A Comparison of Japanese and Chinese Influence and Experience in ASEAN
While China's Belt & Road Initiative (BRI) has made certain progress
in ASEAN countries, it is now facing a number of fluctuations and risks. In
particular, several major projects have been tossed into the dark in ASEAN and
this carries huge impact. To a certain extent, China's current BRI projects
have gradually become a kind of widely-used diplomatic weight. In contrast,
Japan has implemented its southward policy steadily for decades, and is not
afraid of political risks as it constantly adjusts itself. It is then
interesting to compare the two countries' achievements in ASEAN countries.
Although China has invested heavily in ASEAN countries, according to the
latest data from Fitch Solutions, Japan still won the Southeast Asian
infrastructure competition against China, and its project value is almost 1.5
times that of the Chinese. Relevant data shows that among the six major
economies in the region, Indonesia, Malaysia, the Philippines, Singapore,
Thailand, and Vietnam are worth USD 367 billion in projects related to Japan.
On the other hand, the total value of related Chinese projects is USD 255
billion. These figures highlight the scale of potential demand for infrastructure
development in Southeast Asian countries, and that Japan is more dominant than
According to estimates of the Asian Development Bank, from 2016 to 2030,
Southeast Asia's economy needs USD 210 billion in infrastructure investment
every year to maintain the momentum of economic growth. While the latest data
provided by Bloomberg only includes pending projects, i.e. projects that are in
planning, feasibility studies, bidding, and currently under construction; the
data shows that as of February 2018, Japan's investment was USD 230 billion, while
China's investment was only USD 155 billion. The result is an indication that
in ASEAN countries, Japan's investment is much ahead than that of China.
Vietnam is by far the biggest focus of Japanese infrastructure
participation, with ongoing projects worth USD 209 billion, more than half of
Japan's total. This includes the USD 58.7 billion high-speed railway between
Hanoi and Ho Chi Minh City. Therefore, one can only imagine future prospects of
Japan-Vietnam relations. For China, Indonesia is its main customer. Some
unconfirmed data show that China's investment in Indonesia is USD 93 billion,
accounting for 36% of total foreign investment. The Kayan River hydropower
plant alone is worth USD 17.8 billion.
From the perspective of the entire Southeast Asian region and the number
of projects, Japan has obvious advantages, but its profit margin is low. A
survey in ASEAN shows that 240 infrastructure companies in ASEAN have received
funding from Japan, while China has supported 210 in all 10 Southeast Asian
economies. From the perspective of future cooperation prospects, Japan
continues to maintain its advantages, but China is catching up.
It is worth noting the strategic policy differences between China and
Japan in ASEAN countries.
Japan has always attached importance to ASEAN countries, and this has
never changed. From 1951 to 1977, low-interest Japanese yen loans were issued, while
free economic assistance were provided to Southeast Asian countries. Although the
post-war Japan itself required massive reconstructions, Japan has gradually
connected long-term export channels to Southeast Asia with the export of
manufactured products in replacement of war indemnities. Since then, Japan has
gradually connected its import channels with natural gas resources from
relevant Southeast Asian countries.
In the mid-1970s, Japan encountered crisis in its relations with Southeast
Asia. Saigon, the capital of South Vietnam fell, the pro-American forces in
Laos were also subverted; the Indo-China Peninsula had turned red. In response
to the contingency, then Prime Minister Takeo Fukuda strategically proposed the
"Fukuda Doctrine" in 1977, which stressed that Japan would not be a
major military power and emphasized the establishment of an equal partnership
with Southeast Asian countries. Japan showed "quantitative and qualitative
changes" in its subsequent foreign aid. In the three years from 1978 to
1980 alone, the amount of foreign aid reached US$ 3.3 billion. Its ODA loans
have changed from focusing only on securing raw materials and facilitation of
investment by Japanese companies to simultaneously considering how to bring
"positive externalities" to the local areas, hoping to win the trust
of Southeast Asian countries.
Takeo Fukuda's successors Masahiro Ohira, Zenko Suzuki, and Kiichi
Miyazawa all followed the "Fukuda Doctrine" and made every effort to
promote Japan to the top level of ASEAN countries. In the 1990s, Japan began to
actively work on the construction of a regional system. Japanese Prime Minister
Kiichiro Miyazawa visited Indonesia, Malaysia, Thailand, and Brunei. In
addition to emphasizing the liberalization and democratization of the regional
economy, he also proposed that Japan will actively participate in issues
related to politics and security in the Asia-Pacific region, in order to
demonstrate Japan's diversified cooperation with Southeast Asian countries.
This proposition was later called "Miyazawa Doctrine".
Japan's policy towards ASEAN is flexible and has better strategic
inheritance. Comparing the strategic competition between China and Japan, some
scholars in China also suggest that Japan's implementation of the "green"
connectivity policy for Southeast Asian countries today deserves China's
attention at least at two levels: First, the pursuit of the global interconnection
in the BRI has strategic homogeneity competition with Japan's regional
connectivity policy for Southeast Asia after the end of World War II. China
needs to think about how to seek win-win nodes and avoid conflicts of interest.
Second, Japan continues to adjust its connectivity policy, especially in the 21st
century it has gradually emphasized the "green" label, and used
environmentally friendly means to circumvent the negative externalities of
economic development to win the hearts of the local people. Comparing the engagements of the two countries with ASEAN, historically the people of ASEAN have closer relations with Japan, and less so with China. Therefore, China needs to learn from relevant strategic operating models to promote its own "people-to-people bond" to resolve this issue.
Final analysis conclusion:
As ASEAN takes the position as China's largest trading partner, it has also
become vital to China geographically. However, comparing China and Japan's
influence in ASEAN, China still has to learn a lot from Japan's strategy,
policies and long-term implementation in ASEAN. In the context of the current
suppression of China's geopolitics and geo-economic space, this kind of
reflection and reference is now crucial for China.
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