Japan has made an uncanny shift from their hardline stance against China to showing intentions of friendship. And here’s why.
Japanese Prime Minister Shinzo Abe made a visit to Beijing in October, while the U.S. and China slowly change from being “competitors” to “combatants.” He agreed to make effort in establishing friendly Japan-China relations and to even cooperate with the “One Belt, One Road” initiative.
In the realm of finance, Hitachi is showing interest in helping plans to construct a high-speed railway in Thailand that will be used in the Belt and Road route, and Toyota has hinted intentions to manufacture fuel cell and auto-driving vehicles in China.
This shift appears odd considering the Abe administration’s heretofore hardline stance against China and their leadership in the encirclement network and the Free and Open Indo-Pacific scheme. On moral grounds, it would be ignoble for Japanese businesses to contribute to China’s expansionism.
Hideo Tamura, a journalist at Sankei Shinbun criticizes China’s indifference to liberalization. “Japan has promised to help the Belt and Road initiative in exchange for the transparency of Chinese businesses, but even before all this we should request China to stop using their illegal financial system,” he says.
With all of these rampant problems, why then did Abe suddenly decide to change their China diplomacy?
A Rift in the U.S.- Japan Alliance
It all started when Xi Jinping requested Abe’s help with the “One Road, One Belt” scheme at the G20 Summit in 2017. The Abe administration accepted the requested on the condition that China cooperates with North Korea’s denuclearization.
That was when he shifted his diplomacy to splitting economic from political issues, cooperating with China in the former while opposing in the latter. So the Japanese government began encouraging businesses to invest in China.
After that, however, Trump negotiated with North Korea in Singapore without the help of China, and initiated a full-scale trade war against China. Abe’s diplomatic miscalculation resulted in the collapse of the conditions that bound his economic agreement with China.
China’s military expansion thrives on economic power, and one cannot truly separate economics from politics. Trump’s economic sanctions on China are aimed precisely at blocking off China’s source of military expansion.
On the day Trump and Xi met for talk in December, Canadian police arrested Huawei CFO Meng Wanzhou at the request of the U.S. for suspicions of violating U.S. trade sanctions against Iran.
During their meeting in 2017, Trump made a show of ordering a missile strike on Syria to put pressure on China. And this time, Trump has targeted a major Chinese business. Iran is a country along the Belt-Road, so the arrest could signal the collapse of the route itself.
In 2019 we will see more eliminations of China’s pawns, and a rapid succession of withdrawals from the Belt-Road initiative. Japan’s current support for China would provide the latter with a means of escape against U.S. strikes. Abe has been tricked into creating a rift in the U.S.-Japan alliance, and could potential be the target of some pressure from the U.S. henceforth.
Rise in Consumption Tax = Rise in China Reliance
The other reason for Abe’s shift in diplomacy is the decline of Abenomics.
The Abe administration has scheduled to raise the consumption tax to 10% in 2019. But the previous raise to 8% resulted in a drop in consumption and the real GDP scored a negative growth between July and September 2018.
“China has a huge market, so Japan wants a share in it,” comments Tamura. “But China’s looking to sweep Japan off their feet.”
Consumption levels have dropped ever since the tax was first introduced in Japan in 1989, hindering economic and tax revenue growth. The period since 1989 can thus be called “the age of slow consumption”.
The Trump government, on the other hand, has achieved a 3-4% economic growth overall with higher greater consumption and business investments, all due to tax cuts and deregulation. From 2019 onwards we can expect more infrastructure investments and greater economic growth.
By reinforcing their economic power the U.S. can now confront China. Japan, in contrast, has invited poor economic conditions through tax increases, and is embarking on a China-reliant diplomacy, while dividing their economic from their political policies.
Abe’s China-leaning diplomacy will soon discover its limitations.
Japan to Stop South China Sea War in 2019
What should Japan do when the world splits between those two major powers, the U.S. and China?
The year 2018 was a year when countries upholding the values of freedom, democracy and faith stood up in opposition to China. In the year 2019 this movement will increase culminating in a greater clash over the South China Sea.
Once China controls Scarborough Shoal it will make it possible for them to make nuclear attacks on the U.S. The U.S. will then have no choice but to step down as the World Police, and the umbrella protecting Japan will collapse.
Master Okawa predicts an armed conflict between the U.S. and China to begin in 2025. Gordon G. Chang likewise suggests that the ten years between 2020 and 2030 will be a Decade of Concern. Very soon the U.S. will no longer be able to resist China by herself.
Japan must prepare for these coming dark times. Let us look at what Japan should do in the areas of diplomacy, national security and economics in 2019.
Strengthen Defence & Grow Independent of the U.S.
First Japan must outgrow America’s protection, increase the defence budget by two or threefold, and prepare weapons in defence against new styles of warfare such as cyber and electromagnetic attacks. Nuclear armament would also be a necessary step in being prepared to lose the nuclear umbrella. Only thus can Japan protect herself sufficiently.
In response to the South China Sea problem, Japan has been helping educate and train people in South East Asian countries and providing patrol boats to navigate the area. But this is not enough. Japan needs to acquire enough military power to protect the South China Sea and bring peace to Asia thus fulfilling her obligations as a superpower.
Win Without Fighting: A Counter-China Encirclement
It is the basics of diplomacy to reduce enemies and increase allies. If China insists on advancing their Belt-Road initiative, we must confront that with a more powerful Free and Open Indo-Pacific strategy.
In a lecture in November, Master Okawa referred to the worst-case scenario where the Belt-Road plan could spread, and proposed a counter strategy.
We need to dream of a world where a linear motor car Maglev line connects Eurasia from Japan through to Siberia and Moscow to Berlin.
Jayadeva Ranade considers the possibility that, “India and Japan can operate together. For example, in Africa, in Southeast Asia, we can deliver them on time and cheaper than China.”
China has plans to run a high-speed railway through countries along the Belt-Road. The Free and Open Indo-Pacific should make clear its intentions to resist this, get India and Russia involved, strategically engage in infrastructure development throughout Asia and Africa, and eventually create an encirclement network around China.
This infrastructure maintenance plan will unite the U.S., Japan, Australia, India and Russia, thus contributing to closer connections in terms of national defence.
For this to happen, however, Japan must put aside her territorial concerns with Russia and immediately sign a peace treaty with Russia. They should also strengthen economic relations with India and develop that into an alliance agreement, so we can geopolitically surround China.
Add Britain (despite Brexit), France and Germany to the mix and we have a complete blockade against China’s marine expansion.
Consumption Tax Cut to Revive Economy
But none of this can happen without Japan reviving her economic power. Japan urgently needs stimulate demands and to follow Trump’s example of tax cuts and deregulation to retrieve Japanese businesses that have flowed into China.
They must bring an end to the consumption tax that has thrown Japan into recession for the past 30 years. That will encourage consumption expenditure, which makes up 60% of the GDP, and consequently revive the economy. Japan has approximately $17 trillion worth of financial assets held by Japanese households. Effective use of this will bring about greater growth.
In 2019, the “One Belt, One Road” initiative will clash with the Free and Open Indo-Pacific, becoming a crucial time for preventing the impending war in the South China Sea. Japan must not be led astray by short-term interests, and focus on contributing to world peace by proactively getting involved in establishing a new world order based on freedom, democracy and faith.