JUNE
2021

Deepening US-Japan
Strategic Cooperation on China
and the Indo-Pacific
Hitoshi Tanaka, Senior Fellow, JCIEA

fter four months in office, the Biden administration’s Asia policy has started to come into focus. By choosing Japanese Prime Minister Yoshihide
Suga and ROK President Moon Jae-in for his firstface-to-face summits with world leaders, Biden has
sought to emphasize the importance of cooperation
with East Asian allies to uphold a stable, rules-based
regional order. At the same time, he is seeking to sign
US allies and partners around the region onto a toughand united approach to dealing with China while
highlighting shared democratic values.
However, as the United States and Japan deepen
their cooperation with regard to China and the IndoPacific region, there are a number of issues the twocountries should keep in mind. First, China policy
needs to be formulated with consideration for theway in which the Chinese Communist Party (CCP)
exercises power domestically. Second, there is a needto dispel any notion that relations with China represent a second Cold War, an idea belied by the importance of its interdependent economic relations toregional stability. Third, as strategic thinking about
the region and China’s place within it are shiftingfrom an Asia-Pacific to an Indo-Pacific approach, intensive consultations and discussions will be criticalto ensure that there is a shared understanding of ourultimate objectives, and that efforts to deter specificaspects of Chinese foreign policy behavior are coupled with diplomacy, an inclusive approach to regionalism, and the promotion of cooperation in areas ofshared interest.

The CCP’s Domestic Legitimacy Under Xi

Under President Xi Jinping’s leadership, the CCP has
come to rely on three key pillars for the maintenanceof its domestic power and political legitimacy. First,Xi has moved to increase the coercive power of theCCP to maintain social control. This includes anticorruption campaigns to oust rivals, the introductionof the Social Credit Score system to evaluate and incentivize politically correct behavior, and the use oftechnology for mass surveillance.
Second, Xi continues to utilize nationalism asa means of stimulating pride in the CCP. After theTiananmen Square protests in 1989, former ChinesePresident Jiang Zemin bolstered patriotic educationemphasizing the role of the CCP in protecting China
from foreign powers and defeating Japan during
the Second World War. Xi has built on this legacy
and promoted nationalism through his concept ofJUNE 2021 | 2
the China dream to rejuvenate the Chinese nation.
Chinese diplomats have also engaged in so-called“Wolf Warrior” diplomacy, condemning international criticism of China.
Third, and perhaps most important, is economicgrowth. China aimed to double its 2010 GDP and percapita income by 2020, which it was close to realizing before the COVID-19 pandemic. Under the China
dream, Xi aims for China to become a fully developed
modern socialist country by 2049, the 100th anniversary of the founding of the People’s Republic.
The CCP’s maintenance of these three pillars hascome under significant pressure. President Biden has
shown his willingness to criticize China’s use of coercive power, such as its arbitrary mass detention ofUyghurs in Xinjiang, crackdowns against democracy
protesters in Hong Kong, and assertive posture visà-vis Taiwan. Yet China’s leadership has painted itself
into a corner with little room for compromise given
the way it has stoked nationalist sentiments while
framing these issues as sovereign matters.
COVID-19 has affected China’s economic growth.
In the first quarter of 2020, China slumped to its
worst performance in decades with negative growth.
Subsequently, China implemented draconian social
distancing and lockdown measures to beat the virus,
quickly recovered to become the only major economy in the world to register positive growth in 2020
(2.3 percent), and is on track to achieve at least 6percent growth in 2021. Nevertheless, the dent madeby the pandemic has shown the ever-present risk ofexternal shocks.
At the same time, the United States is seeking tostrategically decouple its supply chains from China
in critical sectors, such as high-tech trade and investment. This includes the Biden administration’s
recent agreements with Japan and South Korea to expand cooperation on sensitive supply chains in critical technologies. US high-tech reshoring plans andsanctions are likely to strain China’s ability to procure
semiconductors. And while China is seeking to establish domestic production, such measures are unlikely
to keep pace with demand. Thus, the continuation of
the US-China tech war has the potential to dampen
China’s growth, making it an issue for the CCP’s domestic political legitimacy.
In a scenario where the CCP believes its domestic
legitimacy is under threat, it may feel compelled toturn its nationalism against the United States to divert

public attention from falling growth and to maintaindomestic cohesion at the expense of regional stability. As such, it is important that both carrots andwell-targeted sticks be employed to show China it hasa place as a constructive stakeholder in an inclusive
but rules-based regional order, rather than a stickonly approach that would force China into a corner.

US-China Rivalry Is Not a New Cold War

As the CCP remains anxious to uphold its domestic
legitimacy and the US-China rivalry intensifies, USChina disagreements have at times been portrayed aspresaging a possible second Cold War. Recently, speculation has run rife about the possibility of violent
US-China conflict over Taiwan. Indeed, the Taiwan
question has been increasingly incorporated into US
rhetoric to demonstrate a tough posture on China,
as China’s relative military strength has been increasing and Taiwan has adopted an increasingly pro-­independence identity in response to events in HongKong. As such, careful efforts are needed to maintainthe status quo and avoid an unnecessary conflict thatwould be a losing proposition for all sides.
However, the framing of Taiwan and other USChina disagreements as evidence of an emerging
second Cold War misunderstands the relationshipbetween China and the international community.
Despite the risk of the US-China rivalry erupting ina limited conflict, the circumstances are qualitatively
different from the Cold War. At that time, interaction
between the Western and Soviet economies was marginal. Today, however, China is the key engine driving
global economic growth and a major trading partnerof nearly every country around the region. Whilesome efforts to diversify supply chains away from excessive reliance on China may be justified, attempts
to cut China out of supply chains entirely would be
an exercise in economic self-sabotage. Maintaining
economic interdependence with China is necessary
to protect regional and global economic prosperity.

Maintaining Inclusivity in the Indo-­Pacific

So how can peace and prosperity best be managed
given the continuing intensification of the US-China
rivalry, coupled with economic interdependence between China and the region? The key is to ensurethat measures intended to bolster deterrence vis-à-vis
China and avoid unilateral changes to the status quo,such as the Quadrilateral Security Dialogue (Quad),JUNE 2021 | 3
are coupled with an inclusivist approach that focuseson regionalism, diplomacy, multilateralism, and cooperation in areas of common interest.

The Shift From Asia-Pacific to Indo-PacificAfter the end of the Cold War, Japan adopted a strategic approach focused on Asia-Pacific regionalism.
This enabled Japan to combine two key pillars of
its security and foreign policy: the US-Japan alliance and engagement with regional neighbors. Thisapproach was evident in the 1996 US-Japan Joint
Security Declaration between President Bill Clinton
and Prime Minister Ryutaro Hashimoto, which mentioned the term “Asia-Pacific” 12 times. While thisstatement acknowledged US and Japanese concerns
about China’s behavior, it deliberately avoided excessively strong language and instead emphasized theneed for engagement and cooperation to promote astable regional order.
Strategic thinking is now shifting from AsiaPacific to Indo-Pacific. While the exact form of the“Indo-Pacific region” is still developing, it is generally
conceived of as a move to include India as a counterweight to manage a rising China. The US-Japan Joint
Statement in April mentioned “Indo-Pacific” 15 times
and expressed strong concerns about Chinese behavior with regard to Taiwan, Hong Kong, Xinjiang, theSouth China Sea, and the East China Sea. The over­arching narrative of the statement was one of theUnited States forging strong security cooperation
with Japan as a fellow democracy, but it also left theimpression that diplomacy and cooperation with
China have been deprioritized.
Mechanisms to deepen security cooperation andinteroperability, such as the Quad, are useful to deter aggressive and unlawful behavior in the region.
However, each country has differing conceptions of
how best to manage the rise of China and to shape
the Indo-Pacific region. There is an increasingly bipartisan understanding in the United States on taking a tough posture toward China as the US-China
rivalry and competition for high-tech supremacy
intensifies. Australia has adopted confrontationalrhetoric toward China, but may have gotten morethan it bargained for, as China has responded bylevying official and unofficial trade sanctions andtariffs against a range of Australian products, such as
thermal coal, barley, wine, and lobster. Japan is seeking to diversify its security cooperation in order tocope with China, but it seeks a balanced approachthat incorporates both deterrence and engagement,
and it remains committed to mutually beneficial
economic relations. And while India is content toincrease its security co­operation with Quad members, its threat perception of China is largely limited
to border issues in the remote Himalayas and tempered by its tradition of nonalignment. As such, theQuad is best construed as a complement to—and
not a replacement for—diplomacy and cooperation pursued through inclusivist, regionwide multi­
lateral forums.

Bolstering Multilateral Diplomacy

Diplomacy and cooperation vis-à-vis China shouldincorporate three elements. First, the United Statesand Japan should coordinate to make full use of regional multilateral mechanisms. Second, co­operationon common areas of interest with China, such as
climate change and North Korea, should be actively
promoted. Third, the United States and Japan should
utilize Japan’s diplomatic potential and its position as
China’s neighbor to help open up and deepen channels of communication.
In addition to bilateral alliance cooperation, it isalso important to deepen and coordinate US-Japan
cooperation through regional and multilateral forums. This requires reengagement on the part of theUnited States in APEC and ASEAN-centered forums such as the East Asia Summit and the ASEAN
Defense Ministers’ Meeting Plus. Efforts should also
be made for the United States to join a Trans-PacificPartnership successor agreement to advance highlevel economic rulemaking with the aim of eventuallybringing in China. These key multilateral institutions
provide important lines of communication withnon-democracies, including China, and a platform toexercise regional leadership on critical issues, such as
eradicating COVID-19, mitigating climate change, andenhancing energy security.
Forging cooperation in areas of common interest not only provides a chance to establish mutual
wins on critical issues but also provides an important signal that the “Indo-Pacific” concept is broad
enough to incorporate inclusivity. Climate change
is the most obvious area of common concern giventhat it is a shared existential threat to all of humanity.
Moreover, because China and the United States are
the world’s two biggest carbon emitters in absolute

JUNE 2021 | 4terms, it will be almost impossible to address the issue without US-China cooperation. Denuclearizing
North Korea is another key area of common concern to the United States, China, and the region asa whole. The US-ROK Joint Leaders Statement lastmonth from President Biden and President Moon,
which recognized the importance of upholding the2018 US-DPRK Singapore Joint Statement, was apositive step forward. Yet any agreement between theUnited States and North Korea will require buy-infrom China and other key regional stakeholders if it
is to be successfully implemented.
Japan, as both a US ally and a neighbor with deep
historical and cultural connections to China, canplay an important role in helping facilitate deeper
communication between the United States andChina to ensure that tensions in the region do notescalate. In recent decades, Japan has perhaps lost
some of its diplomatic confidence. A quarter of acentury ago, Japan’s economy was eight times bigger
than the South Korean economy and four times bigger than that of China, but today Japan’s economy isthree times bigger than South Korea’s and one-third
the size of China’s. This change in relative strength
has given rise to nationalistic tendencies in Japan.
Although there are a number of domestic challenges
that Japan must address—including an aging population, high debt, and low productivity—Japan’sability to harness its creative and diplomatic power
to ease the US-China confrontation and promoteshared regional peace and prosperity could go a longway in restoring national confidence.

■■■
As China continues to grow in influence and to posea number of security challenges, it is also driving
global growth as a major economic partner to almost
every country around the region. As the Indo-Pacificconcept continues to be solidified, it is imperativefrom a Japanese perspective that deterrence measures to prevent unlawful behavior and aggression
are coupled with an inclusive approach to regionalism, one that is grounded in engagement, diplomacy,and cooperation. Deterrence and engagement shouldbe pursued simultaneously as two sides of the samecoin, rather than as competing concepts. Attempts
at decoupling, cutting off ties with China, and entrenching bloc-to-bloc rivalry are a lose-lose exercise.
In managing the relationship between China and theinternational community, we must not lose sight of
the fact that our objective should be to deny China
opportunities to be an aggressor while also maintaining diplomacy and forging cooperation on areas ofshared common interest.
Hitoshi Tanaka is a senior fellow at JCIE and chairmanof the Institute for International Strategy at the Japan
Research Institute, Ltd. He previously served as Japan’s
deputy minister for foreign affairs.

East Asia Insights is an occasional newsletter focusing on
East Asia regional issues from a Japanese perspective.
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