Can Japan Counter China’s Growing Influence In Southeast Asia?

Japan, seeking to counter China’s growing influence in Southeast Asia, is hamstrung by an inability to act in enlightened self-interest. In mid-December, Prime Minister Junichiro Koizumi’s summit in Tokyo with leaders of the Association of Southeast Asian Nations (ASEAN) sought to reassert Japan’s influence as the region’s still dominant economic power. But unless Koizumi can rein in Japan’s agricultural lobby, Japan will be left behind as China exploits the power of its rapidly growing economy in order to extend its power and reach.

Koizumi enjoyed some modest success at the summit, held to commemorate the thirtieth anniversary of Japan’s establishment of formal relations with ASEAN. Meeting outside their region for the first time with a foreign leader, ASEAN heads of government signed the “Tokyo Declaration.” The ASEAN leaders are conscious of their region’s weaknesses. That is partly a consequence of the 1997-98 economic crisis that, among other things, led to the overthrow of Indonesia’s President Suharto. But democracy has proved no panacea for Indonesia. To the contrary, a weakened Indonesia became a “second front” for Muslim terrorist groups linked to Al Qaeda.

Suharto’s unseating also provided an opening for China. That’s because Suharto’s Indonesia had been the ASEAN state most willing to resist Chinese hegemony–by virtue of its size, distance and visceral instinct. Indeed, ASEAN was formed in 1967 to provide a mechanism by which Indonesia, under Suharto’s New Order, could enter into civilized relations with its neighbors. In the mid-1960s, under Sukarno’s erratic leadership, Indonesia had become a menace to itself and others as it lurched ever closer to China, which was then in the throes of its Cultural Revolution. Suharto came to power as a result of a failed coup perpetrated by communists aligned with China.

Today’s China is bent on seeking the benefits of the market while retaining party control. So it uses very different instruments, and no longer seeks to foment revolution in Southeast Asia. But China’s long-term objective has not changed–to gain dominant influence over the relatively weak states that control the vital nexus between the Indian and Pacific Oceans. It does not escape notice in Japan that China’s extensive territorial claims in the South China Sea, based on a dubious reading of history, extend as far south as the eastern approaches to the Straits of Malacca. If China were to gain control of this maritime chokepoint, it would be able to plant its foot on Japan’s resource jugular.

Thus, ASEAN leaders have some leverage over Japan. In order to avoid domination by any one great power, they also wish to keep the United States engaged in their region, and thus welcome the strengthening of the United States-Japan alliance. That alliance is critical to regional security because it provides Japan with nuclear and long-range maritime protection, while cocooning Japanese power.

Not least because of the growing perception in Japan of a threat from North Korea, Japan’s attitude to security has been undergoing a sea change. This is shown, for example, by Japan’s willingness to send elements of its Self-Defense Force to Iraq. Japan has also recently signed on to missile defense with the United States, shrugging off China’s complaints that this will lead to a regional arms race. At the Tokyo summit, the ASEAN leaders were willing to endorse Japan’s growing security role, including in relation to regional issues such as piracy.

The ASEAN leaders also know that Japan, and not China, is the dominant economic power in their region. This is despite China’s rapid economic development and Japan’s decade long recession. In 2001, for example, Japan’s trade with ASEAN was three times that of China. Japan’s investment in ASEAN is fourteen times that of China in terms of flow, and fifty-six times in terms of stock. But the ASEAN leaders worry that they cannot compete with China’s huge pool of low cost labor. Since the 1997 crisis, Japanese companies have been pulling out of Southeast Asia and investing more in China, and that has encouraged other foreign investors to leave Southeast Asia.

Thus ASEAN welcomed Japan’s call at the Tokyo summit for enhanced cooperation in economic and political affairs, as well as increased aid. For example, Japan is to provide US$1.5 billion over three years for subregional development projects such as the Mekong River Basin project and the Brunei-Indonesia-Malaysia-Philippine East Asia growth area.

ASEAN also successfully pressed Japan to sign its 1976 Treaty of Amity and Commerce, despite misgivings on the part of the United States. These reservations were based mostly on the link that the treaty draws with ASEAN’s aspirations to create a Zone of Peace, Freedom and Neutrality, or Zopfan. That was a gesture to the nonaligned members of ASEAN, particularly Indonesia and Malaysia, and was later linked to ASEAN’s aspirations for a nuclear-weapons-free zone in their region. There was some concern in the United States that the signing of the treaty by Japan would be inconsistent with Tokyo’s status as a U.S. ally (for these reasons, Australia has not signed the TAC).

But Chinese Premier Wen Jiabao stole the show at the October Bali summit when China signed the treaty. That committed China to the peaceful resolution of disputes, including with various members of ASEAN having territorial claims in the South China Sea that conflict with those of China. When India also signed the treaty, Japan was seen to be dragging its feet. By the time of the Tokyo Summit in mid-December, ASEAN’s urgings had tipped the balance in Japan, where opinion was divided. The United States then apparently concluded that it would serve no purpose to complain about Japan’s signing the Treaty of Amity and Commerce–particularly at a time when Japan was strengthening its security links with the United States across the board.

But if Japan has been able to play catch up with China in this respect, it is unlikely to be able to do so in relation to free trade agreements (FTAs). China has proposed to create a vast free trade zone with ASEAN by 2010. At the Tokyo summit, Japan said it would start talks early this year on reaching free trade agreements with Malaysia, Thailand and the Philippines. That would build on the FTA that Japan has signed with Singapore, its first so far.

Yet the debacle of the October 2003 visit to Japan by Mexican President Vicente Fox does not augur well. Japan sought an FTA with Mexico mostly as a backdoor way of getting additional access to the U.S. market, especially for cars. But Japan did not have much notion of reciprocity, and allowed a handful of pig farmers and orange growers to scupper the agreement. Even the FTA with Singapore excluded the island’s miniscule range of agricultural exports such as tropical fish and orchids. Japan’s insular society is also likely to resist pressures from Thailand and the Philippines to admit nurses and other skilled workers.

In relation to China, Japan must realize that it is dealing with a smart and media savvy group of new leaders. They seek to foster the belief that Southeast Asia has no choice but to accommodate a rising China, which enjoys the advantages of geographical centrality and a long history as the Middle Kingdom. And China, while committing itself to peaceful resolution of South China Sea issues, has not retreated from its sovereignty claims. To the contrary, it intends to pick off the ASEAN members one by one, since they are unable to combine in defense of their interests. Thus, to the consternation of the other ASEAN members, the Philippines–one of ASEAN’s weakest members, and geographically close to China–has entered into a joint drilling deal with Beijing, setting aside sovereignty issues.

Moreover, in relation to Taiwan, China has already achieved some notable successes with Southeast Asia. ASEAN leaders, even though they know it would be dangerous if China were to take Taiwan by force or by threat, profess to see no link between their own security and Taiwan’s continued de facto independence. Thus they remain silent about China’s buildup of military power, including the nearly 500 ballistic missiles that threaten Taiwan.

Yet Japan, like the United States, must not give up on ASEAN members. Japan must encourage them to resist pressures toward pre-emptive capitulation to China. But Koizumi will not be able to do so if he allows vested interests to stymie the pursuit of wider national interests.

Robyn Lim is professor of international relations at Nanzan University in Nagoya, and is the author of The Geopolitics of East Asia.