Asia
Commentary

Japan’s China Policy in Flux

Japan has crafted its China policies to balance security threat and economic opportunity, but rising tension will force Japan to find a new normal

Part of the Japanese Foreign Policy Project
Japan
By Pamela Kennedy Author

Despite the national security challenges posed by China, the importance of China to Japan’s economy has required Japan to carefully balance its relations with China and its ally the United States. Japan’s balancing seems to have worked: Under the Abe administration, relations between Japan and China have seen slow but marked improvement, even when U.S.-China relations spiraled during the Trump administration. But points of tension—on territory and norms or values—are reemerging this summer, forcing a new clarification of Japan’s China policies. Whether Sino-Japanese relations will find a new normal over the next year, or will enter a new freeze, will depend on deliberate efforts by each side to engage the other in dialogue.

Abe and Xi have presided over a rocky period of bilateral relations, punctuated with controversies and tensions. In 2012, the year Abe was elected, anti-Japan riots across China protested the purchase of the Senkaku/Diaoyu islands by the government of Japan. China also sent aircraft into the disputed airspace, marking the beginning of increasingly regular encounters. As a result, Abe became prime minister just as relations had reached a nadir. Abe struggled to reengage China in talks, particularly on points of crisis management in the East China Sea. The challenge Abe faced was in developing policies towards China that met the disparate elements of the relationship. The compartmentalization of China as both a security threat and an economic partner required persistent attempts at diplomacy and overcoming pitfalls in order to build a functioning relationship.

The improvement in Japan-China relations during the Trump administration could be attributed to the worsening U.S.-China relationship and the faltering of U.S. leadership in Asia. This dynamic certainly forced both Japan and China to reevaluate their relations in an uncertain environment. Yet an important factor is also Abe’s repeated efforts to meet with Xi since 2014—on the sidelines of G20, APEC, or the Asia-Africa Summit—and Beijing’s reciprocal calls, especially in 2018 and 2019, to improve relations, which signaled that communication was open and there was a political will to pursue solutions such as the hotline that was finally set up in 2018. These efforts laid the groundwork for progress by focusing on areas where the two countries had overlapping interests, such as on North Korea, or where ongoing communication was vital to prevent escalation of tensions, as with Senkaku/Diaoyu. When the U.S.-China trade war ramped up in 2018, Abe and Xi already had a foundation for Abe’s visit to China, the first of a Japanese prime minister since 2011, and their cordial talks on trade in 2019—a far cry from the fraught atmosphere of 2012-2014.

The coronavirus upended Abe’s plans for Xi to make a reciprocal state visit to Japan in April 2020, but though the pandemic was the impetus, it was not the main reason for the sudden cooling in bilateral relations, at least on the Japan side. Initially, cities and companies in Japan and China showed support by sending face masks to each other. Abe tried to balance the increasingly serious public health situation with the upward trajectory of Japan-China relations, but ultimately fell short. The Abe administration struggled to keep the state visit on track, leading to a drop in Abe’s approval ratings and criticism that Abe had taken too soft an approach on China and was not effectively handling Japan’s outbreaks. Then, on July 7, the Liberal Democratic Party’s policy council adopted a resolution to request that the government cancel Xi’s visit. The problem was, primarily, the passage of the national security law in Hong Kong on June 30, but also the ongoing presence of Chinese ships and aircraft around Senkaku/Diaoyu. The Hong Kong legislation capped a year of protests and struggle in Hong Kong over the rights of the territory’s citizens, starkly displaying the difference in values between China and Japan. The East China Sea encounters, which had been increasing for several years, have reached new highs in frequency, a reminder that the unresolved territorial dispute was a major factor for the freezing of Japan-China diplomatic relations in 2012.

These issues are prominent obstacles in the relationship that are difficult to resolve or reconcile even with robust diplomacy, much less during a pandemic with suffering approval ratings and a negative view of China among Japanese. In the past, during the Abe administration, Japan has responded to the East China Sea issue steadily with jet scrambles, Coast Guard monitoring, and protests to Beijing. On Hong Kong, as with other matters of human rights in China, such as Xinjiang, the government of Japan has been cautious in how it approaches its criticism, aware that China views censure as interference in its internal affairs. In this context, the LDP’s resolution indicates that there may be a reevaluation of Japan’s foreign policy approach to China. The prime minister’s office has yet to make a decision on the resolution, and LDP Chairman Fumio Kishida has already confirmed the importance of dialogue with China’s ambassador to Japan. But without a rescheduled visit on the calendar to signal openness to discussion on Japan’s objections, diplomacy might lose ground.

This is occurring alongside the revision of Japan’s National Security Strategy—its first revision since it was published in 2013—after the cancellation of the Aegis Ashore missile defense system acquisition. The recent recommendations from the LDP’s Research Committee on National Security to consider an enemy territory strike capability indicate that the National Security Council’s new defense policies are likely to draw criticism from China. While this dynamic is familiar, it could result in escalation of hostile interactions, putting Japan and China’s ability to use their hotline and actively manage East China Sea encounters to the test.

The economic relationship has enjoyed smoother sailing through most of Abe’s term. But since the beginning of the pandemic, Japan has implemented new policies to help Japanese companies with operations in China relocate to Japan or Southeast Asia. The rationale is that Japan needs to diversify its supply chains to prevent future production shortages, an acute issue especially with U.S.-China trade relations in turmoil. While Japan is unlikely to attempt “decoupling” from China on a significant scale, the policy has raised concerns in Beijing. Japan’s move comes on the heels of similar policies to shift supply chains from China to other countries in Asia, such as by Australia and Taiwan, and after calls by the Trump administration for American companies to move operations out of China. China’s sensitivity to these policies will require Japan to hold candid discussions on what the policy means for the scope of Japan’s economic activities with China.

With Abe’s final term set to end in September 2021, after nearly a decade of cultivating a multi-pronged China policy, the Japan-China relationship may be due for another transformation before Abe steps down. Perennial issues of territory and human rights that have been carefully controlled through diplomacy have reemerged with new urgency. The defense policy, which has consistently identified China as a threat over the past decade, will be revised to meet the priorities of Japan’s security environment. And the economic policy, during and after the pandemic, will make changes on the scale of interdependence between the two countries. The direction of the United States’ China policy after the U.S. presidential election may impact Japan’s policy course, particularly if a Biden administration opts for a less volatile approach. A less confrontational U.S.-China relationship might provide support for Japan-China dialogue within the LDP. But the temperature of U.S.-China relations will not change the foreign policy and defense issues that Abe’s party has raised, nor the need for frank economic discussions. The balancing act has been upended. It is clear that Japan’s China strategy will emerge in 2021 with a different set of priorities and approaches to the bilateral relationship. How these policy changes will impact the functional relationship that the Abe administration has tried to build remains to be seen, but if both sides have a strong will to maintain dialogue, Japan-China relations might find a new status quo.

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