US pushing Japan and China closer

While US engages with China in a severe trade war — Beijing has been making friends with South Korea and Japan

October 2018 was a turning point in Japan-China relations when Shinzo Abe visited China 11 years after the last Japanese premier had done so, and in the visit, 50 joint infrastructure projects were announced between the two states.

Since WWII, when Japan attempted to occupy Chinese territories in its imperial lust, the states have perceived each other as bitter enemies, with only a thawing in relation in the last decade.

Japan’s imperial moment however had been a product of two factors. One, the Meiji Revolution, an elephantine entry into industrialisation that was itself a product of the US invasion of its islands half a century earlier; and the other, the fear of the communist plague that had wiped out the centuries-old empires in Eastern Europe, Russia and China, and was ready to knock at Japan’s door now.

After WWII and the destruction of Japan by US aerial bombings, including the nuclear ones and Japan’s complete surrender to US occupation forces, the US ensured two things. One was that Japan was not to ever have its own defence setup. The second was that they would allow the revival of the industrial firms of the Meiji times so that Japan would become at an economic giant supplying Western economies and also be able to suppress socialist China and Russia with its economic advances, pushing them behind as global economic competitors.

When US interests with Japan saturated in the 1990s, China was chosen by the US as its new marketplace, a venue sprawling with cheap labour and ample land for industrial activities. Thus started the “two lost decades” of Japan and the two decades of unprecedented economic development in China. Japan, still under the protectorate of the US in security matters to this day, nevertheless learned the lesson that the US could treat it in a dispensable manner whenever time forces it to.

It is notable that the 1951 Treaty of San Francisco — signed by 49 states — that finalised the end of US occupation of Japan, specifically obligated Japan to not to do business with the People’s Republic of China, as the US was supporting its opposing Republic of China, stationed in Taiwan.

Now, after the turn of fortune into China’s lap and almost three decades of Chinese economic growth, China is being accused of exactly the same “unfair competition” and “protectionism” the US had been accusing Japan of, when it was enjoying the upswing of the trade imbalance with the US in the 1980s. In one estimate this had affected 500,000 jobs in the US, but more than that, the US was fearful of “Japan’s amazing success in penetrating an increasing number of key global markets, ranging from the original textiles through shipbuilding and steel to automobiles and high-technology electronics”. All this points to the fact that Japan and China would be recognising US policy bias and discriminatory behavior and may feel the shared victimisation, which may push them together.

Perhaps these were the reasons that the data released by the Japanese Chamber of Commerce and Industry in China showed Japanese’s businesses in China growing at a rate of 16.5% year-on-year to $3.81 billion in 2018. According to the Japan External Trade Organization, 48.7% of the Japanese companies in China were considering expanding their businesses within the next two years in the country. So, even though Japan has kept a stern face against China in public for its alliance in the QUAD to remain secure, and has labeled its ventures in the BRI projects as “Quality Infrastructure Investment” (QII) Partnerships, which are different from China’s because they offer more efficient and resilient infrastructure, and portrayed these projects as an alternative to China’s BRI; the same initiative is taking up joint projects with the BRI in developing countries, like the high-speed rail project in Thailand, costing $45billion.

In fact, Timur Dadabaev suggests that, “China positions itself as Central Asia’s leading economic partner while Japan is CA’s leading assistance provider. These two roles have different implications. Furthermore, the current infrastructure engagements of Japan (from assistance to partnership) and China (from exploitation to contribution to the region) in CA demonstrate both countries’ attempts to adjust and search for new opportunities.”

Japan knows that China cannot be stopped from using its huge capital surplus in the connectivity projects with which it will try to knit in resource and industrial centres globally, in ways that will make China the centre of global commerce. But with all its cutting-edge technological expertise, there is no reason for Japan not to have its share in the pie. So, even as Japan’s security alliances with the US continue, it has found ways to collaborate with China for its economic future.

In 2015, PM Abe announced the “Partnership for Quality Infrastructure” where Japan would increase its investment in Asian infrastructure to ¥13.2 trillion (roughly $116 billion) between 2016 and 2020. But in the same move, Abe made sure not to irritate China. He said, “I have no intention to make this a call for ‘quality over quantity’. Asia has voracious infrastructure demand, reaching as much as 100 trillion yen annually. Instead, we should seek ‘quality as well as quantity’.”

While the US engages with China in a severe trade war and is constantly infuriating China by its backing of the Hong Kong protesters, signing bill after bill on Hong Kong — China has been making friends with South Korea and Japan. The tug of war between China and the US seems to be going in to 2020, and time will show who has been the “protectionist” and who has embraced the future.

Published in The Express Tribune, December 6^th, 2019.

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