2021 JUNE

Deepening US-Japan Strategic Cooperation on China and the Indo-Pacific

Hitoshi Tanaka, Senior Fellow, JCIE

fter four months in office, the Biden admin- to ensure that there is a shared understanding of our istration’s Asia policy has started to come into fo- ultimate objectives, and that efforts to deter specific cus.A By choosing Japanese Prime Minister Yoshihide aspects of Chinese foreign policy behavior are cou- Suga and ROK President Moon Jae-in for his first pled with , an inclusive approach to region- face-to-face summits with world leaders, Biden has alism, and the promotion of cooperation in areas of sought to emphasize the importance of cooperation shared interest. with East Asian allies to uphold a stable, rules-based regional order. At the same time, he is seeking to sign The CCP’s Domestic Legitimacy Under Xi US allies and partners around the region onto a tough Under President ’s leadership, the CCP has and united approach to dealing with China while come to rely on three key pillars for the maintenance highlighting shared democratic values. of its domestic power and political legitimacy. First, However, as the United States and Japan deepen Xi has moved to increase the coercive power of the their cooperation with regard to China and the Indo- CCP to maintain social control. This includes anti- Pacific region, there are a number of issues the two corruption campaigns to oust rivals, the introduction countries should keep in mind. First, China policy of the Social Credit Score system to evaluate and in- needs to be formulated with consideration for the centivize politically correct behavior, and the use of way in which the (CCP) technology for mass surveillance. exercises power domestically. Second, there is a need Second, Xi continues to utilize nationalism as to dispel any notion that relations with China rep- a means of stimulating pride in the CCP. After the resent a , an idea belied by the im- Tiananmen Square protests in 1989, former Chinese portance of its interdependent economic relations to President Jiang Zemin bolstered patriotic education regional stability. Third, as strategic thinking about emphasizing the role of the CCP in protecting China the region and China’s place within it are shifting from foreign powers and defeating Japan during from an Asia-Pacific to an Indo-Pacific approach, -in the Second World War. Xi has built on this legacy tensive consultations and discussions will be critical and promoted nationalism through his concept of JUNE 2021 | 2 the China dream to rejuvenate the Chinese nation. public attention from falling growth and to maintain Chinese have also engaged in so-called domestic cohesion at the expense of regional sta- “Wolf Warrior” diplomacy, condemning interna- bility. As such, it is important that both carrots and tional criticism of China. well-targeted sticks be employed to show China it has Third, and perhaps most important, is economic a place as a constructive stakeholder in an inclusive growth. China aimed to double its 2010 GDP and per but rules-based regional order, rather than a stick- capita income by 2020, which it was close to realiz- only approach that would force China into a corner. ing before the COVID-19 pandemic. Under the China dream, Xi aims for China to become a fully developed US-China Rivalry Is Not a New Cold War modern socialist country by 2049, the 100th anniver- As the CCP remains anxious to uphold its domestic sary of the founding of the People’s Republic. legitimacy and the US-China rivalry intensifies, US- The CCP’s maintenance of these three pillars has China disagreements have at times been portrayed as come under significant pressure. President Biden has presaging a possible second Cold War. Recently, spec- shown his willingness to criticize China’s use of co- ulation has run rife about the possibility of violent ercive power, such as its arbitrary mass detention of US-China conflict over . Indeed, the Taiwan Uyghurs in Xinjiang, crackdowns against democracy question has been increasingly incorporated into US protesters in Hong Kong, and assertive posture vis- rhetoric to demonstrate a tough posture on China, à-vis Taiwan. Yet China’s leadership has painted itself as China’s relative military strength has been increas- into a corner with little room for compromise given ing and Taiwan has adopted an increasingly pro-­ the way it has stoked nationalist sentiments while independence identity in response to events in Hong framing these issues as sovereign matters. Kong. As such, careful efforts are needed to maintain COVID-19 has affected China’s economic growth. the status quo and avoid an unnecessary conflict that In the first quarter of 2020, China slumped to its would be a losing proposition for all sides. worst performance in decades with negative growth. However, the framing of Taiwan and other US- Subsequently, China implemented draconian social China disagreements as evidence of an emerging distancing and lockdown measures to beat the virus, second Cold War misunderstands the relationship quickly recovered to become the only major econ- between China and the international community. omy in the world to register positive growth in 2020 Despite the risk of the US-China rivalry erupting in (2.3 percent), and is on track to achieve at least 6 a limited conflict, the circumstances are qualitatively percent growth in 2021. Nevertheless, the dent made different from the Cold War. At that time, interaction by the pandemic has shown the ever-present risk of between the Western and Soviet economies was mar- external shocks. ginal. Today, however, China is the key engine driving At the same time, the United States is seeking to global economic growth and a major trading partner strategically decouple its supply chains from China of nearly every country around the region. While in critical sectors, such as high-tech trade and in- some efforts to diversify supply chains away from ex- vestment. This includes the Biden administration’s cessive reliance on China may be justified, attempts recent agreements with Japan and South Korea to ex- to cut China out of supply chains entirely would be pand cooperation on sensitive supply chains in crit- an exercise in economic self-sabotage. Maintaining ical technologies. US high-tech reshoring plans and economic interdependence with China is necessary sanctions are likely to strain China’s ability to procure to protect regional and global economic prosperity. semiconductors. And while China is seeking to estab- lish domestic production, such measures are unlikely Maintaining Inclusivity in the Indo-Pacific­ to keep pace with demand. Thus, the continuation of So how can peace and prosperity best be managed the US-China tech war has the potential to dampen given the continuing intensification of the US-China China’s growth, making it an issue for the CCP’s do- rivalry, coupled with economic interdependence be- mestic political legitimacy. tween China and the region? The key is to ensure In a scenario where the CCP believes its domestic that measures intended to bolster deterrence vis-à-vis legitimacy is under threat, it may feel compelled to China and avoid unilateral changes to the status quo, turn its nationalism against the United States to divert such as the Quadrilateral Security Dialogue (Quad), JUNE 2021 | 3 are coupled with an inclusivist approach that focuses cope with China, but it seeks a balanced approach on regionalism, diplomacy, multilateralism, and co- that incorporates both deterrence and engagement, operation in areas of common interest. and it remains committed to mutually beneficial economic relations. And while India is content to The Shift From Asia-Pacific to Indo-Pacific increase its security co­operation with Quad mem- After the end of the Cold War, Japan adopted a stra- bers, its threat perception of China is largely limited tegic approach focused on Asia-Pacific regionalism. to border issues in the remote Himalayas and tem- This enabled Japan to combine two key pillars of pered by its tradition of nonalignment. As such, the its security and foreign policy: the US-Japan alli- Quad is best construed as a complement to—and ance and engagement with regional neighbors. This not a replacement for—diplomacy and coopera- approach was evident in the 1996 US-Japan Joint tion pursued through inclusivist, regionwide multi­ Security Declaration between President Bill Clinton lateral forums. and Prime Minister Ryutaro Hashimoto, which men- tioned the term “Asia-Pacific” 12 times. While this Bolstering Multilateral Diplomacy statement acknowledged US and Japanese concerns Diplomacy and cooperation vis-à-vis China should about China’s behavior, it deliberately avoided exces- incorporate three elements. First, the United States sively strong language and instead emphasized the and Japan should coordinate to make full use of re- need for engagement and cooperation to promote a gional multilateral mechanisms. Second, cooperation­ stable regional order. on common areas of interest with China, such as Strategic thinking is now shifting from Asia- climate change and North Korea, should be actively Pacific to Indo-Pacific. While the exact form of the promoted. Third, the United States and Japan should “Indo-Pacific region” is still developing, it is generally utilize Japan’s diplomatic potential and its position as conceived of as a move to include India as a counter- China’s neighbor to help open up and deepen chan- weight to manage a rising China. The US-Japan Joint nels of communication. Statement in April mentioned “Indo-Pacific” 15 times In addition to bilateral alliance cooperation, it is and expressed strong concerns about Chinese behav- also important to deepen and coordinate US-Japan ior with regard to Taiwan, Hong Kong, Xinjiang, the cooperation through regional and multilateral fo- South China Sea, and the East China Sea. The over­ rums. This requires reengagement on the part of the arching narrative of the statement was one of the United States in APEC and ASEAN-centered fo- United States forging strong security cooperation rums such as the East Asia and the ASEAN with Japan as a fellow democracy, but it also left the Defense Ministers’ Meeting Plus. Efforts should also impression that diplomacy and cooperation with be made for the United States to join a Trans-Pacific China have been deprioritized. Partnership successor agreement to advance high- Mechanisms to deepen security cooperation and level economic rulemaking with the aim of eventually interoperability, such as the Quad, are useful to de- bringing in China. These key multilateral institutions ter aggressive and unlawful behavior in the region. provide important lines of communication with However, each country has differing conceptions of non-democracies, including China, and a platform to how best to manage the rise of China and to shape exercise regional leadership on critical issues, such as the Indo-Pacific region. There is an increasingly -bi eradicating COVID-19, mitigating climate change, and partisan understanding in the United States on tak- enhancing energy security. ing a tough posture toward China as the US-China Forging cooperation in areas of common inter- rivalry and competition for high-tech supremacy est not only provides a chance to establish mutual intensifies. Australia has adopted confrontational wins on critical issues but also provides an import- rhetoric toward China, but may have gotten more ant signal that the “Indo-Pacific” concept is broad than it bargained for, as China has responded by enough to incorporate inclusivity. Climate change levying official and unofficial trade sanctions and is the most obvious area of common concern given tariffs against a range of Australian products, such as that it is a shared existential threat to all of humanity. thermal coal, barley, wine, and lobster. Japan is seek- Moreover, because China and the United States are ing to diversify its security cooperation in order to the world’s two biggest carbon emitters in absolute JUNE 2021 | 4 terms, it will be almost impossible to address the is- shared regional peace and prosperity could go a long sue without US-China cooperation. Denuclearizing way in restoring national confidence. North Korea is another key area of common con- cern to the United States, China, and the region as ■ ■ ■ a whole. The US-ROK Joint Leaders Statement last month from President Biden and President Moon, As China continues to grow in influence and to pose which recognized the importance of upholding the a number of security challenges, it is also driving 2018 US-DPRK Singapore Joint Statement, was a global growth as a major economic partner to almost positive step forward. Yet any agreement between the every country around the region. As the Indo-Pacific United States and North Korea will require buy-in concept continues to be solidified, it is imperative from China and other key regional stakeholders if it from a Japanese perspective that deterrence mea- is to be successfully implemented. sures to prevent unlawful behavior and aggression Japan, as both a US ally and a neighbor with deep are coupled with an inclusive approach to regional- historical and cultural connections to China, can ism, one that is grounded in engagement, diplomacy, play an important role in helping facilitate deeper and cooperation. Deterrence and engagement should communication between the United States and be pursued simultaneously as two sides of the same China to ensure that tensions in the region do not coin, rather than as competing concepts. Attempts escalate. In recent decades, Japan has perhaps lost at decoupling, cutting off ties with China, and -en some of its diplomatic confidence. A quarter of a trenching bloc-to-bloc rivalry are a lose-lose exercise. century ago, Japan’s economy was eight times bigger In managing the relationship between China and the than the South Korean economy and four times big- international community, we must not lose sight of ger than that of China, but today Japan’s economy is the fact that our objective should be to deny China three times bigger than South Korea’s and one-third opportunities to be an aggressor while also maintain- the size of China’s. This change in relative strength ing diplomacy and forging cooperation on areas of has given rise to nationalistic tendencies in Japan. shared common interest. Although there are a number of domestic challenges that Japan must address—including an aging pop- Hitoshi Tanaka is a senior fellow at JCIE and chairman ulation, high debt, and low productivity—Japan’s of the Institute for International Strategy at the Japan ability to harness its creative and diplomatic power Research Institute, Ltd. He previously served as Japan’s to ease the US-China confrontation and promote deputy minister for foreign affairs.

East Asia Insights is an occasional newsletter focusing on East Asia regional issues from a Japanese perspective. Please direct any comments or questions to [email protected]. JCIE/Japan www.jcie.or.jp | JCIE/USA www.jcie.org © 2021 Japan Center for International Exchange