Japan's subsidies to relocate production of essential goods from China to Japan or Southeast Asia to cope with #COVID__19 supply chain disruptions does not amount to decoupling, it is risk management. Yet, significant move given Japan-China rapprochement of recent years. 1/
In my paper for @BrookingsFP’s #GlobalChina project, I explain that growing uncertainty about the role of the U.S. created a powerful incentive for Japan and China to stabilize their relationship after years in disrepair. brook.gs/3c4i0ng 2/
Without a doubt, the Japan-China relationship is complex. While many believe that China has eclipsed Japan, a focus on economic statecraft renders this conclusion premature. 3/
Economic statecraft stands to define Asia not only because a more powerful China is flexing its state capitalism arm abroad, but also because Japan has overcome enough of its domestic limitations to offer economic leadership. 4/
When it comes to the mobilization of state resources to finance economic infrastructure abroad, only Japan is in serious competition with China. Japan alone provided 43% of all economic infrastructure ODA by industrialized nations for 1967-2017. 5/
For 2000-2014, China’s official finance commitments (ODA + Other Official Flows, OOF, such as export and investment credits) amounted to $354 billion, while Japan’s official finance (ODA plus OOF gross disbursements) amounted to $305 billion. 6/
In my paper, I explain that while China is ASEAN’s top trading partner, China still lags behind Japan and the U.S. in terms of FDI flows to the region. Japan contributed nearly double what China did in 2010-2018. 7/
Japan has been more effective in creating relations of trust with recipient countries through its development finance. Japan leads in “trust” rankings across Asia with 61.2% in positive responses and China at the bottom with 16.1%. 8/
Both China and Japan are pushing visions of regional integration (BRI and FOIP, respectively) and offering development finance to see them through. Neither is pressing developing Asia with binary choices. The regional order in Asia is contested but not exclusionary. 9/
But Sino-Japanese relations are not defined exclusively by competition. Japan and China are both part of an emerging trade grouping (RCEP), and both countries are encouraging business cooperation in third-country infrastructure. 10/
The improvement of bilateral ties, however, is no prelude to a reordering of Asian geopolitics. There is no seismic change in security alignments, and some arenas of economic statecraft to pose a harder edge for Sino-Japanese competition (5G, tightened FDI screening). 11/
Japan has emerged as champion of economic internationalism, now it is figuring out how to reconcile globalization with national security. Economic security is fast becoming the new frontier of Asian power competition.
Read my paper for #GlobalChina: brook.gs/3c4i0ng
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Read my paper for #GlobalChina: brook.gs/3c4i0ng
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