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ASEAN in the Era of Japan-China Tensions

Diplomatic opportunities or strategic dilemmas?

Paper prepared for the 2014 Goh Keng Swee Command and Staff College Seminar

Singapore

October 9-10, 2014

Takeshi Yuzawa

Associate Professor of International Relations

Hosei University

First Draft – Please do not quote

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Introduction

The early twenty-first century has witnessed growing tensions between Japan and China.

Despite deepening economic interdependence between the two countries for the past two

decades, the bilateral relations have been increasingly dominated by historical and

territorial disputes. The level of the bilateral antagonism seems to be at its lowest point

since the end of the Cold War as no official bilateral summit has occurred despite of the

emergence of the new administration in both countries. For members of the Association of

Southeast Asian Nations (ASEAN), these tensions are not always an unwelcome

phenomenon, providing them with greater diplomatic leeway and opportunities. Indeed, it

is this continuing distrust and rivalry that has allowed smaller ASEAN states to assume the

“driving seat” of East Asian regionalism, exemplified by its leading role in the ASEAN

Regional Forum (ARF), the ASEAN Plus Three (APT), the East Asian Summit (EAS), and

the ASEAN Defense Ministers Meeting Plus (ADMM-Plus).1 In contrast to these views,

this paper argues that Japan-China tensions have increasingly posed a significant challenge

to ASEAN, rather than contributing to the overall maintenance of diplomatic centrality

within regional institutions. Indeed, as their rivalry has increasingly spilled over into

Southeast Asia, the two major powers has begun to exhibit explicit counterbalancing

behavior, drawing ASEAN states more directly into strategic competition. This not only

weakens ASEAN’s political solidarity but also undermines its leading role in regional

institutions.

The objective of this paper is to examine the implications of Japan-China tensions for

ASEAN. The first section of this paper looks at the major causes of bilateral frictions that

have greatly influenced the geopolitics of Southeast Asia, including a challenge to the US-

led regional order, competition for economic and political supremacy in East Asia, and

1 Evelyn Goh, “Institutions and the Great Power Bargain in East Asia: ASEAN’s Limited ‘Brokerage’ Role”,

International Relations of the Asia-Pacific, 11(3), 2011, p.385. Lan Peng Er, “Japan and China in Post-Cold

War Southeast Asia: Competition and Cooperation”, in Lam Peng Er and Victor Teo (eds), Southeast Asia

between China and Japan, (New Castle: Cambridge Scholars Publishing 2012),p.48

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rising tensions over the South China Sea issues. The second section analyzes opportunities

and dilemmas for ASEAN arising from the major powers’ tensions. The third section

explores recent trends in Japanese and Chinese approaches to ASEAN. It argues that both

Japan and China have increasingly bypassed ASEAN-led institutions and expended more

energies to exclusive approaches to Southeast Asia, most notably strengthening strategic

partnerships with specific ASEAN countries and promoting minilateral cooperation based

on an ASEAN+1 framework. The fourth section assesses the impact of their changing

approaches on ASEAN. It contends that these exclusive approaches significantly increase

the risks of ASEAN’s disunity as well as the weakening credibility of ASEAN’s centrality

in regional institution-building.

1. Sources of Japan-China tensions

The growing antagonism between Japan and China has increasingly become part and

parcel of daily life in East Asian international relations. The bilateral relations have

significantly worsened in recent years due mainly to historical and territorial disputes,

ranging from rancor over official visits to the Yasukuni Shrine to jurisdictional challenges

over the control of Senkaku/Diaoyu Islands. Although these historical and territorial issues

have remained as major sources of Japan-China frictions, the bilateral relations have

increasingly been strained by broader strategic considerations involving Southeast Asia.

The section examines three major sources of bilateral frictions that greatly influence the

prospects of ASEAN.

The first factor is growing disagreement over the legitimacy of US presence and its

centered order in East Asia. The changing power distributions in East Asia have generated

deep uncertainty about prospects for regional stability. Rapid growth in the economic and

military capabilities of China coupled with the relative decline of both American and

Japanese power have opened a window of opportunity for China to reshape regional order

in accordance with its preferred norms and rules. While Japan is an ardent supporter of the

US-centered regional order that encompasses liberal norms of democracy, human rights

and the rule of law, it is still unclear about China’s vision of regional order. Although

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Chinese leaders stress a “peaceful rise” discourse and understand the importance of a US-

led liberal order for China’s continuing economic growth, it is still debatable whether

China seeks integration into the existing order. China’s political ideology and economic

model, which are incompatible with the values and norms enshrined in the liberal order,

have increasingly gained international legitimacy, at least among the autocratic countries,

and this has fueled China’s confidence in reshaping the international order to suit

themselves 2 China’s nonnegotiable claims over “core national interests”, such as

reunification with Taiwan and territorial claims in disputed areas have further reduced the

incentives for China to endorse the US-led order as Washington’s posture towards such

Chinese claims has become stiff.

Indeed, whether China is a revisionist challenger or not, it has already begun to challenge

the legitimacy of US presence in the region, further straining relations between Japan and

China. Since the late-1990s, China has called for the building of a multi-polar world and

questioned the legitimacy of US centered bilateral alliance networks as the manifestation of

“Cold War thinking”.3 China’s soured view the US is based on a series of US initiatives for

upgrading its alliance networks since the mid-1990s, exemplified by the revision of the

defense guidelines for the Japan-US alliance in 1997 that expanded the scope of the

alliance beyond the defense of Japan to include the entire Asia-Pacific region. Many

Chinese policy-makers have regarded US moves as an attempt to inhibit China’s rise.4 The

Obama administration’s “rebalancing” towards Asia strategy that began in 2009 that aims

to enhance the American military presence in Western Pacific and military cooperation

with its security partners has bolstered such China’s concern.

2 Randall L. Schweller and Xiaoyu Pu, “After Unipolarity: China's Visions of International Order in an Era

of U.S. Decline,” International Security, 36( 1) ,2011, ,pp.60-2

3 Rosemary Foot, ‘China in the ASEAN Regional Forum: Organizational Processes and Domestic Modes of

Thought’, Asian Survey, 38 (5),1998, p. 435.

4 Thomas J. Christensen, “China, the U.S.-Japan Alliance and the Security Dilemma in East Asia”,

International Security, 23 (4), 1999, pp49-80.

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As a part of its efforts to dilute US regional presence and influence, China has used

regional institutions, in particular the ARF, to question the legitimacy of the alliance,

aiming to weaken US relations with its Asian allies and strategic partners, in particular

those in ASEAN.5 In addition, China has also endeavored to promote a regional political

and economic entity excluding the United States. As will be discussed in more details

below, China’s attempt to promote East Asian regionalism and community building based

on the ASEAN+3 (APT) reflects such Beijing’s ambition.

China’s diplomatic offensive against the US regional presence has raised concerns on

the part of Japanese policy-makers who regard it as the linchpin of regional order.

Combined with China’s growing military strength and its assertiveness in the East and

South China Seas, such Chinese moves have further driven Japan’s effort to harness the US

presence and existing order in the region. As will be examined below, Tokyo has pushed

back China’s offensive by floating its own vision of East Asian regionalism that is more

compatible with major components of the existing US-led regional order, including US

bilateral alliances and liberal democratic norms.

The second factor is the growing competition for economic and political influence over

Southeast Asia. Unlike political and security relations, economic relations between Japan

and China have been deepening with the rapid development of economic interdependence

over the past decades. While China has served as the largest market for Japan’s exports and

a major destination of foreign direct investment (FDI), Japan has been the leading supplier

of manufacturing technology to China.6 However, this growing economic interdependence

has not necessary led to a stable political relation. Although Japan has realized the critical

importance of China’s continuing economic growth for its own economic development,

China’s economic rise has also raised concerns on the part of Japanese policy-makers that

5 Foot, “China in the ASEAN Regional Forum”

6 Robert Shutter, Chinese Foreign Relations: Power and Policy since the Cold War, (New York: Rowman

&Littlefield, 2010) pp.174-5.

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Beijing would eventually displace Tokyo as the economic leader of East Asia. 7 Such

anxieties began to surface in 2000 when China floated a proposal for the China-ASEAN

FTA (CAFTA) at the APT Summit. According to Terada, Japanese policy-makers saw the

Chinese proposal as a significant challenge to Japan’s economic presence in Southeast Asia,

worrying that Beijing could use the CAFTA as a tool of eroding Tokyo’s extensive

investment networks and trade ties with Southeast Asian countries.8

China’s motivation to promote the CAFTA was influenced by various factors, such as the

need to erase ASEAN’s anxieties about China’s economic rise and the desire to strengthen

its bargaining power within the international trading regime through the promotion of a

regional FTA. However, as Japanese policy-makers worried, Beijing’s motivation also

came from its intention to offset Tokyo’s economic influence over Southeast Asia. In the

late 1990s, Chinese officials witnessed the excess of Japan’s economic influence on

Southeast Asia, moving beyond trade and investment to financial and monetary affairs.

This Chinese perception stemmed in part Japan’s leadership role in combating the 1997

Asian financial crisis, represented by its proposal for an Asian Monetary Fund in 1997, and

in the formation of the Chiang Mai Initiative (CMI) in 2000. Japan’s active financial

leadership provoked not only China’s suspicions of Tokyo’s intention but also the long-

standing geopolitical rivalry between them.9

The opportunity for challenging Japan’s economic influence arose in the wake of the

regional financial crisis. Beijing’s decision not to devalue its currency thereby preventing

the escalation of the 1997-8 financial crisis somewhat ameliorated ASEAN’s perception of

China. This, in turn, encouraged Chinese leaders to make drastic economic overtures

7 Glenn D. Hook, Julie Gilson, Christopher W. Hughes, Hugo Dobson, Japan’s International Relations:

Politics, Economics and Security, Third Edition, (Abington:Routledge, 2012), P.226

8 Takashi Terada, “The Origins of ASEAN+6 and Japan’s Initiatives: China’s Rise and the Agent-

Structure Analysis”, The Pacific Review, 23(1), pp78-80.

9 Gregory Chin and Richard Stubbs, “China, Regional Institution-Building and the China-ASEAN Free

Trade Area, Review of International Political Economy, (18) 3, pp.284.

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towards ASEAN that would enhance its economic profile vis-à-vis Japan.10 In response to

the CAFTA, Japan proposed the promotion of a Japan-ASEAN Comprehensive Economic

Partnership (JACEP) in January 2002.

The Japan-China competition for economic supremacy in East Asia soon spilled over

political domain when the two countries began to project competing visions of East Asian

regionalism and regional community-building. Their competition in this regard is closely

related to their disputes over the legitimacy of the US-led order in East Asia and centers

around the two different model of regionalism: inclusive or exclusive regionalism. During

his official visit to Singapore in January 2002, Japan’s Prime Minister Koizumi proposed

the creation of a regional community through “expanding East Asia cooperation founded

upon the Japan-ASEAN relationship”.11 While stressing the importance of Japan-ASEAN

partnership as a basis of a regional community, Koizumi made it clear that his concept of

an East Asian Community (EAC) was an inclusive entity, consisting not only East Asian

countries but also Australia and New Zealand. Japan’s inclusion of the two developed

democratic countries into the EAC reflected its fear that Chin could easily occupy the

center stage of the EAC if its membership is dominated by non-democratic developing

countries whose preferred values and norms are relatively congruent with that of China.12

China responded the Japan’s EAC proposal by pushing the idea of promoting a regional

FTA and an EAC based on the APT framework. China also acceded the ASEAN’s Treaty

of Amity and Cooperation (TAC) in 2004 for reassuring its ASEAN neighbors.13 In 2005,

regional countries agreed to the formation of the EAS in 2005, comprised of the APT

10 Chin and Stubbs, “China, Regional Institution-Building”, pp.284-5.

11 Terada, “The Origins of ASEAN+6 and Japan’s Initiatives”,p.72

12 ibid, p 80.

13Phillip C. Saunders, “Managing a multifaceted relationship between USA and China”, in Suisheng Zhao

(ed), China-US Relations Transformed: Perspectives and Strategic Interactions, (Abington: Routledge,

2007p.134.

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countries and three non-East Asian countries: India, Australia, and New Zealand. The

emergence of the EAS, however, was not the result of the convergence between two

competing visions of regionalism. In fact, China has steadfastly pushed the APT as the

main platform for an EAC and has seemingly diluted its commitment to the EAS especially

after the United States formally joined in 2011. The EAS has merely encouraged Japan’s

initiative for inclusive regionalism, exemplified by its proposal for the Comprehensive

Economic Partnership (CEPEA) in 2007, a regional FTA consisting of all members of the

EAS.

The third strategic factor contributing to the Japan-China rivalry is the escalation of the

territorial disputes in the South China Sea. Until recently, the South China Sea did not play

a significant role in the status of Japan-China relations. However, since 2009, as tensions in

the South China Sea have dramatically escalated, the Japanese government has begun to

publicly raise its concerns about the situation, in particular targeting China’s assertive

behavior, despite its status a non-claimant state. For instance, reflecting on the oil rig

incident in the South China Sea in May 2013, in which Chinese vessels rammed

Vietnamese patrol ships trying to prevent Beijing from putting its oil drilling rig near the

Paracel Islands, Japan’s Prime Minster Shinzo Abe commented that “I am concerned about

tensions in the region resulting from China’s unilateral drilling activity”. 14 Japan’s Chief

Cabinet Secretary Yoshihide Suga also echoed the view that “We recognize this incident to

be part of China’s unilateral and provocative maritime activities”.15

Chinese reactions to these Japanese verbal interventions in the South China Sea are

hostile enough to raise the bilateral tensions since Beijing sees these interferences as a

serious challenge to Chinese sovereignty. For instance, in response to the above Abe’s

comment on China’s behavior, China’s Foreign Ministry Spokesman argued that “the real

purpose of his comments is to get involved in the South China Sea dispute to pursue his

14 “Japan, Vietnam blame China for maritime tensions”. Kyodo News Agency, May 22 2014 LexisNexis.

15 “S. China Sea spat: Japan voices 'strong concerns'; Tokyo reacts to reports of Chinese ships ramming Viet

vessels”, The Straits Times, May 9, 2014.LexisNexis.

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own hidden political objectives”.16 A similar skirmish also occurred in 2014 at the Shangri-

La Dialogue meeting, in which China’s top military delegate criticized Abe’s indirect

remark about China’s assertiveness in the South China Sea as “a provocative challenge to

China”. 17

There are mainly two reasons why Japan has sharply reacted to the growing instability of

the South China Sea. First, any conflicts in the South China Sea could disrupt Japan’s

regional sea-lines of communications (SLOC). As a trading state, Japan’s economic

prosperity greatly depends on the safety of navigation in its SLOC, which assures its access

to global markets and overseas energy. For instance, around 70% of Japan’s oil imports

come through the South China Sea. Therefore, the instability of the South China Sea,

which would significantly endanger Japan’s main shipping route, is a Japanese national

security concern.18

Secondly, Japanese policy-makers believe that the situation of South China Sea is

closely linked to that of the East China Sea. It is a common understanding within Japan’s

security policy community that China’s basic strategy towards its maritime disputes is

designed to incrementally expand its de facto authority over the disputed area by

pressuring and coercing rival claimants through the deployment of its superior navy and

other maritime agencies.19 In 2012, Japanese policy-makers were able to observe such

Chinese behavior in the South China Sea, exemplified by its blocking of Filipino fishermen

from approaching the Scarborough Shoal, located within the Philippine’s Exclusive

Economic Zone (EEZ). They thereby worry that the expansion of China’s de facto

16 “China urges Japan PM to stop "provocative actions”, BBC Monitoring Asia Pacific. May 23, 2014.

LexisNexis.

17 “China urges Japan PM to stop “provocative actions”, BBC Monitoring Asia Pacific, May 23, 2014.

18 Ian Storey, Japan’s Maritime Security Interests in Southeast Asia and the South China Sea Dispute,

Political Science, 65(2) 2013,p.146.

19 Ibid, p.146

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authority over the South China Sea could encourage the Chinese navy and other maritime

agencies to take more assertive actions in the East China Sea.20

In addition, Japan’s increasingly candid expression of concern about China’s behavior in

the South China Sea is partly triggered by recent deteriorating situations in the East China

Sea. In September 2010, Japanese authority detained the captain of a Chinese fishing boat

that had collided with two Japanese Coast Guard vessels near the Senkaku Islands,

generating a dangerous standoff between Tokyo and Beijing. Those tensions further rose in

September 2012 when the Japanese government nationalized the Senkaku Islands. This

Japanese decision provoked anti-Japanese demonstrations in hundreds of cities across

China, with rioters destroying many Japanese shops and production facilities. China also

initiated explicit measures to undermine Japanese sovereignty claim, including the massive

increase of Chinese patrol vessels in the vicinity of the Senkaku Islands and the setting up

of an Air Defense Identification Zone (ADIZ) covering the airspace over the Islands.

2. Opportunities and dilemmas for ASEAN

Japan-China tensions stemming from these strategic issues have provided enormous

political opportunities to ASEAN. Most notably, the on-going rivalry and competition

between Japan and China have helped strengthen ASEAN’s centrality in regional

institutions and regional community-building in East Asia. As noted above, their disputes

over the legitimacy of the US-led order and contests for regional leadership have led both

Japan and China to promote its own vision of a regional community based on ASEAN-led

regional institutions, such as the APT and the EAS. This indicates that Japan and China

have used regional institutions for counterbalancing purpose, but their engagement of

regional institutions mean that they acknowledge ASEAN’ centrality in regional

institution-building. ASEAN diplomatic centrality is likely to persist as long as Japan and

China continue to engage the existing regional institutions as a basis of a regional

community.

20 ibid, p.146.

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The bilateral tensions have also drawn greater political and economic engagements with

ASEAN from Japan and China. In order to attain comparative advantage in the above

strategic issues, the two major powers need to expand its political and economic leverage

over the rival state by seeking political support from regional countries, especially ASEAN

states. This has led them to engage competition for closer political, economic and security

ties with ASEAN since the early 2000, exemplified by the contesting proposals for an

ASEAN-centered FTA. In addition, China’s diplomatic offensive against US regional

presence has also led Washington to renew its engagement with ASEAN countries,

offering enormous political and security benefits to them.21

However, the major powers tensions have also posed strategic dilemmas to ASEAN. In

long run, the continuity of Japan-China tensions would significantly undermine ASEAN’s

diplomatic centrality within regional institutions. As mentioned above, the “legitimacy” of

ASEAN’ centrality has been mainly sustained by ASEAN’s neutrality in its relations

dealing with the major powers. However, ASEAN cannot afford to keep exploiting the

political opportunity arising from their frictions since the “credibility” of ASEAN’s

centrality largely depends on its ability to promote meaningful cooperation within regional

institutions. Regional institutions are unlikely to develop meaningful cooperation as long as

the deep distrust and tensions between the major powers continue. ASEAN’s diplomatic

centrality has already been subject to severe criticism for the inability of ASEAN-led

regional institutions to address sources of tensions among major powers.22

In addition, the continuing escalation of tension between the major powers poses another

risk, that is, the weakening of ASEAN’s political solidarity. The tendency of the major

powers to use regional institutions for counterbalancing purpose means that these

21 Evelyn Goh, The Struggle for Order: Hegemony, Hierarchy, and Transition in Post-Cold War East Asia,

(Oxford: Oxford University Press, 2013),p. 383.

22 Rizal Sukma, “The Accidental Driver: ASEAN in the ASEAN Regional Forum in Sukuma”, in Jurugen

Haacke and Noel M. Morada (eds)., Cooperative Security in the Asia-Pacific: The ASEAN Regional Forum

(Abington: Routledge, 2010),pp. 115-7.

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institutions have to some extent contributed to an intensification of tensions. As we have

seen, the emergence of the APT and the EAS has helped to exacerbate their regional

leadership strains, providing them with a new instrument for counterbalancing. This

escalation is viewed by ASAN members as beneficial as long as their counterbalancing

game takes place within regional institutions. However, if the level of bilateral antagonism

further increases and prospects for peaceful coexistence decrease, Japan and China are

more likely to engage radical counterbalancing approaches, promoting bilateral and

“minilateral” cooperation with like-minded countries, in order to maintain or strengthen its

own sphere of influence. These “exclusive” approaches are likely to not only weaken

the raison d'etre of regional institutions but also reduce the diplomatic autonomy of

individual ASEAN states, making extremely difficult for them to maintain their neutrality

between the major powers. Given differences in interests and strategic orientation among

ASEAN states, this would significantly increase the risk of ASEAN’s political unity.

As will be discussed below, these risks pertaining to Japan-China tensions have become

increasingly serious as both Japan and China have begun to adopt more aggressive

exclusive approaches to ASEAN, including the strengthening of their bilateral cooperation

with specific ASEAN countries and the promotion of exclusive cooperation within the

ASEAN+1 framework.

3. New dimensions in Japanese and Chinese approaches to Southeast Asia.

2-1. Japan

One of a noticeable change in Japan’s approach towards Southeast Asia in recent years is

its attempts to construct a cohesive security relationship with specific Southeast Asian

countries that more or less share Japan’s concern over the rise of China, namely the

Philippines, Vietnam, and Indonesia, while strengthening its strategic relations with

ASEAN based on “universal values”. The emergence of this new strategic approach mainly

reflects Tokyo’s realization of the need for a more proactive approach to counter China’s

growing power and influence in the region.

13

Since the late 2000s, the Philippine has become the major target of Japan’s new approach

to Southeast Asia due to the existence of shared strategic interests between the two

countries, among other things, China’s assertiveness in the South China Sea and the

maintenance of American military presence in East Asia. Since the conclusion of their

strategic partnership in 2009, Tokyo’s focus has increasingly been centered on the

development of maritime security cooperation, in particular the enhancement of the

Philippines’s maritime capability. For instance, in June 2013 the two countries agreed to

promote capacity building cooperation, especially in the field of humanitarian assistance

and disaster relief (HA/DR). Moreover, in July 2013, during his visit to Manila, Prime

Minister Abe announced that Japan would provide ten patrol boats from official

development assistance (ODA). The two governments also agreed to further enhance their

maritime security cooperation, including joint exercises between their Coast Guards. 23 In

addition, Japanese government has provided diplomatic support to the Philippines’ pursuit

for international legal arbitration resolving the territorial dispute with China that began in

2013.24

Japan has also been forging a strategic relationship with Vietnam, a country confronting

with China in the South China Sea. In July 2010, the two countries lunched a sub-cabinet

level ‘two-plus-two’ dialogue, involving foreign and defense officials in order to

considering possible fields of bilateral cooperation. This has resulted in the issue of “the

Joint Statement on the Strategic Partnership for Peace, and Prosperity in Asia” issued in

October 2010 and “the Memorandum of Understanding on Japan-Vietnam Defense

Cooperation and Exchange” issued in 2011, in which the two countries agreed to initiate

regular vice-minister level talks and to promote bilateral cooperation on HA/DR. In 2013,

reflecting Vietnamese acute need to strengthen its maritime patrol capability due to the

intensification of Vietnam-China tensions over the South China Sea issue, Tokyo began to

offer capacity-building support to Hanoi. For instance, Japan has played a major role in the

23 East Asian Strategic Review 2013-14 (Tokyo: National Institute for Defense Studies, 2014) pp.151-3.

24 Storey, “Japan’s Maritime Security Interests in Southeast Asia”, p.154.

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establishment of the Vietnam’s Coast Guard. Tokyo is now planning to provide six patrol

ships.25

Finally, Japan has also moved forward stronger security ties with Indonesia. Japan has

long maintained close political and economic relations since 1970s due mainly to

Indonesia’s significance as a vital supplier of natural resources. Tokyo’s interest in Jakarta

as a strategic partner has rested on its view that Indonesia as the emerging democratic

power shares core strategic interests with Japan, such as the maintenance of the US-led

liberal order and China’s growing assertiveness in the South China Sea. Although concern

about the rise of China has not necessary been shared to the same degree between the two

countries, Indonesia has strongly backed Japan’s efforts to deflect China’s bid for strategic

dominance, represented by its support for the expansion of the EAS membership to include

Australia, New Zealand, and India. The two countries have also strengthened security

cooperation since the conclusion of their strategic partnership in 2006. Like the case of

Vietnam, Japan made a significant contribution to the creation of Indonesia’s Coast Guard

by providing technical and financial assistance, including the donation of patrol ships.26 In

July 2011, the two countries agreed to enhance their strategic partnership by initiating

annual ministerial-level talks on political, economic and security issues separately. At the

same meeting, they also stressed the need to create rules for ensuring maritime safety under

the framework of the EAS.27

Another new aspect of Japan’s approach to Southeast Asia is its attempt to strengthen a

strategic relation with ASEAN based on “universal values” such as democracy, human

rights and the rule of law. This new orientation of Japan’s approach to ASEAN became

25 Thuy Thi Do, “Locating Vietnam-Japan’s Strategic Partnership in the changing East Asian Political

Landscape” JIIA Report (Tokyo: The Japan Institute of International Affairs, 2013)

26 Corey J. Wallace, “Japan’s Strategic Pivot South: Diversifying the Dual Hedge”, International Relations of

the Asia-Pacific,13 (3),2013, p.502.

27 “Japan, Indonesia to cooperate to enhance regional maritime safety”, Kyodo News Service, June 18, 2011.

LexisNexis.

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particularly evident in January 2013 when Prime Minister Abe outlined the five major

principles of Japan’s ASEAN diplomacy. The first principle called for Japan-ASEAN

cooperation on the protection and promotion of “universal values, such as freedom,

democracy and basic human rights” while the second principle stressed the promotion of

“the rule of law to govern the free and open seas”.28

Japan’s emphasis on universal values in its ASEAN diplomacy originated from the

concept of “values-oriented diplomacy” developed by Japanese officials during the first

term of the Abe administration (2006-7). Although Japanese leaders had already stressed

the importance of universal values through their foreign policy addresses as early as 2000s,

their attachment to those values became more apparent to the public with the delivery of a

major foreign policy speech by Foreign Minister Taro Aso in November 2006. In that

speech, Aso introduced the concept of “values-oriented diplomacy” as a new pillar of

Japan’s foreign policy. He argued that the values-oriented diplomacy is an approach that

stresses the importance of universal values, including “freedom, democracy, and

fundamental human rights, the rule of law, and the market economy” and that the objective

of Japan value’s oriented diplomacy is to establish “the arc of freedom and prosperity”,

consisting of democratic countries that “line the outer rim of the Eurasian continent” .29

It is the rising tensions and rivalry between Tokyo and Beijing that has given strong

impetus to Japan’s shift towards values-oriented diplomacy. China’s increasingly serious

challenges to Japan’s national interests, such as the maintenance of the existing regional

order, including the status-quo in the East and South China Seas, as well as its economic

supremacy in East Asia, have led Japanese policy-makers to consider ways of deflecting

China’s influence. Given the relative decline of Japan’s economic clout over East Asia vis-

28 “Factsheet on Japan-ASEAN Relations”, Ministry of Foreign Affairs of Japan , February 2013)

29 “Arc of Freedom and Prosperity: Japan's Expanding Diplomatic Horizons Speech by Mr. Taro Aso,

Minister for Foreign Affairs on the Occasion of the Japan Institute of International Affairs Seminar”,

November 30, 2006.

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à-vis China, Japanese-policy makers have found the projection of liberal democratic values

to be a promising instrument for attracting regional countries.30 As Yoshimatsu argues;

The universal values were convenient vehicles for Japan’s regional diplomacy. On

the one hand, the advocacy of these values enabled Japan to show clearer leadership

in looking ahead to the future of East Asia. On the other hand, Japan could use them

as a tool to reduce the influence of China, which has difficulty in realizing these

values.31

In addition, the rise of Japan’s value-based ASEAN diplomacy has also been influenced

by ASEAN’s growing attention to “universal values” in its political discourse. In the

ASEAN Political-Security Community Blueprint adopted in 2009, ASEAN declared the

creation of “a rules-based community of shared values and norms” by “promoting the

principles of democracy, the rule of law, good governance, human rights, and freedoms”.32

Although there are wide disparities among ASEAN members over their political will to

promote universal values, it is the Japanese expectation that Japan could attain an

advantageous position vis-à-vis China in their competition for influence over Southeast

Asia by appealing the values that ASEAN places high values on.

2-2 China

Until 2008, China had steadily consolidated its relations with ASEAN and individual

ASEAN member states by displaying relatively restrained behavior, hence successfully

enhancing the credibility of a “China’s peaceful rise” discourse in Southeast Asia.

However, China’s growing assertiveness in the South China Sea since 2009 has cast doubt

30 Yul Sohn, “Japan’s New Regionalism, China Shock, Values, and the East Asian Community”, Asian

Survey, 50 (3), 2010.

31 Hidetaka Yoshimatsu, “Japan and Regional Governance in East Asia: Expanding Involvement, Stagnated

Influence?”, Nicholas Thomas (ed), Governance and Regionalism in Asia (Abington:Routledge 2009), p.85.

32 ASEAN Secretariat, ASEAN Political-Security Community Blueprint (Jakarta: ASEAN Secretariat, 2009),

2–3.

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once again on the validity of this argument. 33 Rising tensions in the South China Sea has

alarmed many of Southeast Asian countries, thus providing Japan and the United States

with golden opportunities to intensify their rebalancing efforts. In order to secure its

political and economic interests, Beijing has begun to redouble its effort to strengthen its

relations with several ASEAN states. This is evinced by a series of China’s initiatives for

forging or upgrading its strategic partnership with Thailand, Cambodia, Laos, Myanmar,

Malaysia, and Indonesia. Among these countries, it may be said that Thailand, Cambodia

and Laos are the three from whom that China has succeeded to enlist sympathies for its

diplomatic position.

Maintaining a close relationship with Thailand has been as a top priority for Beijing’s

diplomacy towards Southeast Asia. China regards Thailand as a reliable friend, through

which it attempts to ease regional concerns about China’ rise and construct cooperative

relations with ASEAN. 34 China’s economic influence over Thailand has been rapidly

increasing while the bilateral trade has grown seven-fold for the past decade. China is now

Thailand’s second-largest trading partner. Bangkok is also Beijing’s closet military partner

in Southeast Asia. They have conducted joint military exercises in a regular basis and have

even engaged in the joint defense production. In 2012, China and Thailand renewed the

2007 bilateral strategic partnership by signing a second five-year Joint Action Plan on

Strategic Cooperation for 2012-2016. Under this renewed partnership, the two countries

pleaded to increase bilateral trade by 20 % and mutual investment by 15 % annually over

the coming five years.35 Their deepening economic and security ties have enabled China to

successfully elicit Thailand’s sympathy for China on the South China Sea issues. During

33 Phillips C. Saunders, “China’s Role in Asia: Attractive or Assertive”, David Shamburgh and Michael

Yahuda (eds)., International Relations of Asia, Second Edition, (Lanham: Rowman & Littlefield, 2014) p.147.

34 Ian Storey, Southeast Asia and the Rise of China: The Search for Security (Abington: Routledge, 2011)

p.143.

35 China, “Thailand pledge closer cooperation amid gloomy global economy”, BBC Monitoring Asia Pacific,

April 19, 2012 LexisNexis.

18

the official visit of China’s Prime Minister Li Keqiang to Bangkok in 2013, Thailand’s

government expressed its support for the Chinese mantra that “the South China Sea issues

should be resolved peacefully by the sovereign states directly concerned”, indirectly

backing China’s critique of Japan and US verbal intervention in the issue.36

China has also boosted its security and economic relations with another old friend,

Cambodia. In 2010, the two countries signed the Comprehensive Strategic Partnership,

stipulating the strengthening of bilateral cooperation in thirteen fields, including energy,

infrastructure, finance and military.37 Beijing has strongly backed the Hun Sen regime since

its inauguration in 1997 by providing all necessary diplomatic, economic and military

support for its survival. For instance, by 2012 China has provided US$2.7 billion soft loans

and grants to Cambodia, supporting major infrastructure projects.38 China has also made a

significant contribution to the enhancement of the Cambodia’s military capabilities. For

instance, in 2010 China donated 250 military trucks to the Royal Cambodia Army. Like the

case of Thailand, these financial and military incentives have greatly contributed to the

maintenance of Cambodia’s unfailing diplomatic support for China’s international position,

especially regarding the South China Sea. 39 During the official meeting with the UN

Secretary-General Ban Ki-moon in October 2010, Prime Minister Hun Sen opposed the

internationalization of the South China Sea issue, arguing that “the parties concerned

should use existing mechanisms to solve the problem through consultation and should not

36 “Joint Press Statement on Long-Term Program on the Development of Thailand -China Relations”,

Ministry of Foreign Affairs, Kingdom of Thailand, October 13, 2013.

37 “China, Cambodia agree to build comprehensive strategic partnership”, BBC Monitoring Asia Pacific,

December 13, 2010. LexisNexis.

38 Heng Pheakdey, “Chinese investment and aid in Cambodia a controversial affair”, East Asian Forum,

July 16, 2013.

39 Storey, Southeast Asia and the Rise of China, 2011, 176

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try to put pressure on China allying with the United States or Japan”.40

In addition, like Japan China has also outlined a new strategy for promoting a closer

relationship with ASEAN. At the ASEAN-China Summit held in Brunei in October 2013,

in which two sides celebrated the 10th anniversary of the establishment of ASEAN-China

Strategic Partnership, China’s Prime Minister Li Keqiang put forward the “2+7 cooperation

framework” as a blueprint for China-ASEAN cooperation over the next decade, suggesting

the advancement of bilateral cooperation in seven fields. The proposed cooperation

included; 1) concluding the Treaty of Good-Neighborliness and Friendly Cooperation

between China and ASEAN countries, 2) improving the China-ASEAN defense ministers

meeting and strengthening non-traditional security cooperation, 3) upgrading the CAFTA

to increase the amount of the bilateral trade to $1 trillion by 2020, 4) establishing an Asian

Infrastructure Investment Bank (AIIB) to accelerate the construction of connectivity

infrastructure, 5) broadening the scale and scope of the currency swap arrangement to

enhance regional financial cooperation and immunity to risks, 6) building a Maritime Silk

Road (MSR) to promote cooperation on maritime economy, maritime connectivity, and

environmental protection, 7) accelerating exchanges in culture, technology, environmental

protection and other areas.41

Contrary to Japan’s new ASEAN strategy stressing the significance of a normative

sphere of cooperation, China’s ASEAN strategy puts a considerable emphasis on economic

cooperation. This is indicating Beijing’s aspiration to fully utilize its world second-largest

economic power for attracting ASEAN members. Indeed, Chinese economic initiatives are

designed to fulfil ASEAN’s immediate economic needs. For instance, there has already

been high expectation among ASEAN countries that the AIIB would supply much-needed

financial assistance to their national infrastructure projects. ASEAN leaders have also

40 “Cambodia opposes internationalizing South China Sea issue”, BBC Monitoring Asia Pacific”, October 28,

2010. LexisNexis. 41 “Chinese premier puts forward seven-point proposal to boost ASEAN cooperation”, BBC Monitoring Asia

Pacific, October 10, 2013. LexisNexis.

20

welcomed the Chinese proposal for reviewing the CAFTA, especially in the area service

and investment, in the expectation that it would not only address their concerns about trade

deficits with China and but also facilitate Chinese investment in Southeast Asia. 42 These

economic initiatives would greatly increase China’s economic and political influence over

Southeast Asia, further increasing asymmetrical interdependence between China and

ASEAN states.

These economic initiatives can also be seen as Beijing’s effort to enhance its economic

and political influence over East Asia vis-à-vis Tokyo and Washington. For instance, the

formation of the AIIB would considerably dilute Japan’s economic and financial clout in

the region since it would pose a significant challenge to the raison-détente of the Asian

Development Bank (ADB) led by Japan. The AIIB is also expected to facilitate not only

the penetration of East Asian markets by Chinese firms, but also the internationalization of

the Yuan, thus further enhancing China’s economic presence vis-à-vis Japan and the

United States.43

4. The growing shift in the balance between opportunities and risks.

As we have seen, both Japanese and Chinese “exclusive” approaches to individual

ASEAN states have offered huge material benefits to them. While most of littoral ASEAN

states have gained a great amount of maritime security related assistances from Tokyo,

especially capacity building support, Beijing has provided greater economic opportunities

to ASEAN states in the form of investments and soft loans, in particular to those backing

China’s diplomatic positions. However, their exclusive approaches have also exerted

negative impacts on ASEAN, in particular regarding the quality of its political solidarity.

42 ASEAN economic ministers seek to form new maritime silk route jointly, BBC Monitoring Asia Pacific,

August 27, 2014.LexisNexis. 43 Cecilia Tortajada And Asit K. Biswas, “Asian investment bank: Realigning the status quo”. The Strait

Times, August 30, 2014.

21

The risk of “ASEAN’s divide” appeared on the surface in July 2012, when ASEAN

states failed to issue a joint communiqué at the ASEAN Foreign Minister Meeting under

the chairmanship of Cambodia. This was due to a heated confrontation between Cambodia

and the Philippine backed by Vietnam over the issue of whether the final communiqué

should include a critical statement against China’s behavior in South China Sea. Cambodia,

having close political and economic ties with China, rejected the Philippine’s and

Vietnamese suggestions for the inclusion of the statement, trying to save China from

international embarrassment.44

A similar incident occurred again in the ASEAN Foreign Ministerial Meeting held in

Nay Pyi Taw in August 2014. At the meeting, the Philippines sought to build consensus on

its own proposal for “a Triple Action Plan”, which mainly called for the cessation of

provocative activities and the conclusion of the binding Code of Conduct in the South

China Sea.45 However, the Philippine’s initiative was blocked by Cambodia and Thailand,

concerning about Beijing’s negative reaction to the proposal. 46 At the end, the Joint

Communiqué merely stated that “We noted the paper on the Triple Action Plan introduced

by the Philippines”.47

ASEAN’s inability to deal with the South China Sea issue has led to sheer frustration on

the part of the Philippines and Vietnam, and this has further encouraged them to move

towards closer security ties with Japan as well as the United States. However, like the

closer political ties between China and Cambodia, the growing strategic relations between

Japan and these claimant countries would contribute to ASEAN’s discord, encouraging

them to take a bold diplomatic action towards the South China Sea territorial dispute, on

44 Renato Cruz De Castro, China and Japan in maritime Southeast Asia: extending their geo-strategic rivalry

by competing for friends, Philippine Political Science Journal, Vol.34, No.2 p.165 45 “Philippines submits plan to settle dispute with China once and for all”, Business World, October 2, 2014,

LexisNexis. 46 Yomiuri Shinbun, August 10, p.7. 47 “Joint Communiqué 47th ASEAN Foreign Ministers Meeting”, August 8, 2014, Nay Pyi Taw, Myanmar

22

which ASEAN’s consensus is unlikely to emerge. The Philippines’s proactive diplomacy

has not been entirely welcomed by many of ASEAN countries. For instance, while Japan

has reiterated its strong support for Philippines’ legal submission to the UN, Indonesia and

Singapore have been cautious about it, worrying that this would not only provoke a hostile

response from Beijing but also undermine ASEAN’s political solidarity.48 In this regard,

Japan’s strategic supports for the Philippines would help to weaken ASEAN’s political

solidarity regarding the South China Sea issue.

In addition, the major powers’ exclusive approaches to ASEAN have indirectly

undermined the credibility of ASEAN’s centrality in regional institution-building by

decreasing the momentum of multilateral cooperation in these institutions. While both

Japan and China have initiated drastic economic and security initiatives within the

ASEAN+1 frameworks, their attention to regional institutions have significantly lowered in

recent years. The ARF and the EAS have increasingly become a venue for major powers’

self- assertions and confrontations rather than for their collaborations in recent years.

During the past four years, the ARF has been caught up with the major powers’ frictions

over the South China Sea issues, and the major agendas for regional security cooperation,

such as preventive diplomacy and maritime security, have been stalling. The prospect for

the EAS has also been overshadowed by the upsurge of Japan-China tensions as their

skirmish over the South China Sea has intruded into EAS meetings. While regional

“minilateral” FTAs within ASEAN, namely the CAFTA and the JACEP, have steadily

flourished, EAS’s work on a region-wide multilateral FTA, namely the Regional

Comprehensive Economic Partnership (RCEP), has stagnated. During the past a few years,

the EAC has seldom become the subject of their foreign policy debate although both Japan

and China proclaimed as the champion of the EAC, at least until the late 2000s.

Hence, the major powers’ exclusive approaches to ASEAN have helped to decrease the

momentum of regional institutions by marginalizing their agenda for cooperation. This, in

48 “Cool responses to push for arbitration by Manila; Several parties stress dialogue in resolving maritime

spat with China”, The Strait Times. January 23, 2014 LexisNexis.

23

turn, has undermined the credibility of ASEAN’s centrality in regional institution-building.

This is because, as sated above, the maintenance of its credibility mainly depends on the

progress of institution-building.

Conclusion

Japan-China relations have been increasingly strained by their contest over broader

strategic issues involving Southeast Asia. Although their strategic competition has posed

dilemmas to ASEAN states, overall, they have gained enormous political and economic

benefits. In other words, ASEAN states have successfully managed the risks arising from

these dilemmas by enmeshing Japan and China in regional institutions. However, since the

late 2000s, an imbalance between opportunities and risks has developed, gradually shifting

towards the latter. Indeed, as the bilateral tensions escalate, both Japan and China are

increasingly bypassing regional institutions and focusing more on exclusive approaches to

Southeast Asia, notably strengthening strategic partnerships with specific ASEAN

countries and promoting minilateral cooperation based on an ASEAN+1 framework. These

exclusive tendencies are significantly increasing the risk of ASEAN’s disunity as well as of

the weakening credibility of ASEAN’s leadership role in regional institution-building.

Despite this, ASEAN’s centrality in regional institution-building is likely to continue

because there seems to be no substitute for its leadership role. However, the continuity of

ASEAN’s centrality means that regional institutions are likely to remain mostly as the

major powers’ instrument for counterbalancing.

For ASEAN, perhaps the only means for escaping from these risks is to make a more

tangible contribution to the maintenance of regional order. Chiefly, as the regional

grouping aiming to promote a security community in Southeast Asia, ASEAN needs to

play a greater role in tackling major regional security problems, most notably the South

China Sea territorial disputes in order to increase its unified power. Likewise, as the driver

of East Asian regionalism, ASEAN needs to make a more serious effort to promote

meaningful multilateral cooperation that can truly contribute to the enhancement of mutual

trust between the major powers, especially through the ARF and the ADMM-Plus, rather

24

than merely providing opportunities for multilateral dialogues, in order to not only enhance

the credibility of its leading role in institution-building but also the prospects for regional

stability.