In the Asia-Pacific region, the China-US conflict remains intense. Beijing is responding to Washington’s attempt to surround China through regional actors, by strengthening its military and economic position in the region.
This contention, which international relations experts called ‘competition’ and China rejected the definitions of ‘competition’ and ‘power struggle’, was also reflected in the Asia-Pacific Economic Cooperation (APEC) Leaders’ Summit held in Thailand last week.
In her speech at the summit, U.S. Vice President Kamala Harris underlined Washington’s message that ‘we are here to stay’, referring to its long-term plans and goals in the Indo-Pacific, while Chinese President Xi Jinping stressed that the Asia-Pacific “is nobody’s backyard”. Unlike Harris, Xi’s use of the term “Asia-Pacific” instead of “Indo-Pacific” was another notable message.
The United States, Britain and Australia formed the AUKUS alliance in September last year to suppress China in Asia-Pacific, which attracted a huge reaction from Beijing. The Chinese government said the pact would seriously damage regional peace and stability.
Japan recently announced that it will sign a military agreement with UK for security co-operation in the Asia-Pacific region. It was commented that this pact was a step that could pave the way for UK in the Pacific and expand AUKUS at the same time. As a matter of fact, the U.S. is planning to include Japan and even Canada in the AUKUS alliance against China soon.
‘Maritime’ agreement from the leaders of China and Japan
China, on the other hand, is trying to overcome the surrounding in Asia-Pacific by strengthening economic relations in the region. Chinese President Xi Jinping discussed the issue with Japanese Prime Minister Fumio Kishida in Bangkok, saying they were aiming to build a regional economic cooperation architecture. They agreed to deepen maritime dialogue, manage differences over Taiwan and territorial disputes, and open a military helpline. Just days after the meeting, the two countries exchanged their views on maritime affairs via video conferencing, and officials pledged to “earnestly implement” the agreement reached by the leaders of the two countries.
Bilateral relations have worn out in recent months as Japan increased its alignment with the U.S. over sensitive issues such as Taiwan, Hong Kong, and Xinjiang. However, the two leaders’ 45 minutes of warm talk during the APEC summit rekindled hopes between the two countries.
Despite this, Tokyo today has accused Beijing of entering Japanese territorial waters in the East China Sea.
Tokyo economists are concerned
Japan’s business community, which has an important position in the U.S. strategy of surrounding China, is worried about the “huge losses” from the decoupling from China. Japanese economists and businessmen are discussing the cost of this disintegration as Washington attempts to urge Tokyo completely cut ties with Beijing.
Speaking to the Global Times recently, Japanese experts pointed out that “the full ‘decoupling’ of the Japanese and Chinese economies will be extremely costly, and both countries may lose in the end,” and stressed that “so-called political interests should not precede national interests.”
Japanese media outlet Nikkei Asia reported that Japanese companies are trying to structure supply chains without dependence on China amid China’s growing conflict with the U.S. However, it is stated that this policy will significantly increase the cost of all kinds of products.
In August, it is reported that Honda launched a project to restructure its large-scale supply chain to explore the possibility of producing cars and motorcycles without being dependent on Chinese-made parts. However, China accounts for more than 30 per cent of Honda’s global sales. According to Nikkei Asia, the company’s “policy of making China the basis of its earnings” will not change in the future. The report highlights that the giant carmaker doesn’t currently intend to separate from China but is preparing for potential risks.
Speaking anonymously to the Global Times, a Japanese executive said the Japanese government plans to incorporate the concept of “economic security” into its national security strategy, essentially expanding its scope of security and “intentionally keeping pace with the US.”
Based on studies conducted at Waseda University, production of about 53 trillion yen ($360 billion) could disappear if the Japanese economy breaks away from China, Nikkei Asia reported. This means a loss of about 10 per cent of Japan’s gross domestic product. China accounts for 26 per cent of Japan’s total imports, while the U.S. is behind China with 19 per cent. According to Japanese statistics, China is Japan’s largest trading partner since 2007.
In addition, one of Japan’s main export targets is China. Japan exports semiconductors, chemicals, and many other products to China. It is reported that the Washington administration have asked Tokyo to take action to impose restrictions on its semiconductor exports to China. Forcing Japan to separate from China may also lead to the loss of Japan’s most important export market. It is not clear whether Japanese politicians will risk this loss, but it seems that economists and industrialists will continue to put pressure on the government to do so.
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