MICHAEL AUSLIN MICHAEL AUSLIN JAPANESE INTERNATIONALISM IN THE 21 INTERNATIONALISM JAPANESE JAPANESE INTERNATIONALISM ST CENTURY IN THE 21ST CENTURY Reshaping Foreign Policy in an Era of Upheaval 1789 Massachusetts Avenue, NW Washington, DC 20036 202.862.5800 www.aei.org MICHAEL AUSLIN Japanese Internationalism in the 21st Century Reshaping Foreign Policy in an Era of Upheaval Michael Auslin AMERICAN ENTERPRISE INSTITUTE © 2017 by the American Enterprise Institute. All rights reserved. The American Enterprise Institute (AEI) is a nonpartisan, nonprofit, 501(c)(3) educational organization and does not take institutional positions on any issues. The views expressed here are those of the author(s). Contents Author’s Note v I. Japan’s National Power in a Shifting Global Balance 1 II. Japan’s New Realism: Abe Gets Tough 43 III. Trumpeting the Alliance: How Much Will the United States and Japan Lean on Each Other? 55 IV. Japan’s Eightfold Fence 79 V. Asia’s Other Great Game 103 About the Author 123 iii Author’s Note Although written individually, the essays in this volume were con- ceived of in an integrated sense. Despite numerous writings on Japan’s security and diplomatic policies, less attention has been paid to the overarching strategies and national priorities that recent Japanese governments have adopted in response to changes in the regional geopolitical and economic balance. In general, a fuller reas- sessment of Japan—its economic, political, social, technological, and security strengths and weaknesses—is long overdue, and this set of essays is a first, limited stab at attempting such. This project would not have been possible without the generous support of the Smith Richardson Foundation, which has invested in my work since I was a junior professor at Yale more than a decade ago. In addition, I would like to thank Arthur Brooks and Danielle Pletka at the American Enterprise Institute for their institutional sup- port during the months of this project and several colleagues at other think tanks and universities who offered their insights, criticisms, and suggestions. I am indebted to my former research assistants, Eddie Linczer and Olivia Schieber. And I am of course grateful to the editors who first published these essays: Ashley Tellis at the National Bureau of Asian Research, Gideon Rose at Foreign Affairs, Ryan Evans at War on the Rocks, Julius Krein at American Affairs, and Jacob Heilbrunn at the National Interest. As always, any errors of fact or misinterpretations are mine alone. v I Japan’s National Power in a Shifting Global Balance Published in Strategic Asia 2015–16 by the National Bureau of Asian Research1 Despite two decades of economic difficulty and political evolution, Japan remains one of Asia’s great powers. Its position as one of the oldest democracies in Asia, combined with its level of development and wealth as the world’s fourth-largest economy (by purchasing power parity valuation), gives it a leadership role in Asia’s geopolit- ical hierarchy. Social stability, a skilled workforce, and an ethnically and linguistically united citizenry add to Japan’s overall strength. Yet Japan faces significant uncertainties in both its foreign and domestic politics. Adequately responding to these uncertainties will tax both Japan’s policymakers and its population and make clear whether the country’s national power remains sufficient to deal with the challenges it faces. Over the past several decades, a number of external threats and problems have emerged. China has grown to become Japan’s primary geopolitical competitor in East Asia and seeks political, economic, and military supremacy in the region. Japan’s security environment is threatened by North Korea’s nuclear and missile programs and by ongoing uncertainty about the intentions of the Kim Jong Un regime. Japan’s relations with South Korea present another problem, as historical grievances and territorial disputes continue to hamstring relations between Tokyo and Seoul. On the domestic front, Japan continues attempting to revitalize its economy, a quarter century after the popping of its asset and real estate bubbles. Regaining competitiveness and innovation remains 1 2 JAPANESE INTERNATIONALISM IN THE 21ST CENTURY a challenge for businesses. While socially stable, the country faces a significant demographic decline and must create policies to deal with labor shortages, an aging population, and a decline in the viability of rural areas.2 A lack of immigration and a drop in the number of Japanese studying or living abroad also contribute to potential insu- larity. While seemingly politically paralyzed, Japan in fact has gone through a 20-year political realignment in which the long-ruling Liberal Democratic Party (LDP) lost power to the opposition Demo- cratic Party of Japan (DPJ), only to return to power after three years with a larger majority than before. Nonetheless, voter participation levels have steadily declined, and doubts about the LDP’s ability to revive economic growth foster continuing pessimism among Japa- nese voters.3 In some ways, Japan is at a crossroads. It must plan for a future with a reduced population and ongoing economic lassitude. At the same time, it struggles to respond to the shift in the balance of power in the Asia-Pacific toward China. Long-held taboos on security cooperation abroad and military operations overseas are beginning to weaken because of both the change in Asia’s security environment and Prime Minister Shinzo Abe’s activist foreign policy. Nonetheless, political culture and a postwar sensibility continue to hold Japan back from passing the full range of economic and secu- rity reforms that are needed to respond to the challenges at home and abroad. While deficient in natural resources, Japan has every other significant element of national power and remains one of Asia’s richest nations. Yet it could do more to tear down the barriers to increasing national power so as to not only retain but also expand its leadership role in Asia. This, in turn, requires the national will for reforming itself. This chapter begins with a review of the inherent strengths that Japan derives from its national resources. These include its diverse yet challenging geography, significant human resources, and long-developed capital and financial resources. The chapter then assesses how these inputs are expressed in national performance, or more precisely, Japan’s capacity to mobilize resources to exercise national power. This assessment begins with an overview of Japan’s MICHAEL AUSLIN 3 threat environment and then examines the role of its government structure and corporate institutions. It then considers how cohesion among elites both helps and hinders national performance, along with the question of how much political reform is needed to opti- mize the system. The final section of this chapter turns to the ultimate output of national resources and performance: military capability. A review of Japan’s defense budget and force structure leads into an examination of the nation’s particular constitutional limitations on the use of force. The changes in Japan’s security environment are then analyzed in a discussion of Tokyo’s “new internationalism” and its security component. The chapter concludes by highlighting the key takeaways of this analysis, stressing the limitations on Japan’s ability to generate and employ its military capability in a challenging regional environment. Japan’s National Resources Japan derives several inherent strengths from its national resources. These include its geography, natural resources, human resources, and capital and financial resources. Geography. Japan is strategically located at the extreme eastern end of the Eurasian landmass and stretches some 3,300 kilometers from Siberia in the north to Taiwan in the south. It thus forms a potential barrier between continental Asia and the northern Pacific Ocean. As an archipelagic nation with no land borders, Japan comprises four main islands and 2,456 claimed smaller islands, with no part of the country more than 150 kilometers from the ocean. Its total area is just under 378,000 square kilometers, making it approximately the size of Norway.4 Japan’s location is strategic as well, given that its neighbors include China, Russia, Taiwan, and the two Koreas. Its relations with each of these nations has political, economic, and security implications for Asia and the globe. Despite its economic importance and strategic position, however, Japan has struggled to develop relations of trust or cooperation with its neighbors. With China, it is increasingly locked 4 JAPANESE INTERNATIONALISM IN THE 21ST CENTURY into a competition for leadership in Asia, while ties with South Korea are strained by unresolved historical issues relating to Japan’s 35-year colonization of the Korean Peninsula and war crimes during World War II. Further, Japan has found itself involved in a complex triangle with Russia and China over energy resources, control of vital sea lanes, and regional politics. Looking for geopolitical maneuvering room, Tokyo often has viewed Moscow as a potential partner to help balance China. Japan is embroiled in territorial disputes with each of its main neighbors, further straining its geopolitical position in Asia. Russia has controlled four of the Kuril Islands (known as the Northern Ter- ritories in Japan) north of Hokkaido since 1945 and has announced plans to upgrade the islands’ defenses in the coming years, thus complicating Tokyo’s desire for closer relations.5 South Korea and Japan are locked in a diplomatic and legal dispute over the status of the Liancourt Rocks (known as Takeshima in Japan and Dokdo in South Korea) in the Sea of Japan, raising tensions between local activist groups in both countries. Most seriously, China actively chal- lenges Japan’s administrative control and claim of sovereignty over the Senkaku Islands (known as Diaoyu in China and Diaoyutai in Taiwan), which are located just northeast of Taiwan and are thus strategic for controlling access from the East China Sea to the west- ern Pacific Ocean.