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Understandably, Japanese have been preoccupied with the Korean Peninsula since the start of 2018. In this Country Report, we cover issues not central to the serious matters over the peninsula, while in the upcoming Report, we focus exclusively on peninsular matters. Together, the two reports serve as coverage of Japan for the first two issues of 2018, including brief accounts from late December 2017 through the dramatic developments in early March 2018: a breakthrough in North-South talks promising to revitalize contacts; agreement for a US-North Korean summit; Moon Jae-in’s March 1 speech with unmistakable references to Japan; Donald Trump’s imposition of unilateral tariffs affecting Japanese exports of steel; and official signing of  the Comprehensive Progressive Trans-Pacific Partnership (CPTPP or TPP-11).

The end of 2017 and the first part of 2018 brought considerable redirection to Japan’s foreign policy. The preoccupation with Donald Trump over the previous year had diminished after his November visit to Tokyo. The pursuit of Vladimir Putin was no longer at a frenetic pace as in 2016 or even marked by countdowns to the next Abe-Putin summit as earlier in 2017. Ties to Moon Jae-in had shifted from anxious concern during the middle months of 2017 to resigned acceptance of the new status quo, in which Abe joined Moon at the Opening Ceremony of the Winter Olympics without any expectation this would have much impact on relations. Now three themes, other than those centered on Korea, had taken center stage for Abe: seeking clarity for the “free and open Indo-Pacific” concept, which Abe and Trump had separately declared in November; accepting the BRI as the key to improving relations with Xi Jinping and making the 40th anniversary of the bilateral 1978 treaty the “year of China,” as one DC observer put it; and giving momentum to the new TPP-11 agreement, for which Abe had demonstrated leadership.

Free and Open Indo-Pacific

In the January Toa Daigi Seima wrote about the Trump administration’s “Indo-Pacific” strategy, following Trump’s November Danang embrace of the concept, arguing that this replaced the old US notion of the “Asia-Pacific region.” He said that Abe had a big influence on that, having articulated this strategy in August 2016 and communicated it to Trump by telephone, reaching a joint understanding. In October 2017 when Tillerson was in New Delhi, there was strong stress on the values behind this approach. Although Trump’s Danang speech was mainly about trade, security was mentioned, including opposition to territorial expansion and insistence on freedom of navigation with strong indications of US involvement in the South China Sea. Trump needs to take strong leadership, the article continues, in opposition to China’s expansion using military force and efforts to forge a new framework. The stress is put on the triangle of Japan, the United States, and India for protecting the freedom of navigation. The article finds Trump’s stance forward-looking, but it notes that his speech was short on clarifications about security issues.

In the next article in Toa, Ida Shoshi took a closer look at the South China Sea issue by focusing on the ongoing talks between China and ASEAN to build on the code of conduct proclaimed in 2002. For 14 years China resisted talking to ASEAN about that code, while violating its terms on peacefully resolving issues, not escalating problems, showing self-restraint, and allowing full freedom of navigation. China agreed to new talks just two weeks after the Court of Arbitration ruling in July 2016, which China called “garbage,” to mute criticism and to make it harder for Japan and the United States to constrain China’s behavior. ASEAN lacks the power to defend the code from China’s actions. While Wang Yi has been enthusiastic about the positive state of the talks and agreement in principle has already been reached, the contents have been kept secret and are unlikely to depart much from the 2002 code, changing little. It is necessary for others to join in maintaining the maritime order, tightening their coordination.

Abe’s diplomacy toward small and mid-level countries drew scrutiny in the January 14 issue of Yomiuri, which reviewed his first trip abroad in 2018 to the Baltic states and Eastern Europe. In his “diplomacy that takes a panoramic perspective of the map,” the two themes that stand out are identified as intensifying pressure on North Korea and raising consciousness in opposition to China’s moves. The article also mentions Kono Taro’s wide travel as part of this diplomacy, but bemoans the fact that Japan has no special airplane for its foreign minister and that the budget and personnel of the ministry were cut before Kono took office. A separate article in that paper compared China’s leaders’ travels with the limited times a Japanese prime minister can leave while the Diet is not in session, complaining about the negative impact of such limited travels on arousing consciousness of China, strengthening containment of North Korea, as well as building trust with South Korea. These are warnings about diplomatic shortcomings facing Japan.

On January 18, Australian prime minister Turnbull visited Japan, leading to an article that day in Sankei to reflect on the context of ties with China and the United States. The article cites Abe’s friend Abbott being driven out, failing to conclude a submarine deal with Japan as Australia’s pro-China forces were active, and says that plans were afoot to strengthen ties to China before stories of China’s “interference in internal affairs” surfaced, which are covered in some detail. With Turnbull starting off badly with Trump, he is turning for support to Japan. Meanwhile, the article cites a Chinese 2017 survey of which country is most unfriendly to China—putting Australia in first place at 60 percent, followed by India, the United States, and then Japan. Sino-Australian distrust is deepening among the public. With no US ambassador yet in place in Canberra, the Japanese role looks more important, as talk is turning to joint military exercises as well as other Japan-Australia military cooperation in opposition to the Chinese threat.

On January 21, Yomiuri covered the theme of the new warnings about China in the US National Defense Strategy publicized two days earlier, stressing that China aims to replace the United States in the leading role and that in place of the “war on terror,” the US focus is on great power competition with China and Russia. This new US strategy is viewed as largely consonant with the interests of Japan, including in facing China’s threat to the Senkaku Islands, boosting traditional alliances, and confronting China more directly. US support is manifested for the Indo-Pacific framework inclusive of Australia, India, and Japan in the “containment of China.” 

While China in the South China and East China seas is denigrating the rule of law, it is acting in the Arctic Sea in a manner supportive of the freedom of navigation. A Yomiuri editorial on February 12 warned that Japan needs a strategy to address the anticipated surge of Chinese ships going through the three passageways bordering Japan as they go back and forth to the Arctic Ocean, influencing the security situation. The editorial cites the first Chinese white paper on Arctic policy with a call for developing the “ice silk road,” in connection with the two overland and maritime silk roads—all under the BRI rubric. The editorial adds that countries active in the Arctic are naturally alarmed, but it makes no specific mention of Russia’s attitude except to say that Russia gives priority to militarization of the Arctic and to unilaterally imposing rules and charges on other countries’ access. The Arctic is recognized as cutting the distance from Japan to Europe by 60 percent and being rich in natural resources, including natural gas and oil. As the 8 countries in the Arctic Council monopolize decision-making and China, Japan, and South Korea are limited to observer status, China is seeking linkages with member states, notably Finland, to make sure access by its big icebreakers is unhindered, while raising alarm about what has been transpiring and about the absence of Japanese.  

In the March Chuo Koron, three authors reflected on the history of maritime power and China’s understanding of it as it boosts its power rapidly. Yamaguchi Noboru, Koda Yoji, and Nagaiwa Toshimichi explained the lessons of Alfred Mahan and observed that since the start of the 21st century, China, a traditional continental power, has begun to strive to be a maritime power in the region where island countries and peninsulas extend across the horizon, creating a very big handicap. China’s main aim is to deny US access to its waters, which is to be followed by power projection. Yet, it lacks allies, failing to meet this condition of Mahan and others. It has far surpassed Japan in some types of ships, altering the military balance, but in five years it cannot build a fleet comparable to what the United States has built over forty years. Yet, in terms of resources, energy, security, and counter-piracy, China has a big stake in the oceans and is striving to boost its maritime power. In this context, both BRI and the “string of pearls” are noted. Yamaguchi finds BRI similar to “manifest destiny” in legitimating advances at sea, building up strong points as in Pakistan’s Gwadar to be used when the military situation calls for them. Yet, India’s presence makes China’s control of the Indian Ocean not so easy, in contrast to the South China Sea, where weaker states prevail. While BRI is basically an economic route, it offers China a strategic exit to the east, while it is blocked by Russia in the north, Islamic states in the west, and India in the south. Yet, it must pass between Okinawa, Taiwan, and the Philippines, where Japan and the United States have a strategic advantage and control some straits. Readers are told that Abe envisions the Quad, adding India and Australia, to keep the edge. In Yamaguchi’s final remarks, he interprets Xi’s 19th Party Congress speech about the “China Dream” as calling for Chinese world hegemony and worries about Trump, while taking comfort in the domestic US three-way division of power limiting Trump’s actions.

The “Year of China”

Tokyo Shimbun on December 24 wrote optimistically about Sino-Japanese summitry in 2018 to mark the 40th anniversary of the bilateral peace treaty. It noted the visits of LDP leader Nikai and Komeito leader Inoue to meet with top Chinese officials, aiming for Li Keqiang to come to Japan for the CJK summit and then for Abe and Xi to exchange visits. After relations were strained in 2012-14 and gradually improved from 2015, Nikai’s visit (he has special rapport with China) to China in May and the visit of another Komeito figure (a party from the 1970s that has stressed ties with China) in December—both with letters from Abe and meetings with Xi—have raised hope, but the article makes clear that China has yet to respond clearly on the 2018 plans. 

In the November/December issue of Gaiko, Takamura Masahiko wrote about the path for Sino-Japanese reconciliation in the year of the 40th anniversary of normalization. He cites what went wrong in 1998—the 20th anniversary—when Jiang Zemin brought history to the forefront after the historic Kim Dae-jung-Obuchi agreement on history, setting back bilateral ties with China, and what transpired in 2003—the 25th anniversary—despite Hu Jintao’s relatively soft stance on Japan when the “new thinking” approach only served to weaken Hu’s standing in China. In the 2008 anniversary milestone, another opportunity to set relations on a clear upward track was missed after their agreement on joint development of gas fields in the East China Sea failed to gain momentum when a Chinese ship sailed close to the Senkaku. Takemura sees today as another chance when signs of improving relations could be utilized despite constraining effects from public sentiments on both sides. In October, Abe and Xi strengthened their political positions. In order to stabilize the situation related to North Korea, they have reason to cooperate despite concerns about the territorial issue in the East China Sea. Japan is more cooperative on the AIIB and the BRI. Takemura urges greater cooperation, more exchanges, and more efforts to cultivate public trust. This is an opening that should be seized, he suggests, without touching on what makes this moment as fragile as the prior cases.

In the same issue of Gaiko, Kawashima Shin analyzed Xi’s foreign policy for his second term. Until 1981, China was guided by a focus on class contradictions in Mao’s revolutionary age. Then came the Deng era, sustained by those who followed including Xi in his first term, focused on economic development with reform and openness. At the 19th Party Congress, however, the focus shifted to a strengthened state seeking balance at home and a better life. For the first 15 years from 2020, the goals are more about building on socialism with Chinese characteristics, while in the following 15 years, a stronger state theme prevails. One theme mentioned is respect for civilizational diversity in the world; instead of a clash of civilizations, this is coexistence of them. A second views China as both the supporter of the world order, i.e., economic globalization, and its reformer, critical of what the United States has built and advancing a different agenda through BRI, AIIB, the G20, BRICS, etc.

As for Japan, Kawashima finds Abe’s diplomacy welcome in various Asian countries concerned about China’s influence growing excessive and fearing that “win-win” means China’s is in control. China cannot separate politics and economics, and its principles for dealing with North Korea and other issues remain uncertain. Japan poses trouble for China as it is trying to forge a regional order building upon its US alliance. Yet, there are signs of some positive change in Sino-Japanese relations and responses to North Korea, while the Trump administration’s Asia policy is in flux. Given Xi’s shift, this could be an opportunity for Japan, the article concludes, on the basis of Japan’s experience with environmentalism and managing an aging society. This conclusion appears upbeat about the domestic focus on improving living conditions in Xi’s second term and about recent indications of shifts in Chinese foreign policy, as on North Korea and Japan, with scant concern about Trump. The article is one of many striving to find hope in Xi’s new willingness to improve ties with Abe.

The theme at the end of 2017—and continuing despite stumbles through the winter—was that after five years of Abe and Xi in power, at last the ice has been broken, as Tokyo Shimbun headlined its story on December 26. While recognizing the potential for a downturn in Sino-US relations, as differences are sharpening, the message for Japan was that it could still pursue China. (Tokyo Shimbun on January 6 noted that “America First” is part of the problem.) Indeed, this newspaper’s optimism about Sino-Japanese relations extended to an appeal on January 9 to put aside differences on the East China Sea and change it into the “Peace Sea.” Recalling the June 2008 bilateral plan for joint development of a gas field, which was aborted in December 2008 when a Chinese ship entered the Senkaku Islands and China proceeded with unilateral development of the gas, the article suggests that now that there is cooperation on BRI, differences are narrowing, and Togo Kazuhiko’s idea for a “Peace Sea” can be advanced through joint development. Yet, on the prior page, the newspaper mentions tensions persisting around the islands as territorial nationalism is on the rise in both China and Japan.

Within days, however, Yomiuri and others on January 12 were in an uproar on Chinese naval encroachment, noting an official stern protest by the Japanese government and warning that this throws cold water on the improvement in bilateral relations. Yomiuri on January 14 objected strongly to how China was handling this. Optimism was not dead, but it was tempered by sobering news. On January 13 a Yomiuri editorial warned against setting back the improvements in Japan-China relations, urging China to refrain from further provocative movements of its ships. It called for early agreement on a mechanism for managing sea and air traffic, arguing that this would be consistent with a December joint statement advancing a forward-looking relationship.

JB Press on March 7 warned that a turning point has been reached in Sino-US relations, as positive expectations have ended. Instead of anticipating that China will be a responsible member of international society and would democratize, as US administrations have done for 40 years, the view was that what Xi has been doing clearly defies such hopes. The decision to end term limits symbolizes the death of democracy. This accompanies a disregard for international rules and unfairness in economic policy, as well as the tightening of controls at home and assertive military expansion. Seeing the contradictions to US expectations, the news media, specialists, and the Trump administration are all responding. As The New York Times and The Washington Post are quoted, US policies toward China have failed. Kurt Campbell’s critique of unmet US expectations and failed policies is also noted, leading to observations that there is a mood building to push Trump toward a tougher policy toward China. With this fundamental shift in US policy, the article concludes by warning that it will have various impacts on Japan but missing is even the slightest hint of what Japan should do as Abe seeks to improve ties to China while also continuing to be seen as the foreign leader able to work most closely with Trump.

Much depends on assessments of China’s future from the once-popular Japanese book titles predicting China’s collapse to the ascendant Japanese talk of “Chinese-style modernization” using the label “socialist” becoming a model by 2035. In Yomiuri on February 9, the prospects for the latter were weighed, contrasting the fatigue of an aged society under the tighter control of the communist party with the promise of leading the world in many sectors reliant on advanced technology. The outcome of China’s rise is left inconclusive, as Japanese acknowledge that China’s rise will continue without convergence in its development to offer hope but anticipate that, without collapsing, it will face more setbacks.

BRI and TPP-11

On January 25, Sankei reported on TPP-11 after Canada finally agreed to the pact, finding it important for urging the Trump administration to return to the path of free trade. Along with a new Japan-EU agreement, it will be a basis for economic development. Expectations are high now for Japan to fill the role the United States used to play. To protect its culture, Canada had tried to limit foreign investment, but other countries had resisted and even contemplated going forward without Canada. They settled on a separate document apart from the agreement, and Trudeau personally thanked Abe. The article notes that the agreement is meant to strengthen reform pressure on China for a market economy and still needs to include the United States. In short, Japan is acting in Obama’s stead to pursue the framework he had long espoused. With Abe close to Trump, there is hope that he can persuade the US president in his second year.

A February 22 editorial in Nihon Keizai Shimbun focused on BRI, noting that the Japanese government is discussing with Chinese firms the idea of cooperation in third countries. Firms from each would provide their own technology, contributing to healthy economic development of these countries and the region. Yet, the article warns that nothing should be offered that can be used by the Chinese military. High transparency and strict environmental standards are needed. This means that Japan must check carefully to see if it can cooperate. Abe stated in June Japan’s intention to cooperate. Three examples for cooperation are: energy savings from solar power, high-quality construction of industrial housing, and the flow of goods between Asia and Europe. At a stage when concrete plans are not ready, it is hard to evaluate things.

For Japan, receiving countries will have to make their procedures public. According to CSIS, Chinese firms receive about 90 percent of the contracts for BRI, leaving only 7 percent for local firms. If the World Bank and ADB allot 30 percent of the capital to Chinese firms, these BRI figures are very unbalanced. Not a member of the OECD and not following international rules, China is not to be trusted by international society, the editorial concludes. The case of the Sri Lanka airport is cited, when China gained rights after repayment proved impossible, along with the cases of a naval base in Djibouti and operation of a port in Greece. If China should make military use of foreign ports in the name of BRI, this would be a big blow to the regional order. Japan cannot let its guard down. It is good that Japan is cooperating with China on BRI, but this must depend on the big picture of Sino-Japanese relations and reflect consciousness of national interests.

Sankei on December 31 warned against becoming involved in the “dead road” of the BRI. It complained about a rekindled fever for participation in BRI in political circles and the media, arguing that this is China-led, centered on Chinese capital. Pointing to concrete talks about a Japanese role, involving the LDP and Komeito led by Nikai Toshihiro meeting with CCP officials, the paper predicts that joining the AIIB will be a big topic in Japan in 2018. It calls the AIIB a tool of Chinese Communist Party expansionism. As for the BRI, Sankei reports that projects are not completed or are done on a low level with poor efficiency, while China is experiencing a real estate bubble as money flows out of the country on a large scale. Examples cited of errors in how China advances loans are Venezuela, Sudan, Laos, Myanmar, and Cambodia. Investments are disorderly, ghost towns are left, and countries are left with massive debts, readers are told. A separate Sankei article on January 18 centered on Sri Lanka, where China’s BRI approach is equated with colonialist practices: providing loans, gaining operating rights, exacerbating tensions with workers and others, excluding open access to others, and gaining control of another country’s property. This is not a commercial operation, warns the newspaper.

Russia

Yomiuri on March 5 fretted that Putin’s March 1 speech, appealing to a strong Russia and aiming to distract people from economic stagnation, has aggravated Russo-US relations. It is said to have revealed the true nature of the regime and legitimates a hardline foreign policy prior to the presidential election. The US missile defense system is indispensable in case of a missile attack from North Korea and others, but Putin objects. Listing Putin’s moves against submitting to the West, the article mentions his negative attitude toward sanctions on North Korea. He is challenging the post-Cold War US-European led international order. International society needs to be wary of Russian hegemonic activity and must oppose a worsening security environment in the world due to tenser Russo-US relations, the article insists.

In the March issue of Sekai, the question of Putin’s reelection and the fate of the Eurasian Union was covered. Assuming that Russians who hate disorder will give Putin a resounding victory, the article explores foreign policy afterwards. It notes that despite the sanctions over Crimea and Ukraine, German gas imports from Russia have risen from 2013 to 2016 from 42 to 46 percent of its imports and Russia has been able to borrow large sums on the international market. Also, as Trump’s America loses influence, Russia has benefited. It has gained ground in the Middle East, the world’s crossroads. As Russia keeps falling further behind China—GDP now 1/9th as much—and watches as China’s Eurasian infrastructure plans advance, Nishitani Tomoaki asks what room is left for Russia to survive as a Eurasian country bridging Asia and Europe. After the silk road plans were launched by China, Putin insisted that Russia would ride the wind of China’s moves. Russia needs China as its biggest oil and gas market and its partner in opposition to the United States, but in this way, can it remain a global power? Nishitani suggests that in the coming six-year term, that will be clarified. Already, talks about a peace treaty with Japan have become entangled in tensions across East Asia. Russia has no reason to negotiate with Japan since the territorial matter is just a local issue over a shared border. The big picture in the region is in the forefront, making it doubtful that the necessary mutual understanding among neighboring states can be realized for putting Moscow and Tokyo on the same page.