September 19, 2017 8:15 am JST

ASEAN seeks strong Japanese presence in Asia to counter China

Region expects Tokyo's infrastructure investment, lead in economic cooperation

HIROYUKI AKITA, Nikkei commentator

TOKYO -- Japanese Prime Minister Shinzo Abe on Thursday met his Indian counterpart Narendra Modi -- his closest political friend in Asia -- for the tenth time. The two, both conservative politicians, became good friends about a decade ago, when Modi was a political leader in his home town.

Their prime concern now is how to cope with China's growing influence, about which they must have had a deep discussion during dinner the previous day.

The main focus is how to respond to China's Belt and Road Initiative, a massive infrastructure investment project to dramatically expand land and sea trade across Asia and beyond.

Japan and India find themselves in a delicate position. Although the two leaders did not point fingers at China in their joint statement released Thursday, they tried to keep their neighbor in check by stressing the importance of all countries ensuring the development and use of connectivity infrastructure in an open, transparent and non-exclusive manner.

In May and June, there was an unprecedented controversy within the inner circle of the Abe administration over whether Japan should support the initiative. One of Abe's close aides is said to have even hinted at resigning due to disagreements.

Forces within the government that favor economic relations with China urged the prime minister to express support for the initiative, saying that Japanese companies would otherwise miss the opportunity for infrastructure investment. On the other hand, the Foreign Ministry and National Security Secretariat -- which are concerned over the initiative's impact on security -- strongly objected to the idea.

In the end, Abe expressed support for the initiative on condition that fairness toward foreign companies would be maintained. The prime minister made his remarks in a speech on June 5 at the 23rd International Conference on the Future of Asia, hosted by The Nikkei.

Meanwhile, India has voiced concerns about the Belt and Road Initiative because it runs through Kashmir, over which India and Pakistan remain at odds. Modi secretly conveyed his feeling to Abe during previous meetings.

While it is encouraging to see the government engage in heated debate over economic strategy, it is disappointing that the debate focused on whether Japan will support China's initiative, rather than discussing Japan's own vision.

More Japan, please

China's gross domestic product is now more than twice that of Japan. Despite this, there is a growing call for Japan to play a greater role in Southeast Asia.

Journalists from member states of the Association of Southeast Asian Nations expressed this sentiment at the Japan-ASEAN Media Forum hosted by the Japan Foundation on Aug. 27 and 28. Beijing's massive funding and infrastructure investment in Southeast Asia means that China's influence in the region is inevitable, but forum participants appealed to Japan to offer non-Chinese options.

I previously pointed out that if U.S. interest in Asia wanes due to domestic concerns, the region could be subject to China's "red order." Southeast Asian countries seem to share my concern.

The Belt and Road Initiative evinces both hope and fear. According to forum participants, ASEAN support for the initiative is unanimous, but member states seem to be wary that they will face the same fate that befell Sri Lanka.

Hoping to improve its ports, Sri Lanka took out a huge loan from China under the Belt and Road Initiative. However, the country was unable to pay its debt due to the loan's high interest rate. Late last year, Sir Lanka was forced to agree on a 99-year lease giving China 80% stake in a state-owned company that controls the port.

While ASEAN countries enjoy the financial support and investment from China, they fear ending up beholden to Beijing.

A similar situation may be brewing in the Philippines, where President Rodrigo Duterte successfully enlisted financial support from Beijing by shelving disputes over claims in the South China Sea.

One diplomatic source said Duterte told a Japanese official that his country would support Japan should it go to war with China. Perhaps Duterte was just trying to accommodate Tokyo, but he is genuinely trying to seek a diplomatic balance between China and Japan.

But what does ASEAN expect Japan to do? The country is no match for China in material resources. Moreover, Japan's official development assistance budget amounts to about 430 billion yen ($3.9 billion) this fiscal year, while China plans to provide more than 10 times that for Africa alone over the next three years.

Experts and ASEAN officials have two expectations for Japan. One is to build quality transportation networks and port facilities. According to an ASEAN diplomat, it is well understood that Japan cannot compete with China in material resources. But it can as regards infrastructure investment, which will help reduce dependence on China.

ASEAN countries also expect Japan to promote economic cooperation in the region. The Trans-Pacific Partnership was supposed to have been the conduit for this. But although the TPP was weakened after U.S. President Donald Trump withdrew his country from the pact, Japan continues to support it -- a fact that has not gone unnoticed.

Asian countries are part of China's economic bloc, but they also want non-Chinese options. If Japan can live up to ASEAN's expectations, they just might get those options.

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