To Prosper in the ‘Chimerica’-Dominated World, Japan Should Aim to Become Asia’s Switzerland

By webadmin on 09:34 am Jul 03, 2012
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Susumu Yabuki

Many people think that current US-China relations are comparable to US-Soviet relations during the Cold War. This is completely wrong.

It is often said that the United States and China are rivals — even potential combatants — in areas near Okinawa and the South China Sea. Some Japanese military strategists go as far as asserting that Japan must enlist US military power to pursue a containment policy against an expanding China.

And yet Japan’s stock market reacts to small changes in the outlook for China’s economic growth every day. China is Japan’s largest export market and offers the best hope of growth for many of Japan’s leading companies. This leaves Japan in an awkward position, because it has to balance its deep mutual economic dependency on China with the need to deter possible military confrontation. How can Japan take stances and pursue policies whose outcomes are so clearly at cross-purposes?

It cannot.

But in which direction should the country turn, and where should politicians seek to build broad popular support? No doubt economic concerns should be given priority because they have a greater immediate effect on people’s livelihoods and the standard of living. Under Japan’s pacifist Constitution this choice is natural and imperative: a strong security system without bread is ridiculous.

In the years after World War II, Japan relied on the US-Japan military alliance for protection from Soviet expansionism. This security policy was necessary until the dismantling of the Soviet Union in 1991. Japan’s potential enemy has since been replaced by emerging China, which Japanese vested interests have turned into the new enemy.

The treaties that ended war and established diplomatic relations between Japan and China were signed only 40 years ago. Does this relative newness mean Japan should prepare for a new war with China? No. China has developed nuclear weapons and ballistic missiles. If Japan fights against China on its own, Japan’s defeat is inevitable.

But what about Japan’s alliance with the world’s strongest military power — the United States? Surely the support of the United States would give Japan the edge in any conflict with China. But Japan cannot count on US power in a confrontation with China because the foremost security threat for the United States is its financial deficit.

US Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, acknowledged as much last year. China currently holds nearly $2 trillion in US Treasury, agency and other securities. In any serious confrontation, or in the lead-up to it, China would naturally sell or demand repayment of its US debt holdings. The disastrous consequences for the US economy are now being factored into the US Defense Department’s scenario analyses. The military power of the United States cannot be relied on to turn against its Chinese banker.

This is the background for and foundation of the US-China Strategic and Economic Dialogue, which was first held in Washington in 2009 and completed its fourth edition in Beijing in May this year. This is the reality of “Chimerica” — a relationship of such deep financial and economic interdependence that it defines a new global paradigm, one in which Japan is being increasingly marginalized and its importance downgraded.

Even in the military sphere, the United States is far from challenging China. Instead, the United States has begun trying to direct it in ways that will strengthen order and maintain international public goods.

There are plenty of reasons to be concerned about the trend toward Chinese militarism. Since the Tiananmen protests in 1989, China has increased its military spending every year and stopped democratic political reforms.

The US-Japan security treaty has not enhanced Japan’s security. On the contrary, it has increased Japan’s insecurity by promoting militarism in China and putting China in a strategic position that makes it difficult to withdraw its support for North Korea.

The United States cannot and will not go to war with China to protect Japan. The right move for Japan is to end the defense treaty with the United States. US military bases in Japan should be closed and military personnel sent home. Japan should use diplomacy to achieve win-win resolutions of disputes with China, including territorial ones.

Japan should aim to become an “Asian Switzerland.” This concept, which was widely endorsed immediately after the war, is now barely mentioned at a time when East Asia is gradually descending into military competition. Japan should return to the peace spirit that characterized the aftermath of the war, when the nation decided to work toward world peace.

East Asia Forum

Susumu Yabuki is emeritus professor of economics at Yokohama City University. He blogs at China Watch Room.