Japan’s China Reckoning

In May 2008, relations between Beijing and Tokyo reached a high point. That month, Chinese President Hu Jintao traveled to meet with Japanese Prime Minister Yasuo Fukuda—the first official visit by a Chinese leader to Japan in a decade. Historical rivals since the 1890s, the two countries still had many unresolved differences, such as their opposing territorial claims over islands in the East China Sea. But Fukuda regarded the fostering of friendly relations with Beijing as a core national interest; a year earlier, China had surpassed the United States as Japan’s top trading partner. During the state visit, Fukuda and Hu issued a joint statement, describing their nations as “partners engaged in cooperation, not as threats to each other.”

The rapprochement was not to last. In the years since that hopeful summit, bilateral trade has continued to increase, but it has been overshadowed by escalating tensions. Not long after the ink dried on the 2008 joint statement, Beijing dispatched vessels to patrol the waters around the Senkaku Islands (known in China as the Diaoyu Islands). To this day, Chinese ships continue to encroach into Japanese territorial waters, blatantly disregarding warnings issued by the Japanese Coast Guard. The last few years have also seen a significant increase in instances of the Japanese air force scrambling to intercept Chinese aircraft nearing Japanese airspace. Between April and December of last year, there were 392 such instances, or about three every two days.

By the end of 2008, Japan had recognized the dangers posed by an assertive China, well before Washington came around to the same realization. Today, the challenge Japan faces in reducing its dependence on China is formidable. In 2023, China accounted for 20 percent of Japan’s total trade. There is no readily available substitute for China’s critical role in the Japanese economy. Japan faces an acute dilemma: how to work with a country that is both an indispensable trading partner and a critical national security threat just 205 miles away.

Japan’s conundrum is a classic case of “the tyranny of proximity.” This tyranny demands that Japan avoid abrupt, provocative moves that might startle China. But it must also undertake careful, long-term work to strengthen its own economy, military, and alliances. If it pulls off this balancing act, it can achieve the twin goals of deterring Chinese aggression and avoiding war.

ABE’S BALANCING ACT

Tokyo cannot hold back Beijing on its own. Japan’s former Prime Minister Shinzo Abe, in whose administration I served as his primary foreign policy speechwriter, pursued two types of balancing strategies toward China: internal balancing, which focuses on enhancing one’s own economic and military capabilities, and external balancing, which involves forging alliances with other nations. Abe invested in Japan’s alliance with the United States and bolstered military cooperation with Australia and India, leading to the formation of the Quad (Quadrilateral Security Dialogue), or what Abe called a “democratic security diamond” in Asia.

He knew that building rapport with other leaders, including U.S. President Donald Trump, was essential to the Quad’s success. It was a testament to Abe’s efforts on this front that after Abe’s assassination, in 2022, Prime Minister Narendra Modi of India and four acting or former premiers of Australia laid flowers at his state funeral.

Abe also recognized that deterring China would require his country to abandon its defense-only, no-first-strike policy that it developed in the aftermath of World War II. In 2015, he faced down a swell of public opposition and overturned the policy. Today, Japan’s armed forces provide round-the-clock reinforcement to U.S. military aircraft, ships, and personnel in the region. Outside Asia, Tokyo has contributed more than $12 billion to Ukraine’s defense. In January, Japanese Foreign Minister Yoko Kamikawa, speaking from a bomb shelter in Kyiv, pledged to allocate another $37 million to a NATO fund for Ukraine; the money will go toward the purchase of drone detection systems.

Finally, to fortify Japan’s domestic economy, Abe worked with Australia to realize the 2018 Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the successor to the unratified Trans-Pacific Partnership. Observing the success of the agreement, the European Union was motivated to strike a similar deal with Japan, which led to the 2019 EU-Japan Economic Partnership Agreement, the largest such deal in history among democracies. Last year, the United Kingdom signed on to the agreement, as well.

Just as Abe did, Japan’s current leadership must do the work of internal and external balancing. Tokyo should continue to consolidate its alliances with maritime democracies sharing similar values—the United States, Australia, India, and the United Kingdom—while striving to bolster its economic strength.

THE TYRANNY OF PROXIMITY

Addressing the tyranny of proximity will require long-term investments in several key areas. First, Japan will need to strengthen its alliance with the United States and other major allies. It is crucial for Japan’s national interest to maintain U.S. involvement in the Indo-Pacific—and expanding that involvement would be even better. Japan must persistently offer incentives to sustain U.S. engagement in the Indo-Pacific. Since the late 1970s, Tokyo has willingly covered the cost of hosting U.S. troops on Japanese soil, even as public opposition to this has occasionally surfaced. This policy must continue if Japan is to remain home to the United States’ single largest concentration of forward-deployed forces—more than 53,000 active-duty troops.

Tokyo is already moving in the right direction. In early April, Japanese Prime Minister Fumio Kishida visited Washington. He and U.S. President Joe Biden issued a joint statement announcing that Japan, the United States, and the United Kingdom will soon begin conducting regular large-scale military exercises.

They also announced that they will soon integrate the command structures of the U.S. and Japanese militaries. Next year, all three branches of Japan’s armed forces—ground, maritime, and air—plan to establish a permanent joint headquarters for the first time. Biden and Kishida have indicated that the U.S. military will build a corresponding command attached to Japan’s. This centralization will make it easier for U.S. forces to coordinate with their Japanese counterparts.

Ultimately, however, the success of this endeavor depends less on what Tokyo does than on the outcome of the U.S. presidential election. Whether Kishida could strike the right chord with Trump as effectively as Abe did remains an open question. Abe was the first foreign leader to meet Trump after the 2016 election, presenting him with a golden golf club in a penthouse at Trump Tower. At the then president-elect’s request, Abe went alone. In the event of a second Trump presidency, few in Japan anticipate Kishida forming a personal bond as strong as Abe’s had been.

Tokyo is sending a strong message to Beijing: there will be costs to any actions that undermine Japan’s national interest.

There is also a need to escalate military cooperation and joint exercises among the other Quad nations. Japan, Italy, and the United Kingdom are collaborating on the development of a sixth-generation fighter jet, further solidifying Japan’s political ties with like-minded countries. Last year, London and Tokyo struck an agreement, the Hiroshima Accord, which stipulates that the United Kingdom will soon deploy aircraft carrier strike groups to Japan on a regular basis for joint exercises.

The AUKUS security partnership, which includes Australia, the United Kingdom, and the United States, will soon expand to include Japan as a technological partner. This expansion will enhance capabilities in cyber, AI, quantum technologies, and undersea operations, among others, transforming the group into JAUKUS. Although the group has not yet extended a formal invitation to Tokyo, Japan’s military alliances with other Western countries have never been stronger. By moving ever closer to its allies, Tokyo is sending a strong message to Beijing: there will be costs to any actions that undermine Japan’s national interest.

Of course, Japan must bolster its own defense capabilities, too. In 2022, Tokyo pledged to double its defense spending to the NATO standard of two percent of GDP by 2027, at which point the country’s defense budget will be the third largest in the world, behind only those of the United States and China. Part of that effort involves enhancing military hardware. Japan is in the process of acquiring nearly 150 F-35 fifth-generation fighter jets from the United States. In November, the U.S. State Department approved the sale of up to 400 Tomahawk cruise missiles to Japan, a deal valued at $2.35 billion. This move is aimed squarely at enhancing Japan’s deterrence capabilities, enhancing its military’s ability to target major Chinese inland bases.

Finally, Japan must focus on revitalizing its economy, a foundational step for achieving the first two objectives. This requires enhancing productivity, which in turn calls for more collaborations with like-minded advanced economies, notably that of the United States. Progress on this front is already well underway. As Biden noted during last week’s summit, “Japan is the top foreign investor in the United States and we, the United States, are the top foreign investor in Japan.”

TROUBLE AHEAD

None of this will be easy. Seventy-seven percent of Japan’s federal budget is earmarked for social welfare spending, particularly for elderly care, paying back government bond obligations, and subsidies to local municipalities. Doubling defense spending is possible but may come at the expense of other national priorities.

The state will also have to convince the nation’s educational institutions to overcome their outdated ethos of pacifism; most top research universities still prohibit their engineers and scientists from collaborating with the armed forces. Trade policy will also need to change: only in 2014 did the policy shift from banning arms exports to encouraging them, with limited success thus far. The country’s defense industries, which historically have catered only to Japan’s forces, will take time to achieve economies of scale.

As the nation gradually opens its doors to immigration, it runs certain risks by virtue of its terrible proximity to China. The number of clandestine Chinese Communist Party “cells” in Japan has likely increased in recent years, especially in the research labs of colleges and private corporations. Officials will have to strike a careful balance: guarding against infiltration by bad actors while also respecting the rights of ordinary Chinese migrants, who make up a quarter of all registered foreigners in Japan.

There is some concern in the Japanese business community that a more assertive foreign policy toward China can backfire. Toyota, Honda, Uniqlo, and many other Japanese companies have significant stakes in China. There are more Uniqlo shops in China than in any other country, including Japan, and Honda produces more cars in China than anywhere else. Even the executives of the nation’s leading defense contractors, such as Mitsubishi Heavy Industries, are cautious about upsetting Chinese-Japanese relations, fearing that their business activities in China could face severe repercussions.

And yet policies aimed at bolstering Japan’s defense capabilities and expanding its alliance networks are now broadly popular, as indicated by a series of polls. Times have changed since Abe put the country on the path to collective self-defense alongside the United States and other partners. Today, Kishida faces strikingly few dissenters. The nation is apprehensive about the rise of China, but it has managed to remain calm, reassured by strengthened ties with its democratic allies.