While China and America strive to counter each other’s influence in Southeast Asia, Japan is quietly increasing its role in the region. Following the visit of nine Southeast Asian leaders to Tokyo in December to celebrate a half-century of Japan-ASEAN relations, Adrian Ashurst, CEO of Worldbox Intelligence, examines how Japan is becoming the most trusted foreign partner for many countries.
Japan has long been an important source of trade, foreign direct investment (FDI) and aid for Southeast Asia, but it is also increasingly keen to play a military and diplomatic role in the region as it seeks to thwart China’s ambition to dominate the Asia-Pacific region. Moreover, the revival of the Japanese economy will provide Tokyo with the means to finance its expansion in Southeast Asia just as China struggles with much slower growth than in the past.
Shared concerns
Many ASEAN countries – increasingly alarmed at China’s aggressive stance in the South China Sea – are only too eager to encourage a larger role for Japan. Southeast Asian countries are also increasingly wary of China’s Belt and Road Initiative (BRI), concerned that it might become a debt trap, and aware that China’s financial assistance always comes at a price.
Tokyo has its own reasons to be concerned about China’s growing assertiveness. The South China Sea is a vital artery of Japan’s trade, in particular of the oil imports from the Middle East that power the Japanese economy. Tokyo is also alarmed by China’s sabre-rattling over Taiwan – Japan lies just 110 kilometres away from Taiwan, so a conflict there would have immediate consequences for Japanese security. Moreover, Japan has its own potentially combustible territorial dispute with China – over the Senkaku Islands, administered by Japan but also claimed by Beijing.
Regional public opinion polls show that Japan is regarded as the most reliable and trusted nation by ASEAN thought leaders, according to a recent report by Nikkei Asia. The report adds that this favourable view partially reflects decades of official development assistance, valued at nearly US$130 billion to date. Japan is also now ASEAN’s third-largest trading partner, after China and the US.1 Meanwhile, Japanese companies have been moving their manufacturing facilities out of mainland China and shifting production to countries in Southeast Asia.
Arms race
Japan has been ramping up its military spending in response to the growing threat from China. The US says Beijing is engaged in the largest military build-up in history, with spending rising by 75% over the past 10 years, to the equivalent of US$298 billion. In December, the Japanese government approved a 16% increase in defence outlays, to US$56 billion in fiscal 2024. The country is acquiring F-35 stealth fighter jets and other American weapons as Japanese troops increasingly work with allies and take on more offensive roles. Tokyo aims to increase military spending to roughly 2% of GDP by 2027, having capped the defence budget at 1% of GDP since the 1960s.
Japan has also relaxed its traditional restraint on arms exports, launching a new programme known as Official Security Assistance (OSA) in April 2023. Last year, Japan pledged over half a billion dollars in funding for five new patrol boats for the Philippine Coast Guard. Manila had earlier pulled out of several infrastructure projects under the BRI and has pivoted back towards the US in the face of Chinese aggression in the South China Sea.
Japan has also provided patrol ships to Vietnam and Malaysia. At the December 2023 Japan-ASEAN summit, Tokyo signed a 400-million-yen (US$2.8 million) deal to bolster Malaysia’s maritime security capability as part of the OSA. Japanese forces are also planning joint maritime exercises with Malaysia. The latter country is a key supplier of commodities, rare minerals and, potentially, semi-conductors to Japan.
In November 2023, Japan and Vietnam agreed to broaden their security cooperation, work on defence equipment and technology transfers, and start discussing how Japan’s OSA could be used to support the Vietnamese military. Japan has consistently ranked among Vietnam’s largest foreign investors, while trade between the two countries has reached US$50 billion. Japan’s economic influence in Vietnam is likely to grow further. Over 50% of the Japanese companies currently present in Vietnam plan to expand their operations in the country over the next two years, according to the results of a survey published by the Japan External Trade Organisation in December.2
Meanwhile, Japan regards Indonesia as a pivotal country in Southeast Asia. In 2020, Tokyo signed a defence agreement with Jakarta and is offering aid to the country under the OSA. The two countries signed a pact in 2021, allowing the transfer of Japanese defence equipment and technology to Indonesia. They also agreed to jointly develop remote Indonesian islands in the South China Sea. In 2022, Japanese defence forces participated for the first time in Indonesia’s annual Garuda Shield military exercises involving the US and other countries.
China’s assertiveness on the global stage has reinvigorated economic and political ties between the US and Japan, and Tokyo’s increasingly assertive role in Southeast Asia dovetails well with the US foreign policy of containing China. But Japan is also reaching out to countries such as Australia, the UK and India to enhance its economic and military security. It has, for example, embarked on the joint development of a next-generation fighter jet, the Tempest, with the UK and Italy. Tokyo’s attempts to strengthen military and economic ties with ASEAN are part of this security strategy, prompted by concern that US capabilities to defend Japan are limited. ASEAN is likely to be a key beneficiary of Japan’s new strategic outlook, benefiting from increased aid and closer economic ties as Japan seeks to reduce its economic dependence on China.
1 https://asia.nikkei.com/Opinion/Japan-s-close-ties-with-Southeast-Asia-hold-lessons-for-U.S
Source: Worldbox Press Release
About Worldbox Business Intelligence
Worldbox Business Intelligence, headquartered in Switzerland, is a Global API data solution provider of business intelligence and used in data analytics.
With the Global API solution Worldbox Business Intelligence enables clients and partners also a frictionless real time onboarding, KYC and compliance verification while rapid global investigations are provided, if needed.
Worldbox Business Intelligence provides global data in a standardised structure to more than 200 Million companies worldwide. The global network of subsidiaries, branches and desks allows to precisely and efficiently collect data and target key territories for clients and partners.”
“Worldbox Business Intelligence – Bringing Swiss Precision To Data”
Copyright (C) 2024 Worldbox Business Intelligence. All rights reserved.
Our mailing address is:
Worldbox Business Intelligence
Breitackerstrasse 1
Zollikon
Zurich 8702
Switzerland
