How Japan Can Power America’s China Strategy

July 27, 2023 Topic: Japan Region: Asia Blog Brand: Techland Tags: JapanTechnologyDefense SpendingSemiconductorsChina

How Japan Can Power America’s China Strategy

The America-Japan alliance is the cornerstone of the current geopolitical order in the Pacific, and it is time for both nations to work toward strengthening bilateral ties to maintain that status.

Last December, Prime Minister Fumio Kishida unveiled Japan’s National Security Statement (NSS), pledging to increase defense spending to 2 percent of GDP by 2027, turning Japan into the third-largest military spender in the world. While many commentators see this as a reactive move toward Chinese aggression and the Russian invasion of Ukraine, the NSS indicates Japan is deliberately and proactively creating a new vision for the Indo-Pacific: “As a major global actor, Japan will join together with its ally, like-minded countries and others to achieve a new balance in international relations, especially in the Indo-Pacific region.”

To pursue this goal, Japan implemented a new diplomatic posture by moving toward ending trade disputes and normalizing defense ties with South Korea. Additionally, Japan’s NSS calls for strengthened cooperation with the United States: “Japan, while ensuring the bilateral coordination at its strategic levels, will work in coordination with the United States to strengthen the Japan-U.S. Alliance in all areas, including diplomacy, defense, and economy.”

Japan’s NSS, in short, highlights that the country aims to become an increasingly active player in Asia and that increased cooperation with the United States is key to maintaining prosperity for both countries.

Tokyo’s willingness to increase spending and cooperation in defense should be seen as a great boon to America’s defense strategy. According to a recent wargame by the Center for Strategic and International Studies, every single optimistic scenario alteration regarding Japan results in a “major change” toward a successful defense of Taiwan, whereas the worst-case scenario of Japan remaining neutral leads to a decisive Chinese victory. This resulted in the paper recommending U.S. leaders to “[prioritize] deeping military and diplomatic ties with Japan.” In particular, operational coordination between the United States and Japanese military was seen as especially important by “participants who had experience with the Japanese military.” However, increased strategic cooperation between the United States and Japan should not be limited solely to the military sphere; Japan can play a vital role in achieving a broad array of America’s strategic objectives.

Under the Biden administration, an American counter to China’s Belt and Road Initiative (BRI) was proposed to the G7 but has struggled to get off the ground. One of the issues contributing to this failure is, according to one analyst, “little understanding of the policy strategy or delivery mechanisms.” In essence, the American response suffers not only from a lack of funding, but also from an incoherent organizational structure and vision for actually delivering on promised projects.

Meanwhile, Japan already has a system for offering development funds and furthering its foreign policy goals in the form of the Japan International Cooperation Agency (JICA), which disburses funds on behalf of their Official Development Assistance, a subdivision of their Ministry of Foreign Affairs. In fact, this system was established back in 1974, arguably making it an inspiration for China’s BRI. Aside from funding development projects, the agency sends personnel abroad and trains personnel in developing countries, amounting to 197,000 experts sent abroad and 649,000 accepted trainees since 1954. Considering current political realities in the United States and a lack of appetite in Europe to create “grand new projects” due to the war in Ukraine, it is prudent to coordinate with Japan’s already well-established system rather than create a new system from scratch. 

Another pillar of America’s strategy is rebuilding its industrial base, as demonstrated by the passage of industrial policy-oriented legislation such as the CHIPS Act and the Build America, Buy America Act. A key part of this task is improving the quality and quantity of personnel in the industrial sector. Currently, there is a talent shortage in the manufacturing sector which will expand to 2 million unfilled openings by 2030 if current trends persist. The Buy American Act is already struggling to find domestic suppliers for many critical goods, particularly in the construction industry. According to industry officials, no domestic manufacturers exist for dock cranes, trucks, boat lifts, and similar equipment. Furthermore, the recently built Taiwan Semiconductor Manufacturing Company (TSMC) chip fab in Arizona has “...yielded very little benefit for TSMC or Taiwan” due to steep construction costs (ten times higher than in Taiwan) and a shortage of qualified personnel.

Japan, meanwhile, has a strong manufacturing base in those sectors, but lacks design talent and ranks dead last in the Organisation for Economic Co-operation and Development for the average annual entry rate of new enterprises. Considering that America’s venture capital ecosystem remains the largest in the world and accounts for 43 percent of chip design talent demand, it would be in the best interest of both nations to pursue personnel exchanges and corporate cooperation.

This is already occurring in some key industries: Japan’s Rapidus, a company formed to put Japan back on the leading edge of the semiconductor industry, has partnered with U.S. tech giant IBM to manufacture the latter’s 2nm chip design. However, the focus shouldn’t only be specialization (i.e., America providing chip design while Japan builds them): both nations should instead look to improve on each other’s weaknesses. For example, President Joe Biden could pass an amendment to the Buy America Act that allows for a temporary exemption for equipment the United States cannot currently produce in exchange for Japanese companies either sending some of their engineers to America (to teach current firms the best practices for producing the equipment) or opening joint ventures in America (for producing the equipment).

The latter has been done before, albeit under far less amicable terms. Following Toyota’s rapid expansion into the American car market in the 1980s, Congress implemented a voluntary export restraint with the Japanese government, limiting automobile exports to the United States to 22 percent of the U.S. market. This action, alongside the looming threat of import tariffs on Japan, encouraged Toyota to create a joint venture with U.S. automotive manufacturing giant General Motors (GM) to produce cars in America, leading to the formation of New United Motor Manufacturing Inc. The goal was for Toyota to learn how to run a factory in America while General Motors would learn how to implement the Toyota Production System successfully to increase the quality of its cars. This venture proved incredibly beneficial to both companies: Toyota is now the second-largest carmaker in America, operating fifteen factories across the United States and employing around 176,000 Americans, while GM’s procurement and production system is “world-class and every bit as efficient as the Japanese automaker’s system” according to the White House Automotive Task Force. If such a productive outcome could come from a mix of desperation on GM’s part and coercion on Toyota’s part, then even greater heights could be achieved today with America and Japan having clearly aligned interests.

Additionally, on a cultural level, American analysts more seriously cooperating with their Japanese counterparts concerning Beijing will result in a more effective China strategy. Due to their shared and turbulent history, many Japanese diplomats were ahead of the curve when it came to many of the issues that resulted from China’s ascension as a great power. Early last year, Sasae Kenichiro, a former Japanese ambassador to America, wrote in an article by The Economist stating that: “We warned the US: this is not a small compartmentalized issue between Japan and China, but a sign of a growing power in the region” Unfortunately at the time, these warnings fell on deaf ears. As one China specialist at Tokyo University lamented in the same article: “Fifteen years ago, if I talked to [Western colleagues] about the negative aspects of China, I was treated as a right-wing, China-hating, Japanese scholar.”

This needs to change. Ideally, the United States should have nearly as many personnel dedicated to understanding and working with Japan as there are for China. The America-Japan alliance is the cornerstone of the current geopolitical order in the Pacific, and it is time for both nations to work toward strengthening bilateral ties to maintain that status.

Siddhartha Kazi is an undergraduate student studying Industrial Engineering at Texas A&M University.

Image: Shutterstock.