Japan now has to deal with ASEAN on a more equal footing

Author: Mie Oba, Kanagawa University

In 2023 ASEAN and Japan celebrate the 50th anniversary of their official partnership. ASEAN and Japan have both changed dramatically over the past 50 years. So too has their relationship as it has moved towards greater equality, with Japan’s projection as a major power shrinking after the bursting of its bubble economy and the rise of China in East Asia.

Japan became the world’s second-largest economy in the late 1960s, establishing a formidable economic presence in Southeast Asia. Japanese companies exported industrialised goods and established business operations across the region. For the founding members of ASEAN — Indonesia, Malaysia, the Philippines, Singapore and Thailand — industrialisation was still a future project. Japan leveraged its economic power for political influence, providing considerable aid to Southeast Asian countries.­

Japan’s early economic presence in Southeast Asia elicited a backlash in ASEAN countries. The ‘equal’ partnership that the Fukuda doctrine of the late 1970s emphasised did not then represent the reality of Japan–ASEAN relations.

As Japan’s status has diminished, ASEAN’s economic and political status has grown, elevating Southeast Asian interests globally. ASEAN combined GDP reached about US$3.6 trillion in 2022 — 85 per cent of that of Japan — and the region’s on a strong growth trajectory.

Both ASEAN and Japan now face new external challenges. After the end of the Cold War, East Asia enjoyed a stable regional environment under the liberal international order sustained by US hegemony. This stability is now threatened by a changing power balance and escalating US–China strategic competition. Navigating these power dynamics is complex, and neither Japan nor ASEAN countries can simply choose one side or the other.

The alliance with the United States is the core of Japan’s defence and foreign policy strategies. The 2022 National Security Strategy prioritises cooperation with the United States towards long-term peace and security in the region. As US–China competition intensifies, this has implications for Japan–China security relations, already fraught by territorial disputes over the Senkaku/Diayuo Islands and natural resources in the East China Sea. Yet the Chinese economy remains crucial for Japanese businesses. China is Japan’s largest trading partner and was the third-largest destination for Japanese direct investment in 2022.

For ASEAN, China’s assertive behaviour in the South China Sea threatens the free and open, rules-based maritime order in the region. Escalating US–China strategic competition challenges ASEAN’s ‘centrality’ while the emergence of minilateral strategic coalitions such as the Quad and AUKUS diminish the importance of ASEAN’s contributions to regional stability.

At the same time, the ASEAN and Chinese economies have also become inseparably intertwined. The share of ASEAN’s total trade with China grew from 12 per cent in 2010 to 19.4 per cent in 2020, ASEAN as a group is China’s largest trade partner and foreign direct investment from China into ASEAN is steadily increasing.

For ASEAN countries, the United States remains important as a trading partner as well as its largest source of investment. Some ASEAN countries cooperate closely with the United States in security and defence. The Philippines and Singapore lease bases to the US military and — with Brunei, Indonesia, Malaysia, Thailand and Vietnam — participate in annual Southeast Asia Cooperation and Training exercises led by the US navy.

As US–China competition intensifies, both powers are strengthening the economic security dimensions of policy. The Japanese policy elite acknowledges that the existing liberal international order under US hegemony is on the wane, and Japan has begun to adopt a new approach, assuming a role as promoter of the rules-based regional order. The proposal of the ‘Free and Open Indo-Pacific’ is one case in point. Like ASEAN, Japan also accepts that it does not have sufficient power to foster and sustain such a regional order alone.

Though the interests and objectives of Japan and ASEAN on specific issues don’t always coincide, they need to enhance cooperation because both need partners to foster a stable regional order and deal with national challenges. They need to ensure their diplomatic autonomy and maintain their voice to protect against the whims of great power rivalries.

There are three main pillars on which Japan and ASEAN can now build that cooperation.


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