Japan and Southeast Asia Take Stock of China's Rise

China's head of delegation Tang Jiaxuan (R) speaks to members of the press as his Japanese counterpart Taizo Nishimuro listens during a press conference for the Japan-China Friendship Committee for the 21st Century in Beijing on Feb. 8. (Photo: Diego Azubel/ AFP-Getty Images)

In 1990, Japan's economy was twice as big as the rest of Asia combined, and the country looked set to challenge America's global economic primacy. After two decades of flat performance, however, this has changed. Some projections claim that China is already the second-largest economy in the world, having overtaken Japan, and others predict that the Chinese economy will be five to six times larger than Japan's within the next 40 to 50 years.

Adding to concerns about Japan's position in Asia is recent friction in its relationship with its most important ally, the United States. Despite wrangles between Tokyo and Washington over naval bases and troop deployment in Japan, however, the alliance between the two countries is steady and remains crucial to security in the wider region, Professor Takashi Shiraishi, currently a member of the Japanese cabinet office, told a forum at Chulalongkorn University.

Supporting this view is the fact that distrust of China still outweighs Japanese public resentment of the U.S. presence. According to opinion polls, more than half the population has a negative opinion of China. Professor Kitti Prasirtsuk, a Thai academic based at Thammasat University who specializes in Japanese politics, said that there is a growing wariness in Japan of Beijing's longer-term strategic intentions.

While it is almost impossible to assess Beijing's long-terms goals, predicting what might happen within China in the coming years—something that will affect how the country projects its newfound power into the 21st century—is even more difficult. This has complicated the debate over whether China wants to become a "responsible stakeholder" in global affairs or prefers to continue engaging with the rest of world purely in terms of perceived self-interest.

Either way, "We need create a situation where it is in China's interest to work multilaterally, and integrating China into the global economy is the way to do it," Shiraishi said.

Whether or not China sees things this way is unclear. It has recently launched a "Buy China" drive, which foreign investors and multinationals believe will give Chinese businesses an unfair advantage within the domestic market. It is thought that senior Chinese business leaders, who are often former military cadres, want to corner the vast Chinese market and use this as a platform for Chinese enterprise to challenge Western and Japanese multinationals on the global stage.

Meanwhile, the United States has long pushed for a revaluation of China's currency, insinuating that Beijing gives rhetorical support to free trade but unfairly undermines competitors through a skewed yuan valuation.

The key to maintaining regional security in the coming years is to interlock China more closely with the regional political and security architecture, according to Shiraishi, who says there is a need to refashion security to fit better with the economic realities of the broader Asia-Pacific region. "China, Vietnam and Myanmar [Burma] are all part of the regional economic system but remain outside the U.S.-led security system that has been in place since the early 1950s," he said.

Recently, Japan, Australia and China have floated similar-sounding ideas for a form of Asia-Pacific community, with the major sticking point being whether or not to include the United States.

However, China's rise has provoked a reassessment of military needs among some U.S. allies. In May 2009, Australia issued a new defense white paper advocating a substantial upgrade and expansion of the country's defense forces to better enable it to deal with a rising China and contribute more forcefully to the U.S. military alliance.

Asked if Japan was thinking along the same lines, Shiraishi intimated that a new defense plan was being considered at the moment. He would not go into further detail, but said that Australian-Japanese-American naval cooperation was key to Pacific maritime security. The new Japanese government has made noises about resetting the U.S.-Japan relationship on a more equal footing, which if pushed would likely see Washington demand that Japan increase military spending and do more to assist in Iraq, Afghanistan and elsewhere.

For now, however, Japan's main regional security worry is North Korea. China is seen in some quarters as the key to resolving the North Korean nuclear issue, though this may overestimate Beijing's influence over the regime of Kim Jong Il, which now has nuclear weapons and would likely be loathe to give them up.

Noting the security threat posed by North Korea, Shiraishi joked that "people in Japan would be happy if North Korea became more like Myanmar." Similarly, China's influence over Burma has long been a point of speculation, with the junta playing China against India in trade and investment and now apparently trying to counterbalance between China and the United States diplomatically while the Americans try to counter a growing Chinese influence in Southeast Asia.

However, China is seeking ways to expand domestic consumption and reduce reliance on trade, after demand in the West for Chinese goods declined since late 2008. This would have profound implications for its Asian neighbors, not least members of the Association of Southeast Asian Nations (Asean) that recently signed up to a China-Asean free trade area, enticed by the lure of the vast Chinese market.

This article was originally published by The Irrawaddy:

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