Japan in the Reiwa Era

The Heisei Era began with the end of “the U.S.-Soviet Cold War” and ended with the beginning of “the new Cold War between the U.S. and China.” Competition for dominance between two major powers ended and has now reemerged in a different form.

American political scientist Francis Fukuyama commemorated the end of the Cold War in 1989 by calling it “the end of history.” During the 1990s, people were basking in the victory of democracy and free economy. It did seem there was nothing to replace democracy and free economy.

U.S.-China confrontation tests Japan’s loyalty

That might have only been a “holiday from history,” as the late American columnist Charles Krauthammer noted. Through the 911 terrorist attacks, the Iraq War, and the Lehman shock in the 2000s, the U.S.’s exhaustion as a superpower was evident. Now a rapidly emerging China is challenging the U.S.

If the U.S. and China can conclude trade negotiations at a summit between President Donald Trump and President Xi Jinping, the trade war may for a while move a step towards resolution. However, that would not necessarily mean an end to the two countries’ competition for dominance in the economic, technological, and security spheres. 

In the midst of the new Cold War, the Reiwa era started. The U.S. and China have different political systems and the two countries are competitors. This may force Japan to chose to side with one or the other. 

In fact, the U.S. government banned federal agencies from purchasing products of Chinese telecom giant Huawei and urges Japan and European countries to follow suit. China has committed itself to expanding its wide-area economic bloc initiative “One Belt One Road.” Beijing has won Italy to its side through the initiative in an attempt to split the Group of Seven countries among which are Japan, the U.S. and European countries.

In the Reiwa Era Japan needs a tough strategy to survive the new Cold War. While joining hands with the U.S., an ally that shares its values, Japan should, needless to say, endeavor to solidify the foundation of democracy and free economy. At the same time, Japan should build a good relationship with China so that it can continue to tap the source of vitality. 

However, Japan should not unconditionally follow the U.S. Tokyo first needs to rectify President Trump’s protectionist trade and isolationism because these roil the international community. China adheres to a one party Communist dictatorship and to a state capitalism incompatible with other countries. In order to press Beijing to change course, Japan, while keeping in step with the U.S., needs to continue to put pressure on China.

At the same time, Japan and China should have their state leaders visit each other on a regular basis to build a stable relationship. China is in an adverse situation due to the trade war with the U.S. This has led Beijing to woo Japan. However, the improvement in bilateral relations should not be temporary. We want China to cooperate with third countries in their infrastructure development through the Belt and Road Initiative based on international standards and the interests of the business community.

The U.S.-China issue is also of a grave concern to Japanese companies. If China compromises with the U.S. and rectifies its problematic practices such as the infringement of intellectual property and forcible technology transfer, it would benefit Japanese corporations to a certain extent. However, with China in mind, the U.S. is tightening screening of investment in the U.S. In the same way, the U.S. is carefully watching Japanese companies. The risk of the new Cold War is undeniably great.

While bearing such a cost, Japan should continue seeking to take advantage of China’s economic and technological strength. Japanese automobiles are selling well in the Chinese market. Didi Chuxing, a taxi dispatch application developed in China, has arrived in Japan. While dealing with the U.S. and China in parallel, seizing business opportunities is Japan’s paramount economic goal in the Reiwa Era.

Champion of freedom and democracy

The new Cold War is not the only challenge Japan faces. The threat of terrorism, as evident in the recent attacks in Sri Lanka, remains. There also remain the geopolitical risks posed by Russia and North Korea that challenge the existing international order. Looking ahead, India’s rise is expected to follow China’s. The world’s frontiers will expand from Asia to Africa.

While taking the lead in increasing the number of like-minded countries that champion democracy and free economy, Japan needs to continue contributing to peace and prosperity in the international community. Japan succeed in having the TPP accord come into force without the U.S. Tokyo should likewise exert influence and make its presence felt on the issues of global warming and aging population.

Edward Luttwak is a well-known American political strategist. In his book “Nihon 4.0” written in 2018, he urged Japan to rebuild a national strategy capable of managing the confrontation between the U.S. and China and a society with a declining birthrate. Luttwak discusses the “Edo system,” which almost completely eliminated civil war; the “Meiji system,” which achieved comprehensive modernization; and the “postwar system,” which transformed a military defeat into an economic victory. He argues that Japan now needs a fourth system.

Japan was unable to find a way to create a fourth system during the 30 years of Heisei. It was a gloomy era, and many of its problems have been carried over to the new era. Now is the time for Japan to draw up a strategy for this era and create a “Reiwa system” that we can boast about to the world.