Japan: Married to the US and dating China

John de Boer (Research Associate, GLOCOM; Japan Fellow, Stanford University)

A number of recent news reports indicate that Japan is experiencing a delicate moment of transition as it encounters and actively promotes significant changes in its political and economic orientation. One of the most recognized challenges facing Japan relates to the future of its relationships with the United States and the People's Republic of China. March 31st marked the 150 year anniversary of the Treaty of Peace and Amity signed between the US and Japan back in 1854, and by many estimates the two countries are closer than they have ever been. As the Asahi Shimbun's Yoichi Funabashi reports, Japan's recent contributions to the "war on terror" and to the U.S.-led occupation in Iraq has given birth to a new phrase called Japan "surpassing". The term was coined by Ralph Cossa, president of the Pacific Forum (Center for Strategic and International Studies), to describe the idea that Japan has far surpassed U.S. expectations when it comes to being a reliable ally (March 30, 2004). It is also safe to say that contacts between president George W. Bush and prime minister Junichiro Koizumi have approached an intimacy level only outdone by the "friendship" between Ronald Reagan and Yasuhiro Nakasone.

Simultaneous to what appears as a strengthening of ties between America and Japan, however, is emerging an increasing level of economic interdependence linking China with Japan. According to the Financial Times, Japanese exports to China, which leapt some 40 percent in 2003, have been the biggest component of Japan's improving trade position and more positive economic outlook. China is now close to eclipsing the US as Japan's biggest trading partner. US predominance in this sector is being challenged for the first time since 1945. As US presidential election candidates forewarn the inherent danger of an emerging China, many Japanese business people as well as politicians are starting to argue that China represents more of an opportunity than a threat. Some, such as Motoya Okada, the president Aeon, one of the largest retail chains in the world, go so far as to suggest that China will become Japan's future partner much like the US was for the past fifty years. "There was one time when people talked about the China threat, but I believe that the Chinese people will make us rich," he said. "That's what happened with the US. As we got wealthy, they got wealthy. Now we must get wealthy together with the Chinese" (Richard McGregor and David Pilling, Financial Times, 30 March 2004).

At this moment, we seem to be witnessing the convergence of an apparent incompatibility between a Japan that is married to the leader of free market capitalism and is simultaneously dating the most powerful communist country in the world. Japan is also bound by a mutual security treaty with the United States that includes a clause on "collective security" which potentially obliges Japanese forces to join the US in defending Taiwan if it were attacked by mainland China. The potential economic costs of Japan's joining in against China have never been higher with Japan's trade surplus with Asia topping that with the United States for the first time last month. Underlying this extraordinary situation is the emergence of China as a major consumer of Japanese exports (Australian Financial Review, 26 March 2004).

Notwithstanding Japan's increasing interest in China, however, the latest political feud between China and Japan over the arresting of seven Chinese on a disputed island in the East China Sea (Senkaku/Daioyu Islands) last week has been a reminder that although ‘business may be hot, politics are cold' between these two East Asian powers (Financial Times, 30 March 2004). This most recent clash combined with Koizumi's overt appeal to transforming Japan into a "normal" nation equipped with a modern military and unbound by Article 9 of the constitution has made the likelihood of a true partnership between China and Japan, which replaces the US-Japan alliance, highly unlikely in the near future.

Then again, perhaps it is a mistake to consider closer involvement between Japan and China to be incompatible with Japan's association with the US. China has played a key role in facilitating six-nation talks in hopes of resolving the North Korean nuclear crisis. It has also joined in Bush's war on terrorism. Furthermore, the latest from Japanese government insiders indicates that powerful Japanese political factions such as that of former prime minister Yasuhiro Nakasone are urging US counterparts to coordinate their East Asian policies with Japan's. While this would not be unprecedented in terms of process, the orientation of America's East Asian policy with respect to China will likely be far more amicable if it were coordinated with a Japan that is keen on engaging China instead of restraining it. Regardless of whether or not such a coordinated strategy emerges, it is clear that Japan is approaching a crossroads in its disposition towards both the US and China. Hopefully, Japan will not have to be forced to choose between the two.