[China & SEA]Japan's "existential anxiety" increases in Southeast Asia
Da Zhigang, Director and Researcher, Institute of Northeast Asian Studies, Heilongjiang Academy of Social Sciences
According to recent reports in the Japanese media, Japan is "losing its presence in Southeast Asia, the engine of global growth," measured in terms of trade, investment and the movement of people. So, as the creator of the East Asian economic miracle and even the economic leader of Asia, why is Japan's presence in Southeast Asia, which was developed over many years, starting to go downhill, and why is it becoming increasingly difficult to hide the anxiety that has arisen from this in Japan?
Japan's declining outward attractiveness amid sluggish economic growth is of course the primary factor. In the short term, this cycle has been accelerated by the sense of isolation of the Japanese economy in the wake of the epidemic and the poor coherence of economic policy in the face of political uncertainty. In the longer term, the more serious "de-Japanisation" of Japanese companies themselves is a structural factor. The overseas investment boom of the 1980s had already started to create a hollow industry, and now the increasing ageing of the young has led many Japanese companies to actively choose to "de-Japanise" themselves, forcing the Japanese government to devalue the yen in order to attract manufacturing back. Japan's digital economy is also lagging behind. Compared to countries such as China and South Korea, where the digital sector is developing rapidly and empowering foreign cooperation to achieve breakthroughs, Japan is lagging behind in terms of government investment, social application and integration into the economic and trade sectors in the digital economy, which is not commensurate with its status as a major economic power.
It is under the influence of these short-term and long-term factors that Japan's economic and trade investment in Southeast Asia, as well as its influence in general, is contracting. This, coupled with the fact that countries such as China and South Korea have since taken the lead in cooperation with Southeast Asia, has fueled a sense of anxiety in Japanese domestic public opinion. In recent years, China and South Korea have taken advantage of bilateral and multilateral FTAs such as FTA and RCEP, as well as cultural cooperation, and have continued to promote trade and investment on a larger scale, winning more recognition from Southeast Asian countries and beginning to accumulate competitive advantages. According to the ASEAN Secretariat, China's trade volume with ASEAN will be US$878.2 billion in 2021, nearly three times that of Japan. Japan's trade volume with ASEAN was three times that of South Korea in 2003, but the gap is reduced to 1.3 times by 2021.
In the process, the perception of Japan's economic status in Southeast Asia has changed. As China's trade with ASEAN surpassed Japan's in 2009, China's GDP surpassed Japan's in 2010, and ASEAN became China's top trading partner by 2020, the perception of Japan's status as a "major economic power influencing the region" has diminished. In addition to the rise in the scale of economic and trade cooperation, the influence of the "Korean Wave" and the "Han Style" in Southeast Asia has also expanded. "The influence of the Korean Wave on Southeast Asia has far surpassed that of iconic cultural products such as Japanese anime, while the Han style is being activated in Southeast Asia as China promotes humanistic exchanges. There is a growing trend for China and South Korea to use their cultural strengths to help their trade and commerce catch up with Japan.
The Japanese government's policy adjustment and layout towards the "Indo-Pacific" region has played a catalytic role in the decline of its presence in Southeast Asia. The chain reaction of Japan accelerating the implementation of the Indo-Pacific strategy with the United States to contain China is causing increasing dilemmas for Southeast Asian countries.
First, Japan's pursuit of "Indo-Pacific" interests is hedging against the immediate interests and concerns of Southeast Asian countries. The establishment and strengthening of the US-Japan-India-Australia "Quadrilateral Security Dialogue" mechanism, the introduction of the "Indo-Pacific Economic Framework" and the proposed introduction of Japan's own "Indo-Pacific" plan are in fact deliberately dwarfing Southeast Asia as a pawn to serve the Japan-US "Indo-Pacific Strategy". In fact, Southeast Asia is being deliberately dwarfed as a pawn to serve the "Indo-Pacific strategy" of Japan and the US.
Secondly, the US has accelerated its economic competition with Southeast Asia. Although the US and Japan are military allies, the US economic community has been fighting with Japan over the years around trade with ASEAN. The Biden administration's "Indo-Pacific Economic Framework" also has the obvious intention of stimulating US companies to compete for the economic map of Southeast Asia, the growth engine of the Asia-Pacific region, in the context of the biggest goal of containing and fencing off China.
Third, Southeast Asia's trust in Japan is divided. Japan and the United States have joined forces to contain China, resulting in some Southeast Asian countries are reluctant to choose sides among the major powers, and to intervene in the geopolitical and economic layout of the nature of resistance to China is even more difficult to talk about, Japan and the United States deliberately create divisions and contradictions and lead to the embarrassment of the status of ASEAN, in fact, Southeast Asian countries have also increased distrust of Japan and the United States.
Objectively speaking, Japan's influence in Southeast Asia, which has been painstakingly built up over the past few decades, will not disappear abruptly, and the foundation laid over the past few decades is still sufficient for Japan to consume for many years. But in terms of trends, Japan's presence in Southeast Asia is not only not on par with China's in terms of "quantity", it is also likely to be overtaken by South Korea in terms of "quality" in the future. Some people in Japan blame China for their reduced presence in Southeast Asia, but this is obviously the wrong pulse. If Japan fails to look for the crux of the problem in terms of its own economic structure and subjective factors such as external containment thinking, it may not only be a problem of reduced presence in Southeast Asia, but also a gradual decline in its future presence in East Asia, South Asia and even the wider Asia-Pacific. The Japanese media's present anxiety becomes a dramatization of the future.