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TASK FORCE The Donald C. Hellmann Task Force Program Photo by pengpeng/Getty Images Navigating Great Power Competition: Maximizing Japan's Position Between the U.S. and China 2021 The Henry M. Jackson School of International Studies jsis.washington.edu Phone: (206) 543-6001 Email: [email protected] Navigating Great Power Competition: Maximizing Japan’s Position Between the U.S. and China University of Washington, Seattle Henry M. Jackson School of International Studies Task Force Report, Winter 2021 Faculty Advisor Marie Anchordoguy Evaluator Joseph A. Massey Former Assistant U.S. Trade Representative for Japan and China Coordinator Jonathan Chang Editors Natalie Hert Julia Ge Authors Chika Fukuhara Benjamin Yamada Ricky Chen Shuo Zhang Kana Kitahama Tyler Chung Kara Haney Tristan Gutbezahl iii Acknowledgments The members of this Task Force would like to sincerely express our deepest gratitude and appreciation for the individuals who have made this report possible. We would first like to thank Joseph A. Massey for taking the time and effort to evaluate our Task Force report. We recognize the generosity and kindness that has been extended to us. Thank you to our librarians, Michelle Li and Azusa Tanaka, for sharing their knowledge and expertise and providing us with countless resources and research help. Finally, we would like to thank Marie C. Anchordoguy, our faculty advisor, for her constant support, dedication, and passion for this Task Force. Without her help and expertise, we could not have possibly created this report. iv Acronyms ADB - Asian Development Bank AI - Artificial Intelligence AIIB - Asia Infrastructure Investment Bank APEC - Asia-Pacific Economic Cooperation ASEAN - Association of Southeast Asian Nations ASEAN + 3 - Association of Southeast Asian Nations Plus Three BDN - Blue Dot Network BIS – United States Bureau of Industry and Security BRI - Belt and Road Initiative CCP - Chinese Communist Party CDB - China Development Bank CFIUS - Committee on Foreign Investment in the United States CPTPP - Comprehensive and Progressive Agreement for Trans-Pacific Partnership DPRK - Democratic People’s Republic of Korea ECS - East China Sea EPA – United States Environmental Protection Agency ETC - Eastern Theater Command EV - Electric Vehicle FBI – United States Federal Bureau of Investigation FDI - Foreign Direct Investment FIL - Foreign Investment Law FMCT - Fissile Material Cut-Off Treaty FOIP - Free and Open Indo-Pacific Strategy FONOPs - Freedom of Navigation Operations FYP - Five-Year Plan GDP - Gross Domestic Product HNS - Host Nation Support HTA - Health Technology Assessment ICBM - Intercontinental Ballistic Missile ICT - Internet Communication Technology IP - Intellectual Property JASDF - Japan Air Self Defense Force JBIC - Japan Bank for International Cooperation JETRO - Japan External Trade Organization JGSDF - Japan Ground Self-Defense Force JSDF - Japan Self-Defense Forces MI5 – United Kingdom Military Intelligence Section 5 MOFA - Ministry of Foreign Affairs of Japan MOU - Memorandum of Understanding NISC - National Center of Incident Readiness and Strategy for Cybersecurity NSC - National Security Council PAFMM - People’s Armed Forces Maritime Militia v PLA - People’s Liberation Army PLAN - People’s Liberation Army Navy PQI - Partnership for Quality Infrastructure PRC - People’s Republic of China R&D - Research and Development RCEP - Regional Comprehensive Economic Partnership RIMPAC - Rim of the Pacific Exercise RMB - Chinese Renminbi ROK - Republic of Korea SCS - South China Sea SLOC - Sea Lines of Communication SMA - Special Measurements Agreement SOEs - State-Owned Enterprises SSN - Nuclear-powered Attack Submarine TPP - Trans-Pacific Partnership TRA - Taiwan Relations Act UEL - Unreliable Entity List US – United States USJTA – United States-Japan Trade Agreement WTO - World Trade Organization Contents Acknowledgments ........................................................................................................................ iii Acronym List ................................................................................................................................ iv Executive Summary ................................................................................................................... viii CHAPTER 1: Major Challenges Facing Japan in its Relationship with the U.S. and China ....................................................................................................1 CHAPTER 2: Japan’s Security Policies with the United States................................................7 Japan’s Security Concerns ...........................................................................................................7 Japan’s Geostrategic Importance..................................................................................................8 American Plans for an Integrated Indo-Pacific ..........................................................................11 The Quadrilateral Security Dialogue .........................................................................................14 A Sixth Eye in Asia ....................................................................................................................16 The Taiwan Question .................................................................................................................18 Unrestrained Partnership ............................................................................................................19 Conclusion ..................................................................................................................................20 CHAPTER 3: Japan-China Security Relations ........................................................................22 Disputes Over the Senkaku Islands with China .........................................................................22 South China Sea Conflict ...........................................................................................................24 The North Korea Issue ...............................................................................................................27 The Taiwan Issue .......................................................................................................................28 The Quadrilateral Security Dialogue versus China ....................................................................29 Military Spending of Japan and China .......................................................................................31 Stances of Future Prime Ministers .............................................................................................31 Conclusion ..................................................................................................................................32 CHAPTER 4: Japan-China Economic Relations......................................................................33 Japan’s Current Trade Balance with China ................................................................................33 Bilateral Investments ..................................................................................................................35 Major Opportunities and Concerns for Japan with China ..........................................................37 Innovation and Technology ....................................................................................................37 Advanced Manufacturing .......................................................................................................39 Healthcare, Education, and Tourism ......................................................................................41 Japan-China Economic Relations in a Multilateral Context ......................................................43 Competition between Japan and China in the Region ............................................................43 Japan as an Important Balancer in the Region .......................................................................44 Going Forward: Economic Interdependence and Cooperation with China ...............................45 Conclusion ..................................................................................................................................47 CHAPTER 5: Japan’s Economic Struggles in Case Studies ...................................................49 Supply Chains and Manufacturing .............................................................................................49 Challenges in Manufacturing .....................................................................................................50 Economies of the Belt & Road Initiative ...................................................................................52 Countering the Belt & Road Initiative .......................................................................................54 5G Networks ..............................................................................................................................55 Vulnerabilities in Cellular Networks ..........................................................................................56 Cybersecurity .............................................................................................................................57 Threats to Japanese Cybersecurity .............................................................................................58 Intellectual Property Protection ..................................................................................................60
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