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Prime Minister Abe Shinzo has lately appeared to want it both ways: to tighten the alliance with the United States to the point of joining the “five eyes” in intelligence sharing, and to boost relations with China by insisting on going forward with a state visit by Xi Jinping as the key to upgrading ties despite growing opposition at home due to China’s assertive and growing illiberal behavior at home and abroad. How can Japan proceed with this balancing act given the sharp downturn in Sino-US relations in 2020, as seen in both heated mutual accusations over the pandemic and signs of decoupling? Japan’s dilemma is similar to what numerous states in Asia are facing. There are economic reasons to show pragmatism toward China and security imperatives to draw the US closer. To combine these into a grand strategy requires explaining why and how to walk this tightrope—something Japan has yet to attempt. 

The "dean of Cold War historians" John Lewis Gaddis, defines “grand strategy” as aligning “potentially unlimited aspirations with necessarily limited capabilities.”¹ He stressed that the best strategists focus on overarching goals but respond pragmatically to circumstances. Japan is wrestling with a strategic dilemma of how to navigate the increasingly byzantine Sino-US strategic competition–made more complex in the wake of the COVID-19 pandemic, which has aggravated many of the structural issues in the triangular relationship among Beijing, Washington, and Tokyo that Japan was facing prior to the outbreak. Intensifying an already difficult situation, the July 23, 2020 speech by Secretary of State Mike Pompeo entitled “Communist China and the Free World’s Future” further pushed Sino-US relations onto a negative trajectory characterizing the “decades-long desire for global hegemony of Chinese communism,” which poses a challenge for Japan’s desire to balance relations with both sides.²

Xi Jinping has also not made it easy for Japan to strike the desired balance. On matters of great sensitivity to Japan, he has acted more aggressively in recent months. Hong Kong is a vital concern, and China has imposed a new national security law, enforcing it quickly with arrests and academic crackdowns. Taiwan has deep significance, and China is threatening to move forcefully to oblige it to accept “one country, two systems.” Finally, the waters near the Senkaku Islands are considered the test for defending territorial sovereignty, and since June China has broken all records for consecutive days of ships intruding into space considered to be Japan’s. Yet Abe is insistent that Xi make his visit when COVID-19 conditions permit.

This article is premised on the understanding that a Japanese grand strategy is related to two perennial concerns: over open access to sea lines of communication (SLOCs) and over the integration of Japan into Asia (Asianism) with economics as the driving force. Without secure SLOCs, invaluable for the import and export of consumables, energy, and industrial resources, Japan’s economic and, subsequently, national security would be in jeopardy. The focus on SLOCs in Japan’s strategy remained unabated from the Meiji Restoration to the end of WWII, prosecuted through imperialism and war. Postwar, it was accomplished through supporting an international rules-based order organized and underpinned by the US. This system was reinforced by a web of like-minded countries which found the order suitable to meet their developmental needs, including some now challenging that order such as China.

“Reentry into Asia” is a longstanding aspiration whose meaning has changed over the past 75 years. It started with normalization, overcoming the “history” issue. It then shifted to forging economic networks, ensuring that Japan would lead the “flying geese” formation. As the Cold War ended, Japan was fixated on building a bridge between China and the United States and also an East Asian community. Watching China’s unexpectedly rapid rise and the first signs of assertiveness, Japan adjusted again to seek a broader, balanced type of regionalism inclusive of India, Australia, and New Zealand, and then insistent on a prominent position for the US, but not at the expense of some diplomatic autonomy for Japan. The appeal of Asian regionalism in some form persisted and survives even in this period of Sino-US acrimony.

Japan’s approach to negotiating the triangular relationship continues to be based on a balancing blueprint to meet its economic, regionalization, and security imperatives through strengthening its autonomy and deepening its alliance partnership with the US. Economics take Chinese production by Japanese firms and China’s market as indispensable, but lately add a security concern by diversifying necessary imports to other countries and preventing critical high technology from either coming from or going to China. Regionalization posits inclusiveness to counteract Sinocentrism, allowing cooperation if there is ASEAN centrality or if transparency is assured as in Japanese involvement in BRI infrastructure construction. Priority goes to security, agreeing to a level of interoperability with the US earlier unseen.

The assumption that Tokyo can pull this balancing act off is contentious. Siding squarely with the US in security and dual-use technology need not inhibit cooperation with China in other domains is the bet being made. From Japan’s perspective, a coherent strategy must not let critical areas of contestation override necessary cooperation in exigent domains. This means recalibrating its relationship to both the US and China as circumstances are changing.

Section One contextualizes Japan’s reliance on the post WWII rules-based order, its growing alarm about preserving that order given the US-China strategic competition, and how the pandemic is exacerbating pre-existing structural pressures on that order. These pressures are compelling Japan to aspire to a strategy to reconcile contradictory policy trends. Section Two analyzes China’s appeal to Japan, explaining that it is, above all, economic in nature, but that there has long been more to the attraction. Despite the stark geopolitical and values gap with China today, there are important forces in Japan seeking an accommodation in pursuit of some sort of Asian balance to heavy dependency on the US. Section Three reflects on the possibilities for Japan continuing to pursue a balance ahead. Much depends on the United States and China, but there is a scenario in which a Japanese grand strategy may be of avail.

Buttressing the rules-based order in trade and security

Japan has benefitted tremendously from the postwar rules-based order largely organized and sustained by the US. This order is now under tremendous strain from a Trump-led US that is increasingly unwilling and arguably unable to sustain the current rules-based order. The rules-based order is under increased strain too from China’s reemergence as the dominant economy in the Indo-Pacific and as a near peer competitor to the US wishing to secure its core interests within its immediate periphery.³ COVID-19 has further aggravated the strains on the rules-based order. Global supply chains have been disrupted, economies have shut down, and both the US and China have lost credibility in the eyes of many states for their inability to cooperate to deal with the pandemic and for their politicisation of it.⁴ The responses of both have shattered the confidence in many states that the US and China can manage their own societies, let alone global issues with China badly mismanaging the initial response,⁵ and the US, under Donald Trump, having 170,000 deaths with no end in sight.

The trajectory of US-China relations is in the short to mid-term on a negative spiral and will increasingly be informed by what Scobel, et. al in their July 2020 Rand Report outline as four possibilities: 1) triumphant China, in which Beijing is remarkably successful in realizing its grand strategy; 2) ascendant China, in which Beijing is successful in achieving many, but not all, of the goals of its grand strategy; 3) stagnant China, in which Beijing has failed to achieve its long-term goals; and 4) imploding China, in which Beijing is besieged by a multitude of problems that threaten the existence of the communist regime.⁶ While all four remain a possibility, Scobel et. al. argue that an ascendant China or stagnant China is the most likely outcome and that policy approaches should be informed with these expectations in mind.

The RAND report echoes findings that China’s economic outlook will likely be a midway point between ascendant China and stagnant China, especially in consideration of the economic impact of the COVID-19 pandemic.⁷ Japan’s grand strategy of securing a rules-based order that protects SLOCs and promotes Japan’s integration into Asian regionalism in a post-COVID-19 world would be informed by the aforementioned assessments and the need to ensure that any new international order is not defined by the US-China strategic rivalry. Core goals include preserving a rules-based order, playing a leading role in building economic and expanded infrastructure and digital connectivity in the Indo-Pacific, and keeping a focus on non-traditional security issues in the maritime and terrestrial domains while at the same time developing the collective resilience to push back against egregious behavior. These goals are consistent with the objectives of firmly enmeshing Japan economically into the Asian region, buttressing a rules-based order to protect SLOCs, and balancing pragmatic economic engagement with China and deepening military coordination with its security partner, the US.

Japan is now a “rule-shaper” ⁸ through leading in multilateral agreements, taking on a larger burden within the Japan-US alliance structure, diversifying strategic partnerships in quality and quantity, and promoting a Free and Open Indo-Pacific (FOIP) that fosters regional integration based on transparent, sustainable trade, development, and connectivity. Lastly, the development of national resilience is achieved through a mixture of economic statecraft and domestic self-strengthening reform, reflected in mechanisms to achieve strategicobjectives.

The recent Australian 2020 Defence Strategic Update understands the rules-based order as “the rules, norms and institutions that help maintain peace and security and guide global cooperation.”⁹ This is similar to Funabashi and Ikenberry’s definition of the rules-based order being “a set of rules, norms, and institutions that govern relations between states in an open manner, backed by hard power guaranteed by the United States. It has three pillars: the security order, the economic order, and the human rights order.”¹⁰ Abe has been able to play a proactive and constructive role in buttressing the liberal international order since returning to power in December 2012. The July 2020 report Japan’s Leadership in the Liberal International Order: Impact and Policy Opportunities for Partners,¹¹outlines the domestic and international structural changes that have contributed to Japan’s ability to transform itself from a reactive player in international affairs to a proactive state, demonstrating its agency that can effectuate change or apply triage to the rules-based order as it faces the triple strains of a unilateralist US, a revisionist China, and slowbalization¹²of the global economy due to COVID-19’s impact on supply chains,¹³ the movement of people, and political decoupling .¹⁴

Tamaki (2020) argues that to preserve the rules-based order, Japan’s “method is classical as it includes a balance-of-power approach involving military expansion and alliances, and a diplomatic approach to making agreements with a variety of political regimes, whether democratic or authoritarian, including China.”¹⁵ Proactive balance-of-power initiatives to buttress the rules-based order began with Abe’s return to power in December 2012, having recognized that despite the low point in Sino-Japanese relations in 2012 following the nationalization of the Senkaku Islands, resurrecting Japan from two decades of economic stagnation and a revolving door of prime ministers required economic pragmatism with China and stronger alliance relations with the US. Doing so would contribute to securing Japan’s inclusion into Asian regionalism and simultaneously help it achieve its security imperatives.   

The first tranche in this process of buttressing the rules-based order was Japan’s agreement to join the original Transpacific Partnership (TPP). The election of Trump in November 2016 brought with it a 180-degree turn in many US foreign policy inclinations, including the sudden withdrawal from the TPP. Abe soldiered up to pass the Comprehensive and Progressive Transpacific Partnership (CPTPP), leaving the door open for the US to rejoin but also for additional partners to be included. This commitment to a 21st century, multilateral trade deal was in direct opposition to the threat Trump’s America First unilateralism was posing to the rules-based order from which Japan has and continues to benefit. Japan’s commitment to a rules-based order was further evidenced by the signing of the Japan-EU Economic Partnership agreement, which came into force February 2019, and its continued commitment to complete the Regional Comprehensive Economic Partnership (RCEP),¹⁶ albeit one that was made on the assumption that India would join, which proved incorrect.

 Japan has also been proactive in creating consensus on rules-based behavior in the maritime domain through participating in the Quadrilateral Security Dialogue (QUAD), by deploying its marine self-defense forces in the South China Sea (SCS) for maritime awareness activities, human capacity and inter-operability building, and humanitarian assistance and disaster relief activities.¹⁷ Security plays a big part in Japan’s understanding of the new order. China is seen as threatening to the old order and the new framework Japan is forging with the US presence.  

The need for buttressing rules in the economic and security spheres in the post-COVID19 era is increasingly critical. At one level, as Javorcik, Oldekop et al. and others have pointed out, the response by many states to the economic tsunami has been to put up protectionist walls, to begin a process of selectively decoupling from China, and to rebel against globalization.¹⁸ As a manufacturing powerhouse and a state firmly wedded to trade, Japan cannot prosper if other states prop up protectionist walls. It needs to champion multilateral trade, complicated by tariffs associated with the US initiated US-China trade war, and the escalation by the Trump administration to stop China’s Made in China 2025 initiative to transform the economy into a world leading, high-tech powerhouse. Japan continues to pragmatically adjust to increased Sino-US strategic competition through the logic of balancing, embracing various multilateral tracks to exclude no country and leverage its comparative advantages.

Trump persistent tweets question the usefulness of that Japan-US alliance and offer a chaotic approach to the FOIP. Tokyo’s response has been astute. As Adam Liff argues, despite such concerns, Japan has doubled down on the alliance through investing in institutional and personal ties.¹⁹ This was well in evidence in the 2017 defense white paper, which stresses the importance of strengthening the Japan-US alliance.²⁰ Japan increased the quantity of interlocutors in Washington. boosting institutional relations that cannot be easily fractured by an arbitrary tweet or misinformed pronouncement by Trump. Japan has also demonstrated a willingness to increase its autonomy on the international stage, internationalizing the burden of securing SLOCs. Japan’s increase in autonomy under Abe is evidenced by the expansion of strategic partnerships in the Indo-Pacific region and outside the region, including commitments to shared norms, principles of engagement, technological aid, economic incentives, the provision of coast guard vessels, surveillance technologies, etc.²¹

Past partnerships with Southeast Asian countries include agreements “in principle to negotiate the transfer of defense equipment and technology from the Japan Self-Defense Forces to the Armed Forces of the Philippines (AFP)” among others.²² Vietnam signed a memorandum in September 2015 to bolster-defense related cooperation. The provision of new marine patrol vessels is meant to buttress  bilateral ties but also to meet overlapping security interests in the SCS.²³ Expanded strategic partnerships with Australia, India, Indonesia, and others all demonstrate that while Japan is doubling down on the Japan-US alliance, it is also independently building partnerships in and outside the region through capacity building, interoperability training, port visits, and joint maritime activities. Importantly, these strategic partnerships enhance the numerous economic agreements in which Japan is participating.

Along with trade as a pillar of FOIP vision, infrastructure and connectivity were also identified as important components for a sustainable regional vision—even more critical in the post-COVID 19 period. This includes ports, bridges, roads, and digital connectivity through which citizens cannot only participate and benefit but also can access the internet for information, education, and global solutions to local developmental challenges. A growing consensus is emerging that any infrastructure and connectivity project must be transparent and fiscally and environmental sustainability. The “Partnership on Sustainable Connectivity and Quality Infrastructure between the European Union and Japan” and the “Australia-Japan-United States Trilateral Infrastructure Partnership” exemplify these principles.

The FOIP vision also focuses maritime capacity-building and regional interconnectivity projects promoting intra-ASEAN connectivity such as the East West Economic Corridor (EWEC) and the Maritime ASEAN Economic Corridor (MAEC). In the post-COVID 19 period, Japan will be challenged to not overtly securitize its FOIP vision as Sino-US tensions deepen, supporting, where possible, ASEAN centrality in FOIP. Japan is the most trusted partner in Southeast Asia followed by the EU according to The State of Southeast Asia: 2020 Survey Report.²⁴ The same survey found that both China and the US are distrusted the most. These results provide Japan insight as to potential ways to strengthen FOIP in a post-COVID-19 era through the inclusion of trusted partners in the region. Springboarding off the already established “Partnership on Sustainable Connectivity and Quality Infrastructure between the European Union and Japan, may seek to include the EU in FOIP initiatives, enhancing its ability to ensure that the region is not determined only by the Sino-US strategic clash.

Building national resilience to manage Sino-US strategic competition in a post COVID-19 world will require Japan to reshape its relationship with both countries. As part of that effort, Japan’s Supplementary Budget for FY2020 (MOF, 2020) includes subsidies to promote domestic investment in support of the supply chain [¥220.0bn], and of diversification of the global supply chain [¥23.5bn]. Funds for these purposes are understood not as decoupling from the Chinese market but as the first step in reshaping bilateral economic relations.²⁵ The purpose is to make Japan less vulnerable to black swans events like COVID-19 and less exposed to the boomerang effects of Sino-US tensions as when Japanese businesses lately were subject to tariffs if their products were made in China. Building more resilience into the Japanese economy makes it less vulnerable to exogenous forces that can impact its stability.

Forging middle power solidarity will be imperative, alongside Australia, Canada, South Korea and other like-minded states.²⁶ Building economic security to combat economic coercion should be a key pillar of any collective resilience initiative focused on middle power alignment. A balancing approach would expand the current CPTPP members. This would help diversify the economic and trade portfolios of participating countries, so they are not so deeply affected by the deployment of economic coercion when they disagree with Beijing.

Accommodation of China

Maintaining good economic relations with China is the pragmatic thing to do, given the close trade ties between Japan and China. Memories of the frustrating state of Japanese diplomacy in the Cold War era are a reminder that polarization with security in the forefront leaves deep concern that a repeat would strike a serious blow against Japan’s autonomy. Relief that the long-sought normalization and then regularization of diplomacy with China has endured is another sentiment operating. Concern that a breakdown in what are often careening relations would have disastrous consequences impacts Japanese thinking as well. The business lobby is more powerful in Japan than in the US, given the weaker roles of the security and human rights lobbies. No matter how disappointed Japanese have felt at times, they have left the door open to renewed upbeat diplomacy. This is still the case in 2020 despite the backlash.

The compulsion to accommodate China has at least five roots. First, there is the postwar pull toward Asianism, reestablishing Japan as a leader in the region to balance dependence on the US. Second, there is the legacy of pacifism, assuming that Japanese goodwill toward states perceived as threats can ameliorate tensions. Third, there are geographical and demographic realities that drove Japanese firms to China and left them heavily invested there. Fourth, the LDP has nurtured factions committed to the causes they embrace, and the China faction has proved to have strong staying power. Finally, Abe has cultivated an aura of personal bonds via summitry, suggesting that he can alter the course of bilateral relations in this way, and this has given rise to hopes that his looming meetings with major leaders will be transformative.

As Sino-US relations continue to spiral in a negative direction in a post-COVID 19 period, Southeast and South Asia will be areas of contestation for the US and China because of maritime security concerns in the SCS but also in terms of economic statecraft as China continues to use its economy and the BRI to expand its influence and economic relationships with stakeholders in the region. Emerging states economically wounded by the COVID-19 in Southeast and South Asia will be particularly open to economic assistance to stabilize their respective socio-economic options, allowing China to tighten its diplomatic, economic, and security footprint in the region. For example, Fook found that “China started extending COVID-19 assistance to Southeast Asia in early February 2020, at a time when it was still in the thick of fighting the coronavirus threat within its own borders.”²⁷ Importantly, these initiatives have been welcomed by most Southeast Asian states.²⁸ The strong COVID-19 aid by China to Southeast Asian states even culminated in the holding of the February 20th ASEAN-China foreign ministers meeting in Vientiane, which brought together states to combat the epidemic. Yang views the ASEAN-China foreign ministers’ meeting focusing on COVID-19 as the precursor to deepening cooperation and the development of mechanisms to deal with future health challenges and enhanced information sharing.²⁹ Japanese are inclined to accept this reality, competing with China in some arenas and acceding to the preferences of states accepting China’s offerings by softening its response or even agreeing to cooperate.

To counter Chinese broad-gauged influence in the region hitherto to the COVID-19 pandemic, Japan was striving to embed itself in and proactively reshape the Indo-Pacific and cooperate with its partners such as ASEAN through initiatives such as the “Partnership on Sustainable Connectivity and Quality Infrastructure between the European Union and Japan,”³⁰ and the “Australia-Japan-United States Trilateral Infrastructure Partnership.”³¹ Considering China’s perceived successful mask diplomacy in the region when compared to the US,³² Japan “has been seen to be slower to provide assistance to combat Covid-19 than China or the United States.”³³ Japan will necessarily need to step up its unilateral and multilateral assistance to the region in order to counter gains made by China with the explicit purpose of ensuring that any regional integration process favors Japan’ s interests.

Balancing accommodation and alliance

At each stage of Sino-US relations over three decades Japan has adjusted its relationship with both states to ensure that the US stays engaged and leans heavily to Japan and that China sees clearly that Japan both has a secure alliance and has sufficient autonomy to satisfy China in ways that the US will not. Although in successive stages Japan has had to lower its targets for leverage in the triangle, it has navigated the triangular dynamics with lingering hope it has room to maneuver. Mostly, it has responded to China’s behavior by calibrating alliance ties. In the 1990s, after China unleashed the “patriotic education campaign,” reviving images of Japan as an enemy, it approved new defense guidelines angering China. In the 2000s after massive Chinese demonstrations over Japan’s moral deficit to become a Security Council permanent member, Japan touted a regional security community with shared liberal values. And in the 2010s after China began its maritime pressure around the Senkaku (Diaoyu tai) Islands, Japan assumed a new posture on collective security. China played the “history card” and railed at changes in Japan’s defense policies, even as it welcomed closer economic ties.

Japanese leaders responded in kind, purposefully fortifying national security individually and in partnerships, while striving to keep economic relations on an even keel. They approved a version of East Asian regionalism welcomed by China after the Asian financial crisis. They were encouraged by brief signs of “new thinking” as Hu Jintao became China’s leader. Then, Abe patiently encouraged Xi Jinping to resume high-level meetings during his first term as leader. If on a few occasions, Japan’s leaders tilted the balance in China’s direction, such as in the Emperor’s visit in 1992 and in the DPJ appeal. In 2010 for an East Asian community, absent the US, these were short-lived imbalances met with little Chinese interest in finding common ground. The overall pattern was Japan reacting to increased pressure from China or concern over China’s rapid rise creating an imbalance by reinforcing security ties to the US, while simultaneously keeping channels to China open in an effort to balance Asian policies.

The year 2020 greatly complicates Japan’s balancing act. Trump’s crusade against China has intensified, month by month. Given the tightening Japan-US alliance, Abe can hardly remain aloof. Pressure within the LDP has mounted at home to disinvite Xi Jinping for a state visit. The Japanese public is also holding a deeply disapproving view of both Xi and of China further complicating any state visit.

Xi has seized the opportunity of early national recovery from the pandemic to go on the offensive, including in Hong Kong, damaging China’s image in Japan further. He clearly is not concerned about loss of soft power in Japan or even averting rising alarm about a China threat, centered for now on the East China Sea disputed islands. In this atmosphere, Abe is postponing any sharp policy shifts. Ahead are the US elections and vaccines to control the epidemic before any decisions.

A Biden victory could breathe new life into a balancing strategy between allying ever more closely with the US and finding renewed hope in accommodating Xi Jinping. It holds out hope for a more strategic, allied-centric, multilateral approach. The trade war would not take central billing to Japan’s relief. Yet some in the LDP are suspicious of Democrats as lacking vigilance against China in security. The defense budget could shrink even more than is likely in light of the pandemic deficits accumulating by the month. After rushing to steer Trump on his first foreign policy moves, Abe would also pursue Biden intensely to rejoin the trade pact—now revised—that Trump abandoned and to commit to FOIP even if renamed.

Conclusion

In the face of the intensification of Sino-US strategic competition, key features of Japan’s approach include: 1) buttressing the rules-based order in trade and security; 2) strengthening the US-Japan alliance and institutional ties; 3) diversifying both in quality and quantity strategic partnerships; 4) promoting the FOIP vision; and 5) building national and collective resilience. These pillars are firmly wedded to Japan’s perennial concerns over open access to SLOCs and over the integration of Japan into Asia (Asianism). Major concerns Japan faces in regards to Sino-US relations are a breakdown in rules-based order, US abandonment, and the reestablishment of a Sinocentric order in the Indo-Pacific. A breakdown in the order would be an existential challenge to Japan’s enduring interests in rules-based SLOCs in the region.  

Japanese leaders have not been known for articulating their worldview. Even Abe, who has been credited with unprecedented strategic thinking, makes few far-reaching statements—the ones he gives in recognition of the anniversary of the end of WWII on August 15 are closely followed for their message on history. Based on Abe’s rhetoric, one would be hard-pressed to articulate a grand strategy for accommodating China and allying more closely with the US.

In the 2020s Japan’s ability to navigate between the two dominant powers will depend more on what their leaders decide than on Japanese strategy. On the one hand, if Biden were to be elected and to set a course to rely heavily on Japan but keep decoupling with China within limits and Xi Jinping were to pause aggressiveness for a long-term strategy of gradual Sinocentrism, space would open for Japan to strategize without arousing a sharp backlash from either side. It would have an incentive to be a cautious middleman, winning US confidence as the strategic lynchpin in East Asia and Chinese tolerance as the key partner restraining the US on issues such as Taiwan. On the other hand, in the case Trump were to be re-elected and his approach to China to continue unabated, Japan would find it increasingly difficult to find space to balance its economic pragmatic approach to China and comprehensive partnership with the US.  In this situation, Japan would need to find ways to develop new and enhance old strategic partnerships and institutional cooperation to strengthen and diversify Japan’s position in the region’s development and continue to redefine integration in a way that internationalizes Japan’s strategic concerns in the region. 
In either case, at present there is no Japanese grand strategy to deal with the increasingly challenging Sino-US competition. Conditions may evolve to enable one to appear.

Stephen R. Nagy is a senior associate professor in the Department of Politics and International Studies at the International Christian University, Tokyo. He was selected for the 2018 CSIS AILA Leadership Fellowship in Washington. Concurrently, he is Distinguished Fellow at Canada’s Asia Pacific Foundation (APF), a Fellow with the Canadian Global Affairs Institute (CGAI), and a Visiting Research Fellow with the Japan Institute for International Affairs (JIIA).