Asia ’ s Future
at a Crossroads
A Japanese Strategy for Peace and Sustainable Prosperity“Asia’s Future” Research Group
Yoshihide Soeya and Mike Mochizuki
Co-Conveners

Kuniko Ashizawa

Miwa Hirono

Jong Won Lee

Kiyoshi Sugawa

Saori Katada

Takashi Terada

Hirotaka Watanabe

Kei Koga

Kazuhiko Togo

July 2023

Contents
Preface……………………………………………………………………………………………

Forward ……………………………………………………………………………………………
Acronyms……………………………………………………………………………………………

1
3
5

Executive Summary………………………………………………………………… 6
Introduction…………………………………………………………………………………… 13
Chapter 1

Approach toward Asia andPromotion of Middle Power Diplomacy………… 17
1.1 Values, Norms, and Principles……………………………………………… 18

1.2 Different Geographic Prisms for Asia…………………………………… 19
1.3 Dialogues, Institutions, and a Rules-Based Order…………………… 23
1.4 Japan’s Diplomacy and Middle Power Leadership…………………… 26
Chapter 2

Regional Economics………………………………………………… 29
2.1 Striking a Balance between Economic Liberalization,
Sustainable Development, and Economic Security…………………… 29

2.2 Regional Financial Stability and Governance………………………… 30
2.3 Regional Trade (CPTPP and RCEP)……………………………………… 33
2.4 Regional Infrastructure Development Cooperation…………………… 37
2.5 Supply Chain and Digital Technology…………………………………… 40
Chapter 3

Regional Security……………………………………………………… 44
3.1 Defense Policy…………………………………………………………………… 44

3.2 U.S.-Japan Alliance…………………………………………………………… 47
3.3 North Korea……………………………………………………………………… 48
3.4 Taiwan……………………………………………………………………………… 49
3.5 Senkaku Islands………………………………………………………………… 51
3.6 South China Sea………………………………………………………………… 53
3.7 Nuclear Arms Control and Disarmament………………………………… 54
3.8 Ukraine-Russia War and Asia……………………………………………… 58
Chapter 4

Transnational Challenges……………………………………… 60
4.1 International Public Health………………………………………………… 61

4.2 Climate Change………………………………………………………………… 63
4.3 Human Rights and Humanitarianism……………………………………… 65

Major Recommendations……………………………………………………… 67
Research Group Members………………………………………………………………… 76

Preface
In 2018, we convened the “Asia’s Future” Research Group because of concern about theintensification of U.S.-China geopolitical rivalry and the increasing risk of military clash
in the Asia-Pacific region. The lack of balance in Japanese public discourse about how
Japan should address this evolving strategic environment in Asia deeply troubled us. We
saw that not only Asia’s future but also Japan’s future was at a strategic crossroads. We
therefore invited scholars and experts on Japanese foreign policy and international relations
to join a multiyear project in order to develop a realistic and moderate Japanese strategy
for Asia. The shortcomings of the National Security Strategy adopted by the Kishida
Cabinet in December 2022 confirmed the urgency of this task and the need to chart analternative course for Japan.
The project involved two retreats in Karuizawa held in December 2018 and August 2019,
panel discussions and workshops held at George Washington University in March 2019and March 2020 and in Tokyo in July 2022, and multiple virtual online meetings convened
during and after the height of the COVID-19 pandemic. This report is the culmination of
the research group’s deliberations over a period of more than four and a half years. We
thank all of the participants for their expertise and insights and their contributions to thediscussions and final report.
Dr. Kuniko Ashizawa and Mr. Kiyoshi Sugawa served as the project coordinators and ablymanaged the preparation of both the Japanese and English editions of this report. During
the last four years, Dr. Ashizawa has been teaching a seminar course on “Asian Order andCommunity-Building” at the Elliott School of International Affairs at George Washington
University. This course parallelled the “Asia’s Future” project and enabled a number ofexperts to engage students and scholars regarding key regional issues examined in the“Asia’s Future” project.
We express our gratitude to former Prime Minister Yukio Hatoyama and the East Asian
Community Institute for providing generous support for the project and for hosting the tworetreats at the Yuai Villa in Karuizawa and the workshop in Tokyo. We are grateful to
Mr. Daisuke Haga of the East Asian Community Institute for his assistance in organizing
the meetings in Japan and to Mr. Kantarō Suzuki for preparing the transcripts of the
discussions.

1

We also extend our appreciation to the Eurasia Foundation (from Asia), especially Mr. Yōji
Satō (Chairman) and Dr. Joon-Kon Chung (Senior Researcher), for the generous grants tofund the “Asian Order and Community-Building” course and the various activities related
to the “Asia’s Future” project. Finally, we thank the leadership and staff of the Sigur
Center for Asian Studies at George Washington University for their invaluable assistancethroughout this endeavor.

Yoshihide Soeya and Mike Mochizuki

Co-Conveners of the “Asia’s Future” Research Group2

Forward
I am very concerned about Japan’s future. This concern extends not only to domestic
politics but also to foreign affairs.
Japan must be a nation that respects the dignity of others as well as its own. That spirit
is what I call fraternity. But what is the current situation? The tendency to get along andcooperate with nations that share the same values, to view those with different values
as enemies, and to behave as if it were justice has become more pronounced. What lies
ahead is inevitably intensifying conflict. I believe that the true meaning of diplomacy is toenable nations with different values to understand, respect, and cooperate with each other.
Without this, the creation of an East Asian Community, which I have long advocated, is
impossible.
Today, we are facing the so-called “Thucydides Trap,” where tensions between the
United States, which still maintains global hegemony, and China, which has achieved
unprecedented growth, are rising. We cannot turn away from this reality. U.S.-China
tensions are unlikely to ease anytime soon; in fact, they will probably become more acute.
Japan should, of course, make diplomatic efforts to mitigate the growing Sino-American
tensions, and it cannot ignore the need to discuss national security matters. What should beJapan’s conduct in the face of such tensions? To address this question, Japan must rid itselfof the diplomatic disorder of adhering to the concepts of “following the United States” and“leaving Asia, entering Europe.”
When I was contemplating these thoughts, I had an opportunity to converse with Associate
Professor Mike Mochizuki of George Washington University five and a half years ago.
When Professor Mochizuki stated that Japan should develop a more autonomous foreign
policy, I agreed and offered my support. Professor Yoshihide Soeya of Keio University
and Professor Mochizuki have led this project to examine Japan’s position in Asia’s
future, consider Western perspectives as well, and develop policy proposals. Researchersof different generations joined the project, and heated discussions took place over several
years. Their enthusiasm helped to overcome the outbreak of COVID-19, and the report has
now been completed. I could not be more pleased.
The report’s recommendations include a number of policies that differ from current
Japanese government policy. However, these policies are necessary for Japan to become a3

truly independent, peace-loving nation that is respected not only in Asia but throughout theworld. I am convinced that these proposals deserve a wide audience, not just from thosein government. Finally, I would like to thank Drs. Soeya and Mochizuki, and all the otherprofessors who participated enthusiastically in the discussions. I hope that this report will
inspire many of you, and that it will be a beacon of light for the future of Asia.

Yukio Hatoyama

President
East Asian Community Institute4

Acronyms
ADB

Asian Development BankAOIP

ASEAN Outlook on the Indo-Pacific

AIIB

APEC
ARF

ASEAN
ASEM
BRI

CPTPP
DEPA
EAS
EU

FOIP
FTA
G7

G20

GDP
INF

IMF

IPEF

NATO
NPT

OECD

OECD/DAC
RCEP

SDGs
TPP
UN

UNCLOSWHO
WTO

Asian Infrastructure Development Bank
Asia-Pacific Economic Cooperation
ASEAN Regional Forum

Association of Southeast Asian Nations
Asia-Europe Meeting

Belt and Road Initiative

Comprehensive and Progressive Agreement for Trans-Pacific Partnership
Digital Economy Partnership Agreement
East Asia Summit
European Union

Free and Open Indo-PacificFree Trade Agreement
Group of Seven

Group of Twenty

Gross Domestic ProductIntermediate-Range Nuclear Forces
International Monetary Fund

Indo-Pacific Economic Framework

North Atlantic Treaty Organization

Treaty of the Non-Proliferation of Nuclear Weapons

Organization for Economic Cooperation and Development
OECD Development Assistance Committee

Regional Comprehensive Economic Partnership
Sustainable Development Goals
Trans-Pacific Partnership
United Nations

United Nations Convention on the Law of the Sea
World Health Organization
World Trade Organization

5

Executive Summary
As the strategic competition and confrontation between the United States and China intensifies
and the future of the international order in Asia has become uncertain, Japan confronts the taskof refashioning its diplomatic and security strategy. In December 2022, the Japanese government
adopted a new “National Security Strategy” for the first time in a decade. Although it does notignore the need for diplomatic dialogue and cooperation, what stands out is the strong emphasison power politics (including military capabilities) and geopolitics as well as economic security.
In response, the new strategy stresses the centrality of Japan’s self-defense capabilities andthe U.S.-Japan alliance. However, there exists a significant disparity between the paradigm
presented in the new “National Security Strategy” and Japan’s own capabilities. Consequently,
the U.S.-Japan alliance is deemed essential to fill this gap; and in that sense, there is an elementof logical consistency in the new strategy. Accordingly, strengthening the U.S.-Japan allianceends up being the strategy’s a priori premise and its absolutely indispensable prescription. Whatunderlies the discussion and recommendations in this report is our serious concern that the newparadigm will leave Asia entangled and divided in the future.

Japan’s long-held emphasis on a multifaceted and multilayered approach to Asia policy continues
to be a constructive way to address the new regional and international challenges that haveemerged. The transnational challenges that have become particularly prominent in recent years
have acutely demonstrated the need for an unprecedented level of international cooperation.
Nevertheless, recent foreign policy discourse around the world has tended to focus more on
great power competition than on interstate cooperation. In this context, Japan should maintainand promote security cooperation with the United States; but at the same time, it should also
exercise leadership to help mitigate the competition between the U.S. and China in Asia throughconstructive diplomacy, thereby reducing the danger of great power war in the region. Without
this, there can be no solution to transnational problems and no progress toward a world free of
nuclear weapons. Such efforts and practices are consistent with the concept of “middle power
diplomacy,” which aims toward a more autonomous foreign policy that is close to but not solely
dependent on the United States.

Approach toward Asia and the Promotion of Middle Power Diplomacy
One of the most important goals of Japan’s policy toward Asia is to promote further prosperityin the region through international trade, investment, and technological advances while making
6its economic activities more environmentally sustainable and ensuring that the benefits ofeconomic development are distributed more equitably. To achieve this future vision, cooperation
with countries that share values and similar political and economic institutions is crucial.
Relations with the United States remain an important pillar of Japan’s foreign policy. However,using the rationale of strengthening the U.S.-Japan alliance, Japan should not neglect countries
that are not allies or partners of the United States. To mitigate great power competition andprevent it from escalating into great power wars, Japan should deepen cooperative relationships
with middle powers in the Asian region, such as South Korea, Australia, New Zealand, India,
and the Association of Southeast Asian Nations (ASEAN) and become a driving force of middle
power cooperation.
While defending fundamental human rights and democratic principles, Japan should recognize
the diversity of political systems in Asia and be sensitive to the different historical trajectories
and sociocultural traditions in each country. Japan should resist moves to divide Asia into a

struggle between democracies and autocracies and avoid an overly ideological approach toforeign policy. It should also be cautious about defining the Asian region solely in terms of
the “Indo-Pacific,” a concept that has recently been used frequently in international political
discourse. While the concept of the “Indo-Pacific” has the advantage of emphasizing theimportance of freedom of navigation and the security of long sea lanes vital to international
trade, it has the drawback of viewing the Asian region primarily in maritime terms. The “IndoPacific” concept diminishes the importance of continental Asia and suggests an intention tocounter or contain China. Rather than concentrating on a single geographical concept, Japan’s
diplomacy should reflect a multifaceted view that also incorporates the perspectives of “AsiaPacific,” “East Asia,” and “Eurasia.”
Japan should reinvigorate its middle power diplomacy to build a more stable, peaceful, andprosperous future for Asia. South Korea, which shares basic strategic interests and politicalvalues, is Japan’s most important partner in middle power diplomacy. Japan can also build on themeetings involving Japan, Australia, India, and the United States (i.e., the Quad meetings) andtake the lead in promoting a “middle power coalition” of Japan, Australia, and India. Inviting
other Asian middle powers, such as South Korea and the ASEAN nations, to the mix would leadto the formation of a region-wide middle power alignment. Japan should energetically engage
China on the basis of partnerships with middle power countries in Asia and Europe to achieve
stability in bilateral relations between Japan and China and cooperation on urgent transnational
issues.

7

Regional Economics
The Asian region has achieved remarkable economic development since World War II. At thesame time, economic liberalization and rapid globalization that have driven this development
have brought to the surface problems such as widening economic disparities and environmental
degradation. To mitigate such side effects and socio-political costs, Japan must place greater
emphasis on Sustainable Development Goals (SDGs), which focus more on social andenvironmental protection. In addition, the negative impact of the COVID-19 global pandemic andthe disruption of international supply chains due to the Russia-Ukraine war, as well as China’s“weaponization of trade” and economic coercion have become prominent as new challenges of
economic security. Devising an effective response to these challenges is now an urgent priority
for Japan and many Asian countries. Therefore, Japan’s regional economic diplomacy requires
policies from three separate perspectives: economic liberalization, sustainable development, andeconomic security.
Japan has played an important role in the Asian region in areas such as financial governance,
trade promotion, and development assistance cooperation, including infrastructure development.
Building on this past success, Japan should continue to play a leadership role in rulemaking andcooperation in each of these areas as a leading economic power in Asia and a global middle
power. For example, Japan can make a meaningful contribution to implementing and expanding
the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP), which is
widely regarded as a “high standard” FTA in terms of trade liberalization and order building. It
can also help to devise an effective international debt restructuring program for Sri Lanka, which
defaulted last year. In the area of infrastructure development, Japan should continue to promote
and realize its proposal to standardize the international principles of “quality infrastructure
investment.” Encouraging China to follow these principles would help steer China’s investment
and support for infrastructure development toward sustainable economic development in thedeveloping countries in Asia. In addition, while various frameworks for regional economic
cooperation exist in Asia, Japan’s basic position should be “open regionalism” and the preventionof a fragmented Asia. From this perspective, Japan should promote cooperation under the
U.S.-led “Indo-Pacific Economic Framework” (IPEF), as its founding member, but also consider
joining the “Digital Economy Partnership Agreement” (DEPA), which was launched by small
and medium-sized Asia-Pacific countries (Singapore, Chile, and New Zealand) and is expected
to expand its membership in the future, as well as the China-led Asian Infrastructure Investment
Bank (AIIB).
8

Regional Security
In order to maintain peace in Asia and to uphold Japan’s security, a certain level of deterrence isessential, but this raises the potential of a “security dilemma.” For deterrence to be effective, it isnecessary not only to properly develop defense capabilities, but also to provide some assurance
to potential adversaries that their core interests will not be threatened. Also, in pursuing defense
cooperation between Japan and the United States, Japan should not hesitate to actively andopenly express its views on security issues to the United States. A healthy alliance is not one
in which Japan simply submits to U.S. policies and intentions, but rather one in which Japan
confidently engages in strategic dialogue with the United States on a more equal footing.
Regarding various Asian security issues, Japan should skillfully balance deterrence anddiplomacy and pursue policies that contribute to reducing tensions and preventing crises. With
regard to North Korea, Japan should seek a realistic, gradual, reciprocal, and step-by-step
approach toward the ultimate goal of denuclearization of North Korea by making concrete
progress on the “resolution” of the abduction issue. With regard to the Taiwan issue, it isnecessary to avoid a military crisis by maintaining conditions under which the status quo ispreserved until the day comes when China and Taiwan can find a peaceful solution to theunification issue. To this end, it is important that both Japan and the United States convey toChina in a credible manner that they clearly oppose any unilateral use of military force by
China and at the same time have no intention of supporting Taiwan’s permanent separation or
independence from China. Meanwhile, the Senkaku Islands issue is one of the major factors
undermining stability and cooperation in Sino-Japanese relations, and Japan should be creativein discussing with China various ideas for reducing tensions over the Senkaku Islands. Japan
should politically revive and try to implement the Japan-China joint press release of June 2008
and the understanding on joint development in order to make the East China Sea a “sea of peace,cooperation, and friendship.”
The first pillar of Prime Minister Kishida’s “Hiroshima Action Plan” is the continued non-use
of nuclear weapons. To strengthen this pillar, the Japanese government should publicly urge thenuclear weapon states to adopt a doctrine of “no first use” of nuclear weapons. By doing so, itwill help institutionalize a global norm against the use of nuclear weapons. By participating as
an observer in the UN Treaty on the Prohibition of Nuclear Weapons, Japan can demonstrateinternational leadership toward nuclear disarmament as a long-term goal. Japan’s participation as
an observer would not undermine U.S. nuclear deterrence but rather serve as a bridge between
the nuclear weapon states and non-nuclear weapon states.
9Transnational Challenges
Japan has heretofore made considerable contributions through international organizations andbilateral aid to address transnational issues such as global warming, pandemics of infectious
diseases, and refugees from conflict in unstable regions. Based on this track record, Japan should
continue to demonstrate its leadership in this area as a responsible major Asian country anda leading global middle power. In addition, as an economically developed liberal democracy,
Japan has an international responsibility to defend and promote universal human rights. In thisregard, the concept of “human security,” which Japan has long advocated, is effective in dealing
with these transnational challenges in Asia, where many countries tend to emphasize nationalsovereignty and a variety of political systems exist. Therefore, Japan needs to promote more
inclusive and effective regional and international cooperation, while keeping this concept as abasic principle and acting as a bridge across the geopolitical and ideological divides that havebecome more pronounced in recent years.
Specifically, Japan should work with other Asian countries to ensure that public healthcooperation, such as COVID-19 vaccine provision, is not unnecessarily drawn into theintensifying Sino-American strategic competition. On climate change, given that both Japanand China are major carbon emitters in Asia, Japan should directly cooperate with China inthe development and promotion of environmental technologies. This would not only enhancetheir ability to meet their own emission reduction targets, but also contribute to helping other
Asian countries reduce their greenhouse gas emissions. In the area of human rights andhumanitarianism, Japan should first and foremost improve its own human rights and humansecurity situation and lead by example. While refraining from bringing up human rights anddemocracy as ideological tools in the geopolitical competition with China, Japan should adopt
practical humanitarian approaches that are in line with local realities. For example, throughexisting frameworks such as the ASEAN Intergovernmental Commission on Human Rights,
Japan can share best practices with other countries on improving government transparency
and reforming legal and judicial systems and foster and support civil society actors involved inproviding humanitarian assistance to victims of human rights abuses.

Major Recommendations
Based on the above ideas, this report presents the following specific fifteen recommendations forJapanese policy toward Asia:
101. To develop middle power diplomacy, lead the promotion of a “middle power coalition”
of Japan, Australia, and India, which could drive the agenda-setting of the Quad (Japan,
Australia, India, and the United States), and further strengthen functional cooperation with
the Republic of Korea, ASEAN, and other middle power countries.

2. In response to the South Korean government’s decision regarding the “conscripted labor
issue,” make continuous efforts to improve relations with South Korea.
3. Regarding debt restructuring measures for Sri Lanka, encourage China to participate
continuously in the newly established “Creditor Committee for Sri Lanka” and cooperateby disclosing necessary information.
4. Encourage the return of the United States to the Comprehensive and Progressive
Agreement on Trans-Pacific Partnership (CPTPP) and make diplomatic efforts toward
the goal of simultaneous accession of China and Taiwan, which have formally applied formembership.
5. Explore the appropriate timing with a view to joining the Asian Infrastructure Investment
Bank (AIIB).

6. With regard to rulemaking in the digital sector, consider applying for membership in the
Digital Economy Partnership Agreement (DEPA), while promoting cooperation in the
Indo-Pacific Economic Framework (IPEF).
7. Strengthen and deepen the doctrine of strictly defensive defense in the direction ofenhancing deterrence by denial rather than focusing on counterstrike capabilities, which
are less effective and have greater side effects.
8. Encourage North Korea to conduct another investigation into the abduction victims andestablish a liaison office in North Korea to carry out such an investigation, with the aim ofresuming negotiations for the normalization of diplomatic relations with North Korea.
9. Since a gradual, realistic, incremental, and reciprocal approach is needed to achieve theultimate goal of denuclearization of North Korea, seek as a first step a freeze of North
Korea’s nuclear weapons and missile development programs.
10. Based on paragraph 3 of the 1972 Japan-China Joint Statement, while opposing unilateralchanges in the status quo from either side of the Taiwan Strait, clearly state that Japan does11

not support Taiwan’s independence.
11. Acknowledge the reality of the existence of an issue between Japan and China regarding
the Senkaku Islands and discuss with China ways to ease and resolve tensions over theislands.

12. Urge the nuclear-weapon states to adopt a doctrine of “No First Use” of nuclear weapons
and participate as an observer in the UN Treaty on the Prohibition of Nuclear Weapons.
13. Encourage inclusive transnational cooperation in the public health sector and work to
reduce the negative impact of geopolitical tensions, ideological differences, and sovereignty
conflicts on such cooperation.
14. Cooperate with China to promote environmental technologies and develop low-carbon
infrastructure in third-country markets to address the climate change crisis in Asia.
15. Regarding human rights and human security, focus on improving the human rights
situation at home while promoting a non-ideological, humanitarian approach that ispractical in line with local realities in order to broaden support and cooperation among
Asian countries.

12

Introduction
As the strategic competition and confrontation between the United States and China grows more
intense and the future of the international order in Asia has become uncertain, Japan confronts
the task of refashioning its diplomatic and security strategy. In this context, on December 16,
2022, the Japanese government approved a new “National Security Strategy” for the first time ina decade, outlining Japan’s strategic choices for the foreseeable future.1 Based on an assessmentthat Japan faces “the most severe and complex security environment since the end of WorldWar II “ (p. 2) and that the activities of China, North Korea, and Russia in the Indo-Pacificregion are causing serious security concerns (pp. 8-10), this new strategy outlines an ambitious
effort to take “full advantage of [Japan’s] comprehensive national power, including diplomatic,
defense, economic, technological, and intelligence capabilities” (p. 3). Although it does notignore the need for diplomatic dialogue and cooperation, what stands out is the strong emphasison power politics (including military capabilities) and geopolitics as well as economic security.
In response, the new strategy stresses the centrality of Japan’s self-defense capabilities and the
U.S.-Japan alliance.2
In retrospect, Japan’s postwar security policy until around 2012 did not embrace such an explicit
geopolitical orientation. On the contrary, postwar Japan consciously withdrew from the realmof power politics in international relations, abandoned the notion of a “required defense force”
in the 1970s, and limited itself to a “basic defense force” to deal with “small and limited”
acts of aggression.” As reflected in Prime Minister Yasuhiro Nakasone’s diplomacy during
the 1980s, even while maintaining the U.S.-Japan alliance as the foundation of its foreign
policy, Japan focused on building a stable relationship with China. The new “National Security
Strategy,” however, marks a 180-degree turnaround. Regarding a fundamental strengthening ofdefense capabilities, the strategy states that “it is difficult to accurately predict when an entitywith powerful military capabilities will come to have an intention to directly threaten othercountries.” Therefore, Japan must focus on “the capabilities of such actors and develop defense
capabilities to take all possible measures to ensure the security of Japan in peacetime.” (p. 17).

1 National Security Strategy of Japan, December 16, 2022, https://www.cas.go.jp/jp/siryou/221216anzenhoshou/nss-e.pdf
2 For example, Japan’s defense capabilities are given a higher significance than economic, technological, and intelligence capabilities and areviewed as “the last guarantee of Japan’s national security.” “[T]his function cannot be replaced by any other means.” (p. 11) The new strategy
goes on to state: “Japan, while ensuring the bilateral coordination at its strategic levels, will work in coordination with the United States tostrengthen the Japan-U.S. Alliance in all areas, including diplomacy, defense, and economy.” (p. 13)

13

However, this raises a fundamental question. It is indeed true that the security environment
surrounding Japan is becoming more severe. It is also true that China’s posture toward theoutside world has become increasingly hardline in recent years. And it goes without sayingthat Russia’s invasion of Ukraine is a major event in international politics. But to what extent
is Japan really able to cope with this new geopolitical situation on its own? Although it does
not explicitly acknowledge such a premise, the “National Security Strategy” appears to express
a wish for building up Japan’s own comprehensive power capabilities. Also, as shown by the
discussion of “counterstrike capabilities,” what would only be of tactical use during a military
conflict is recklessly justified from the logic of strategic deterrence. Given what the new strategy
calls “the most severe and complex security environment since the end of World War II,”
does anyone believe that Japan’s national power is now greater than before in either relative
or absolute terms? Under such circumstances, is it reasonable to shift so fundamentally theparadigm of Japan’s postwar security policy? One must conclude that there exists a significant
disparity between the paradigm presented in the “National Security Strategy” and Japan’s own
capabilities. Accordingly, the U.S.-Japan alliance is deemed essential to fill this gap; and in thatsense, there is an element of logical consistency in Japan’s new security strategy. Accordingly,
strengthening the U.S.-Japan alliance ends up being the strategy’s a priori premise and its
absolutely indispensable prescription.

From the perspective of “middle power diplomacy,” which this report presents below, the U.S.Japan alliance remains an important pillar of Japan’s security policy. What is problematic,
however, is the paradigm shift articulated in the new “National Security Strategy.” Whatunderlies the analysis and recommendations in this report is our serious concern that this newparadigm will leave Asia entangled and divided in the future. Although Asia faces numerous
challenges today, they do not erase the successes that the region has enjoyed over the past several
decades. After the end of the decolonization process and its attendant conflicts and wars ended,much of Asia has enjoyed international peace and stability. Many of the countries in Asia haveengaged in successful nation and state-building and have focused on economic development.
Most observers now see the region as the most economically dynamic in the world with thepotential to become even more prosperous. Japan has played a critical role in this regional
success. Through trade, investments, and economic assistance, Japan supported the development
efforts of numerous Asian nations and promoted regional economic integration. It cultivateddialogues and institutions to foster mutual understanding and trust among countries and toencourage regional cooperation. Even as the Japanese government partially implements the“National Security Strategy” in the face of new geopolitical challenges, it should build on the
successes of previous Asian policies and not discard the key elements that remain relevant today.
14

Japan’s long-held emphasis on a multifaceted and multilayered approach to Asia policy continues
to be a constructive way to address the new regional and international challenges that haveemerged.
The transnational challenges of the COVID-19 pandemic and climate change have acutely
demonstrated the importance of international cooperation. Compared to other regions in
the world, the countries of Asia on the whole have addressed the pandemic with relative
effectiveness. They have kept the death toll relatively low through state-society cooperation in
the implementation of both “non-pharmaceutical interventions” and vaccination programs.3 The

countries of Asia along with the rest of the world must learn from the tragedy of COVID-19
to develop more effective preventive and response measures against future pandemics. The
negative effects of climate change are already being felt in Japan and the rest of Asia withextreme weather patterns and accompanying natural disasters. Unfortunately, global and regional
efforts to reduce greenhouse emissions and to curtail rising temperatures have been woefully
inadequate despite the fact that climate change poses the greatest threat to human livelihood andsecurity.
Whereas the above transnational challenges demand more international cooperation, the shifting
power balance between China and the United States along with internal developments withinboth countries has unfortunately precipitated a preoccupation with great power competition. To
be sure, the rapid growth of China’s military capabilities and its assertive international behavior
are worrisome for Japan and most countries in Asia, and the close alliance relationship with theUnited States should continue to be the foundation of Japan’s foreign policy. An overemphasison U.S.-China strategic competition, however, can increase the risk of military conflict andwill inhibit cooperative efforts to deal with serious transnational problems. Therefore, while
continuing to enhance security cooperation with the United States, Japan should exercise moreregional leadership to help mitigate the U.S.-China competition in Asia through constructive
diplomacy and to reduce the danger of great power war. This practice is consistent with thenotion of “middle power diplomacy.” 4 Rather being solely dependent on the United States, Japanneeds a more autonomous foreign policy -what might be called a “pro-American, autonomous

3 Jeffrey D. Sachs, “Reasons for Asia-Pacific Success in Suppressing COVID-19,” World Happiness Report 2021, Chapter 4, March 21,
2021, https://worldhappiness.report/ed/2021/reasons-for-asia-pacific-success-in-suppressing-covid-19/
4 “Middle power diplomacy" refers to the diplomacy of countries that may possess a certain degree of national power capabilities but focuseson conflict prevention and multilateral cooperation, while abandoning unilateralism and all-out confrontation with great powers, as in the caseof "great powers.” In terms of Japan, while building on U.S.-Japan relations, Japanese middle power diplomacy seeks a more proactive rolein other areas. Soeya Yoshihide, Nihon no "Midorupawa− Gaikō": Sengo Nihon no Sentaku to Kōsō [Japan's "Middle Power" Diplomacy:
Choices and Concepts in Postwar Japan] (Tokyo: Chikuma Shinsho, 2005).

15

diplomacy”( 親米自立の外交 ). 5
Finally, the Russian invasion of Ukraine clearly violated international law, including the United
Nations Charter. Japan has correctly aligned itself with G7 and NATO countries and manynations in the world in condemning the aggression and imposing sanctions on Russia. The
Russian invasion also showed that security should never be taken for granted; and Japan should
be vigilant about security threats, do what is appropriate and necessary to defend itself, andadvance security cooperation with the United States and partner countries. But at the time,
Japan should not misapply the lessons of the Ukraine war to Asia. It needs to examine carefully
the various factors that contributed to the strategic context that made the Russian aggression
more likely and to consider ways to prevent a similar contextual evolution regarding tensions in
Asia. Japan should also assess how the developments in the war between Russia and Ukraine
might affect the calculations of states in Asia that might be contemplating the use of force tosettle disputes. And it should seek to prevent China and Russia from acting together in ways thatjeopardize Japan’s security interests.

5 Watanabe Hirotaka, “Takyoku Jidai no Shin Bei Jiritsu” [Pro-U.S. Autonomy in a Multipolar Era] in Watanabe Hirotaka (ed.), Yu−rasia
Dainamizumu to Nihon (Tokyo: Chuo Koron Shinsha, 2022), pp. 11-30.

16

Approach toward Asia andPromotion of Middle Power Diplomacy

Chapter 1

One of the most important goals of Japan’s strategy toward Asia should be to foster aregion that continues to become more prosperous through international trade, investments,
and technological progress while ensuring that economic activity is more environmentally
sustainable, and the benefits of economic development are shared more equitably. Japan
should facilitate social and political developments in the region so that they are moreconsistent with universal values such as human dignity, freedom, and equal rights. It should
also promote a regional community in which a diversity of cultures, societies, economies,and political systems can co-exist peacefully and cooperate effectively to address urgent
transnational challenges like climate change, environmental degradation, and the spreadof infectious diseases. And Japan should strive to prevent military conflicts and cultivatea region in which war among major powers becomes unthinkable as a means for settlinginternational disputes.
Although Japan should enhance its national capabilities to play a leading role in shaping
Asia’s future, it must collaborate closely with other countries and peoples to achieve theabove regional vision. Japan should cooperate with countries that closely share its values
and have similar political and economic systems, but an emphasis on so-called “likeminded countries” should not lead to a neglect of countries whose values and politicalsystems might differ from those of Japan and other liberal democracies. As Prime Minister
Fumio Kishida stated in his January 2023 speech in Washington, D.C., “We need to be
more committed to our values, and at the same time, when engaging with the Global
South, we need to remain humble while putting aside preconceptions and then have a firm
understanding of their respective historical and cultural backgrounds.” 6
While the relationship with the United States should remain a key pillar of Japan’s foreign
policy, strengthening the U.S.-Japan alliance should not prevent Japan from developing its own
autonomous foreign policy to reach out to countries outside the U.S. security alliance network. To
mitigate great power competition and prevent such competition from escalating to a war between
6 Policy Speech by Prime Minister Kishida Fumio at the Johns Hopkins University School of Advanced International Studies (SAIS), January
13, 2023, https://japan.kantei.go.jp/101_kishida/statement/202301/_00005.html

17

great powers, Japan should become a leader of middle power diplomacy by forging a cooperative
coalition with other middle powers in the region like the Republic of Korea, Australia and New
Zealand, the ASEAN states, and India. Such a coalition would also contribute to developing andimplementing more cooperative approaches to deal with transnational challenges.
In working to shape Asia’s future, Japan must also see the international order from a global
perspective and not just an Asian one. For example, the Russia-Ukraine war has affected
Japan’s diplomacy with both China and Russia insofar as Moscow and Beijing have increased
their cooperation after the Russian invasion. This trend has indeed had a worrisome effect on
Japanese security because of greater China-Russia coordination of military activities in Japan’s
vicinity. In short, what happens in Europe or elsewhere will affect international relations in
Asia. Japan therefore should not think about Asian regionalism in isolation of global trends andregional conflicts outside of Asia proper. In this era of globalization, cooperation and dialogue
from a global perspective are necessary to develop an effective collective security system.

1.1 Values, Norms, and Principles
Japan as a leading democratic nation in Asia has naturally welcomed the democratization of anumber of countries in the region and hopes more countries will follow this path. Japan can
support this process first and foremost by being a better model of democracy in Asia. It can
improve its own policies and practices that relate to human rights and social equality and enhance
its own democratic institutions and processes. Insofar as successful democratization is more likely
to occur when the basic economic and social needs of the population are addressed, Japan should
continue to assist the lesser developed countries in Asia so that their peoples have greater humansecurity. An effective way to promote human rights abroad is to support a humanitarian approach
to international affairs and continue to highlight the importance of human security.
While championing basic human rights and democratic principles, Japan should also recognize
the diversity of political systems in Asia and be sensitive to their different historical trajectories
and sociocultural traditions. Rather than being self-righteous in pursuing a so-called valuesoriented foreign policy, it should respect political diversity and underscore the importanceof peaceful coexistence. Japan should resist efforts to divide Asia into a struggle between
democracies and autocracies and avoid an overly ideological approach to foreign policy. A“divided Asia” is not beneficial to Japan, and all other Asian countries want to avoid such adivision. Japan therefore should value moderation, pragmatism, and compromise to decrease the18danger of military conflict, encourage tension reduction, and promote interstate cooperation.7
In short, adopting a political realist approach that relies on multiple perspectives, Japan should
promote a region that is both open and inclusive.

1.2 Different Geographic Prisms for Asia
The notion of Asia as a region has been dramatically changing due to economic andtechnological progress, geopolitical interactions and security calculations, and social and culturaldevelopments. Moreover, the increasing salience of global transnational challenges argues
against the imposition of strict regional boundaries.
It is problematic to frame the Asian region solely in terms of the “Indo-Pacific”, which is
now commonly used in international discourse. The concept of “Indo-Pacific” emerged bylinking together the Pacific and Indian Oceans and emphasizing maritime connectivity.
Although the term “Indo-Pacific” has the benefit of highlighting the importance ofnavigational freedom and the security of long sea lanes essential for internationalcommerce, this maritime conception of the region has shortcomings. The “Indo-Pacific”
prism diminishes the importance of continental Asia and suggests a regional orientation
designed to counter and even contain China.
Rather than adopting a single geographic framework or label for thinking about Japan’s Asia
policy, this report advocates a multiplicity of geographic prisms to underscore the different
dimensions and complexity of Asia’s recent evolution. Indeed, after the end of the Cold War,Japan’s foreign policy discourse has reflected these different geographic prisms in addressing
regional challenges and opportunities.
The following provides an overview of such geographic prisms:

Asia-PacificAsia-Pacific is a framework that encompasses the countries on both sides of the Pacific
7 A Japanese approach to Asia that values diversity, tolerance, and “listening to the other side” has its roots in Japanese thinking that has
accumulated over a long history and has been disseminated as one approach to international politics. One example is “World” Thought fromJapan: Philosophy, Philosophy, Public Affairs, and Diplomacy published by the Kyoto Sangyo University Institute of World Affairs in 2017. A
key concept for diplomacy based on this intellectual tradition is “yawaragi,” which the late Ezra Vogel translated into English as “moderation.”
Tōgō Kazuhiko, Nakatani Masahiro, Mori Tetsurō (eds.), Nihon Hatsu no “Sekai” Shisō: Tetsugaku, Kōkyō, Gaikō [“World” Thought from Japan:
Philosophy, Public Affairs, and Diplomacy] (Tokyo: Fujiwara Shuppan, 2017).

19

Ocean and East Asia, including all the major countries involved in Asia: the UnitedStates, China, Japan, and Russia. In the late 1980s, Japan promoted the geographic
prism of the Asia-Pacific region to counter the potential movement toward exclusive
regional economic groupings in Europe and North America. Tokyo sought to prevent an
economic and strategic divide in the Pacific basin between East Asia on the one hand andthe western hemisphere on the other hand. In particular, Japan wanted U.S. continued
security engagement in Asia and the preservation of Japanese and Asian access to theAmerican market. The creation of the Asia-Pacific Economic Cooperation forum andthe ASEAN Regional Forum to discuss security issues are two of the fruits of the AsiaPacific perspective.8 This perspective served to integrate China into the regional economic
system and facilitated China’s acceptance of Taiwan’s participation in regional economic
multilateralism as Chinese Taipei.
The concept of the Asia-Pacific not only links maritime Asian countries with continental
East Asian countries, but also has the potential to promote U.S. and Chinese involvement
in regional cooperation. This framework has also deepened the involvement of Australia
and New Zealand in the Asian region and helped to orient various Latin Americancountries toward Asia. In this respect, Asia-Pacific is a more comprehensive and nonexclusionary framework than the other regional concepts discussed below.

Eurasia
In July 1997, then Prime Minister Ryūtarō Hashimoto invoked the perspective of Eurasia“to enlarge the horizon” of foreign policy toward the Asia-Pacific region.9 Recalling
Russian President Boris Yeltsin’s statement that there were neither winners nor losers in
the process of ending the Cold War, Hashimoto argued that developments within Russia
and China held “the key to the formation of an international order.” Japan’s Eurasian
diplomacy should therefore foster cooperation with both Russia and China across avariety of issue areas. He also highlighted the importance of the “Silk Road’’ region
that encompassed the Central Asian Republics and the nations of the Caucasus region.
Drawing on this Hashimoto vision, Prime Minister Junichirō Koizumi then launched the“Central Asia plus Japan’’ initiative in 2004, which culminated in Prime Minister Shinzō
8 Kuniko Ashizawa, Japan, the US, and Regional Institution-Building in the New Asia: When Identity Matters (New York: Palgrave
Macmillan, 2013).
9 “Address by Prime Minister Ryutaro Hashimoto to the Japan Association of Corporate Executives,” 24 July 1997, https://japan.kantei.
go.jp/0731douyukai.html.

20

Abe’s visit to all five Central Asian countries in 2015.
In recent years, especially after Russia’s invasion of Ukraine, Japan’s Eurasian diplomacy
has faded and continues to be stagnant because of frictions with both Russia and China.
After the end of the Cold War, Central Asian countries had hoped to build direct relations
with Japan; but these expectations have been recently deflated. Notwithstanding thedramatic change in Japan’s relations with both China and Russia, the Eurasian perspective
still has a role to play since it links East Asia and Europe. This perspective also has thepotential of allowing Japan to foster cooperation with China and Russia on a wide variety
of issues, as well as with European countries and the European Union (EU).10 It could also
create opportunities for Japan to engage in “mediation diplomacy” in relations between the
major powers (United States, China, and Russia).

East Asia
The prism of East Asia became salient in the wake of the 1997-98 regional financial
crisis. To prevent a similar crisis from happening again, Japan took the lead in promoting
financial cooperation among Japan, the Republic of Korea, China, and the ASEAN statesin what came to be known as the ASEAN-Plus Three framework. Out of the ASEANPlus Three process emerged the East Asian Vision Group that articulated in 2001 avision of an East Asian community that would prevent conflict and cultivate peace in theregion, promote economic cooperation, advance human security through environmental
protection and good governance, enhance cooperation in education and human resources
development, and foster the identity of an East Asian community. The Vision Group also
recommended the establishment of an East Asian Summit (EAS).11
During the Koizumi government, Japan supported the inclusion of Australia, New
Zealand, and India in the regional integration process, yielding the ASEAN-Plus Six
Framework. This move reflected Japan’s concerns about a China-centric process ofcommunity building that could diminish U.S. influence in the region. The Hatoyama
government in 2009-2010 energized the East Asian Community vision by invoking the
10 In recent years, the EU has been seeking to strengthen ties with ASEAN; and Japan could play a bridging role by supporting the building of
connectivity between the EU and ASEAN in the context of Eurasian diplomacy.
11 Terada Takashi, Higashi Ajia to Ajia Taiheiyō: Kyōgō suru Chi-iki Tōgō [East and Asia-Pacific: Competing Regional Integration] (Tokyo:
Tokyo University Shuppnkai, 2013); and Lee Jong Won, “Higashi Ajia Kyōdōtai Keisei no Genjō to Kadai” [Current Situation and Problems in
Developing an East Asian Community] in Hiroshima Peace Institute (ed.), Ajia no Heiwa to Gabanansu (Tokyo: Yushindo, 2022), pp. 208-217.

21

positive example of the development of the European Economic Community after WorldWar II and by emphasizing the principles of openness, transparency, inclusiveness, andfunctional cooperation. In his first press conference as prime minister, Yukio Hatoyama
noted that the East Asian community idea is not intended to exclude the United States
and would be a step toward the realization of an Asia-Pacific community which could notreadily be achieved without the United States.12
Compared to other regional frameworks, the East Asian framework is marked by theembodiment of functional cooperation in specific areas such as finance, trade, and evenmedicine and health. There has also been an awareness of the need to promote confidencebuilding among East Asian countries through institution building. From early on, Europe
has attached great importance to ASEAN as a form of regional integration in Asia andlaunched the Asia-Europe Meeting (ASEM) in 1996.

Indo-PacificPrime Minister Shinzō Abe articulated the Indo-Pacific framework in 2007 when hereferred to the confluence of the Pacific and Indian oceans as creating a “dynamic
coupling” of the seas of freedom and prosperity. He stressed how the coming togetherof Japan and India helps the evolution of a “broader Asia” into an immense open
and transparent network that would “allow people, goods, capital, and knowledge toflow freely.” Abe’s Indo-Pacific framework dovetailed with his “Arc of Freedom andProsperity” diplomacy that would seek to promote democracy, human rights, and the ruleof law based on universal values along the Eurasian continent. Given that this framework
evolved into Abe’s proposal in 2012 for “democratic security diamond,” it gave theimpression that Japan was departing from its previous middle power diplomacy and was
aspiring to become a “major power,” if not a great power, and was seeking to contain
China’s influence in shaping the regional order.
In 2016 at the Sixth Tokyo International Conference on African Development (TICAD
VI) held in Kenya, Prime Minister Abe unveiled Japan’s vision for a “Free and Open
Indo-Pacific” (FOIP) and discussed “the union of two free and open oceans and twocontinents” [Asia and Africa]. Although the FOIP vision aimed to protect the freedom ofnavigation, enhance connectivity across Asia and strengthen a rules-based order, Japan
12 “Press Conference by Prime Minister Yukio Hatoyama,” September 16, 2009, https://japan.kantei.go.jp/hatoyama/statement/200909/16kaiken_e.html.

22

by 2017 began to indicate that the vision was not designed to counter or exclude China. In
fact, Abe suggested that China’s “One Belt, One Road” initiative could harmonize with a“free and fair Trans-Pacific economic zone.” Japan became sensitive to the concerns of theASEAN states that the FOIP vision might intensify interstate rivalry and undermine theprospects for regional cooperation. Therefore, Japan embraced the ASEAN Outlook on the
Indo-Pacific adopted in 2019, which viewed “the Asia-Pacific and Indian Ocean regions,
not as contiguous territorial spaces but as a closely integrated and interconnected region,
with ASEAN playing a central and strategic role.” Nevertheless, some of original ideas
contained in FOIP since the Abe administration still remain, and future developments
should be closely monitored.
The overlap of the above four geographical prisms reflects the multifaceted and multilayered
nature of Japan’s approach to Asia policy. In recent years, the first three approaches have
weakened, and there is now a much greater emphasis on the U.S.-Japan alliance and the IndoPacific. This tendency is not desirable because it deprives Japanese diplomacy of strategic
flexibility. Japan should continue to recognize the utility of integrating multiple perspectives,
rather than focusing on one geographic perspective to the exclusion of others.

1.3 Dialogues, Institutions, and a Rules-Based Order
Since the end of the Cold War, multilateral dialogues and institutions have proliferated in Asia;and many of them have been established because of Japan’s initiatives. Some of these fora haveencompassed many countries and addressed a broad agenda, while others have been relatively
small in size and tended to focus more on particular functional areas or policy issues.
In the economic realm, Japanese policymakers developed a proposal for an Asia Pacific
Economic Cooperation (APEC) forum and worked with Australia to launch APEC in 1989.
Regarding security affairs, Japan worked closely with the Association of Southeast Asian Nations(ASEAN) to create the ASEAN Regional Forum in 1994. To connect Europe and Asia together
and discuss a broad array of economic, political, and sociocultural and educational issues, theAsia-Europe Meeting (ASEM) was initiated in 1996. Japan has been an active supporter andparticipant along with 50 other countries and two regional organizations (the European Union
and ASEAN). In December 2005, the first East Asia Summit (EAS) was convened in Malaysia,
and this forum has expanded into a meeting involving leaders of 18 countries after the admissionof the United States and Russia in 2011. Japan’s efforts to promote regional cooperation in
the wake of the 1997-98 East Asian financial crisis laid the foundation for the establishment23

of the EAS. Japan was also instrumental in concluding the Regional Cooperation Agreement
on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) in 2004 and thecreation of the Information Sharing Center in 2006 with 21 contracting parties. In order toenhance mutual understanding and cooperation, a key characteristic of these large multilateralprocesses and institutions has been openness and inclusivity. They have sought to overcome
national differences based on types of political regime, levels of economic development, andcountry size and relative power.
In addition, Japan has supported a variety of minilateral regional dialogues to address specificfunctional issues. It was an early supporter of initiating six-party talks to deal with the problem
of North Korea’s nuclear weapons program. Japan was also responsive to South Korea’s proposal
for regular trilateral meetings among Japan, China, and the Republic of Korea to discuss
functional cooperation and regional economic issues (e.g., a trilateral free-trade agreement), andthe three countries have held summit and ministerial meetings on a quasi-annual basis since

2007-2008. In recent years, however, the trilateral summit process has stagnated, and summit
meetings have been postponed for three consecutive years since the last one that was held in
December 2019. The recent agreement between Japan and South Korea and between Japanand China to resume a high-level Japan-South Korea-China trilateral process is a welcome
development, and Japan should respond proactively without missing this opportunity. Some of
the minilateral dialogues have focused on enhancing cooperation among allies of the UnitedStates to advance common security interests and move beyond the traditional bilateral “hub-andspokes” U.S. alliance system. A good example is the trilateral security dialogue among Japan,
Australia, and the United States, which was inaugurated in 2006.
In recent years, much attention has focused on the Quad involving Japan, Australia, India,
and the United States. Building upon the cooperation among these four countries to provide
humanitarian assistance and disaster relief in the wake of the 2004 Indian Ocean earthquake andtsunami, Japan during the Abe Administration initiated this dialogue in 2007. In 2008, the Quadceased to function because of Australia’s concerns that this minilateral could exacerbate tensions
between the United States and China. After Australia renewed its support for the Quad in 2017as Canberra’s relations with Beijing deteriorated, the Quad has emerged as a dynamic agenda
and pace setter in the region. The annual Malabar joint military exercises of Quad members
have given the impression that the Quad could evolve into a military alliance to counter and evencontain China in the Indo-Pacific region. Some have even argued that the Quad should indeed
become an Asian version of NATO.

24

Japan as well as the other Quad members, however, have denied that the Quad will be a military
alliance designed to contain China. The strength and potential of the Quad lies in the fact thatit has not focused narrowly on military security. During recent Quad summits, the leaders
addressed the issues of COVID-19 pandemic, the climate change crisis, critical and emerging
technologies, and the regional demand for infrastructure as well as maritime domain awareness,cybersecurity, and cooperation in the space field. As a consequence, the Quad certainly canand should be consistent with Japan’s promotion of open and inclusive regionalism. Because theQuad is limited in size, the grouping can serve as an effective agenda and policy pace setter forthe region because it is not hampered by the need to forge a consensus among a large number ofmembers. But as the Quad-Plus dialogues suggest, the Quad can work with other countries on acase-by-case basis to deal with specific issues and functional areas.
The establishment of numerous regional dialogues and institutions has facilitated interstate discussions to explore points of both agreement and disagreement, to enhance mutual
understanding, and to explore areas of common ground. But a frequent criticism of many
dialogues and institutions in Asia is that they are too process-oriented and insufficiently resultsoriented. As a consequence, Japan in recent years has emphasized the promotion of a rulesbased order. But the concept of a rules-based order raises the question of how these rules areformulated and how they can and should be implemented and enforced.

After the end of World War II, the United States played a critical leadership role in establishing
many of the international institutions and rules that have become the foundation for global
governance. They include the United Nations, the World Bank, the International Monetary Fund,and the General Agreement on Tariffs and Trade. But these institutions have evolved over time;and new institutions and rules, both global and regional, have emerged. In short, the international
order is not fixed, but rather a work in progress. Certainly, the advanced democracies, especially
the United States and other G7 countries including Japan, have exercised a major influence in theformulation of new international rules. But international rule formulation is by no means justa top-down process spearheaded by so-called hegemonic or great powers. New rules are often
established through complex negotiations involving the initiatives and active participation of
middle powers and small countries, debates between developed and developing economies, andthe increasing role of non-state actors and civil society groups.
As a consequence, the rules that emerge are often the product of difficult compromises
and contain ambiguities that are subject to different interpretations. This fact makes theimplementation of international rules a challenging task, especially because dispute resolution
25

and adjudication processes remain underdeveloped. The premium that states usually place on
their own sovereignty also impedes the creation of effective rule-enforcement mechanisms andpractices. Given this reality, a stridently legalistic and formalistic approach to a rules-basedorder carries the danger of exacerbating rather than mitigating international conflict. Moreover,
the argument that China seeks to overturn a U.S.-led liberal international order and establish analternative China-led autocratic international order over-simplifies and mis-represents the actualinternational dynamics of order creation, maintenance, and reform. Promoting a rules-basedorder requires astute diplomacy and a pragmatic problem-solving approach that utilizes both thelarge multilateral and the smaller “minilateral” processes and institutions in the region.
In addition to regional multilateral and minilateral processes, Japan should be more proactive
in utilizing the United Nations to address regional issues and challenges. The United Nationsindeed provides a good platform for Japan to engage China and to explore promising areas ofcooperation with China as well as with other Asian countries.

1.4 Japan’s Diplomacy and Middle Power LeadershipTo promote a more stable, peaceful, and prosperous future for Asia, Japan should re-energize
its middle-power diplomacy. Japan’s diplomatic activism as a leading middle power has indeed
become even more necessary because of international developments during the last several years
in general and the Russian invasion of Ukraine in particular.
With his long-term grip on power, Russian President Vladimir Putin has not been able to hidehis nostalgia for the former Russian empire and the Soviet era. The annexation of Crimea in2014 and the military invasion of Ukraine are manifestations of this tendency. Similarly, Chinese
President Xi Jinping who has consolidated power for the long term, appears to be driven byactions reminiscent of traditional Chinese thinking. For both Russia and China, the greatest
obstacle to their “dreams” is the United States, and the root of the ties between Russia and Chinais their rivalry with the United States. Amid this strategic triangle among the three great powers,
the so-called NATO Asia-Pacific Partners (AP4) consisting of Japan, South Korea, Australia and
New Zealand have been deepening ties with European countries and seeking mutual engagement
between their respective regions whose security and prosperity have become inseparable.
The vital strategic theaters of Russia and China, however, are Europe and Asia respectively, andthey do not necessarily ally with each other in each other’s theater. In Asia, while the strategic
friction between the United States and China is the defining factor of a regional order, a number26

of regional countries do not wish to take sides in the great power rivalry. Many of them, which
are now referred to as part of the Global South, are neither democracies nor supporters of the
U.S.-led liberal international order, but they also do not necessarily side with China nor accept
Chinese dominance in the region. Engagement with these developing countries in the Global
South is an important agenda of middle power diplomacy for Japan and other leading middle
powers.
The most important partner for Japan’s middle power diplomacy is the Republic of Korea.
South Korea is an established democracy and a developed economy. It has become one of the tenlargest economies in the world, and its per capita income matches or even exceeds that of Japan.
Japan and the Republic of Korea share fundamental strategic interests as well as political values.
Both countries are close allies of the United States; and they both see North Korea’s nuclear andmissile programs as acute threats and are concerned about China’s military buildup and coercive
behavior. But at the same time, they share a deep interest in preventing a military conflict in East
Asia that would have devastating consequences for both countries; and they want to maintainclose and stable economic relations with China which is their largest trading partner. In short,both Japan and South Korea desire an Asia that is not divided into two conflicting camps andwould prefer a region that is open and inclusive. Despite this basic convergence in strategicinterests, relations between Japan and South Korea have unfortunately been marred in recent
years because of disputes regarding the past. In March 2023, the South Korean government
under President Yoon Suk Yeol offered a solution to the “conscripted labor” issue; and President
Yoon and Prime Minister Kishida agreed to resume shuttle diplomacy. In response to the South
Korean government’s courageous decision, Japan should address its own historical issues andwork sincerely and energetically with South Korea to develop a strong partnership as leading
middle powers in Asia.

As part of its middle power diplomacy, Japan could also build on the Quad involving the UnitedStates, Japan, Australia, and India and take the lead in promoting a “middle power coalition”
among Japan, Australia, and India, and thus lead the agenda-setting of the Quad. The notion
then can be extended to include other middle powers in the region, including South Korea andthe ASEAN countries. In this process, it would be effective to envision a “middle power quad”
by inviting South Korea to join the Japan-Australia-India coalition. Through such efforts, Japan
could enhance cooperation among the middle powers in the region and contribute to mitigating
U.S.-China competition and confrontation, while sustaining cooperative relations with theUnited States. This is not necessarily unrealistic if there is political will, because the leaders’meetings of Quad have been emphasizing the principle of “ASEAN centrality” as a foundation27

of Quad cooperation, thus in effect endorsing the importance of the “middle power” approach in
the Indo-Pacific region.
By building on its partnerships with middle powers in Asia and in Europe, Japan should
vigorously engage China to stabilize bilateral relations as well as to cooperate on pressing
transnational challenges. Japan should work with China to develop robust mutual assurance andconfidence building measures so that changes in the regional balance of power do not increase
the risk of military conflict. In cooperation with other middle powers, Japan should encourage
China to abide by its Five Principles of Peaceful Coexistence: mutual respect for sovereignty
and territorial integrity, mutual non-aggression, non-interference in each other’s internal affairs,
equality and mutual benefit, and peaceful coexistence.
The following chapters will discuss possible policy initiatives as a leading middle power in Asia
in three broad functional areas: economics, security, and transnational challenges.

28

Chapter 2

Regional Economics

2.1 Striking a Balance between Economic Liberalization,
Sustainable Development, and Economic Security
Economic liberalization and deepening international economic interconnectedness havecontributed significantly to global economic growth. In recent years, however, their economic
side effects and social costs have become more pronounced in countries around the world in
the form of widening economic disparities and the rise of anti-globalization and anti-immigrantsentiments. Asia, which has enjoyed remarkable economic development since World War II, is
no exception to this recent trend. For example, in 2021, the top 10 percent of the population in
Asia owned nearly 70% of the wealth in the region (compared to 76% for the world as a whole).13
These adverse effects of economic liberalization and deepening economic interdependence arelikely to lead to social fragmentation and instability. They can even threaten existing democratic
institutions, as seen in the rise of authoritarian-leaning populist leaders in some countries.
Therefore, as Japan seeks stable economic and social development in the region, it needs to pay
close attention to the need of providing and securing social protection against these negative
effects. In other words, Japan’s regional economic foreign policy should strike an optimalbalance between two agendas: (1) promoting economic liberalization to further growth and(2) strengthening regional mechanisms to mitigate the adverse effects of liberalization. The
Chiang Mai Initiative led by Japan to ensure regional financial and fiscal stability is a good
example of the latter agenda. Japan’s long-standing economic and technical assistance to
Asian countries should be more closely aligned with Sustainable Development Goals (SDGs),
with greater emphasis on environmental and social protection. Furthermore, Japan, as a major
economic power in Asia and a leading global middle power, must promote rules-based economic
integration aimed at “shared growth” in the Asian region.
The issue of economic security also needs to be incorporated in this equilibrium. Economic
security concerns efforts to eliminate “economic threats” that could threaten national security;
13 World Inequality Lab, World Inequality Report 2022, https://wir2022.wid.world/executive-summary/29

and the concept had heretofore been discussed in terms of stable supply of energy resources
and food self-sufficiency. Recent developments including U.S.-China trade conflict sparked by
the Trump administration, the COVID-19 pandemic, and the disruption of international supply
chains due to Russia’s war in Ukraine have renewed interest in this concept. In May 2022, theJapanese government passed the Economic Security Promotion Act and defined four areas of
economic security enhancement: “strengthening supply chains for critical goods,” “ensuring thereliability of key infrastructure,” “promoting the development of key advanced technologies,”and “establishing a closed patent system.” Also this May, G7 leaders issued the “G7 Leaders’Statement on Economic Resilience and Economic Security” at the Hiroshima G7 Summit.
Japan’s economic diplomacy in the Asian region will require integrating three perspectives:
economic liberalization, sustainable development, and economic security. However, policies
based on these three perspectives will often conflict with each other. Accordingly, when
determining and implementing specific individual economic and foreign policies in Asia, Japanneeds to strike a balance among these contending perspectives. Based on the above, this chapter
considers Japan’s regional economic diplomacy in the following four areas: financial stability
and governance, regional trade, infrastructure development, and supply chains and digitaltechnology.

2.2 Regional Financial Stability and GovernanceIn response to the 1997 Asian economic crisis, which entailed the collapse of several national
currencies and precipitated severe recession across the region, Asian countries pursued financial
reforms, including the consolidation and restructuring of their own financial institutions andthe reinforcement of bank capital. Furthermore, China, Japan, and South Korea, as well as
the ten ASEAN countries, established a regional cooperative mechanism called the Chiang
Mai Initiative, a currency swap arrangement to address short-term liquidity difficulties during
emergencies. These efforts strengthened the financial system in the Asian region as a whole, anda 1997-type currency crisis did not recur in Asia during the global financial crisis of 2008. Inother words, the financial situation in the region has remained reasonably stable for more than
two decades, and there is little likelihood of a major region-wide crisis in the near future. Yet,
recent major developments at the global level raise some concerns for regional financial stability
in Asia.
The global COVID-19 pandemic and the outbreak of Russia’s war in Ukraine have caused
economic stagnation and recession, disruption of manufacturing and supply chain, soaring30

oil prices, and inflation in many countries. Some countries have faced severe food shortages
and price hikes. The IMF, the World Bank, and others have observed not only a sharp decline
in economic growth throughout the Asian region but also major capital outflows in somecountries, most notably India, and they have warned about the possibility of a major recession
in developing countries in coming years.14 In addition to these new economic challenges, theproblem of excessive debt in low-income countries has become more pronounced worldwide
since the outbreak of COVID-19 crisis. In Asia, Sri Lanka defaulted in May 2022 on its overseas
loans for the first time since its 1948 independence; and there have been growing concerns about
financial conditions of small island developing states such as the Maldives.15 Also, how and towhat extent the rising U.S. federal interest to counter inflation, and resulting rapid appreciationof the U.S. dollar (especially against the Japanese yen), would affect Asian economies as awhole is another important concern. Furthermore, the Chinese government has been graduallyinternationalizing its official currency since 2019 and now appears to be accelerating thisprocess.16 This suggests that the influence of the renminbi (RMB) will incrementally expand in
Asian economies where the US dollar has been the dominant international currency and could
bring about major structural changes over the medium to long term.
Asian currency and financial stability is critically important to the Japanese economy. As
Asia’s second largest economic power and a leading global middle power, Japan must makethe maintenance of regional financial stability one of the priorities of its regional economic
foreign policy. As mentioned earlier in this chapter, Japan has already undertaken a major
and indispensable initiative in establishing the Chiang Mai Initiative. Therefore, Japan should
continue to provide leadership in regional discussions on further strengthening the existingregional financial cooperation system and ensuring its effectiveness.17 As for the excessive debt
problems of low-income countries, Japan, as a world’s major creditor, will inevitably have to
be involved in devising both preventive measures for risk countries against defaults and debt
14 The World Bank, Global Economic Prospects June 2023, https://www.worldbank.org/en/publication/global-economic-prospects; Krishuna
Srinivasan, “Asia’s Economies Face Weakening Growth, Rising Inflation Pressures,” IMF Blog, July 28, 2022, https://www.imf.org/en/Blogs/
Articles/2022/07/28/blog-07282022-apd-asias-economies-face-weakening-growth-rising-inflation-pressures
15 Masood Ahmed and Niki Baroy,“A Spiraling Debt Crisis, LICs, and SIDS,” Asia Insights and Analysis, April 27, 2022, https://
asiafoundation.org/2022/04/27/a-spiraling-debt-crisis-lics-and-sids/
16 Seki Shinichi, “Jinmingen Kokusaika no Kasoku wo Mezasu Chūgoku” [China that Seeks to Accelerate the Internationalization of theRenminbi], Ajia Mansuri-, May 27, 2021, https://www.jri.co.jp/page.jsp?id=38965; Yamaguchi Ayako, “Ajia Ikinai ni Okeru Jinmingen
Keizaiken Kakuchō no Ugoki” [Movement in the Expansion of the Renminbi Economic Sphere in the Asia Region], Kokusai Tsūka Kenkyūjo
New Letter, March 10, 2020, https://www.iima.or.jp/docs/newsletter/2020/nl2020.10.pdf
17 The Japanese government has recently proposed expanding the scope of the Chiang Mai Initiative to cover temporary foreign currency
shortages caused by disasters and other events, and further developments in this line are expected.

31

restructuring measures after defaults. In this regard, the above-mentioned Sri Lanka, which
entered a serious economic crisis in early 2022 and has been in a state of suspension of external
debt repayment, should receive a special attention here. Indeed, given the fact that China has
been Sri Lanka’s largest creditor, followed by Japan as the second largest and India as the third,
the Sri Lankan debt crisis represents a challenge for global and regional economic governance.
To arrange international debt restructuring for countries experiencing debt crises, the Paris
Club (an informal group of major creditor countries), consisting of 22 states centered around G7
members, has been the main forum for negotiation. In the case of Sri Lanka, however, its largest
creditor country, China, and the third largest, India, are not members of the Paris Club. Thisrendered the Paris Club an inadequate mechanism to coordinate effective bailout measures andtemporarily stalled initial debt restructuring efforts.18 Against this backdrop, a new negotiation
framework, the “Creditor Committee for Sri Lanka,” was launched in April 2023, under theleadership of Japan, India and France. The establishment of this framework enabled India andother members of the Paris Club to work together to formulate a debt restructuring program for
Sri Lanka. Notably, this committee will be co-chaired by Japan and India, two major creditor
countries, together with France which has many years of experience in debt restructuringnegotiations. However, the fact that China, the largest creditor, has not formally joined thenegotiation framework raises questions about the committee’s ability to produce meaningful
and workable measures. In this regard, China’s participation as an observer in the first round oftalks held on May 9th is a positive sign., Therefore, Japan as a co-chair should seek to create
conditions that will encourage China to continue participating in the talks and cooperate bysharing the details of China’s loan programs.19
Furthermore, since China’s bilateral loans to the poorest countries now account for 49% of the
global total, there is a strong international call for China to increase transparency regarding its
loan programs and unilateral debt restructuring measures.20 Accordingly, Japan, in cooperation
18 This problem had been pointed out even before the Sri Lankan case emerged. Accordingly, the G20 members (including China and India)
and the Paris Club agreed, in November 2020, on establishing a “Common Framework” to arrange debt relief arrangements for low-income
countries that are experiencing difficulties in making public payments due to the impact of the COVID-19 pandemic. However, as Sri Lanka
falls into the category of middle-income countries, the “Common Framework,” which was designed exclusively for low-income countries, wasdeemed unsuitable for the Sri Lankan case. Discussions on expanding the scope of countries subject to the Common Framework are continuing
at the G20.
19 In fact, when the Sri Lankan problem first came to light, some suggested that China and Japan, the two largest creditors, should co-chair
an international negotiation to arrange Sri Lankan debt-credit measures. “Faced with an overseas debt crisis, will China change its ways? It
may have no choice,” Economist, April 24, 2022, https://www.economist.com/china/2022/08/24/faced-with-an-overseas-debt-crisis-will-chinachange-its-ways
20 “Fukuramu Shinkōkoku Saimu” [Growing Debt of Developing Countries], Nihon Keizai Shimbun February 26, 2023.

32

with other concerned countries, should keep encouraging the Chinese government to participate
in existing and new multilateral frameworks to address debt problems facing some of the mostvulnerable countries in the world.

2.3 Regional Trade (CPTPP and RCEP)For Japan, a leading trading nation, the stability and sound expansion of intra-regional tradein Asia remains an important foreign policy objective. This section focuses on two recently
established frameworks of regional trade cooperation, namely the Comprehensive andProgressive Agreement on Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive
Economic Partnership (RCEP).
The CPTPP, which entered into force in 2018, established a new free trade area involving eleven
Asia-Pacific countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand,
Peru, Singapore, and Vietnam) that accounts for 15% of global trade. Its origins date back to
2005, when New Zealand, Chile, Singapore, and Brunei concluded a free trade agreement (FTA),
which was later renamed the Trans-Pacific Partnership (TPP) Agreement, with 12 countries,
including the United States and Japan, participating in the negotiations that culminated in thesigning of the agreement in 2016. However, the following year, the United States under the
Trump administration withdrew from the agreement, compelling the remaining 11 countries torenegotiate the agreement under the current name of CPTPP, which was signed in March 2018.
Though initially reluctant, Japan joined the TPP negotiation in 2013 in response to the Obamaadministration’s enthusiasm for creating a trans-pacific FTA and a growing international concern
about the increasingly dysfunctional World Trade Organization (WTO). After the U.S. departure,
Japan played a central role in realizing the successful conclusion of the CPTPP. 21
The CPTPP is widely regarded as a “high-standard” trade agreement, as it covers not only
the liberalization of goods but also a wide range of sectors from services, direct investment,
state-owned enterprises, e-commerce, labor, and environment. It has also received substantial
attention as a new kind of trade rulemaking by a self-selected group of countries, or a “coalitionof willing,” against the backdrop of decades of stagnation in WTO trade liberalization processes
and the rising protectionism triggered by the Trump administration and observed in othernotable countries. Interestingly, after its inception, the United Kingdom, China, and Taiwan,
as well as Ecuador, Costa Rica and Uruguay, submitted their formal applications to join the
21 Saori N. Katada, Japan’s New Regional Reality: Geoeconomic Strategy in the Asia-Pacific (New York: Columbia University Press, 2020), pp. 109-118.

33

CPTPP; and South Korea, Thailand, and the Philippines have expressed interest in joining. Since
the United Kingdom reached in March 2023 an agreement in principle to join the CPTPP, it is
now set to become the twelfth member by the end of 2023. These developments suggest that
the CPTPP will gradually expand both within and beyond Asia, thereby embodying Japan’s
principle of “open regionalism” as well as “high-standard” rulemaking. Given its origins as an
initiative by four small and medium-size countries in the Asia-Pacific region, the CPTPP is a
successful example of “bottom-up,” as opposed to “top-down” led by major powers, regional
institution-building, which may serve as a useful model for future institution-building in Asia.
Considering the significance of the CPTPP and Japan’s notable role in its founding, Japan should
continue to be actively involved in implementing and strengthening it. As for membership
expansion, it should be based on the “open regionalism” principle. Regarding membershipconditions, as was the case for U.K.’s admission, “accepting the CPTTP rules in their entirety,”“explicitly committing to transparency, predictability, and credibility,” and “providing maximum
market access,” should remain as the baseline criteria for any future membership ​negotiation.22​

As for individual countries, the prospect of the United States rejoining the CPTPP appears slim
because of the current domestic political climate. Yet, considering the benefits of promoting
high-standard trade rules and open regionalism as well as enhancing U.S. engagement in Asia,
Japan should keep the door open for the United States’ eventual return. Japan should also
encourage South Korea, which is already interested in CPTPP membership, and the European
Union, which fully meets the CPTPP criteria, to join the CPTPP.
With regard to China and Taiwan, which applied for membership in September 2022, Japanneeds to approach their membership applications with considerable prudence and creativity.
As for China, the process of accession negotiation itself will provide a valuable opportunity
for Japan and other member countries to obtain information about China’s domestic rules andconditions in light of the CPTPP rules, its past practices in dealing with trade agreements, andChina’s intentions regarding compliance. China’s eventual accession will greatly facilitate its
domestic economic reforms, which will be a major benefit not only to the Chinese economy, butalso to companies of other countries that operate in and with China. Considering these benefits,
China’s application for membership should not be dismissed outright, and it should be weighedwith greatest care. In doing so, China’s acceptance for the aforementioned membership criteria
devised for the case of U.K.’s accession should be the baseline. This requires persistent andvigilant negotiations to ensure that current CPTPP standards are not weakened or become a
22 Munakata Naoko, “Tsūshō Senryaku no Saikōchiku: CPTPP to Sono Sakie” [Restructuring Trade Strategies: CPTPP and Beyond], Asia
Pacific Initiative, 2022.

34

mere formality because of Beijing’s possible abuse of the security exception clause and treatmentof the scope of state-owned enterprises.23 As for Taiwan, its advanced economy and longstanding
good relationship with Japan make it obvious for Japan to support Taiwan’s application formembership. If both China and Taiwan were to become members, CPTPP would serve as oneof the few official channels for Sino-Taiwanese dialogue in multilateral settings, and therefore,
provide a valuable tool for managing the difficult cross-strait relations. In light of these potential
benefits, the optimal option is arguably for both China and Taiwan to join CPTPP.

While Taiwan’s economy is already fully compliant with CPTPP criteria, China will need toundertake major institutional reforms to become a member. If Taiwan were to join first, there isa strong possibility that China would withdraw its application for membership given its strong
aversion to any sign of elevating Taiwan’s official status in international institutions. Also,
whether Taiwan’s accession prior to China would indeed secure unanimous support by thecurrent CPTPP member countries is uncertain. On the other hand, if China were to join first,
it would inevitably oppose Taiwan’s accession, making Taiwan joining the CPTPP virtually
impossible. Considering these scenarios, the only way to enable both China and Taiwan to
become members is that Beijing and Taipei join “simultaneously.” Indeed, the format ofsimultaneous accession has already been practiced in the cases of APEC in 1991 and the WTO
in 2001. In this sense, the conditions for initiating accession negotiations should be for bothparties to agree to adopt the WTO’s 2001 format of simultaneous accession and to refrain from
intentionally obstructing the accession of the other party.24
RCEP, which was concluded in 2020, two years after the conclusion of the CPTPP, and enteredinto force in January 2022, is a regional free trade agreement consisting of 15 countries,
including the 10 ASEAN countries plus China, Japan, South Korea, Australia, and New Zealand.
RCEP accounts for about 30 percent of global trade, GDP, and population. When negotiations
led by ASEAN began in 2012, India initially joined. But India later withdrew in 2019 leaving
RCEP in its current form. The level of tariff liberalization rates and the range of sectors subject
to discipline are generally lower than those of CPTPP. When compared to the WTO, RCEP
rules include areas that are not covered by the WTO, such as e-commerce and small and23 Ibid.; Kawase Tsuyoshi, “Chūgoku Taiwan no CPTPP Kanyū Shinsei to Nihon no Taiō: Kōsuijyun na Ru-ru wo Ijishi FTAAP Keisei ni
Mukau Senryaku” [China and Taiwan’s Application to Join the CPTPP and Japan’s Response--Strategy to Maintain High Standard Rules andMove Toward FTAAP Formation] February 18, 2022, https://www.rieti.go.jp/jp/papers/contribution/kawase/09.html
24 The WTO was established in 1995 by the then seventy-six GATT (General Agreement on Tariffs and Trade) member countries. China
formally acceded on December 11, 2001 and Taiwan on January 1, 2002 under the name “Customs Territory of Taiwan, Penghu, Kinmen
and Matsu” on January 1, 2002. The idea of separating the accession timing by three weeks made it possible to implement the simultaneousaccession of China and Taiwan.

35

medium-sized enterprises (SMEs); and it contains more advanced regulations on intellectual
property rights than the WTO. Given that bilateral FTAs centered around ASEAN, such as
China-ASEAN, Japan-ASEAN, and Korea-ASEAN, had proliferated over the past decades, thefact that these Asian countries are now under RCEP’s common rules is of great significance interms of regional economic development and governance.25 Furthermore, RCEP is a long-waited

regional FTA that encompasses all East Asian economies, except for North Korea and Taiwan,
and in effect, functions as a China-Japan-South Korea FTA. Therefore, RCEP marks a positive
development in Japan’s regional policy by reducing fragmentation and division in Asia.

Given this significance of RCEP, Japan should be actively involved in further institutional building
within RCEP (e.g., establishing a permanent joint committee) to enhance its effectiveness.
Tokyo should also aim to deepen regional rules through RCEP’s five-year review process. These
processes would provide an opportunity for Japan to raise the issue of “weaponization of trade,” agrowing concern in recent years, so as to exchange frank views with other member states including
China and to discuss new mechanisms to deter such behavior.26 In the meantime, as RCEP leads
to further deepening and expansion of business-to-business supply chains in the region in coming
years, it will inevitably make RCEP member countries more economically dependent on China.
Prior to RCEP, about 8% of Japan’s industrial exports to China were tariff-free. After RCEP comes
into effect, that percentage is expected to rise to 86%. This may raise economic security concerns,
noted at the beginning of this chapter, in terms of supply chains for critical goods. Moreover,
RCEP could be problematic for the U.S.-led “friend-shoring” initiative to build up supply chains
among its allies and partner countries.27 In this regard, Japan should remain fully conscious about

this economic security challenge associated with RCEP, while making sure that the United States
appreciates RCEP’s positive role in setting trade standards, and not regard it as merely a Chinaled and anti-US grouping in Asia. Lastly, India, which withdrew from the negotiations midway
through the process, is a strategically important partner for Japan, and its participation in RCEP ishighly desirable in order to realize the principle of open regionalism. Accordingly, Japan should
persistently encourage India to join RCEP in the future.

25 Yanagida Kensuke, “Indo Taiheiyō no Keizai Renkei to RCEP” [Indo-Pacific Economic Partnership and RCEP] Kokumonken Senryaku
Komento, October 17, 2020, https://www.jiia.or.jp/strategic_comment/2020-16.html; Ajia Kenkyūjo, “RCEP wo Dou Miruka: SeijigakuKeizaigaku no Kenkyū Kadai,” 2021, https://www.ide.go.jp/Japanese/Publish/Reports/Seisaku/202011.html.

26 Currently, Japan and Australia are seeking to address this “trade weaponization” issue in the pre-negotiations of China’s CPTPP accession,
which they view would enable more direct communication with China.
27 The U.S.’s “friend-shoring policy will be further discussed in section 5 of this chapter.

36

2.4 Regional Infrastructure Development Cooperation
With the adoption of the “Seoul Development Consensus” at the G20 Seoul Summit in2010 and Chinese President Xi Jinping’s “Belt and Road Initiative” (BRI) introduced in2013, infrastructure development assistance and cooperation for developing countries
have become a major focus of discussion in Asia and globally. A 2018 report of the
Asian Development Bank (ADB) notes that, by 2030, the regional demand for new
infrastructure in Asia region will exceed US$ 1.5 trillion annually, highlighting a large
gap with the current annual investment of around US$ 881 billion. 28 Given that Japan
has been heavily involved since the 1960s in the construction of transportation andenergy infrastructure in Asia through its Official Development Assistance (ODA), thegrowing need for regional infrastructure development is an important issue area for its
economic diplomacy in Asia.
China’s BRI originally sought to establish a vast economic zone spanning the continentsof Asia, Europe, and Africa with China being the point of origin. According to China’s
official account, 146 countries and 32 international organizations as of March 2022 hadconcluded cooperation agreements under the BRI framework; and in 2021 alone, US$59.5
billion in loans and investments were reportedly made in 144 countries. 29 Because of its

origin and nature, BRI has been widely viewed as China’s geopolitically-driven national
strategy aimed at expanding the country’s hegemonic position and possibly building aninternational order based on the “Chinese model”; and therefore it has, become one of the
key causes of tension between China and Western countries. Other often noted problems
associated with BRI include the so-called “debt trap” problem under which some recipient
countries become unable to repay their loans, overdevelopment and corruption caused bymassive capital investment, environmental destruction and accompanying human suffering,and the lack of transparency and uncertainty surrounding BRI-related projects. The caseof Sri Lanka’s Hambantota port whose operation rights were transferred to a Chinesecompany for a 99-year term is commonly cited as a quintessential example of this debt trap.

28 Asian Development Bank, Strategy 2030: Achieving a Prosperous, Inclusive, Resilient, and Sustainable Asia and the Pacific, July 2018,https://www.adb.org/documents/strategy-2030-prosperous-inclusive-resilient-sustainable-asia-pacific
29 Green Finance and Development Center, “Countries of the Belt and Road Initiative (BRI),” https://greenfdc.org/countries-of-the-belt-androad-initiative-bri; Wong, K., “China’s belt and road plans face new EU, US competition, but ‘space for cooperation’ remains,” South China
Morning Post, 4 Feb 2022, https://www.scmp.com/economy/china-economy/article/3165794/chinas-belt-and-road-plans-face-new-eu-uscompetition-space37

In response to these developments, Japan put forth the concept of “quality infrastructure
investment” at the G7 Ise-Shima Summit in 2016 and has led discussions for setting up
global standards of infrastructure development investment that require consideration for local
job creation, economic viability, and environmental impacts.30 In a similar vein, the UnitedStates, in 2019, proposed the “Blue Dot Network,” a new international certification system for
infrastructure projects, and has been working with Japan, Australia, and the OECD, to actualize
the concept. In the meantime, although the Japanese government has not participated in the
BRI, Prime Minister Abe, during his visit to China in 2018, announced his administration’s
new policy to promote cooperation between Japanese and Chinese companies in infrastructuredevelopment in other countries in Asia under the banner of “Promotion of Japan-China
Economic Cooperation in Third Country Markets.” Prime Minister Abe identified fourbasic standards as conditions for this Sino-Japanese infrastructure cooperation: “openness,”“transparency,” “economic efficiency,” and “durability of the recipient country’s finances.” 31
The Chinese side has been adjusting its polices and undertaking necessary measures in response
to international criticism and concerns about BRI, especially in terms of sustainability and costeffectiveness of BRI projects. Xi Jinping, for instance, announced at the second BRI Forum in2019 that China would shift the primary focus of BRI from quantitative expansion of investment
and aid to “high-quality development,” declaring that “Chinese companies will operateaccording to international standards in project management and bidding.” 32 At the same time,it should be noted that for many developing countries, financing of BRI projects often appears
attractive due to more lenient conditionality regarding environmental regulations and humanrights compared with that of the World Bank and Western donors.
Considering these developments, Japan’s basic position toward infrastructure development
cooperation in Asia should be to refrain from overreacting to concerns about China’s hegemonic
expansion associated with BRI, and instead, to induce BRI’s infrastructure development
investment to move toward contributing to sustainable economic development in developing

30 The concept of “quality infrastructure investment” was first mentioned in a speech by then Prime Minister Abe at the “21st International
Exchange Conference on the Future of Asia,” hosted by Nihon Keizai Shimbun, in May 2015, in Tokyo. Ministry of Foreign Affairs, “Dai21-kai Kokusai Kōryūkaigi ‘Ajia no Mirai’ Bansan Kai. Abe Sōri Supi-chi” [Dinner Speech by Prime Minister Abe at the 21st International
Exchange Conference on the “Future of Asia”], May 22, 2015, https://www.mofa.go.jp/mofaj/ic/dapc/page1_000106.html.
31 Shushō Kantei, “Nicchū Daisankoku Shijō Kyōryoku Fo-ramu, Abesōru Supi-chi” [Japan-China Third Country Market Cooperation
Forum: Prime Minister Abe’s Speech], October 26, 2018, https://www.kantei.go.jp/jp/98_abe/statement/2018/1026daisangoku.html
32 Ōnishi Yasuo, “Tenki no Ittai Ichiro Kōsō to Nicchū Keizai Kyōryoku” [The One Belt, One Road Initiative at a Turning Point andJapan-China Economic Cooperation], Ajiken Porishi-Buri-fu, No. 133, April 10, 2020, https://www.ide.go.jp/Japanese/Publish/Reports/
AjikenPolicyBrief/133.html; Watanabe Shino, “Ittai Ichiro Kōsō no Henkan to Jittai” [Changes and Realities of the “One Belt, One Road”
Concept], Kokusai Anzen Hoshō, Vol. 47, No. 1 (2019).

38

Asian countries.33 This will lead to further and stable development of the regional economy

as a whole and will also provide opportunities for Japan’s business to utilize BRI indirectly
and directly. Along this line, Japan should further promote the above-mentioned “quality
infrastructure investment” initiative for setting up international standards for infrastructure
investment finance and encourage China to adopt these principles. In fact, China has endorsed
the G20’s “Principles on High-Quality Infrastructure Investment,” which was adopted under theJapanese leadership at the G20 Osaka Summit in 2019. Drawing on this positive development,
Japan should persistently encourage China to follow through on these principles, especiallytransparency and information disclosure, by, for instance, submitting self-monitoring reports on
their BRI projects. With regard to the looming sovereign debt problems discussed in Section
2, as the largest creditor for the least developed countries, China urgently needs to cooperatewith other creditors by disclosing the details of loan contracts, so as to arrange effective debt
rescue and reconstruction programs. This again highlights the importance of encouraging
China through the G20 framework. In a similar vein, given that China has so far been reluctant
to participate in the OECD Development Assistance Committee (OECD/DAC), which sets
standards for general development assistance among major donor countries, Japan should makeefforts to promote dialogues and cooperation mechanisms between China and the OECD/DAC
and encourage China to participate.
With regard to Prime Minister Abe’s initiative on Sino-Japanese private-sector cooperationin third countries noted above, there has not been significant progress made in terms of largescale infrastructure projects, probably due to Japanese business concerns about profitability andinherent difficulties in coordinating among private firms. However, it is necessary for Japan tocontinue its efforts to realize Japan-China cooperation among private business actors, as it could
facilitate behavioral changes among Chinese. In doing so, Japan must make sure that the four
conditions set by Prime Minister Abe be met and that the OECD/DAC Principles and SDGs
perspectives be incorporated in Sino-Japanese joint projects.
Finally, Japan needs to adopt a constructive and flexible approach to the Asian Infrastructure
Investment Bank (AIIB), established in 2016 under China’s leadership. Japan, along with theUnited States, did not join AIIB, due to a concern, among others, that it might be arbitrarily used
for China’s BRI projects. However, the majority of AIIB’s investment projects have so far been
carried out in the form of co-financing with the well-established international development banks
33 Hirono Miwa, “Chūgoku Akuta- no Guro-baru ka to Ittai Ichiro no Kokunai Mondaika: Nihon eno Shisa” [Globalization of Chinese Actors
and One Belt, One Road as a Domestic Issue: Implications for Japan] in Hirono Miwa (ed.), Ittai Ichiro wa Nanio Motarashitanoka: Chūgoku
Mondai to Tōshi no Jirenma (Keisōshobō, 2021).

39such as the ADB and the World Bank, rendering them consistent with international standards.34

In this sense, Japan, as a leading member of the ADB and the World Bank, should seek to shapeindirectly the AIIB’s projects, by further promoting joint projects with the AIIB while ensuringthat the AIIB continues to act in line with established international standards. Given today’s
political climate in Japan, the possibility that Japan will seek AIIB membership in the near
future is close to zero. Yet, the AIIB, which already has 106 members, can serve as a great venue
for Japan to exercise its leadership as a major middle power and enhance its presence in Asia.
Furthermore, considering Japan’s decades-long experience in economic cooperation in Asiaand its wealth of accumulated expertise, the country’s close collaboration with AIIB would be asignificant contribution to the AIIB and to the regional economy. Accordingly, Japan should be
open to the idea of eventually joining AIIB and carefully monitor the timing of its membershipso that Tokyo would be able to ensure, from the inside, that AIIB will continue to provide solidand high-quality infrastructure development investments.

2.5 Supply Chain and Digital Technology
As noted in the beginning of this chapter, Japan’s new Economic Security Promotion Act
highlights “strengthening critical goods supply chains” as one of the key issue areas forformulating new measures. Russia’s invasion of Ukraine which disrupted supply chains of some
key goods served as a trigger for this new policy. There has also been a growing wariness inJapan that China, which has greatly benefited from global supply chains over the past three
decades, has in recent years taken excessive advantage of global economic interdependence andengaged in hostile economic measures against some countries. President Xi Jinping’s statementthat “We must make the international supply chain dependent on our country and develop theability to retaliate and intimidate others through supply disruptions” 35 symbolizes China’s
willingness to use its enormous economic power not only to exert influence for realizing its own
political and strategic interests but also to challenge the United States in hegemonic competition.
While Japan needs to avoid becoming exclusively preoccupied with indicators of China’s
hegemonic expansion, Japan and many other countries must effectively address the challenges of
economic coercion associated with supply chain and economic interdependence.
Washington’s response to this growing challenge is to prioritize the following three goals: delay
34 Sano Junya, “AIIB no Genjō to Wagakuni no Kakawarikata” [The Current Status of the AIIB and Our Country’s Involvement], Ajia
Mansurii, August 2018, https://www.jri.co.jp/page.jsp?id=33071
35 Nihon Keizai Shimbun, November 15, 2020.

40

as much as possible China’s economic and technological catch-up, maintain U.S. technologicaland military superiority, and ensure the survival of the liberal international order based on
existing and long-standing rules and principles. To achieve these goals, the United States
imposed trade restrictions on China bilaterally, while working to establish, in the form of“friend shoring,” an economic collective security regime among its trading partners. In thisvein, the United States proposed the “Indo-Pacific Economic Framework” (IPEF) in May 2022
and held the first ministerial-level meeting four months later. Currently, the IPEF is a relatively
loose framework consisting of 14 countries including Japan and India that discusses policy
coordination and cooperation around four pillars: trade (including the digital economy), supply
chains, clean economy, and fair economy. IPEF is explicitly designed to restructure supply
chains among participating countries in order to reduce excessive dependence on the Chinese
market.
For Japan’s economic security strategy, IPEF is important in several ways. First, IPEF

is and will remain for the foreseeable future the only regional multilateral framework,in which the United States participates, to explicitly address China’s economic rise. The
same is true with India, which withdrew from RCEP. In this sense, IPEF is the only
regional framework in which Japan, the United States, and India-all major economies

in Asia- can collaborate on economic security challenges, especially the growing
fragility of supply chains due to China’s possible economic coercion. Second, IPEF willserve as a new venue for Japan, the United States, and India to consult and work withother participating countries, including South Korea, Australia, and other Southeast Asian
countries, which are more economically vulnerable in terms of their economic dependence
on China. Third, IPEF is significant because there are no existing international institutions
designed to establish secure supply chains, which has become a pressing global issue since
the outbreak of COVID-19. Finally, insofar as RCEP’s implementation will further increase
Japan and other Asian countries’ dependence on the Chinese market and supply chains, theU.S.-led IPEF is expected to help offset this particular effect of RCEP.
These apparent benefits notwithstanding, when it comes into full swing, IPEF could effectively
bar China from joining the process of rulemaking in international trade and investment in the
Asia-Pacific region. It could further escalate the U.S.-China tensions, which would result ina more fragmented Asia. The potential negative impact of IPEF-led supply chain policies on
Japan’s economic activities is another concern. For instance, the U.S. government, in October
2022, unilaterally introduced export restrictions on advanced semiconductors to China, which
the Japanese government duly followed five months later; and it has been widely reported
41

that Japanese firms in this sector will be badly affected by these new measures.36 The scopeof goods targeted for new supply chain restriction, or enhancement, is another concern. The
Japanese government currently designates 11 types of goods, as critical goods for supply chain
enhancement, such as semiconductors, storage batteries, and natural gas. The U.S. governmenthas been reportedly weighing the idea to add biotechnology and quantum computers to its listof targeted goods, both of which are not included in the current Japanese list. This means thatin the future, Tokyo will likely be asked by Washington to follow suit, which may pose further
stress on some Japanese firms. Accordingly, regarding policymaking about supply chains, Japan
will need to carefully weigh these different considerations such as economic security, alliancemanagement, the impact on U.S.-China tensions, and spillover effects on Japanese firms and its
economy as a whole.
In addition to supply chains, security of high-tech digital equipment and technology
and data has become a major concern for economic security. At the global level, G7
members and OECD members have been discussing the establishment of rules andprinciples for digital trade, while WTO members have been negotiating internationalrules and regulations on digital data management and security. In the Asia-Pacific region,
the CPTPP agreement stipulates principles of free flow of data, the first international
agreement of this kind. Meanwhile, Singapore, New Zealand, and Chile concluded in June
2020 (effective in 2021) the Digital Economic Partnership Agreement (DEPA), which isdedicated to the digital sector and stipulates rules and principles for digital trade and useof digital technology, including Artificial Intelligence. Similar to the way TPP originated(see section 3 of this chapter), the founding countries of DEPA are small and medium-sizecountries in the Asia-Pacific (and all three were founding members of CPTPP’s precursor);and therefore, DEPA may follow path similar to CPTPP in terms of membership expansion.
In fact, three countries, South Korea, China, and Canada, have already applied to join
DEPA; and in June 2023, South Korea officially acceded to this agreement. 37 Japan has
been actively involved in discussions within existing multilateral frameworks such as the
WTO where it is currently co-chairing negotiations on the digital sector. 38 Tokyo should
36 “Nihon Seifu, “Handōtai Seizō wo Yushutsu Kanri Taishō ni. Bei ga Taichū Kisei Yōsei” [Japanese Government Makes Semiconductor
Manufacturing Subject to Export Controls: US Requests Restrictions on China], Roita-Tsūshin, March 31, 2023, https://jp.reuters.com/article/
idJPT9N31N01I
37 Ministry of Trade, Industry and Energy, “Press Releases: Korea becomes first country to join DEPA as non-founding member,” June 12,2023, https://english.motie.go.kr/en/pc/pressreleases/bbs/bbsView.do?bbs_cd_n=2&bbs_seq_n=1318#
38 Keizai Sangyō Shō, Tsūshō Hakusho 2022, “Dai III Bu Dai 1 Shō Dai 6 Setsu, ‘Aratana Takokukan Renkei (IPEF, Nichibeigōin,
Dejitaru Nado)’ [New Multilateral Collaboration (IPEF, Japan-US Australia-India, Digital, etc.)],” https://www.meti.go.jp/report/
tsuhaku2022/2022honbun/i3160000.html

42therefore closely monitor the evolution of DEPA and carefully explore the option of Japan’s
applying for membership. At the moment, international efforts for rulemaking in the digitalfield remains in a state of disarray. Yet, ensuring national security and protecting personal
information are urgent issues that should not be undermined by any digital devices due totheir country origins. In the meantime, from an economic rationality standpoint, creating
separate blocs over digital communication technologies in an extreme form, as well as
decoupling is undesirable. 39 Thus, Japan should further strengthen cooperation withcountries that share the same concerns, and seek to play a leading role in rulemaking inthis new area of international economic governance in Asia.

39 The G7 Hiroshima Leaders’ Communiqué announced on May 20, 2023 emphasized the concept of “de-risking,” not “decoupling,” asthe basis of G7’s approach. Given the lack of clarity of the “de-risking” concept at the time of writing, this report refrains from assessing indetails the implication of the use of this concept. Gaimushō, “Hiroshima Shunō Komyunike” May20, 2023, https://www.mofa.go.jp/mofaj/
files/100507034.pdf

43

Chapter 3

Regional Security

3.1 Defense Policy
During the last decade, the security environment has become more worrisome anduncertain. Despite various diplomatic efforts, North Korea continues to develop and test
missiles that threaten South Korea, Japan, and the United States; and the international
community has failed to end and reverse North Korea’s nuclear weapons program. China
is strengthening its naval, air, missile, and other military capabilities and is pursuingwhat some have called an “anti-access/area denial (A2/AD)” strategy that encompasses
a substantial portion of Japan’s territory. Chinese assertive behavior in the Taiwan strait
and the East China and South China seas has alarmed many countries in the Asia-Pacificregion as well as Japan.
In response to this change in the security environment, Japan saw a need to strengthen
its defense capabilities. In December 2022, the Kishida Cabinet approved three securityrelated documents (“National Security Strategy,” “National Defense Strategy,” and “Defense
Force Development Plan”) and intends to increase the defense budget in a broad sense
so it reaches 2 percent of current GDP by 2027. 40 However, with the Japanese economy
showing no signs of getting out of its long-term slump, it is difficult to predict whether
Japan will be able to sustain a large increase in its defense budget over the medium to longterm, especially given its already massive budget deficit and the inevitable increases in thesocial security-related expenditures. In addition, the defense force buildup announced by
the Kishida Cabinet includes items that are ineffective (or counterproductive) in enhancing
deterrence. The Japanese government needs to constantly reevaluate its priorities for
40 Japan has heretofore narrowly defined the items that are considered to part of defense spending; and as a consequence, defense spending
in fiscal year 2022 amounted to 0.95 percent of gross domestic product (GDP) in FY2022. When the Cabinet approved the security-related
document in December 2022, the Japanese government decided that the total amount of defense spending would include not only theconventional standard defense budget, but also supplemental items such as the Japan Coast Guard budget, UN PKO contributions, benefits forformer military personnel, expenses for developing ports and airports for use by the Self-Defense Force and U.S. forces, and budget for scienceand technology research with potential military applications. Using this revised method of calculating defense spending, the government has
decided that total defense expenditures should reach 2 percent of the current gross domestic product (GDP) in FY2027. Regarding defense
spending on a conventional basis, the government decided to set the total amount at around 43 trillion yen over the five years from FY2023 to
FY2027. Since the total defense spending from FY2019 to FY2023 was 27.5 trillion yen, this represents an increase of about 1.56 times.

44

strengthening defense capabilities.
Recently, the Kishida government decided to acquire “counterstrike” missile capabilities todeter missile attacks against Japan, including the procurement of long-range Tomahawk cruise
missiles from the United States. Supporters of such counterstrike capabilities employ the logic ofdeterrence by both punishment and denial in support of Japan getting these longer-range missile
capabilities. Such missiles would enable Japan to deter missile attacks by having the ability topunish the adversary through punishment and to prevent or limit further attacks by being able
to degrade the adversary’s military capabilities. Realization of the shortcomings and exorbitant
expense of missile defense systems has understandably reinforced calls for acquiring long-range
missiles to hit at least North Korean and Chinese missile sites in order to bolster deterrence.
But assessing the necessity and efficacy of such an option requires looking at possible concrete
scenarios.
One is the possibility of North Korean missile attacks on Japanese targets. Although
Japanese missiles to strike North Korean military targets in response to a North Korea
attack might make sense according to the logic of deterrence by punishment, why would
North Korea choose to attack Japan with missiles? If Pyongyang were to contemplatea launch of missiles tipped with nuclear warheads against Japan, the United States still
has overwhelming strategic superiority over North Korea to make extended deterrence
credible and effective. A bolt out-of-the-blue North Korean missile attack against Japanis improbable since such an action would be suicidal for the North Korean regime given
the retaliatory capabilities of the United States. A major reason why North Korea would
like to retain a missile capability to threaten Japan is to deter a U.S.-led attack on North
Korea. Ultimately, the best way for Japan to address the North Korean missile threat is tofacilitate a peace-building system in the Korean peninsula rather than to exclusively invest
in expensive offensive strike missiles and the necessary ancillary systems.
U.S. extended deterrence regarding possible Chinese missile attacks against Japan is lessrobust compared to the North Korean case because China has a nuclear arsenal capable ofstriking the U.S. continent. But determining whether or not Japan needs to have its own
missile capabilities to strike military targets on China’s mainland for deterrence purposesdemands an analysis of the possible motive that China might have to attack Japan withmissiles. A Chinese missile attack against Japan in isolation is hard to imagine. Suchan attack is most likely when China has decided to seize control of Taiwan by militaryforce and in that context seeks to destroy U.S. military assets in Japan to weaken the U.S.
45

ability to intervene militarily to help defend Taiwan. Therefore, the most direct way todeter Chinese missile attacks against Japanese territory would be to deter China fromusing military force to take Taiwan in the first place. Since a Chinese seizure of Taiwan
will ultimately require an amphibious invasion across the Taiwan strait, China could
be deterred by supporting U.S. as well as Taiwan’s efforts to interdict and stop such aninvasion. In other words, deterrence would function by having the ability to deny China’s
achievement of its military objectives against Taiwan. Japan can best contribute to thisdeterrence by denial by improving the resilience and survivability of U.S. and Japanese
defense assets in Japan and by strengthening Japan’s own capabilities to defend its own
territory, especially its southwest island chain that is close to Taiwan.
Japanese capabilities to strike Chinese military targets on the mainland with missiles
would not make a meaningful contribution to deterrence. Since Chinese missile and air
bases are dispersed across a vast geographic area, the number of missiles that would benecessary to prevent Chinese attacks against Japan would be enormous and therefore
costly. Moreover, given the size of China’s missile arsenal, China could easily retaliate
against Japanese “punishment” strikes with overwhelming force. Deterrence by retaliatory
punishment against an adversary like China places Japan at a strategic disadvantage
because of China’s geographic depth as well as its expansive network of airfields andmissile bases. Moreover, there is the risk that China could launch some form of a nuclear
attack on Japan if the exchange of fire between China and Japan escalates in the context
of a high-intensity war over Taiwan that engulfs China and the United States.41 In the end,
the best way to prevent a Chinese missile attack on Japan is to encourage tension reduction
and demilitarization across the Taiwan strait.

In summary, the deterrence benefits of offensive counterstrike capabilities are marginal at bestand could pose huge opportunity costs by diverting limited defense funds away from more
important investments. Proponents of long-range land-attack missiles to strike enemy bases
tend to focus on tactical military utility and ignore the broader strategic perspective. Rather
than adopting a military doctrine of counterstrikes against military targets inside the territoryof potential adversaries and investing in expensive long-range missiles to strike such targets,
Japan should increase its defense expenditures within the framework of a strictly defensive
41 Sugawa Kiyoshi, “‘Teki Kichi Kōgeki Nōryoku’ Rongi no Shinjitsu” [Reality of the Debate about ‘Enemy Base Attack Capability’],
Alternative Viewpoint No. 43 (September 1, 2022), https://www.eaci.or.jp/archives/avp/699; Sugawa Kiyoshi, “‘Hangeki Nōryoku’ wa Taiwan
Bō’ei no tame ni: Uōgēmu kara Yomitoku [‘Counterstrike Capability’ to Defend Taiwan: Analysis Based on War Games], Alternative Viewpoint
No. 48 (January 28, 2023), https://www.eaci.or.jp/archives/avp/785.

46

defense doctrine ( 専守防衛 ). Some of the priority defense investments include more robust air andmaritime defense capabilities, more mobile defense forces to respond rapidly to contingencies
and to engage in non-combatant evacuation operations, the enhancement of the resilience andsurvivability of Japanese and U.S. defense bases and assets in Japan, combat readiness byincreasing and securing stockpiles for fuel and ammunition, greater efforts to address cybersecurity and space-security challenges, and protection against electromagnetic threats. Japan
should also continue to develop air, sea, and ground-launched longer-range missiles that canbe used as stand-off weapons to interdict attacking forces as part of an active defensive denial
operation.42
Although a certain level of deterrence remains critical for maintaining peace in Asia as wellas protecting Japan’s security, deterrence must be supplemented by diplomatic initiatives that
foster security reassurances and mitigate tensions. An overreliance on deterrence can exacerbate
what political scientists call a “security dilemma” –that is, military efforts to respond to security
threats could worsen the threat because of the military competition fueled by the mutual pursuitof deterrence.43 A key element of making deterrence effective is reassurance. Without somereassurance toward a potential adversary that its vital or core interests would not be threatened,
deterrence will not be effective as a dissuasion strategy.44 History has shown that a state may

use force even if it finds itself at a military disadvantage in order to counter threats to its mostimportant interests. Therefore, diplomacy to reduce tensions and promote regional cooperation
is just as important as military deterrence to build a more stable and peaceful security
environment. An example of reassurance regarding the Taiwan issue will be discussed in section
4 of this chapter.

3.2 U.S.-Japan Alliance
The alliance with the United States is a key pillar of Japan’s security policy, and it should
42 Regarding a more active “strictly defensive defense” doctrine, see the following: Sugawa Kiyoshi, “Tai-Chū Bō’ei Senryaku no Yōtei wa‘Senshu Bō’ei no Jūjitsu’ ni ari: Ukuraina Sensō ni Manabu Nihon no Bō’ei Ryoku no Seibi (3)” [The Key to Defense Strategy Against China
Is “Enhancement of Strictly Defensive Defense”: Preparation of Japan’s Defense Capabilities based on Lessons from the War in Ukraine(3)], Alternative Viewpoint No. 45 (November 5, 2022), https://www.eaci.or.jp/archives/avp/758; and Sugawa Kiyoshi, “‘Senshu Bō’ei noJūjitsu Saseru Tame no Itsutsu no Kadai: Ukuraina Sensō ni Manabu Nihon no Bō’ei Ryoku no Seibi (4)” [Five Issues for Enhancing Strictly
Defensive Defense: Preparation of Japan’s Defense Capabilities based on Lessons from the War in Ukraine (4)], Alternative Viewpoint No. 46(November 22, 2022), https://www.eaci.or.jp/archives/avp/760.
43 Robert Jervis, “Cooperation under the Security Dilemma,” World Politics Vol. 30, No. 2 (1978), pp. 167-214.
44 Thomas C. Schelling, Arms and Influence (New Haven: Yale University Press, 1966), pp. 74-75; and Matthew D. Cebul, Allan Dafoe, andNuno P. Monteiro, “Coercion and the Credibility of Assurances,” Journal of Politics Vol. 83, No. 3 (July 2021, pp. 975-991.

47

remain so. As discussed in the above, U.S. extended deterrence helps to protect Japan fromexternal threats, especially from nuclear weapons and other weapons of mass destruction.
The American military presence in Japan and South Korea as well as the Western Pacificmakes its treaty-based defense commitments more credible. Since the 1990s, Japan
has enhanced defense cooperation with the United States along numerous dimensions
including communication, coordination, joint training and operational planning, and reararea support. These efforts should continue so that both Japan and the United States can
respond more effectively to regional security challenges. At the same time, as U.S.-Japan
defense cooperation deepens, Japan should not be shy about actively and candidly voicing
its views to the United States about security issues. A healthy alliance relationship is not
one in which Japan simply follows U.S policy and preferences, but rather one in which
Japan has the confidence to engage in a strategic dialogue with the United States on a moreequal basis.
As Japan strengthens its defense capabilities and assumes greater responsibility for
defending Japanese territory, opportunities should emerge to reduce the U.S. militarypresence in Japan. For example, Japan’s Amphibious Rapid Deployment Brigade (ARDB)
established in 2018 could be expanded. With intensive training with the U.S. Marine
Corps, the ARDB could become ready to assume responsibility for the defense of Japan’s
southwest island chain. As a result, there could be a reduction of U.S. Marine units in
Okinawa, thereby alleviating some of the burden that Okinawan residents bear for hosting
American bases and military personnel. Moreover, as the Japan-U.S. alliance becomes
more equal, the current Status of Forces Agreement (SOFA) could be revised so that Japan
has a more effective voice in regulating U.S. military exercises and operations on Japanese
territory.

3.3 North Korea
Although more than 75 years have passed since the end of World War II, Japan still does
not have diplomatic relations with North Korea, and bilateral relations continue to behostile. Negotiations to normalize diplomatic relations did begin in 1991, but this process
has been suspended because of the abduction issue as well as North Korea’s nuclear
and missile programs. The 2002 Japan-North Korea Pyongyang Declaration provided
a positive framework for improving Japan-North Korea relations; but without tangible
progress on “solving” the abduction issue, a breakthrough in Japan-North Korea relations48

is politically impossible. Japan continues to demand “complete, verifiable, and irreversible
denuclearization” (CVID), and Tokyo has imposed strict sanctions against North Korea
beyond the U.N. sanctions and has even banned the use of Japanese contributions tovarious U.N. agencies for humanitarian assistance.
To overcome this impasse and improve the environment for normalization talks, Japan
should address the abduction issue first by clarifying what “solving” the issue means.
Japan should ask North Korea to re-examine the situation of Japanese in North Korea
including abductees, missing persons, and others and to provide accurate informationthat Japan can verify with field surveys. A Japanese liaison office should be establishedin North Korea so that Japanese officials can conduct this verification. As North Korea
makes progress on this investigation and verification process, Japan could begin torelax its own sanctions on North Korea and eventually resume normalization talks andcomprehensively address issues related to the abduction of Japanese nationals, North
Korean nuclear weapons and missiles, economic cooperation, and the status of Korean
residents in Japan.

While Japan-North Korea bilateral talks move forward, Japan should actively promote aninternational framework for addressing North Korea’s nuclear and missile programs bybuilding upon the multiple layers articulated in the September 2005 Joint Statement of the
Six-Party Talks. Progress on “solving” the abduction issue would allow Japan to supporta realistic incremental and reciprocal step-by-step approach to achieve the ultimate goalof North Korean denuclearization. Japan could also help promote a “Korean Peninsula
Peace System” through economic cooperation with North Korea after the normalizationof bilateral diplomatic relations. Regarding the human rights issue in North Korea, Japan
should encourage a “human rights dialogue” through various international organizations
based on the experiences of the European Union.

3.4 Taiwan
Since the rise of Xi Jinping as the top leader of China in 2012 and the election of Tsai
Ing-wen as president of the Republic of China (on Taiwan) in 2016, the Taiwan issue has
become more tense. China has stepped up its effort to isolate Taiwan internationally,
has accelerated its military buildup across the Taiwan strait, and has used both militaryand economic coercion to intimidate Taiwan. On the other hand, developments in Hong
Kong have reinforced the skepticism and indeed opposition among the people of Taiwan
49

regarding China’s so-called “one country, two systems” formula for Taiwan’s unification
with mainland China. Support for independence has grown in Taiwan, and Taipei has
moved to reduce Taiwan’s economic dependence on China through its southern strategy.
As the prospects for peaceful unification become more unlikely in the foreseeable future,
analysts are increasingly concerned that China might seriously consider the use of militaryforce against Taiwan. In response, the United States has been seeking to mobilize its allies,
especially Japan and Australia, to support the defense of Taiwan. From the American
perspective, deterring a Chinese attack on Taiwan is an important goal because Taiwan isa thriving democracy and is strategically important for Japan as well as the United States.
China, however, sees recent U.S. policy statements and initiatives as undermining the “oneChina” policy that has been the basis for U.S.-China normalization and stable bilateralrelations. Although the Biden Administration has stated that there is no change in the U.S.
“one-China” policy, calls by members of the U.S. Congress as well as former American
officials to end the one-China policy, extend diplomatic recognition to Taiwan, and defend
Taiwan unconditionally are especially provocative. As a consequence, the danger of an
U.S.-China military conflict over Taiwan has unfortunately increased.

A war over Taiwan would be devastating for Japan given its geographic proximity to
Taiwan and the presence of U.S. military bases and forces in Japan that will be used todefend Taiwan. During a Taiwan contingency, China would have a strong incentive toattack U.S. bases on Japanese territory. Therefore, the policy objective of Japan should
be to maintain the conditions for preserving the status quo until the day comes when
China and Taiwan can find a peaceful solution to the issue of unification. Japan should becautious about American calls to become more integrated in U.S.-led military planning for
defending Taiwan. Japan should of course take measures to strengthen its ability to defend
its own territory; and such self-defense efforts might raise the risks for China of using
military force against Taiwan, thereby indirectly contributing to deterrence. But direct
involvement in military efforts to defend Taiwan is likely to entrap Japan in a Taiwanrelated security dilemma and contribute to the escalation of cross-strait tensions. The
primary responsibility for the defense of Taiwan lies with the people of Taiwan.
As a consequence, Japan should firmly uphold the 1972 Japan-China Joint Communique inwhich the Government of Japan stated that it “fully understands and respects” the stand of
the Chinese government that “Taiwan is an inalienable part of the territory of the People’s
Republic of China.” And it should support the peaceful resolution of the Taiwan issue.
Moreover, Japan should not base its policies on forecasts of imminent military conflict50

or Chinese purported deadlines on unification and should not support the drawing ofvarious “redlines.” Such moves will contribute to escalating tensions rather than deterring
conflict. At the same time, Japan should explore ways that Taiwan can participate morein international fora and agreements and contribute more to the international community
in areas of global public health especially after its success in dealing with the COVD-19
pandemic.
Observing Russia’s difficulties in its war against Ukraine, China could become morecautious about using military force to unify Taiwan with China. Xi Jinping would also
like to avoid the economic costs as well as military risks China would inevitably incur if itwere to attack Taiwan. Nevertheless, China could still resort to the use of force if Taiwan
moves closer to de jure independence from China because of encouragement by the UnitedStates, Japan, and other countries. Therefore, as the United States recently reaffirmed in
its October 2022 National Security Strategy, Japan should clearly state that it does notsupport the independence of Taiwan.45 And Japan should declare that it would welcome any

settlement of the Taiwan issue that emerges between Beijing and Taipei through peacefuland non-coercive means. Without credible assurances to China that the United States
and Japan do not favor the permanent separation or independence of Taiwan from China,
military deterrence will be inadequate to prevent a military conflict across the Taiwan
Strait.

3.5 Senkaku Islands
Tensions between Japan and China regarding the Senkaku Islands intensified after
September 2012 when the Japanese government bought Uotsuri, Kitakojima, andMinamikojima from their landowner. It all started with then Governor Shintarō Ishihara’s
attempt to purchase the islands and build facilities on them. The Cabinet of then Prime
Minister Yoshihiko Noda decided to purchase the islands in order to prevent the escalationof tensions between Japan and China over the Senkaku Islands. Although the transaction
was simply a transfer of ownership from a private family to the national government,
the Chinese government referred to this as “nationalization” of the islands and accused
Japan of changing the status quo. Since then, China has been sending at regular intervals
its Coast Guard vessels into the territorial waters of the Senkakus to assert its territorial
45 National Security Strategy October 2022, p. 24,. https://www.whitehouse.gov/wp-content/uploads/2022/10/Biden-Harris-AdministrationsNational-Security-Strategy-10.2022.pdf

51

claim to the islands and challenge Japan’s administrative control. Although the number ofChinese intrusions in the territorial waters has generally stabilized, Chinese Coast Guard
ships now maintain a near constant presence in the contiguous zone waters around the
Senkakus. And when Japanese fishing boats enter the Senkaku territorial waters, Chinese
ships tail these boats.46 Japan is also concerned that the Chinese Coast Guard vessels havegotten larger and equipped with more powerful armaments. Therefore, Japan must continue
to be vigilant, invest in Coast Guard capabilities, and enhance coordination between the
Coast Guard and Self-Defense Forces.
At the same time, Japan should work with China to reduce the risks of dangerous accidents byimplementing the Maritime and Air Communication Mechanism that was agreed to in 2018.
Japan should also launch a dialogue without preconditions with China on how to address the
Senkaku Islands issue. In 1971, the Chinese government declared its sovereignty over the
Senkakus; but during the Japan-China normalization talks in 1972 when Prime Minister Kakuei
Tanaka raised the issue, Zhou En-lai stated that it would be better not to talk about these islands
at that time. And after the signing of the Japan-China Peace and Friendship Treaty in 1978,
Deng Xiaoping proposed deferring the matter to future generations. The Japanese government
takes the position that a territorial dispute does not exist with China because the Senkakus areinviolably Japanese territory; and therefore, there should be no talks with China regarding thesovereignty of the islands. But with the increasing risk of militarization of this issue, Japan
should adopt a more flexible approach by building on the four-point consensus reached between
Japan and China in November 2014.47 Depending on how a dialogue between China and Japan
progresses, Japan might be able to recognize the existence of a bilateral problem and explore
various ideas to defuse tensions about the Senkaku Islands, which has been one of the major
factors undermining stability and cooperation in Japan-China relations.48 Moreover, Japan should

try to revive and implement the June 2008 agreement with China to turn the East China Sea into
“a sea of peace, cooperation and friendship” based on a joint development arrangement. In 2017,
Japan and China indeed confirmed that the 2008 negotiations remain valid.49

46 Mike Mochizuki and Jiaxiu Han, “Is China Escalating Tensions with Japan in the East China?” The Diplomat, September 16, 2020, https://thediplomat.com/2020/09/is-china-escalating-tensions-with-japan-in-the-east-china-sea/.
47 “Regarding Discussion toward Improving Japan-China Relations,” November 7, 2014, https://www.mofa.go.jp/a_o/c_m1/cn/
page4e_000150.html
48 One possibility might be a joint mechanism to control the goats in Uotsuri and establish a nature preserve for the Senkaku Islands, while
China ceases the entry of its Coast Guard vessels into the territorial waters of the islands.
49 “Japan-China Summit Meeting,” November 11, 2017, https://www.mofa.go.jp/a_o/c_m1/cn/page4e_000711.html.

52

3.6 South China Sea
Sovereignty disputes between China and various claimant states in Southeast Asia
intensified because of competition to demarcate maritime rights under the UNCLOS
regime. 50 The situation worsened after China engaged in coercive tactics to promote its
resource claims in the South China Sea and the United States appeared to move awayfrom its traditional neutral position in these sovereignty disputes after the United States
supported the Philippines in the 2016 South China Sea arbitral tribunal. China faced off
with the Philippines in the Scarborough Shoal over fishing rights and began aggressive
land reclamation projects in some of the maritime features in the Spratly Islands. The
Philippines sought international legal arbitration according to UNCLOS procedures, but
China refused to accept the legitimacy of this legal proceeding by insisting that UNCLOS
did not allow an international tribunal to rule on issues of sovereignty. Eventually, thePermanent Court of Arbitration (PCA) ruled in favor of the Philippines on almost all
points, but China has refused to recognize the PCA ruling.
What is especially worrisome now is the gradual militarization of South China Sea maritime
disputes because of possible Chinese deployment of military capabilities on the large land
reclamation projects in the Spratly Islands. The United States has in response stepped up its
naval freedom of navigation operations (FONOPs), and there is now a danger that the South
China Sea will become a key area for U.S.-China military competition.
Japan’s objective should be to prevent further militarization of the South China Sea
disputes. To do so, Japan should continue its policy of capacity-building of various
Southeast Asian countries, including more frequent workshops and education oninternational maritime law and norms as well as joint training between coast guards,
so that they can legitimately protect their maritime rights through effective coast guard
patrols rather than turning to military capabilities. It should also promote the Quad’s“Indo-Pacific Partnership for Maritime Domain Awareness” (PMDA) for capacity-building
and information-sharing so as to empower the littoral states in Southeast Asia. For
example, the creation of a regional data center could increase the transparency of the South
China Sea situation by regularly publicizing information. Japan should also encourage
ASEAN and China to finalize a Code of Conduct and try to persuade China to be clearer
about its maritime claims so that they are consistent with UNCLOS. Finally, Japan should
50 Aoyama Rumi, Chūgoku no Ajia Gaikō [Foreign Policy of China] (Tokyo: Tokyo Daigaku Shuppankai, 2013), pp. 223-227.

53

work closely with the ASEAN states to implement the ASEAN Outlook on the Indo-Pacific
to avoid “the deepening of mistrust, miscalculation, and patterns of behavior based on a
zero-sum game” and promote regional maritime cooperation based on the principles of
openness, transparency, inclusivity, and a rules-based framework. Practically, Japan should
support any initiatives and participate in maritime cooperation in nontraditional security
fields, such as environmental protection –for example, cleaning plastic debris in the South
China Sea.
In recent years, European military forces, including a British aircraft carrier and a French
fleet, have come to the East China Sea to conduct joint exercises with Japan and South
Korea. In addition, 2+2 meetings involving foreign and defense ministers are being actively
held with European countries. While these are beneficial for East Asian security, it would
be wrong to assume that this marks a major perceptual change of European countries
toward China. The EU and West European strategy in Asia and the Indo-Pacific is a mixof caution and hopeful expectation, and they do not necessarily assume a hostile stancetoward China. West European countries see themselves as stakeholders in the region, andthe EU is neutral on territorial issues. In this sense, Japan needs to emphasize its relations
with European countries and at the same time foster an institutional framework thatfacilitates European countries’ commitment to the Indo-Pacific. Such a framework would
likely include China. Japan should also insist on institutional reforms of ARF and otherfora and strengthening democratic frameworks.

3.7 Nuclear Arms Control and Disarmament
In August 2019, the United States withdrew from the Intermediate Nuclear Forces (INF)
Treaty because Russia’s deployment of ground-launched cruise missiles violated thetreaty. Also behind this U.S. decision was the concern that China, which was not party to
the INF Treaty, had expanded its regional ballistic and cruise missiles, in the context ofa decline in the U.S. conventional military advantage in the Western Pacific. According
to the Bulletin of Atomic Scientists, China possesses about 350 nuclear warheads thatcan be delivered by “approximately 280 operational land-based ballistic missiles, 72 seabased ballistic missiles, and 20 nuclear gravity bombs assigned to bombers.” 51 The US
Defense Department’s 2022 report on China’s military estimates that China currently
possesses more than 400 operational nuclear warheads and that if the current pace of
51 Hans M. Kristensen and Matt Korda, “Chinese nuclear weapons, 2021,” Bulletin of the Atomic Scientists Vol. 77, No. 6 (2021), 318.

54

increase continues, China’s nuclear warhead count would reach approximately 1,500 by
2035. The report also states that China has expanded its rocket arsenal to include morethan 300 ground-launched cruise missiles with a range of up to 1,500 km, more than 600
short-range ballistic missiles (with a range of 300 to 1,000 km), more than 500 mediumrange ballistic missiles (with a range of 1,000 to 3,000 km), over 250 intermediate-range
ballistic missiles (range 3,000-5,500 km), and 300 intercontinental ballistic missiles (range
over 5,500 km). 52 In short, China now has a robust capability to strike the entire Japanesearchipelago with missiles tipped with conventional or nuclear warheads. To counter thesecapabilities, American defense planners have been considering the deployment of U.S.
ground-launched ballistic and cruise missiles of medium and intermediate range on Japanand other locations along China’s periphery. Such missiles might enable the United States
to quickly damage Chinese air bases as part of a counterair mission during a high-intensity
conflict like a Taiwan contingency. Some U.S. policymakers believe such deployments
might encourage China to engage in arms control talks to limit and reduce China’s missile
capabilities. Despite the U.S. interest in deploying ground-launched missiles in alliedcountries like Japan, South Korea, and the Philippines, there is a recognition that such
deployments are likely to meet strong local resistance from these treaty allies.
A nuclear arms race is also brewing because of the U.S. pursuit of strategic primacy
through its new triad of nuclear forces, regional missile defense systems, and conventionaland nuclear counterforce capabilities. In response, China is projected to expand its
nuclear arsenal to an estimated 1,000 warheads in order to maintain an assured retaliation
capability, and there are reports that Beijing might be reconsidering its doctrine of no firstuse of nuclear weapons. 53 The Ukraine war may have strengthened Chinese belief that

secured nuclear arsenals are the weapons of last resort in order to deter the United States.
Although U.S. defense analysts justify strategic primacy and the regional deployment ofground-launched medium and intermediate range missiles as a way to strengthen both
direct and extended deterrence, such developments will not only fuel an arms race, but also
could be destabilizing by increasing fears of preemptive attacks and risks of inadvertent
nuclear escalation during a crisis.
Japan may have limited influence over U.S. strategic policy in the nuclear realm, but it

52 U.S. Department of Defense, Military and Security Developments Involving the People’s Republic of China 2022 Annual Report toCongress (Office of the Secretary of Defense, 2022), ix and 167.
53 Henrik Stålhane Hiim, M. Taylor Fravel, and Magnus Langet Trøan, “The Dynamics of an Entangled Security Dilemma: China’s Changing
Nuclear Posture,” International Security Vol. 47, No. 4 (Spring 2023), 147-187.

55

should not reinforce the above trend. U.S. defense policy makers often justify their strategic
choices because of the need to reassure allies at a time of North Korean nuclearization anda Chinese military buildup. Japanese defense analysts echo this justification by alluding toconcerns of potential strategic decoupling between Japan and the United States. But suchconcerns are exaggerated. The United States possesses ample nuclear capabilities to deter
nuclear attacks by China or North Korea against Japan. As already noted, North Korea has
no rational motive to threaten Japan with nuclear weapons except to deter a U.S. attack
against North Korea. And the best way to counter potential Chinese threats to Japan isthrough conventional deterrence based on defensive denial and diplomatic efforts to reduce
tensions and the danger of military conflict. Therefore, Japan should firmly oppose U.S.
requests to deploy ground-launched medium and intermediate-range missiles on Japanese
territory. It should also encourage the United States to pull back from its quest for strategic
primacy and devote more efforts to promote strategic stability and restraint.
In preparation for the G7 Summit in Hiroshima, Prime Minister Kishida outlined a“Hiroshima Action Plan” to promote a world without nuclear weapons. Unfortunately, theG7 Leaders’ Hiroshima Vision on Nuclear Disarmament of May 19, 2023 failed to provide
new concrete steps toward nuclear disarmament and an effective path to reverse the current
alarming trend of expanding nuclear arsenals and weakening of the global nuclear nonproliferation regime. In fact, the G7 Hiroshima Vision statement was weaker than theNovember 2022 G20 Bali Declaration which stated that “the threat of use or use of nuclear
weapons is inadmissible.”
The first pillar of Kishida’s “Hiroshima Action Plan” entails continuing the non-use of
nuclear weapons. To buttress this pillar, Japan should publicly favor the adoption of nofirst use of nuclear weapons by the nuclear weapons states. By doing so, Japan would help
to institutionalize a global norm against the use of nuclear weapons. Insofar as deterrence
remains necessary to prevent military aggression, nuclear weapons should be limited todeterring attacks with nuclear weapons or other weapons of mass destruction. Deterring
conventional, non-nuclear military aggression with nuclear weapons is not credible,
increases the danger of nuclear war, and motivates nuclear weapon states to enlarge andmodernize their nuclear arsenals.
The Nuclear Posture Review (NPR) issued by the Biden Administration in October 2022
stated that the United States conducted a thorough review of “No First Use” and “Sole56

Purpose” policies 54 and rejected them because they “would result in an unacceptablelevel of risk in light of the range of non-nuclear capabilities being developed and fieldedby competitors that could inflict strategic-level damage to the United States and its
Allies and partners.” 55 But the 2022 NPR retained “the goal of moving toward a sole
purpose declaration” and noted that the United States “will work with our Allies andpartners to identify concrete steps that would allow us to do so.” One of the many factorsthat contributed to the U.S. reluctance to embrace a “No First Use” or “Sole Purpose”
declaration has been the opposition of allied countries like Japan. 56 Moreover, from the
U.S. perspective, reducing the role of nuclear weapons will depend on how much Japan andother allies are willing to upgrade their conventional defense capabilities.
Japan can exert international leadership for nuclear disarmament as an ultimate goalby participating in the U.N. Treaty on the Prohibition of Nuclear Weapons as anobserver. Even if Japan is unwilling at this time to sign the treaty, being an observer
would allow Japan to express its views in meetings of the treaty signatories. Japan being
an observer would not necessarily weaken nuclear deterrence by the United States andprovoke an international divide between nuclear weapon states and states that do nothave nuclear weapons. Japan would instead serve as a bridge between states with nuclear
weapons and those without nuclear weapons. 57 Moreover, as declared by the Kishida

Administration, Japan should not pursue nuclear sharing with the United States. Given theclear US commitment to extended nuclear deterrence, nuclear sharing is unnecessary and

54 “No First Use” is a declaratory policy to not use nuclear weapons except in retaliation for nuclear attacks. A “Sole Purpose” is a policy thatseeks to constrain the reasons for having nuclear weapons. For example, a “Sole Purpose” policy might limit the purpose of nuclear weapons
to deter a nuclear attack as well as retaliate against a nuclear attack. Although “Sole Purpose” is ambiguous compared to “No First Use,” sucha policy could reduce the role of nuclear weapons in a country’s national security strategy.
55 U.S. Department of Defense, 2022 Nuclear Posture Review, p. 9.
56 According to media reports, the Abe government had expressed its concerns about the Obama Administration’s consideration of “no firstuse.” “Abe tells U.S. of Japan’s concerns over ‘no first use’ nuke policy being mulled by Obama, Japan Times, August 16, 2016. However,former U.S. Secretary of Defense William Perry has criticized Japan’s opposition to “no first use”: “As the only nation to have suffered anuclear attack, and as a supporter of the elimination of nuclear weapons, Japan should support no first use as a step toward that goal. If allnations declared a no-first-use policy, and those declarations were credible, then nations would not need their arsenals and could work together
to eliminate them. In opposing no first use, Japan is opposing the principle of nuclear disarmament itself.” William J. Perry and Tom Z. Collina,
The Button: The New Nuclear Arms Race and Presidential Power from Truman to Trump (Dallas: BenBella Books, 2020), p. 103.
57 In June 2022, Germany attended as an observer the first meeting of states parties to the TPNW held in Vienna. In explaining its attendance,
Germany stated the following: “We do not deem the TPNW to be an appropriate framework to make tangible progress on nuclear disarmament
and we will not accede to it. But we want to continue to improve dialogue on nuclear disarmament with all interested stakeholders, hold anhonest debate on how we can realistically create the conditions necessary for concrete steps towards disarmament and explore cooperation,
especially with regard to addressing the humanitarian consequences of nuclear weapons, victims’ assistance and environmental remediation.”“Statement of the Federal Republic of Germany on Nuclear Weapons at the UN General Assembly,” 77th Session, First Committee, October
17th, 2022, https://new-york-un.diplo.de/un-en/-/2558968#:~:text=Germany%20participated%20as%20an%20observer,will%20not%20
accede%20to%20it.

57

carries the risk of provoking and accelerating a regional nuclear arms race.
For the longer term, to encourage North Korean denuclearization, Japan should explore with
South Korea the creation of a Northeast Asia Nuclear Weapon Free Zone. If Japan and South
Korea together would commit to a non-nuclear weapons policy, they could be more persuasivein getting North Korea to freeze its nuclear weapons program and participate in a step-by-stepprocess of denuclearization with the encouragement of negative security assurances from theUnited States, China, and Russia.58 The concept of a nuclear-free zone in East Asia as well asa ban on the first use of nuclear weapons have been discussed in the Nuclear Nonproliferation
Treaty conferences, and Japanese participants should continue to make such proposals.

3.8 Ukraine-Russia War and Asia
More than a year has passed since the war in Ukraine began. Since it was Putin who invaded
Ukraine, Japan has naturally joined the United States and other G7 countries in supporting
Ukraine and condemning Russia’s actions. However, over the past year, the struggle between thetwo sides has intensified in terms of weapons, troops, and morale; and prolonged fighting seems
inevitable with little prospect of an end to the war. Under these circumstances, the majority
opinion in the West, including the Japanese government, is that as long as Ukraine has the will
to continue to fight, support for Ukraine should continue with the provision of increasingly
sophisticated weapons. However, there also exists within Japan and the West at large a minority
opinion that questions the above majority opinion. For example, there is concern about whether
unforeseen escalation and prolonged continuation of the fighting between Ukraine and Russia
can be left unchecked, resulting in a loss of life far greater than that of the past year. This
minority opinion has been reflected by researchers, journalists, and others who suggested that an“exit strategy” for an early ceasefire should be developed among the warring parties.59
While the Russian invasion of Ukraine demonstrates that security should never be taken
for granted, it is also important not to misapply the lessons of the Ukraine-Russia war to
Asia. After the end of the Cold War, many scholars of NATO warned about the danger of
expanding NATO into Eastern Europe too quickly because this expansion would provoke
Russia. Although NATO now supports Ukraine in its defense against Russia, this view
58 Negative security assurance means a promise by a nuclear weapons state to a non-nuclear weapons state that it will not use nuclear weapons.
59 Kazuhiko Togo, “An Alternative Way to Face the Ukrainian War,” Journal of Territorial and Maritime Studies, Vol.10, No.2 (Summer/Fall2023), pp. 86-96.

58

regarding the negative effect of NATO expansion remains evident in various European
countries, especially France and Germany. The Ukraine-Russia war indeed shows thatmilitary deterrence is not sufficient to prevent war unless military deterrence is supported
by robust and credible assurances that the core interests of a potential adversary are nottrampled.
In light of the above, we strongly suggest that Japan explore the possibility of mediating
toward a ceasefire on the Ukraine issue. In doing so, Japan should seek to establish amultilateral framework with Turkey and other countries. As a precondition for this, Japan
should not close off relations with China and Russia. There is a strong tendency in Japan toview relations with the United States and with China and Russia as incompatible, but thisview is not correct.

59

Chapter 4

Transnational Challenges

Japan has long been an advocate of the concept of human security. In 1995, Prime Minister
Tomiichi Murayama emphasized “human-centered” social development at the Copenhagen
World Summit for Social Development. Two years later, Prime Minister Ryūtarō Hashimotostressed the “security of human beings” at the United Nations. During the 1997-98 Asian
economic crisis, Prime Minister Keizō Obuchi strengthened Japan’s commitment to “humansecurity” and announced the establishment of the “Human Security Fund” in 1998 to help
the people of Southeast Asia who were suffering because of the collapse of local social andeconomic infrastructure. In 2001, the Government of Japan with UN Secretary- General Kofi
Annan took the initiative to establish the Commission on Human Security. Chaired by former
UN High Commissioner for Human Refugees Sadako Ogata and Nobel Prize winning economist
Amartya Sen, the Commission in its final report submitted in February 2003 defined humansecurity in the following manner: “Human security means protecting fundamental freedoms–freedoms that are the essence of life.... It means creating political, social, environmental,
economic, military and cultural systems that together give people the building blocks of survival,
livelihood, and dignity.” 60
Two decades after the 2003 Commission on Human Security report, promoting humansecurity has become even more urgent and critical both regionally and globally. The
COVID-19 pandemic demonstrated the importance of universal access to basic healthcare and the need for international coordination and cooperation to deal with publichealth challenges. The effect of climate change is becoming much more serious. Extreme
weather conditions due to global warming have already had devastating consequences forhuman life and livelihood. Not only must the international community do more to reducegreenhouse gas emissions, but it must also actively mitigate the effects of climate change.
Conflict, environmental degradation, natural disasters, and political repression havemagnified human suffering, the impact of poverty, and the tragedy of refugees and othervulnerable people.

60 Commission on Human Security, Human Security Now: Protecting and Empowering People (New York, 2003), p. 4, https://digitallibrary.
un.org/record/503749?ln=en.

60

These acute transnational challenges demand that Asia transcend the current preoccupation
with great power competition and military rivalry. Given its longstanding efforts on behalfof human security, Japan should revitalize its leadership in Asia and beyond to address
the pressing transnational challenges to human security. It should harness existing global
and regional institutions and processes and work to bridge geopolitical and ideologicaldivisions that hamper more inclusive and effective approaches to international cooperation.
Japan should avoid an overemphasis on cooperation among so-called “like-minded”
countries to the neglect of countries with different political systems and values. As Japan’s
new National Security Strategy of December 2022 states, “Japan has built relationshipsof trust with many countries, regardless of differences in political and economic systems,
through various forms of cooperation.” 61

4. 1 International Public Health​​The
countries of East Asia and Oceania have been more effective in dealing with
COVID-19 compared to the United States and those in Europe and South America. They
generally experienced substantially fewer deaths relative to their populations. Part of the
explanation is that some like South Korea, Taiwan, Singapore, and Vietnam had learned
from the SARS (severe acute respiratory syndrome) epidemic in 2002-2004 and were
institutionally better prepared to pro-actively address COVID-19 compared to othercountries. In addition to this institutional preparedness, the high degree of trust and social
cohesion in these societies contributed to widespread acceptance of public measures andguidance to deal with the pandemic, including the wearing of masks, social distancing andcontact tracing, and vaccinations. Absent were the political polarization, public distrust,and incompetent leadership that contributed to a comparatively high fatality rate in the
United States. Moreover, whereas Asian countries have favored transnational cooperation,some leaders in the United States have tried to use the pandemic to amplify theirconfrontational stance toward China. As the region and the world gradually shift to a postCOVID-19 situation, Japan should strive with other countries in Asia to insulate publichealth issues from the intensifying strategic competition between the United States andChina.
In March 2021, the four countries in the Quad (Japan, the United States, Australia, and India)
launched the Quad Vaccine Partnership to be implemented by the Quad Vaccine Experts
61 National Security Strategy of Japan, December 2022, p. 32, https://www.cas.go.jp/jp/siryou/221216anzenhoshou/nss-e.pdf

61Group consisting of senior government officials and top scientists. The Quad nations havebeen coordinating vaccine financing, manufacturing, production, and distribution to provide
COVID-19 boosters and pediatric doses to countries with the greatest need. As part of thiseffort, the Japan Bank for International Cooperation (JBIC) and the Export-Import Bank of India
provided a $100 million loan to the Indian health sector engaged in responding to the COVID-19
pandemic. One implicit objective of the Quad Vaccine Partnership has been to compete with
China, which has supplied about 2 billion doses worldwide. Although such international
competition may be helpful in getting vaccines to the largest number of people as quickly as
possible, an overemphasis on this competitive mindset could obstruct the need and opportunities
for cooperation with China.
During the early months after the outbreak of COVID-19, Japanese local governments,
corporations, civil society groups, and politicians mobilized quickly to provide China
with much needed medical supplies. This support created much goodwill among Chinese
citizens toward Japan; and Chinese local governments and firms later reciprocated this
support when the virus began to spread in Japan. Regional cooperation among Asianpublic health experts has also been ongoing since the SARS outbreak. In 2006, Japan’s
National Institute of Infectious Diseases signed agreements with both the China Center for
Disease Control and the Korea Centers for Disease Control and Prevention (later the Korea
Disease Control and Prevention Agency or KDCA) to share information, promote researchcooperation, and exchange human resources.

While such cooperative efforts must be deepened to prevent and respond to future
pandemics, geopolitical competition between China and the United States could present
obstacles and dilemmas for the Asian region. For example, ASEAN has steadily been
improving collaboration among its members to deal with infectious diseases, but aworsening of tensions between the United States and China could undermine ASEAN
unity. 62 After the election of Tsai Ing-wen as president of the Republic of China (onTaiwan), relations between Beijing and Taipei have deteriorated, and China has blocked
Taiwan’s participation as an observer in the World Health Assembly. If cross-strait relations
worsen in the context of U.S.-China military rivalry, the prospect of China allowing
Taiwan to participate in World Health Organization activities will grow dimmer. Insofar
that the risk and dangers of infectious diseases transcend national borders, the aim of

62 Kei Koga, “Countering Emerging Infectious Diseases and COVID-19,” in A.P. van der Veere, F. Schneider and C.Y.-p Lo (eds.), Public
Health during the COVID-19 Pandemic: Global Health Governance, Migrant Labour, and International Health Crises (Amsterdam University
Press, 2022), pp. 45-61.

62

Japanese foreign policy should be to encourage inclusive transnational cooperation in the
public health sector and reduce the negative impact of geopolitical tensions and sovereignty
conflicts on such cooperation.

4.2 Climate Change
Climate change poses a global existential crisis for humanity, but the implications for Asia
are especially acute. Given Asia’s large population and its rapid economic development, thecontinent as a whole has been dramatically increasing greenhouse gas emissions. Moreover, thedevastating effects of climate change are already being experienced by many countries in the
Asia-Pacific region.
As a leading advanced industrial country, Japan has an obligation to reduce its greenhouse gas
emissions and help meet international targets to limit rising temperatures. But unfortunately,
after the Great East Japan Earthquake in March 2011 and the Fukushima nuclear disaster,
Japan has increased its reliance on fossil fuels such as natural gas and coal to make up for the
sharp decline in nuclear-powered electricity generation. Insofar as the revival of nuclear energy
remains controversial in Japan because of safety concerns and challenges regarding the storageof spent nuclear fuel, Japan should accelerate the development of renewable energy sources.
Japan should also push further on the decarbonization of its transportation sector through theproliferation of electric vehicles.
During the first two decades of the 21st century, Japan played a prominent role in promoting
both regional and bilateral environmental policy dialogues and initiatives. They include the East
Asia Summit Environmental Ministers Meeting, the ASEAN+3 Environment Ministers Meeting,
the Tripartite Environment Ministers Meeting among Japan, China, and Korea (TEMM), andthe Japan-ASEAN Dialogue on Environmental Cooperation. In recent years, Japan’s regional
activism regarding the environment has lost momentum in part because of frictions in JapanChina relations. Japan now tends to focus more on the Quad as the key regional venue foraddressing the climate crisis. With establishment of the Climate Working Group in March 2021,
the Quad has worked to convene the transportation and energy ministers to advance policies toaddress climate change, to develop clean hydrogen and clean ammonia fuels and reduce methane
emissions, and to create a Quad Climate and Information Service Task Force.
This emphasis on the Quad, however, has reduced efforts to cooperate with China on thechallenges posed by climate change. Although the Biden Administration has mentioned possible
63

cooperation with China in this policy area despite its stress on strategic competition with China,
the Japanese leadership has not expressed much will to engage China.
As the two largest economies in Asia, Japan and China must play a leading role in dealing
with the climate crisis; but both countries have fallen short of bold new initiatives to reducegreenhouse gas emissions, especially their reliance on coal. To some extent, Japan-China
competition can have a positive effect by encouraging Beijing and Tokyo to declare more
ambitious carbon neutrality targets and to invest more in green technologies. But direct bilateral
cooperation on pro-environment technologies would not only facilitate their ability to meettheir emission reduction targets, but also assist other countries in Asia to limit their greenhousegas emissions. As Japan and China compete and cooperate on Asian infrastructure aid andinvestments, both countries should stress the United Nations’ Sustainable Development Goals. In
August 2021, Japan and China did convene a bilateral forum in Wuhan to discuss cooperation inthird-country markets regarding low-carbon and carbon neutral projects. But the top leadershipof Japan and China needs to follow up and encourage the implementation of such cooperative
projects.

While doing what is necessary to mitigate global warming, Asia must also collaborate more
to alleviate the consequences of climate change and to respond effectively to natural disasters
caused by extreme weather patterns. To protect the livelihood of people, Japan through its
development assistance policies should encourage infrastructure that would be more resilient toclimate-induced natural disasters. It should also work to enhance the region’s ability to provide
multinational humanitarian assistance and disaster relief in a timely and effective manner.
In 2004, a “Core Group” of Japan, the United States, India, and Australia worked together toprovide humanitarian assistance after the 2004 tsunami disaster in the Indian Ocean. This
four-country collaboration eventually evolved into the Quadrilateral Security Dialogue or the
Quad. Rather than being the foundation for more inclusive international cooperation, the Quadhas become increasingly an agenda-setting venue to counter Chinese influence in the region.
In September 2022, the four Quad countries agreed to guidelines for the “Quad Partnership on
Humanitarian Assistance and Disaster Relief (HA/DR) in the Indo-Pacific.” These guidelines
may open the way for cooperation with Southeast Asian countries to deal with humanitariandisasters. But the risk of the Quad-led HA/DR partnership is it could exacerbate tensions with
China by being a thinly disguised attempt to mobilize some of the ASEAN states to counter
China militarily. A more constructive approach would be to explore ways that regional countries
could also cooperate with China on HA/DR operations in response to natural disasters triggered64

by climate change. Such an approach would facilitate making HA/DR cooperation into a
confidence-building tool rather than a means for geopolitical competition.

4. 3 Human Rights and Humanitarianism
Fundamental human rights are an essential foundation of human security. As an economicallyadvanced liberal democracy, Japan has an international responsibility to promote and protect
universal human rights that are delineated in the United Nations Universal Declaration of
Human Rights, including “the right to life, liberty and security of person.” Unfortunately, during
the last decade, Asia has witnessed numerous assaults against human rights. These human rights
challenges include persecution of Rohingya Muslims and military repression in Myanmar,
political crackdown in Hong Kong, detention of Uyghurs in Xinjiang, arbitrary arrests and police
brutality in the Philippines, and repression of Muslims in India. No country has an unblemishedhuman rights record, but the international community should be persistent as well as pragmaticin maintaining and protecting fundamental human rights throughout the world.
Liberal democracies like Japan should first and foremost promote human rights and humansecurity by example. In fact, numerous human rights and human security issues have beenraised in Japan, including the following: (1) criminal procedures that violate the rights ofsuspects and defendants to remain silent, to be presumed innocent, and to have access to counsel
during interrogations; (2) the long-term incarceration of undocumented foreign workers andthe inhumane treatment that accompanies it; (3) discrimination against social minorities; and(4) the issue of internally displaced persons following the Great East Japan Earthquake andthe Fukushima Daiichi Nuclear Power Plant disaster. Japan must reform its current criminal
justice system to provide greater legal protection to defendants and rectify discrimination basedon sexual orientation and gender identity in addition to race and ethnicity. It is also necessary
to improve the labor rights of foreign and irregular workers and to expand the acceptance ofrefugees. Improving the human rights situation in Japan in this way will make the country morepersuasive when pursuing human rights policies in the international community.
Given the emphasis that Asian countries place on national sovereignty, Japan must also take anapproach that is both realistic and pragmatic. Efforts to trigger regime change or intervene in thedomestic politics of other countries are likely to be counterproductive. Such actions can often
worsen human rights abuses. In light of the plurality of political and economic systems in Asia,
attempts to divide the region into a simplistic competition between democracies and autocracies
65will also be ineffective in promoting human rights and democratic norms. Japan should continue
to stress the importance of economic and social development and the alleviation of poverty inthe promotion of human rights. And it should refrain from using human rights and democracy as
an ideological tool in a geopolitical competition with China.
Rather than openly challenging the sovereignty of nation-states, a constructive Japaneseapproach would be to champion good governance norms in Asia. Japan could build upon
existing regional frameworks such as the Bali Democracy Forum created in 2008 and theASEAN Intergovernmental Commission on Human Rights founded in 2009 to share ideas andbest practices for increasing government transparency and accountability and for developing
legal and judicial institutions. Japan could also help establish a regional organization that would
cultivate and assist civil society actors engaged in humanitarian assistance for victims of humanrights abuses. As part of this effort, Japan should increase both public and private funding forhumanitarian assistance activities.
A non-ideological, humanitarian approach to human rights that is practical in line with local
realities is likely to garner more support among Asian countries, including China. For example,
with the establishment of the China International Development Cooperation Agency (CIDCA)
in 2018, Japan could offer China its knowledge and experience in the humanitarian assistancefield. After the Kosovo refugee crisis in 1999, Japan formed Japan Platform (JPF) as aninternational emergency humanitarian aid organization to provide emergency aid to refugees
as well as victims of natural disasters. JPF embraces the four principles of humanitarianassistance: humanity, impartiality, neutrality, and independence. Japan is also a member of Good
Humanitarian Donorship, an informal forum and network of donors to improve humanitarian
action. Since it has adopted a “whole of society” approach that encompasses both firms and nongovernmental organizations as well as government support, Japan could work with China to
conduct joint research on how to coordinate aid activities with localities, to assess the need forhumanitarian assistance, and to collaborate on relief development. Doing so would help China’s
humanitarian community that includes civil society and businesses to enhance individual andorganizational capacities.63

63 Miwa Hirono, “Exploring the links between Chinese foreign policy and humanitarian action: Multiple interests, processes and actors,”
Humanitarian Policy Group Working Paper, January 2018, p. 31.

66

Major Recommendations
During these tumultuous times, the most important goal of Japanese diplomacy should
be to prevent the U.S.-China competition from leading to war and the formation of
economic blocs and to ensure that Asia is not divided because of a “democracy versus
authoritarianism” conflict. To this end, while continuing to regard its relationship with
United States as an important pillar of foreign policy, Japan must also actively pursue amore autonomous diplomacy, such as strengthening ties with middle powers in the AsiaPacific region and Europe and promoting dialogue with China. In formulating its policy
toward Asia, Japan should not concentrate exclusively on the geographical prism of the“Indo-Pacific,” which has been the focus in recent years, but should also balance theperspectives of the “Asia-Pacific,” “East Asia,” and “Eurasia” prisms, and strategicallyutilize and promote regional cooperation frameworks for each. Based on these ideas, thefollowing 15 items are presented as specific policy recommendations.

1. To develop middle power diplomacy, lead the promotion of a “middle power
coalition” of Japan, Australia, and India, which could drive the agenda-setting of
the Quad (Japan, Australia, India, and the United States), and further strengthenfunctional cooperation with the Republic of Korea, ASEAN, and other middle power
countries. (Chapter 1, Section 4)
A Japan-Australia-India “middle power coalition” could play an agenda and pacesetting role in addressing functional issues in the region by bringing in middle
power countries in Asia, such as South Korea and the ASEAN countries, as well as
middle power countries in Europe. As part of such an effort, it would be effective
to envision a “middle power quad” that includes Japan, Australia, India, and South
Korea. Such an effort could help deepen cooperation among middle power countries
in the region and mitigate competition and conflict between the U.S. and China, while
maintaining a cooperative relationship with the United States (including cooperationin the Quad).

67

2. In response to the South Korean government’s decision regarding the “conscripted
labor issue,” make continuous efforts to improve relations with South Korea.
(Chapter 1, Section 4)
Shared political values and convergent economic and security interests make theRepublic of Korea the most critical partner for Japan’s middle power diplomacy
in Asia. In addition to enhancing deterrence and the security of supply chains incooperation with the United States, Japan and the Republic of Korea should work
closely together to stabilize relations with China and promote a more open andinclusive regional order. To facilitate this process, Japan should energetically support
the revival of the annual Japan-South Korea-China trilateral summits. Japan should
also seize the opportunity of the recent improvement in inter-government relations
to expand and deepen educational exchanges and civil society dialogues in order tocultivate a shared understanding of history and ultimately reconciliation with South
Korea at the societal level.
3. Regarding debt restructuring measures for Sri Lanka, encourage China toparticipate continuously in the newly established “Creditor Committee for Sri
Lanka” and cooperate by disclosing necessary information. (Chapter 2, Section 2)
The excessive debt of Sri Lanka, whose external debt repayment was suspended in
2022, is important for Japan’s diplomacy toward Asia. China is the largest creditor
of Sri Lanka, followed by Japan and India. The “Creditor Committee for Sri Lanka,”
launched in April 2023, is a multilateral framework led by Japan, India, and France;
but China, the largest creditor nation, has not officially joined. In order for the debt
restructuring measures to be effective, it is important to understand the details ofChina’s loan program. Therefore, Japan, as co-chair, should encourage continued
participation by China, which participated in the first meeting as an observer, andpersistently seek its cooperation, including the disclosure of information. This is an
opportunity for Japan, as a long-time creditor nation, to show its leadership in thearea of bailing out Sri Lanka, an Asian country, and the problem of excessive debt,
which is now becoming more serious at the global level.

684. Encourage the return of the United States to the Comprehensive and Progressive
Agreement on Trans-Pacific Partnership (CPTPP) and make diplomatic efforts
toward the goal of simultaneous accession of China and Taiwan, which have formallyapplied for membership. (Chapter 2, Section 3)
Japan, which played an important role in the realization of the CPTPP, should be
actively involved in future implementation and strengthening of the CPTPP andshould make “open regionalism” a principle for membership expansion. Regarding
the issue of China’s accession to the CPTPP, it will be possible to assess the actual
status of China’s domestic institutions through the accession negotiation process.
Furthermore, accession will have the advantage of promoting China’s domestic
economic reforms and implementing trade policies in accordance with high-level
rules. Given that Taiwan is an advanced economy and has a longstanding friendshipwith Japan, Japan naturally supports Taiwan’s application to join CPTPP. Accession
by both China and Taiwan would provide one of the few official channels for TaiwanChina dialogue within a multilateral framework and would be a valuable tool for
managing Taiwan-China relations. It is desirable to establish the following conditions
at the start of accession negotiations: maintaining the current CPTPP standards, nomutual obstruction of accession, and some form of simultaneous Sino-Taiwaneseaccession following the example of the WTO accession in 2001.

5. Explore the appropriate timing with a view to joining the Asian Infrastructure
Investment Bank (AIIB). (Chapter 2, Section 4)
Japan’s basic position with regard to infrastructure development cooperation in Asia
should be to avoid overreacting to China’s Belt and Road Initiative (BRI) solely
in terms of hegemonic expansion and to encourage investment and support for
infrastructure development in a way that contributes to the sustainable economic
development of developing countries in Asia. As far as China-led AIIB’s operations
to date are concerned, many of its investment projects have been carried out in theform of co-financing with existing international development finance institutions suchas the ADB and the World Bank and have been sound and in line with international
standards. The AIIB, which already has 106 member countries and regions, can serve
as a good institution within which Japan can exercise its leadership as a major middle
power and enhance its presence in Asia. Given Japan’s accumulated expertise basedon many years of experience with economic cooperation in Asia, Japan can contribute69

enormously to the regional economy by ensuring the AIIB’s sound operations andquality infrastructure development investments from the inside as a member of the
AIIB.

6. With regard to rulemaking in the digital sector, consider applying for membership in
the Digital Economy Partnership Agreement (DEPA), while promoting cooperationin the Indo-Pacific Economic Framework (IPEF). (Chapter 2, Section 5)
The creation of international rules and regulations in the digital field is in a state ofdisarray. As a basic principle, national security or personal information protection
should not be undermined by digital devices, regardless of the country in which
they are manufactured. At the same time, an extreme development of exclusive
international blocks (decoupling) over digital communication technologies isundesirable in terms of economic rationality. The U.S.-led IPEF is the primary
framework in which the major Asia-Pacific economies of Japan, the U.S., and India
work together to address economic security issues involving China’s economic
coercion. IPEF aims to coordinate policies with participating countries suchas Southeast Asian countries, South Korea, and Australia, which are especiallyvulnerable because of their economic dependence on China. DEPA, on the other
hand, is a bottom-up framework of small and medium-sized countries in the region
signed by Singapore, New Zealand, and Chile in 2020, which will define rules andprinciples for digital trade and use of technology, including AI, among the signatory
countries. South Korea has already officially decided to join, and China and Canada
have also submitted applications for membership and have begun negotiations.
Japan should take a leadership role in rulemaking in these frameworks, whilestrengthening cooperation with countries that share a common awareness of thesalient issues.

7. Strengthen and deepen the doctrine of strictly defensive defense in the direction ofenhancing deterrence by denial rather than focusing on counterstrike capabilities,
which are less effective and have greater side effects. (Chapter 3, Section 1)
The acquisition of counter-strike missiles to attack military bases of adversaries
yields only marginal deterrence benefits and could exacerbate security dilemmas
in the region. Moreover, it will divert limited defense funds away from more70

important investments. These priority defense investments include more robust
air and maritime defense capabilities, more mobile defense forces to respondrapidly to contingencies and to engage in non-combatant evacuation operations, theenhancement of resilience and survivability of Japanese and U.S. defense bases andassets in Japan, combat readiness by increasing and securing stockpiles for fuel andammunition, greater efforts to address cyber-security and space-security challenges,
and protection against electromagnetic threats. Japan should also continue to develop
air, sea, and ground-launched longer-range missiles that can be used as stand-off
weapons to interdict attacking forces as part of defensive denial operations andconsistent with a strictly defensive defense doctrine.

8. Encourage North Korea to conduct another investigation into the abduction victims
and establish a liaison office in North Korea to carry out such an investigation, withthe aim of resuming negotiations for the normalization of diplomatic relations with
North Korea. (Chapter 3, Section 3)
Although the 2002 Japan-North Korea Pyongyang Declaration provided a framework
for improving Japan-North Korea relations, a breakthrough in bilateral relations
has been impossible for lack of tangible progress in “solving” the abduction issue.
Japan should therefore clarify what “solving” the abduction issue means and ask
North Korea to re-examine the situation of Japanese in North Korea including
abductees, missing persons, and others and to provide accurate information thatJapan can verify with field surveys. Establishing a Japanese liaison office inNorth Korea would facilitate conducting this verification by Japanese officials. As
North Korea makes progress on this investigation and verification process, Japan
could resume normalization talks and begin to relax its sanctions on North Korea
and comprehensively address issues related to North Korean nuclear weapons andmissiles, economic cooperation, and the status of Korean residents in Japan as well as
the abduction of Japanese nationals. This should also serve as an important guarantee
for the North Korean regime.

71

9. Since a gradual, realistic, incremental, and reciprocal approach is needed toachieve the ultimate goal of denuclearization of North Korea, seek as a first stepa freeze of North Korea’s nuclear weapons and missile development programs.
(Chapter 3, Section 3)
Although Japan continues to call for “complete, verifiable, and ir reversible
denuclearization” (CVID), North Korea continues to develop nuclear weapons andmissiles. The most acute North Korean security threats are the rapid succession of
missile tests as well as its nuclear weapons programs. Therefore, while maintaining
the ultimate goal of North Korea’s denuclearization, Japan should work closelywith the Republic of Korea and the United States to develop a realistic incremental
and reciprocal step-by-step approach to negotiate a verifiable freeze of North
Korea’s missile and nuclear programs. Japan could also help promote a “Korean
Peninsula Peace System” through economic cooperation with North Korea after thenormalization of bilateral diplomatic relations.  

10. Based on paragraph 3 of the 1972 Japan-China Joint Statement, while opposing
unilateral changes in the status quo from either side of the Taiwan Strait, clearlystate that Japan does not support Taiwan’s independence. (Chapter 3, Section 4)
Japan’s policy objective should be to preserve the status quo until the day comeswhen China and Taiwan can find a peaceful solution to the issue of unification. As
the United States has already done in its October 2022 National Security Strategy,
Japan should explicitly declare that it does not support the independence of Taiwan
in order to reassure China as well as opposes any unilateral changes to the statusquo from either side of the Taiwan strait. While being cautious and prudent aboutbecoming more integrated in U.S.-led military planning for defending Taiwan, Japan
should strengthen its ability to defend its own territory. Such self-defense efforts
might raise the risks for China of using military force against Taiwan, thereby
indirectly contributing to deterrence. But direct military involvement to defend
Taiwan is likely to entrap Japan in a Taiwan-related security dilemma and contributeto the escalation of cross-strait tensions.  

72

11. Acknowledge the reality of the existence of an issue between Japan and China
regarding the Senkaku Islands and discuss with China ways to ease and resolve
tensions over the islands. (Chapter 3, Section 5)
In order to reduce the risk of militarizing the area surrounding the Senkaku Islands, Japan
should adopt a more flexible diplomatic approach toward China that builds on the fourpoint consensus reached between Japan and China in November 2014 and recognizes
the reality of an issue between Japan and China, while continuing to maintain that the
Senkaku Islands are Japan’s territory. A constructive bilateral dialogue might facilitate
the exploration of various ideas to defuse tensions about the Senkaku Islands, which has
been one of the major factors undermining stability and cooperation in Japan-China
relations. Moreover, Japan and China can revive and implement the June 2008 agreement
to turn the East China Sea into “a sea of peace, cooperation and friendship” based on a
joint development arrangement. In 2017, Japan and China indeed confirmed that the 2008
negotiations remain in effect.

12. Urge the nuclear-weapon states to adopt a doctrine of “No First Use” of nuclear
weapons and participate as an observer in the UN Treaty on the Prohibition of
Nuclear Weapons. (Chapter 3, Section 7)
Japan should publicly favor the adoption of “No First Use” of nuclear weapons by
the nuclear weapons states to help institutionalize a global norm against the useof nuclear weapons. Nuclear weapons should be limited to deterring attacks with
nuclear weapons or other weapons of mass destruction. Deterring conventional,
non-nuclear military aggression with nuclear weapons is not credible, increases
the danger of nuclear escalation, and motivates nuclear weapon states to enlarge
and modernize their nuclear arsenals. Japan should exert international leadershipfor nuclear disarmament as an ultimate goal by participating in the U.N. Treaty
on the Prohibition of Nuclear Weapons as an observer. Japan being an observer
would not necessarily weaken nuclear deterrence by the United States and provoke
an international divide between nuclear weapon states and states that do not havenuclear weapons. Japan would instead serve as a bridge between nuclear weapon andnon-nuclear weapon states.

7313. Encourage inclusive transnational cooperation in the public health sector and work
to reduce the negative impact of geopolitical tensions, ideological differences, andsovereignty conflicts on such cooperation. (Chapter 4, Section 1)
Cooperation among so-called “like-minded” countries such as the Quad Vaccine
Partnership has certainly facilitated the distribution of COVID-19 vaccines tocountries with the greatest need. But an overemphasis on competition with China
could obstruct opportunities to promote more inclusive and effective regional
cooperation regarding public health. The Japanese government should therefore
work closely with the private sector and civil society groups to engage the myriadof regional organizations and actors to prevent and address the spread of infectious
diseases. While promoting cooperation with China, Japan should encourage China
to improve transparency as well as continue to support Taiwan’s participation in theWorld Health Assembly as an observer.

14. Cooperate with China to promote environmental technologies and develop lowcarbon infrastructure in third-country markets to address the climate change crisis
in Asia. (Chapter 4, Section 2)
Japan’s activities in Asia on environmental policy have lost some of their previous
momentum, particularly with the decline of cooperative efforts between Japan and
China regarding climate change. As Asia’s leading economies, Japan and China are
well positioned to play a leadership role in addressing the regional environmental
crisis, but both countries lack bold, new initiatives to reduce greenhouse gas
emissions. Direct cooperation between Japan and China in the development andpromotion of environmental technologies will not only enhance their ability to meettheir respective emission reduction targets but will also help other Asian countries
limit their greenhouse gas emissions. And the idea of Sino-Japanese cooperation inthird-country markets on low-carbon and carbon neutrality, discussed at the 2021
bilateral forum in Wuhan, should be pursued and implemented.

7415. Regarding human rights and human security, focus on improving the human rights
situation at home while promoting a non-ideological, humanitarian approach thatis practical in line with local realities in order to broaden support and cooperation
among Asian countries. (Chapter 4, Section 3)
First and foremost, liberal democracies like Japan should promote human rights andhuman security by setting a good example. Given the emphasis that Asian countries
tend to place on national sovereignty, efforts to trigger regime change or intervenein the domestic politics of other countries are likely to be counterproductive. A
more pragmatic and constructive approach would be for Japan to champion good
governance norms in Asia by building upon existing frameworks like the Bali
Democracy Forum and the ASEAN Intergovernmental Commission on Human
Rights. Japan can also assist China’s humanitarian community that includes civilsociety and businesses to enhance individual and organizational capabilities.
.

75Research Group Members
Kuniko Ashizawa

Kuniko Ashizawa teaches international relations at the School of International Service, American
University, and at the Elliott School of International Affairs, George Washington University. Her researchinterests include Japan’s foreign policy, regional institution-building in Asia, and global governance.
She has published a number of academic journal articles and book chapters, including in International
Studies Review, Pacific Affairs, the Pacific Review, and Journal of Peacebuilding and Development. Her
book, Japan, the U.S. and Regional Institution-Building in the New Asia: When Identity Matters (Palgrave
McMillan, 2013), received the 2015 Masayoshi Ohira Memorial Prize. Ashizawa was a visiting fellow at
various research institutions, including the Woodrow Wilson International Center for Scholars, the EastWest Center in Washington, the Reischauer Center for East Asian Studies, SAIS. She received her PhD ininternational relations at the Fletcher School of Law and Diplomacy, Tufts University.

Miwa Hirono

Dr Miwa Hirono is a Professor at the College of Global Liberal Arts at Ritsumeikan University. Until 2015,
she held a Research Councils UK (RCUK) Research Fellowship at the University of Nottingham. She wasalso a Visiting Fellow at the Ash Center for Democratic Governance and Innovation at Harvard Kennedy
School on Fulbright Fellowship (2018-2019). Her publication includes “China’s Evolving Approaches to
the Principle of Non-Intervention” (The China Quarterly 2019), “Linkages between China’s Foreign Policyand Humanitarian Action” (Overseas Development Institute 2018), and China’s Evolving Approach toPeacekeeping (London: Routledge 2012).

Saori Katada

Saori N. Katada is Professor of International Relations and the director of the Center for International
Studies at University of Southern California. Her book Japan’s New Regional Reality: Geoeconomic
Strategy in the Asia-Pacific was published from Columbia University Press in July 2020. She has coauthored two recent books: The BRICS and Collective Financial Statecraft (Oxford University Press, 2017),
and Taming Japan’s Deflation: The Debate over Unconventional Monetary Policy (Cornell University Press,
2018). She has her Ph.D. is from the University of North Carolina at Chapel Hill (Political Science), andher B.A. from Hitotsubashi University (Tokyo). Before joining USC, she served as a researcher at the WorldBank in Washington D.C., and as International Program officer at the UNDP in Mexico City.

Kei Koga

Kei Koga is Associate Professor at the Public Policy and Global Affairs Programme, School of Social
Sciences, Nanyang Technological University (NTU). Concurrently, he is a Nonresident Fellow at The
National Bureau of Asia Research (NBR), the United States, and a member of RIPS Research Committee,
the Research Institute for Peace and Security (RIPS), Japan. His research focuses on International Security,
International/Regional Institutions (particularly ASEAN), and East Asian/Indo-Pacific security.

76

Jong Won Lee

Jong Won Lee is Professor at the Graduate School of Asia-Pacific Studies, Waseda University. He wasan assistant professor at the School of Law, Tohoku University, a professor at the School of Law, Rikkyo
University, and a visiting scholar at Princeton University before assuming his current position. His
publications include East Asian Cold War and ROK-US-Japan Relations (University of Tokyo Press
1996, winner of the Ohira Masayoshi Memorial Prize), East Asian Community from the Perspective ofInternational Politics (co-author, Minerva Bō, 2012), Japan-ROK Diplomatic Normalization as History(co-editor, Hosei University Press, 2011), History of Postwar Japan-ROK Relations (co-author, Yuhikaku,2017), The East Asia: The Road to Reconciliation (co-edited, Iwanami Shoten, 2016,).

Mike Mochizuki

Mike Mochizuki holds the Japan-U.S. Relations Chair in Memory of Gaston Sigur at the Elliott School ofInternational Affairs of George Washington University, and he is also a Non-Resident Fellow at the Quincy
Institute for Responsible Statecraft. He received his Ph.D. in political Science from Harvard University.
He specializes in East Asian international relations and Japanese politics and foreign relations. His works
include Energy Security in Asia and Eurasia co-edited with Deepa Ollapally (2017), Nuclear Debates in
Asia: the Role of Geopolitics and Domestic Processes co-edited with Deepa Ollapally (2016), Okinawa
Solution (2015), Crisis on the Korean Peninsula (2003), and Toward a True Alliance: Restructuring U.S.Japan Security Relations (1997).

Yoshihide Soeya

Yoshihide SOEYA is Professor Emeritus of Keio University, from which he retired in March 2020
after serving as professor of political science and international relations at the Faculty of Law for
32 years since 1988. He received Ph.D. from the University of Michigan in 1987, majoring in worldpolitics. His areas of interest are international relations in East Asia, and Japanese diplomacy and its
external relations.

Kiyoshi Sugawa

Kiyoshi Sugawa is a senior research fellow at the East Asian Community Institute (EACI). After working
for Sumitomo Bank, he earned an MA in international relations from the University of Chicago. After
1996, he worked for the Democratic Party of Japan and its successor parties for almost 24 years. From2009 to 2012, he served as a Special Researcher on Foreign Policy at the Cabinet Secretariat of the Prime
Minister’s Office of Japan, advising three Prime Ministers under the DPJ government. He is the author of
How to Enhance Japan’s Diplomatic Power (Kodansha, 2008) and Second Korean War Scenario and Japan(Kodansha, 2007).

77

Takashi Terada

Takashi Terada is Professor of International Relations at Doshisha University, Kyoto, Japan. He received his
Ph.D from the Australian National University in 1999. Before taking up his current position in April 2012,he was an assistant professor at the National University of Singapore, and professor at Waseda University,
Tokyo. He also served as a visiting fellow at University of Warwick, U.K., a Japan scholar at Woodrow
Wilson Center, Washington D.C., and an adviser for the US-Japan Institute. His areas of specialty include
international political economy in Indo-Pacific, theoretical and empirical studies of Asia-Pacific integration,
and Japanese politics and foreign policy. His latest works include “Politics on TPP/CPTPP: Turning
Japan into One of the World’s Major FTA Powers” in Critical Review of Abe Administration (Routledge,
forthcoming) and “The Evolution of Japan-ASEAN Relations: Core Moves for Japan’s Initiatives in AsianRegionalism beyond Southeast Asia” in The Oxford Handbook of Japanese Politics (OUP, 2021).

Kazuhiko Togo

Kazuhiko Togo, (Ph.D. 2009, Leiden University) is Visiting Professor, Global Center for Asian andRegional Research, University of Shizuoka. He joined the Japanese Foreign Ministry in 1968. Half of his
career was directly related to Russia, He retired as Ambassador to the Netherlands in 2002. Then he firsttaught in foreign universities, including Leiden University and Princeton University. He served as Professor
and Director of Institute for World Affairs, Kyoto Sangyo University from 2010 to 20. His researchinterests include International politics and Japanese foreign-security policy in East Asia and Identity andcivilizational dialogue. For his publications, refer to http://kazuhiko-togo.com

Hirotaka Watanabe

Hirotaka Watanabe is Professor at the Department of Political Science, Teikyo University. He graduatedfrom Tokyo University of Foreign Studies in 1978, and received M. A. from Tokyo University of Foreign
Studies in 1980. After the completion his doctoral studies in international relations at the Universite de Paris
I Pantheon-Sorbonne in 1986, he served as Assistant Professor, and then Professor of Tokyo University ofForeign Studies. He also served as a Minister, Public Diplomacy at Japanese Embassy in France (20082010) and Editor in Chief of Cahier du Japon (2002-2012). Concurrently serves as Director, Institute ofInternational Relations at Tokyo University of Foreign Studies, Editor in chief, French edition of “nippon.
com.”

78