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The East Asia Program conducts research on the politics and foreign policies of the countries of East Asia, with a focus on how domestic politics in these countries shape external behaviour. Researchers focus on China, Indonesia, and Myanmar, and commission work by other scholars on the broader region. The program also holds a robust series of dialogues and events on the politics of the region, independently and in partnership with other organisations.

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Abe's mandate: The economic imperative

As predicted, the Liberal Democratic Party (LDP)-Komeito coalition led by Prime Minister Shinzo Abe scored an easy victory in Japan's Lower House election on Sunday. For Abe it was a vital win on a shrewd, strategic gamble.

The LDP under Abe's leadership was judged the only viable option by an electorate craving political stability and economic prosperity. The main opposition party, the Democratic Party of Japan (DPJ), in disarray, remained badly out of favour with the electorate following its brief period in government from 2009 to 2012. Other opposition parties had promised new beginnings in 2012, but the significant support attracted then has largely dissipated over the past two years.

The objective of gaining time drove Abe to call this snap election. Now his coalition has won more than a two-thirds majority and Abe has achieved his goal of a further four clear years in power. He now has the extended mandate critical to his chances of breaking through on the far-reaching agenda he laid down over the past two years.

Abe knows Japan's economy is unlikely to recover lost momentum if he does not take strong and early action to address multiple challenges. Policies that are unpopular with large swathes of the electorate must be implemented. Japan needs sustained economic recovery if it is to hold its own against the challenge to national self-esteem posed by China's economic and strategic growth. China's increasingly powerful regional and global influence has impacted Japan deeply.

Abe's management of priorities will need astute judgment. Driven by the mood of some parts of the electorate and by China's rise, the temptation to pursue issues relating to national security will be great. Initially, however, it will be wise for Abe to focus on the economy.

During his first two years in power, Abe fired two of three 'arrows' of his economic reform program. These strategies were quickly termed Abenomics. Mixed outcomes resulted. The first arrow of Abenomics initiated massive quantitative easing to stimulate the economy; a second huge tranche of easing followed shortly before the 14 December election. The second arrow of Abenomics featured a proposed increase in the consumption tax to 10%, to be achieved in two stages. However, the impact of the first increase to 8% in April 2014 hit more severely than anticipated as Japan's economy fell into a technical recession in October 2014. Prime Minister Abe responded by announcing that implementation of the second increase of a further 2% would be delayed a further eighteen months to April 2017, and based his call for a snap election on that timeframe.

Prime Minister Abe's intention with his first arrow — to stimulate the economy with massive quantitative easing  — was controversial and the merits much debated. On the second arrow, there is a consensus across the political divides that Japan's huge 240% ratio of debt to GDP needs all the help it can get from the extra revenue raised through the increased consumption tax.

The third arrow of Abenomics, which introduces more radical structural economic reform, is not only the most crucial but the most difficult. Abe made little progress on structural reform in his first two years, and this renewed mandate offers a 'do or die' chance.

The major reason for calling the snap election was the need to have sufficient opportunity in the political cycle to seriously address major structural reforms. If the LDP wants to achieve much greater economic efficiency and budget savings nationally, it must open up Japan's notoriously protected and subsidised agriculture sector. It must also address areas of the domestic economy, such as labour practices, that remain bound up in excessive red tape, dragging down productivity. This includes the need to take measures to facilitate entry of a much larger proportion of women into the workplace.

Prime Minister Abe knows such steps are necessary. The key question is whether he will now feel confident to tackle full-on the redoubtable agricultural lobby, for example. This powerful, respected, conservative and ageing lobby group is a cornerstone of the LDP's support base. Japan's keen national interest in concluding the long-delayed Trans Pacific Partnership (TPP) negotiations offers Abe the greatest opportunity to achieve genuine progress on agricultural reform. The extent to which Japan meets the requests for far-reaching agricultural liberalisation demanded by the US in the TPP negotiations will be the acid test of Abe's resolve to push forward on structural reform.

The signing of the Japan Australia Economic Partnership Agreement (JAEPA) in July saw Japan agree for the first time to reduce agricultural protection in  some sectors. This was a curtain-raiser for what Abe will ultimately need to agree for the TPP negotiations to be successfully concluded.

Japan's economic health remains burdened by the enormous cost of recovery from the 2011 earthquake, tsunami and nuclear disasters. With each of its remaining 50 nuclear reactors still idle, Japan's balance of payments is hard hit by the need to import alternative energy sources. Australia's growing LNG industry has benefited greatly from this situation.

Re-starting the vital nuclear reactors, once they are declared safe by an exhaustive assessment process, is LDP policy and Abe clearly wants to implement that policy. While Japanese consumers and industrialists want lower power costs, they are divided about safety of nuclear energy in the wake of the Fukushima nuclear disaster. The decision to restart even the few nuclear reactors that have been assessed as safe remains a tough political decision. Abe may well decide he has the mandate to act but it will be controversial and potentially unpopular.

In a follow-up post, I will examine the security dimensions of Abe's election victory.

Indonesian foreign policy under President Jokowi

In this Lowy Institute Analysis, Aaron L. Connelly previews the likely direction of Indonesian foreign policy under President-elect Joko 'Jokowi' Widodo, highlighting major issues and profiling key advisers.

Japan's continuing confidence in the alliance

The views expressed here are the author's own, and do not necessarily represent those of National Institute for Defense Studies or the Japanese Ministry of Defense.

I am inspired by the recent debate on The Interpreter about the trajectory of Japan's security strategy. Brad Glosserman's Washington Quarterly article, which prompted the debate, sketches the contemporary discourse in Japan. Many do indeed appear to accept the decline of Japan rather comfortably, which, Glosserman suggests, explains why Japan does not go beyond picking 'low-hanging fruit' in economic and security policy. Although I personally wouldn't use this expression, I agree with Brad's underlying message that the series of recently announced policy initiatives do not constitute a radical change in Japan's strategic posture.

Building on Brad's explanation, which focuses on Japan's domestic discussion, I would add another key factor which accounts for why Japan is not changing as fast or as dramatically as a number of external observers, including Hugh White, anticipate. That is: despite the hot debate about the end of the US unipolar moment, the Japanese Government continues to place a high degree of confidence in the leadership of the US, and indeed in the alliance. In other words, from a Japanese perspective, changes in the external environment have not yet reached the point where Tokyo is forced to fundamentally reconsider its post-war strategy, founded upon its alliance with the US.

The Abe Government's National Security Strategy (NSS) captures this perception: 'though its relative influence in the international community is changing, the US remains the country that has the world's largest power'.

Japan's confidence is also underscored by America's repeated commitment to the alliance, powerfully demonstrated by flying B-52s through China's so-called air defence identification zone in November 2013 and President Obama's affirmation of the US treaty obligation to defend the Senkaku Islands. The Abe Government's confidence is also widely shared by the public. According to a recent poll by the Japan Broadcasting Corporation (NHK), 70% of respondents believe the alliance should be maintained or even further reinforced. I am sure this widely shared confidence in the Japan-US alliance shapes opinions and discourses within Japan and encourages many to feel comfortable with the status quo.

Of course, this does not mean the Japanese Government is blind to some of the challenges facing the US both on its international and domestic fronts.

In order to support the US in this difficult time, Japan's policy aims to strengthen and further support the alliance rather than switching to any alternative strategy. This is, at minimum, a fourfold initiative: (1) reforming Japan's security policy and system by establishing the National Security Council, amending some long-standing self-imposed restraints and building a 'Dynamic Joint Defense Force'; (2) adjusting the alliance infrastructure, including the defence cooperation guidelines, in line with China's 'gray-zone' activities and Japan's constitutional reinterpretation; (3) reaching out to third parties who share Japan's interests and values, including most prominently Australia; and (4) attempting to manage the relationship with China.

As Malcolm Cook rightly argues, Japan's policy moves are largely consistent with what the US is trying to do in Asia. Perhaps the only existing discrepancy between Japan and the US is how successful each has been at engaging China. While the US institutionalises its relations with China through the Strategic and Economic Dialogue and regular summit meetings, so far Japan's engagement vis-à-vis China remains stagnant, despite the Japanese Government's consistent calls for dialogue.

The current status of Japan's engagement with China is a concern for the alliance. It is more difficult for regional partners to cooperate with Japan if Sino-Japanese relations remain strained. It may also slow the US-Japan initiative to work with third countries (eg. a Japan-Australia-US or Japan-Korea-US framework). Furthermore, a functioning and healthy Sino-Japanese relationship is clearly advantageous to the alliance. For example, creating a Sino-Japanese maritime communication mechanism (a key agenda of Japan's China engagement) would help Japan and China avoid accidental or inadvertent escalations and hence prevent the US from having to make a difficult decision about how to respond. This is the key reason why the US vocally supports Japan's China engagement.

The past few weeks have seen some positive signs in the Japan-China relationship. On the sidelines of this year's ASEAN Regional Forum ministerial meeting, the Japanese and Chinese foreign ministers held a dialogue for the first time since the Abe Government came to power. In addition, speaking to a visiting Japanese parliamentary delegation on 18 August, Chinese Vice-Present Li Yuan Chao made some positive remarks about the possibility of an Abe-Xi summit meeting when Prime Minister Abe visits China for APEC in November.

How effectively and quickly Japan's engagement with China is restored is still an open question. But there is no question that any progress in Japan's engagement with China will support the US-Japan alliance and thus further strengthen Japan's confidence in the alliance. 

Image courtesy of the White House.

Should the US retrench from South Korea? Part 2: No

A couple of days ago I laid out the arguments for a US withdrawal from South Korea. Today, I lay out the arguments for staying.

This topic is rarely discussed. In the US, the foreign policy consensus for hegemony, forged between liberal internationalists on the left and interventionist neoconservatives on the right, remains strong. It has only just recently come under sustained criticism, likely due to the messes in Iraq and Afghanistan. That consensus takes the US position in Korea as a given. An American withdrawal has not seriously been mooted since the Carter Administration, when it indeed would have been a large mistake.

So what are the benefits of staying?

1. US Forces Korea (USFK) insures that the US retains a strong regional ally in a region the US now deems central

If the pivot to Asia (or 'rebalance' or whatever we are supposed to call it) is to take off, the US will need regional allies. Japan of course is the central US ally in the region. And others are being pushed toward the US by China's belligerent behaviour in the East and South China Seas. But India and the southeast Asian states are not so much pro-American as anti-Chinese.

By contrast, Korea has been a staunch US ally since the 1950s. It has deep inter-operability with the US military. It has never really wavered from the US camp. It even sent soldiers to fight in Vietnam to demonstrate loyalty. It is not the 'reckless driver' that other allies, most notably Israel, have been. While it spends less than it should on defence, South Korea free-rides far less on US power than Europe or Japan. As a percentage of GDP it spends around double what the average US ally does on defence.

The looming unknown question is whether South Korea would line up with the US in a Sino-US or Sino-US/Japanese war. The primary purpose of the pivot is to militarily hedge China (or openly contain it, if you're Chinese). South Korea is wary of this. China is its largest export market, and both Seoul and Beijing share a disturbingly bitter loathing for Japan. Will that draw Seoul and Beijing together? Probably not.

2. China will  claim that the US has 'fled' (or, once the US goes somewhere, it can never leave)

This is the worst possible argument for a US commitment — credibility. Staying some place for no other reason than that staying sends a good 'signal' is not a good rationale.

But it is pretty clear now that the Sino-US relationship is 'sliding from engagement to coercive diplomacy,' as David Lampton puts it. As East Asia enters toward bipolarity, a zero-sum logic will increasingly kick in, in which a US retrenchment will happily be read by China — one can always count on the Global Times — as US capitulation. Whether the US wants to stay in Korea or not, now it can't leave. It's stuck.

Indeed this is one of the great unseen costs of US interventions: once in, America can almost never leave anywhere without provoking a crisis of confidence about its credibility and commitment. In this vein, the time to withdraw from Korea was in the 1990s, at the peak of the unipolar moment, before the Chinese challenge to US power in the western Pacific, and when North Korea was wobbling. That window has probably closed.

3. South Korea, standing alone, might slide toward a semi-democratic national security state like Pakistan

This cost is almost never reckoned by those advocating withdrawal from Korea. Most advocates of retrenchment from Korea, such as Cato's Doug Bandow, assume Korea to be a stable market democracy that can carry the costs of a head-to-head competition with North Korea. This is so economically, but I am not so sure politically. For thirty years the 'republic' of Korea was more like a Prussianised barracks-state dictatorship than a republic, with one dictator, Park Chung-hee, who genuinely seemed like the Korean version of Mussolini (Park's repression was the big reason President Carter wanted to withdraw from Korea as part of his human rights emphasis in US foreign policy). So thorough-going was the McCarthyite propaganda of dictatorial Korea about the 'reds' to the north that many older Koreans will tell you they actually believed that North Koreans had red skin.

Long, enervating national security competitions, like those between Pakistan and India, or North and South Korea, are corrosive to democratic and liberal institutions. South Korea's dictators used to justify repression and illiberalism on precisely these grounds. It is a huge achievement for South Korea that it managed to create real democratic and liberal institutions. It would have been easy for South Korea to stay a militarised faux-democracy like Egypt today, or Turkey and Indonesia earlier on. A US withdrawal that pushed up South Korean defence spending to 7% of GDP might threaten the South Korean experiment with liberalism and democracy, one of especial importance in the future as an Asian model against the authoritarian 'Beijing consensus.'

4. A US withdrawal might in fact encourage the North Koreans to try again

A common assumption, particular on the South Korean left and among more dovish commentators (me included), is that North Korea has no real interest in unification. Unification means the elimination, if not extermination, of the Kimist elite and their privileges. North Korea, we assume, knows it will lose a war. The (North) Korean People's Army (KPA), while very large, is based on Cold War-era technologies. And like many communist militaries, its force structure is based around a repeat of World War II: the KPA has many tanks, armoured personal carriers, and infantry. It could fight and win the 1943 battle of Kursk. It is however unprepared and unequipped for the sort of modern warfare practiced by the US: C4ISR, overwhelming airpower, stand-off strikes facilitated by space power, the rapid destruction of command-and-control, and so on. As such, the KPA would lose a war with combined allied forces. It knows this; hence Pyongyang built nuclear weapons. They are the ultimate deterrent for an otherwise outdated military.

But it is precisely these 'networked battlefield' technologies that the South Korean military lacks. The ROKA (Republic of Korea Army) is still configured around infantry and traditional homeland defence. It lacks many of the high-tech capabilities of the US military, particularly in the air. The US would indeed 'tank-plink' the KPA and rapidly dissociate its units from each other and Pyongyang by destroying command and control. Can the ROKA do this? As the never ending debate over the reversion of OPCON ('operational control') of the ROKA in wartime suggests, most are sceptical. If not, the KPA might actually hold together in the field in a conflict.

The question is tough: if the US left South Korea, would North Korea see an opportunity for victory, to absorb a successful economy and bail-out its own decrepit system?

So what does all this mean? In brief, the debate over US forces in Korea is far less clear than many think. The Cold War is over. North Korea is no threat to the US, and if South Korea ramped up seriously, it could probably win a war without US assistance. On the other hand, US forces are already there. The costs of staying are minimal, and if the pivot is to really define US grand strategy in the coming decades, then South Korea could be a valuable ally if it will tilt against China.

Image courtesy of U.S. Army Korea (Historical Image Archive).

China-Japan competition: Hugh White responds

The four excellent responses to my post on China-Japan relations all present important points about Japan's situation and its options in the face of China's growing power. Just to recap, my piece questioned whether Chinese political and military pressure on Japan in the East China Sea is as counter-productive for China's strategic objectives as many people believe.

That depends of course how Japan and the US react to it. I suggested that it would serve China's aim of weakening US leadership in Asia if it undermined Japan's confidence in the US alliance by exposing America's reluctance to support Japan militarily against China. This would be seen as a win in Beijing even if Tokyo responded by building up its own defences, because China would rather face Japan than America as a strategic competitor in Asia.

My old colleague and valued sparring partner Malcolm Cook argues that if Beijing's leaders thinks this way, they are wrong. He says China's pressure on Japan has strengthened the US-Japan alliance, and cites Abe's measures to 'normalise' Japan's military role as evidence.

This is a key issue: if Malcolm is right than the Chinese really are making a big mistake in the East China Sea. That is why it is so important to test our judgments on it quite carefully. I'd offer Malcolm two sets of thoughts about it.

First, how confident is Tokyo that America really would be willing to go to war with China over the Senkakus? This is not at all a hypothetical issue for Japan. Malcolm seems to think Tokyo has complete faith in US military support. I am much less sure. That's partly because of what people in Tokyo say to me. It's partly because of what Americans say, and don't say. The polite word for America's signals over the Senkakus is 'mixed', and they remain so even after Obama's Tokyo statement earlier this year. Above all, it's because of the military realities. When we look at what would happen if the US actually did fight China over the Senkakus, we can see why Japan would be wise to doubt US support. 

Second, what is Abe's motive in strengthening Japan's military posture? Malcolm is sure that it is to reinforce the US-Japan alliance, not to replace it. I think it is aiming to do both. Prime Minister Abe no doubt hopes that by doing more to support America in Asia it will strengthen US capacity and resolve to preserve the status quo. But I have argued before that this won't work, and it seems that Abe sees that as a real risk. So his new policies are also intended to lay the foundation for Japan to look after itself if US support should fail.  

If these thoughts are right, China would be right to think that its assertiveness will weaken the US-Japan alliance, and leave Japan with only the two choices I mentioned.

However Dhruva Jaishankar's elegant post raises a different possibility.

He suggests that even if Beijing is right to expect a weakening US-Japan alliance, it might be overlooking a third Japanese option. Rather than meekly submitting to Chinese primacy or reconstituting itself as an independent great power confronting China, Japan could join and perhaps lead a coalition of regional powers along the lines recently suggested by Rory Medcalf and C Raja Mohan. This is what Abe himself may well have in mind. 

Rory's and Raja's fine paper deserves a post to itself, but let me just say here that I think the possibility that they and Dhruva raise is less threatening to China's ambitions than one might suppose. That is because, whatever might be its diplomatic attractions, the strategic potential of such a grouping against China is very limited. Ultimately, it depends on how willing its members are to go to war on one another's behalf. In Japan's position, of example, the value of a regional coalition would depend on whether India, Australia, Vietnam and others would be willing to go to war with China to support Japan over the Senkakus. I bet they wouldn't, and I think China would bet that way too. So without America, Japan is on its own.

Of course China is keen to make sure it stays that way. That is why, as Christopher Pokarier quite rightly says, China is going out of its way to stigmatise Japan's defence policy changes as 're-militarisation'. Like him I think this is quite unjustified. Japan has a perfect right to defend itself just as any other country does. It has almost 70 years of good international citizenship behind it, from which the historical revisionism of Prime Minister Abe and his circle does not materially detract. And, above all, Japan today lacks the strategic weight to threaten China or any country that Beijing chooses to support. This is why I don't think we should be too worried about Japan reconstituting itself as an independent strategic power in the new order that is emerging in Asia as the old one passes away.

Which brings me finally to Brad Glosserman's piece. Brad is another favourite sparring partner. As always, he goes straight to the core questions. I absolutely agree with him (and with Malcolm) that the best thing for Japan would be to continue to depend on America. But I do not believe that is possible, because the old regional order in which that posture worked so well for Japan has been overturned by China's new power and ambitions.

The impact on Japan's situation is a simple matter of what we might call Newtonian strategy. As China's wealth and power grows, the costs to the US of conflict with China grow, and the threshold for US support to Japan against China goes up accordingly. It has now gone up far enough that America may no longer be willing to support Japan militarily over issues like the Senkakus which Japan rightly regards as vital. I think perhaps many Americans are in denial about this. I don't think many Japanese are. The Chinese understand it very clearly, and that is the message their actions over the Senkakus are trying to convey.

So what can Japan do? I think it faces a binary choice: accept Chinese primacy or try to preserve its full political and strategic independence. Which path Japan takes will depend, inter alia, on what kind of regional hegemon China might become. If it turned out to be as benign as the US has been in the Western Hemisphere, then a future for Japan as Asia's Canada might not be so bad. But how trusting are the Japanese willing to be? And what have the Chinese done to earn Japan's trust? 

And the alternative? I may have misled Brad by describing Japan's other option as a return to 'great power' status. I do not mean that Japan would need to compete with China for hegemony in Asia, or assert a sphere of influence of its own to match and balance China's. In the right regional setting Japan could establish itself as a great power on equal terms with China, without seeking hegemony or a sphere of influence. For reasons I set out in The China Choice, that regional setting would need to resemble the nineteenth-century European Concert of Powers: a Concert of Asia. Only as an independent great power in that kind of setting can Japan be secure over coming decades, unless it is willing to accept subordination to China.

Image courtesy of the White House.

China links: SCO, Muslim faith revival, graft, China dream, Taiwan, Xinjiang and more

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