allies against China. While the election of President Biden and his prioritization of rebuilding and strengthening alliances in the Asia-Pacific region might be a source of optimism for Japan and South Korea, unfriendly relations between two key regional partners is a cause for concern.

Japan and South Korea are also a part of the Trilateral Summit with China, a platform for the three East Asian countries to forge strong relations and negotiate on regional economic cooperation. Rifts between Japan and South Korea pose challenges for the US but end up giving China the upper hand, possibly. If these tensions between Japan and South Korea continue, China is left benefiting economically from bilateral relations with each country and puts China in an advantageous position if the US is unable to rally its allies in the region.

Deep-seated historical, identity and territorial issues makes cooperation between Japan and South Korea difficult, but not necessarily impossible. The US, therefore, should consider encouraging friendly relations between Japan and South Korea, by focusing on cooperation in the Korean Peninsula via joint exercises, intelligence cooperation and coordination mechanisms like sanctions and North Korean denuclearization. Additionally, the US should push for more trilateral collaboration on matters relating to COVID-19, climate change and the digital space. The positive impact of these trilateral relations on common issues might allow for positive spillover in the Japan-South Korea bilateral relationship.

Moving Forward: Considerations for Japan

So, where does Japanese foreign policy go from here? Firstly, Japan could consider adopting some form of ‘mediator role’ between the US and China. For Japan choosing sides ensures that it is at risk of losing something valuable. Leveraging relations with the Quad, ASEAN, Europe, and even South Korea could pressure the US and China to resolve supply-chain monopoly, and digital primacy more diplomatically. Zero-sum competition between the US and China undermines the peace and stability of the East Asia region. Therefore, Japan should see this as an opportunity to lead the region away from conflict and these geopolitical tensions.

Alternatively, Japan might consider decreasing its dependence on both the US and China to avoid being put in these challenging positions. Under Prime Minister Abe, Japan started making moves towards greater defensive independence through a reinterpretation of the constitution to allow the involvement of Japanese forces overseas, and increasing military spending above the initial cap of 1percent of GDP. Additional independence might be sought through a more concerted effort at supply-chain diversification. Japan’s current dependence on both superpowers makes it vulnerable to being entangled in conflict.

On relations with South Korea, a strong Japan-South Korea relationship will not only be necessary for US-China relations, but also for cooperating with the US on other issues in the Asia-Pacific, namely North Korean denuclearization. Platforms like a trilateral cooperation between the US-Japan-South Korea, should be seen as opportunities for rapprochement between Japan and South Korea. Focussing on common interests over short-term domestic political gains should be prioritized to protect the peace and stability of the East Asia region, and their own prosperity, overall.

It is also important to acknowledge that a political change in Japan could have a significant impact on how Japan handles US-China tensions and relations with South Korea. Suga lacks the popularity and clout that his predecessor had, so it is difficult to know how much of a positive impact Japan will have on either the US-China or South Korea issue under Suga. On July 26th, Prime Minister Suga’s approval rating reached an all-time low of 34%.Public discontent with Suga stems from the decision to host the Olympic games in the midst of a pandemic, the ineffectiveness of declaring a fourth state of emergency, and a general “lack of leadership”. Furthermore, there is speculation that the prevalence of negative attitudes towards South Korea puts Suga in a precarious position in the upcoming election, where concessions towards South Korea could put the Japanese electorate ‘over the edge’. President Moon himself also only has less than a year left in office, so ameliorating relations with South Korea might prove meaningless if a new leadership emerges.

While the low approval ratings do not specifically reflect issues relating to US-China relations, or the intricacies of Japan-South Korea tensions, the impact of low approval ratings for Suga could mean new leadership in Japan, and even more uncertainty about Japan’s positioning in the US-China rivalry.

Regina Robbins-Codera recently graduated with a Master’s of Global Affairs from the Munk School of Global Affairs & Public Policy, University of Toronto. She has been accepted into the Japan-Canada program and will be in Japan learning the language and teaching English for the next several years.

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