Southeast Asia Tests the Allure of Japan’s Global Vision
Southeast Asia Tests the Allure of Japan’s Global Vision
Southeast Asia is a familiar region for the Japanese, where both political leaders and corporate executives feel at ease. While Northeast Asia garners the most attention for great power challenges and historical memory and recently the Quad has redirected attention further south and west, there is no substitute for the arena of Southeast Asia in strategizing about the revival of Japan’s leading role economically and, with the United States, strategically. Over the past decade from 2013 to 2023, three distinctive periods can be discerned in Japan’s thinking, always with the United States and China clearly in the picture.
In the first period from 2013 to 2016, the Abe administration weighed mounting concern about China’s advancing position in Southeast Asia and the limits of the Obama administration’s “rebalance to Asia,” as it sought to intensify its presence in Southeast Asia. In the second from 2017 to 2020, the Abe administration struggled to manage the Trump administration’s pullout from the US-initiated Trans-Pacific Partnership (TPP) with a strong Southeast Asian focus while searching for common ground with Xi Jinping’s Belt and Road Initiative (BRI). Finally, from 2021 to 2023, Abe’s two successors have been more reactive, as Suga and Kishida responded to a cascade of new initiatives from the Biden administration, such as the Indo-Pacific Economic Framework (IPEF), in search of a far-reaching strategy for Southeast Asia, above all, while pointing to its unique role there as critical to realizing shared objectives with Washington. Throughout these three periods, Japan perceived its moves in Southeast Asia in the context of US and Chinese ones.
Japan’s interests in Southeast Asia are nothing new, both geostrategically and economically. From its quest to secure scarce natural resources in the early 20th century, to a surge in corporate commitment to seek new opportunities as the Japanese economy rebounded from the devastation of World War II, Japan has historically turned to ASEAN as the nation’s commercial interests dovetailed with its foreign policy strategy. Over the decades, economic cooperation has remained at the heart of Japan’s relations with the most dynamic area of the Indo-Pacific, but the seismic changes in the geopolitical as well as the economic realities of the region have expanded not only Japan’s ambitions in Southeast Asia, but also expectations for Tokyo’s leadership amongst the ASEAN countries themselves. With no sign of tensions between the United States and China easing, Southeast Asia is emerging as a battleground for strategic competition between Washington and Beijing. For Tokyo, though, Southeast Asia has long been established as the heart of its overseas economic and now increasingly its security interests. It is also at the frontline of testing Japan’s growing influence as a leader of middle powers, and bringing together countries that are facing the challenges of a shifting regional order and pressure from the two competing powers. The question is whether Japan can continue to champion the needs of the countries finding themselves in the middle, amid ever-intensifying strategic competition between China and the United States.
The Heart of Japan’s “Free and Open Indo-Pacific” (FOIP) Vision
As Japan marks five decades of partnership with ASEAN in 2023, it should be noted that until the early 2000s, commercial interests together with energy security concerns had been the drivers of Japan’s economic engagement with Southeast Asia. As a result, private enterprise has had a sizable role in shaping, if not leading, Japan’s economic relations there. At first blush, it is all too easy to conclude that the sharp increase in Chinese capital to the region is not only challenging Japan’s position as the biggest investor in the region, but that Beijing is also threatening to topple Tokyo’s historical dominance in Southeast Asia. The reality, though, is that Japan is only deepening its commitment to the region not just economically, but also politically, militarily, and perhaps most strikingly, socially as well. In turn, expectations are on the rise among the ASEAN countries for Japan to increase investments, demonstrate commitment, and lead in shaping the rules and priorities of the region.
Abe drives focus on Southeast Asia
Japanese political leadership has been a driving force in defining not only Tokyo’s relations with Southeast Asia, but also in propelling the centrality of ASEAN in confronting the rising challenge of China during the period from 2013 to 2016. After all, it was Japan’s late Prime Minister Abe Shinzo who was instrumental in promoting the concept of the “FOIP,” which positioned Southeast Asia as key in the new regional framework. In his 2007 speech before the Indian Parliament during his first term in office, Abe declared that a “confluence of the two seas” between the Indian and Pacific oceans expanded the idea of a “broader Asia” committed to continued freedom, prosperity, and coexistence.1 Since then, the concept of an Indo-Pacific strategy has expanded not just to provide the roadmap for Japan’s relations with India and the subcontinent, but across Southeast and South Asia as well. Abe articulated his vision for a regional strategy further soon after taking office for the second time in December 2012. In his essay “Asia’s Democratic Security Diamond,” Abe argued the need for Japan not only to focus on Southeast Asia, but for closer cooperation with Australia, India, and the United States “to form a diamond to safeguard the maritime commons stretching from the Indian Ocean region to the western Pacific,” which has remained at the heart of the Quad’s tenets for cooperation.2
The “FOIP” cannot be seen as a grand strategy for Japan to dominate the Indo-Pacific, nor is it a roadmap to claim victory over authoritarian rule and China in particular. Rather, it is a reflection of Japan’s more realist and multidimensional approach to the shifting realities in the region in which the country has found itself over the past decade. From taking action to thwart the economic threat posed by China to seeking continued US commitment to Japan and Asia more broadly, Japan’s foreign and economic policy directives since 2010 have sought to enhance its domestic capabilities, to make Japan an indispensable partner on the global stage, and ultimately to position Japan as the champion of a rules-based order regardless of any potential wavering on the part of the United States in moving forward with its commitment to the Indo-Pacific. Growing concerns regarding China have pushed Japan to further its engagement in Southeast Asia beyond economic or even political engagement. In 2016, the Vientiane Vision was unveiled to further Japan’s defense commitment to ASEAN as a bloc, rather than simply bilaterally between targeted countries.3 The agreement focused more on capacity building and human resources development. That vision was further expanded in 2019 as Vientiane Vision 2.0, to focus on cooperating on defending the rule of law and enhancing maritime security in particular.
Japan steps up to champion “US values”
While Japan’s commitment to regional military security cannot be underestimated, it is nonetheless in the realm of trade and economic concerns that the country has come to be seen as a trend-setter. US withdrawal from the TPP was without doubt a game-changer for Japan, pushing it to step up to the plate to fill the vacuum left in 2017. Indeed, the period from 2017 to 2020 proved to be a golden age of sorts for Japan’s foreign policy, as it put the country at the forefront of balancing both its relations with Washington as well as Beijing, while garnering greater support for its commitment to Southeast Asia. Japan stepping up to lead the TPP was certainly the beginning of that period.
Granted, Japan had been the 12th and final country to sign onto the TPP, but the Abe government saw the trade deal as a means to keep the country relevant on the global stage as well. As the prime minister stated, “if Japan alone should become inward-looking, we would have no chance of growth. Companies would not invest in Japan then. Talent would not be attracted either. The TPP is a framework which promises ‘prosperity in the future’ in the Asia-Pacific.”4
US withdrawal from the agreement forced Tokyo to take on a leadership role in championing not just a multilateral trade regime that is ambitious in reducing trade barriers, but also addresses issues that have not traditionally had a place in trade deals, including labor standards and environmental sustainability. Ensuring that the remaining 11 member countries stayed committed to the pact and defending its own continued commitment to the agreement to Japanese voters was a test of Tokyo’s diplomatic skill and political strength. In short, the TPP could not have evolved into the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) agreement successfully concluded in 2018, a year after the Trump administration declared its decision to pull out of an agreement that Washington was instrumental in promoting, without strong Japanese leadership.
Embracing its role as a trust-builder
Japan’s success not only in ensuring the CPTPP’s future but also in promoting its allure to potential new member countries has recast Tokyo’s role in the international economic architecture of the Indo-Pacific. The fact that a communist state such as Vietnam would not only remain committed to work closely together with the Sultanate of Brunei and the Republic of Singapore spoke volumes about Southeast Asia’s collective interest in ensuring continued regional growth that could be achieved through closer coordination of trade rules. In hindsight, it also seems obvious that Japanese commitment to CPTPP even without the United States would not waiver, and that Tokyo would emerge as a champion of countries in the midst of growing tensions between Washington and Beijing. Yet in the immediate months after Trump announced his decision to pull the United States out of the framework, there was a noticeable uptick in Japanese government officials visiting Washington who were eager to sound out the US response to Tokyo continuing to pursue TPP on its own. Once the Trump administration’s indifference to Japan remaining with the TPP was made clear and that there would be no backlash from the United States for Tokyo to move forward with the CPTPP, Japan embraced its role as its champion, especially in Southeast Asia.
Indeed, Tokyo’s role as a bridge-builder has taken on greater significance as wariness of the Trump administration’s more unilateralist approach to US foreign policy coincided with the rise of Abe. Even his foes could not argue that Abe had an ambitious vision for Japan that balanced the need to ensure closer ties with the United States, and desire to work closely with like-minded countries across Asia committed to a rule-based order in light of the growing threat of an ever-aggressive China. To that effect, Abe was recasting Japan as a regional stabilizer that would be proactive in mobilizing partners including Washington to push back against Chinese economic as well as military aggression. While China overtook Japan as the world’s second largest economic power and has not looked back since, expectations for Tokyo to act as a stabilizing influence in the Indo-Pacific too have been rising steadily over the past decade.
Tokyo’s efforts to be a bridge-builder and regional stabilizer is paying off. According to the ISEAS Yusof Ishak Institute’s annual survey of Southeast Asian sentiment, Japan remains the most trusted power in the region compared to three other countries surveyed, namely the United States, China, and India as well as the European Union. The Singaporean think tank’s latest report on perceptions by analysts and leaders in 10 ASEAN countries found that over 54 percent were either confident or very confident for Japan to “do the right thing” to contribute to global peace and stability. In contrast, 29 percent had the same expectations for China, compared to 31 percent for the United States. 41 percent of those surveyed saw Japan as a “responsible stakeholder” that respects and champions the rule of law.5
The trust Japan has been able to garner among Southeast Asian nations contrasts sharply with Tokyo’s ongoing challenges in diplomatic relations with its immediate neighbors, especially with South Korea. While the legacy of Imperial Japan still runs deep in most ASEAN countries and the lasting consequences of historical memory can hardly be ignored, Tokyo’s relations with most of Southeast Asia has focused on the future rather than the past. Japanese investments in the region have played no small part in focusing on the way forward rather than looking back. At the same time, wariness about emerging geopolitical risks as well as uncertainties in the economic sphere have been a uniting force in the region.
As Japan’s longest-serving prime minister, Abe had the opportunity to engage more fully with partners than any other premier, and he made clear from the beginning that Southeast Asia was key to a more realist approach to Japan’s foreign policy strategy. He became the first Japanese prime minister to visit all 10 ASEAN countries, and made a point of visiting Vietnam, Thailand, and Indonesia for his first overseas trip. Abe also made headlines worldwide in 2016 by becoming the first world leader to meet with President-elect Trump in New York before he took office. If the old adage that showing up is half the battle when it comes to diplomacy, then Abe’s high visibility was a strategic maneuver in demonstrating Japan’s reinvigorated focus on Southeast Asia on the one hand, while articulating Tokyo’s commitment to furthering ties with Washington on the other. Abe’s strategic personal diplomacy has been carried on by his successors. Suga Yoshihide’s first overseas visit during his short-lived premiership too was to Southeast Asia, touring Vietnam and Indonesia in 2020. Kishida Fumio had been to all 10 ASEAN countries in his capacity as foreign minister, and as head of state, he too has already visited Indonesia, Vietnam, and Thailand. Such proactive diplomacy at the highest level is not only paying dividends in bolstering Japan’s reputation in Southeast Asia, but it is also playing a vital role in bridging US ties to the region.
Japan has leveraged its strong diplomatic ties to ASEAN for the United States as well. Just as Japan played an essential role in keeping the TPP together and building up the CPTPP, so too has it been a critical player in ensuring the success of Washington’s own economic initiative in the region, namely the Indo-Pacific Economic Framework (IPEF). Officially launched in May 2022, IPEF has been touted by the Biden administration as a US-led economic vision that provides an alternative to China’s foothold in the region. Consisting of four key pillars of interest, IPEF looks to bolster trade relations especially on the digital front; enhance supply chain resilience of critical goods; further decarbonization and promote a green economy; and tackle corruption and push for a fair economic base across the region. It does not, however, provide market access to signatory nations, thereby denting the allure of IPEF considerably, especially for Southeast Asian nations eager to further trade relations with the United States.
Japanese officials have made clear that it was Tokyo’s careful negotiations with its Southeast Asian partners that encouraged not just Singapore, Vietnam, and Brunei, which have already joined the CPTPP, but also Thailand, Malaysia, Indonesia, and the Philippines to join the U.S.-led pact for initial negotiations. The fact that IPEF was launched in Tokyo should also not be ignored, giving Japan greater impetus for it too to be committed to the success of the framework for diplomatic, if not economic, reasons. As Washington proclaimed a win for IPEF at its launch, given the diversity of the 14 countries representing the Indo-Pacific, Japan’s political capital in the region was critical in ensuring that Washington could promote the framework as a serious effort on its part to remain committed to Asia economically.
Quality Infrastructure as Global Standard
Japan’s geostrategic endgame in Southeast Asia is not simply to fill the hole left by the United States, or to ensure US commitment to the region to counterbalance China’s hold. Tokyo has stepped up its own strategic economic statecraft in the region. While China’s Belt and Road Initiative may be garnering more headlines across the board as part of Beijing’s grand strategy to further its ambitions across the Indo-Pacific and beyond, Japan was actually the first to have a comprehensive approach to investing, lending, and networking in the region long before BRI. Japan remains the single biggest investor in Southeast Asian infrastructure projects to the tune of $321.8 billion, compared to $255.3 billion for China.6 Nevertheless, the prospect of Beijing outpacing Tokyo in terms of investment volume is to be expected, not least because of China’s ability to absorb costs and even profitability.
It is not, however, simply the fact that the sheer amount of spending by Tokyo has topped Beijing to date that has wooed Southeast Asian nations over the years, even though money certainly does help. If competing with the BRI purely on dollar terms is a competition that puts Japan at a serious advantage, a focus on the quality of infrastructure, in contrast, has led not only to closer economic ties, but also the building of trust and become a defining theme of Japan’s broader development assistance strategy. In 2015, the Abe government launched its Partnership for Quality Infrastructure initiative focusing on sustainable growth and partnering with countries across Southeast Asia as well as international organizations including the Asian Development Bank.7 The focus on higher quality infrastructure that costs higher upfront but has the advantage of longer-term durability and sustainability not only differentiates Japan’s approach to development assistance from China’s BRI, but it has increasingly become a standard-setter to which other countries including the United States as well as China are looking to adhere. Just as the stringent lending practices of the World Bank became the foundation of China’s Asian Infrastructure Investment Bank (AIIB), the success of Japan’s high-quality infrastructure projects has also led Chinese authorities to address the sustainability of their own infrastructure projects in the region. With a race to higher standards, sustainable infrastructure development is ultimately a win for the recipient Southeast Asian nations.
Tokyo has, however, gone further in its economic statecraft since the pandemic by expanding the areas for investment and engagement in the region. The 2023 ASEAN-Japan Economic Co-Establishment Vision is an example of an expanded approach to Tokyo’s relations with Southeast Asia that aligns Japan’s broader economic goals with its foreign policy objectives. It highlights four areas for collaboration between the two sides, namely in prioritizing sustainable growth, promoting innovation, enhancing physical as well as cyber connectivity, and developing an ecosystem that encourages the growth of human capital.8 These areas are removed from the traditional investments of large-scale infrastructure projects of roads, bridges, and urban development that Japanese companies have excelled at to date and where China is rapidly emerging as the competing investor to be reckoned with, especially when it comes to cheaper costs.
The latest ASEAN-Japan initiative is also noteworthy insofar as it reflects Japan’s development assistance priorities over the past decade outlined in the 2021 G7 infrastructure initiative. The leaders of the world’s richest nations agreed to develop a “values-driven, high-impact, and transparent infrastructure partnership,” which echoed the goals outlined by Abe seven years earlier.9 At the same time, the Partnership for Global Infrastructure has broadened the definition of infrastructure and the strategic interests of development assistance. The focus on tackling climate change, promoting interoperable information technology networks, and pushing for finding solutions to inequity certainly distinguishes the G7’s vision for global growth from that of China. While critics have been quick to argue that the G7 infrastructure initiative is unlikely to be able to match what the BRI offers to Southeast Asia in sheer scope, Japan has undoubtedly helped to shape the direction of what the wealthy nations can offer that Beijing cannot, namely a commitment to high standard infrastructure, and investing in people to ensure the sustainability of projects that can have a ripple effect in furthering economic growth.
While Japan knows only too well that high upfront costs can make it difficult for its projects to be competitive with Chinese projects at first, time is beginning to be on its side as cheaper Chinese-financed infrastructure projects are proving to be less dependable, if they are completed at all. The $5 billion Shinkansen high-speed rail project in Indonesia is such an example. Having spent years scoping, planning, and promoting the vision to win over Indonesia, Japan ultimately lost the deal to China in 2015, which promised a no-strings attached financing plan. The decision by Indonesian President Joko Widodo to go with China, rather than Japan, was a source of bitterness not just for the Japanese rail builders including Kawasaki Heavy Industries, but for the Japanese government at large.10 Since then, however, the Indonesian government has found that the project under China not only ended up costing far more than expected, but continued to be delayed. As a result, Indonesia has turned to Tokyo again to commit not only to develop the project Japan had initially lost, but also to upgrade an existing rail network spanning 750 km between Jakarta and Surabaya.11
Connectivity Key to Counterbalance China
Japan’s infrastructure investment plan is increasingly being shaped by efforts to counterbalance Chinese dominance in Southeast Asia by putting connectivity of the region in the forefront by land and increasingly by sea. On land, the East West Economic Corridor’s vision first outlined in 2010 may not be quite as ambitious or audacious as the BRI in scale, but the corridor spanning across 1,700 km is arguably a better thought out, bold endeavor on the part of Tokyo to connect Da Nang in Vietnam to Yangon in Myanmar via Laos and Thailand, ultimately connecting the South China Sea with the Indian Ocean.12 Two bridges to connect Myanmar and Thailand, which is the leading destination for Japanese foreign direct investment, have been built, and the corridor has fast become a hub to attract new capital as much-needed infrastructure investments are made. Da Nang has attracted Japanese corporate interest, most recently with semiconductor processing equipment manufacturer Fujikin investing $35 million, as efforts to develop it as Southeast Asia’s Silicon Valley are in full force, together with advanced research capabilities through the Da Nang University of Technology.13
In addition, the Southern Economic Corridor is being developed to connect Ho Chi Minh to Myanmar’s Dawei via Cambodia and Thailand. The success of the Southern Economic and East West Economic Corridors will of course lead to reduced travel times, lower costs, and greater economic opportunities for all countries involved. For instance, travel time between Hanoi and Bangkok is reduced since the conventional sea route can be taken across land in three days. For ASEAN countries, enhanced connectivity has tremendous economic benefits, and opportunities for greater commercial and political interaction as well as physical connectivity. Equally important too from a geopolitical perspective is that the East West and South Economic Corridors could ultimately reduce some of the vulnerabilities of depending too heavily on China for goods. There are, however, downside risks from Southeast Asia’s perspective, most notably the prospect of a further divide between those countries that are able to attract new investments, and those that are seen as less attractive by investors.
While decoupling from China is unrealistic economically and unlikely ever to become a longer-term objective, Japan has steadily been adopting a so-called “China plus one” hedging strategy, whereby Japanese companies are seeking to reduce their dependence on China while looking elsewhere in Southeast Asia in particular to offset the risk of focusing on the Chinese market too heavily. Japan is hardly alone in pursuing such a hedging strategy since the disruptions caused by the pandemic have been a wake-up call for governments about the risks of depending too heavily on authoritarian regimes especially for critical goods. Indeed, the allure of Thailand and more recently Vietnam is apparent across the board, especially as governments seek to boost the resilience of their supply chains from an array of potential disruptions ranging from Chinese economic coercion to natural disasters. The need for Southeast Asia to be part of a hedging strategy for advanced manufacturing in particular, however, could accelerate a further divide amongst ASEAN nations. While Vietnam, Thailand, Malaysia, the Philippines, Indonesia, and Singapore will continue to attract Japanese business interest and investments, the risk of Cambodia, Laos, and Myanmar not being able to compete with their fellow ASEAN rivals looms large, even for Japanese grants, let alone private sector capital. In 2021, the Japan International Cooperation Agency reported that the Philippines attracted the most official development assistance from Tokyo, followed by Indonesia at 260 billion yen and 111 billion yen respectively. Myanmar came in third place with 90 billion yen, but as international pressure against the junta increases, Japan’s commitment to the country may be challenged.14
“New Capitalism” in Action?
A growing divide based on wealth and competitiveness as well as political considerations is hardly limited to ASEAN nations. Indeed, Japan has been grappling domestically with rising disparity within its own borders, and Kishida announced the launch of “new capitalism” to ensure steady and more equitable growth soon after taking office in 2021.15 While the cabinet approved the vision the following year, the implementation of the ideology at home has been lackluster, and worries about a socialist approach to growth rattled international financial markets. Still, some of the core principles of Kishida’s vision for growth may actually be exactly what is needed not only to further development in Southeast Asia, but also to enhance trust between Tokyo and ASEAN.
Take the expansion of an apprenticeship-based approach to support companies, for instance. In 1962, Japan adopted an educational system that would allow high school-aged students to focus on engineering for five years to meet the industrial needs of the country. The “kosen” college of technology system has been seen as key for blue-chip manufacturers such as Toyota to have dedicated workers who are highly trained in technology-related sectors such as electrical engineering that are in great demand by industries.16 That approach to workforce development is emerging as an effective way not only to match workers’ skills with industry needs, but is also promoting the Japanese work ethic and values system in key Southeast Asian nations. The Japanese Ministry of Education has actively promoted the “kosen” system in Thailand and Vietnam as well as Mongolia since 2017, touting it as a way not only for 15-year- olds to acquire sought-after skills, but also to continue to be trained and remain competitive in the workplace by updating their knowledge.17
With select Southeast Asian nations seen as an integral part of Japan’s strategy for supply chain resilience in critical supplies as well as for overall growth, Tokyo’s commitment to the region is expected to remain strong. At the same time, Japan’s demographic realities of a shrinking population will need to tap into the growing, youthful ASEAN market even more in coming years. Southeast Asian nations may continue to need Japanese capital and know-how, but the relationship is hardly a one-way street. Japan’s rapidly aging society will need ASEAN more not just as a lucrative market, but also as a source of dynamism and inspiration. Nevertheless, shifts in geopolitical realities are expected to impact Japan’s economic roadmap and with it, its commitment to ASEAN as well.
Commitment to the Indo-Pacific and Southeast Asia beyond Abe
Since the US withdrawal from TPP, Tokyo has continually pressed Washington not only to reconsider joining the new multilateral trade deal, but to remain engaged in the Indo-Pacific. In fact, the “FOIP” initiative was one of the few multilateral frameworks to which Trump had been committed, and the Biden administration has continued to engage in the region not just economically through IPEF, but also politically as well as militarily through the Quad and AUKUS, the trilateral security agreement between Australia, Britain, and the United States. Even after the departure of Abe, both Suga and Kishida have succeeded in achieving not only continued US commitment to the Indo-Pacific, but US agreement to be the Indo-Pacific leader in promoting the rule of law and providing an economic vision for regional development that can be an attractive alternative to the BRI.
Looking ahead, however, the prospect of Japan providing political leadership that matches its economic vision in the region may not be as straightforward as once expected. For one, even as Tokyo’s commercial and geopolitical interests in Southeast Asia remain high, the immediate risks in Northeast Asia are rising at a faster pace. Still, Tokyo’s commitment to Southeast Asia and the FOIP in particular has been a constant under both Suga and Kishida. In fact, Kishida committed to expand the FOIP strategy in early 2023 to counterbalance the China threat. 18
Japan’s latest national security strategy, together with the national defense strategy and the defense buildup program that were released in December 2022, reflects that new reality. In fact, the national security strategy pays little attention to Southeast Asia, and focuses largely on the threats posed by China, North Korea, and Russia, and the need to enhance its defense capabilities for growth.19 At the same time, security concerns are clearly playing a greater role in defining Japan’s economic interests.
Therein lies Japan’s dilemma. On the one hand, continuing to invest in much-needed quality infrastructure including workforce development makes good business sense, and creates new opportunities for Japanese companies beyond construction at a time when Japan is in ever greater need to expand overseas given its domestic market constraints. It also advances Tokyo geostrategically, given that partnership-driven investments lead to a closer working relationship with Southeast Asia that ultimately builds up trust between Tokyo and ASEAN. The fact that Japan’s investment strategy contrasts sharply with the BRI also makes a strong case for the allure of transparency, good governance, and adherence to the rule of law that goes beyond rhetoric.
On the other hand, Japan’s own longer-term economic objectives are in flux, and an adjustment of its Southeast Asia strategy may be needed as a result despite its success in the region to date. One of the biggest challenges for Japan moving forward will be to ensure that it can continue to be one of the leading rule-making nations even as it may not necessarily be completely aligned with the US threat perception towards China. As one senior Japanese official commented privately, “the biggest risk is to keep the United States from becoming protectionist and withdrawing” from Asia and the world at large. If ensuring continued US commitment to the Indo-Pacific means aligning itself with Washington’s China policy, then Japan will need to move in that direction. In that case, the challenge for Japan will be to remain a trusted partner in Southeast Asia even if the threat perception towards China is less inclined to be aligned with that of the United States.
As Japan transfers more advanced technology capabilities to select Southeast Asian countries, businesses in the region must ensure that they are consistently compliant with US export restrictions that are expected to go beyond the semiconductor industry in the near future. A corporate executive responsible for strategy development at a multinational company said in a closed-door meeting that while the cost may be prohibitive, looking into the prospect of developing a two-supply chain strategy “must be taken very seriously.” That would entail one supply chain and its personnel to be in compliance with US export control rules. The second supply chain would cater to the Chinese market. Ensuring that costs are divided effectively will be a challenge for Japanese businesses worldwide, but especially in Southeast Asia where conflict over the need for US compliance may emerge. For the middle powers including Japan and ASEAN, winning the technology war by dominating the standard-setting of advanced technologies is not a goal that is shared. Rather, victory means ensuring a rules-based approach to growth that also leads to social as much as political stability.
Unlike China or the United States, Japan’s economic commitment to ASEAN remains less ideologically driven, and both Tokyo and ASEAN seek not to be caught between great power competition. By investing in ASEAN’s connectivity through infrastructure projects, Tokyo is promoting broader cooperation and prosperity among Southeast Asian nations including Myanmar, with expectations for greater resilience within ASEAN and adherence to a rules-based order, especially when it comes to trade rules. Still, as innovation and advancements in technology will increasingly define economic power, competition between the United States and China to dominate global standard-setting will intensify. That competition will make it increasingly difficult for Japanese technology investments to Southeast Asia not to choose compliance with one side or another. As technology-driven smart growth takes on a greater role in large-scale infrastructure development, Japan’s development assistance vision too may be impacted by the rising technology competition as well.
Over a decade Japan’s approach to Southeast Asia has hinged on three critical factors. The first being the urgency of preventing China from gaining a hegemonic position there, using economic lures and dependency to shape political and strategic outcomes. The second is the need to keep the United States fully engaged in the region and agreeing to coordination on security and values while striving to find a common approach to trade and economic security. Thirdly is the quest for Japanese leadership in a realm long prized as central to Japanese foreign policy, where Japan enjoys public opinion support. At times, China had appeared to gain the advantage with the BRI and active diplomacy. For a time, the United States had appeared sidelined with “America First” thinking and loss of interest in a trade agenda, while defying regional desires not to have to take sides. The steady Japanese hand under Abe, Suga, and Kishida has striven hard to overcome these challenges.
Over three periods, Japan’s approach to Southeast Asia reflected the evolution of the above forces. From 2013 to 2016, Abe was intent on countering China’s advancing position across Southeast Asia and convincing Obama to play a more active role there. Under the impact of Xi Jinping’s Belt and Road Initiative and Trump’s rejection of TPP as well as antipathy to multilateralism, Abe reinvigorated his Southeast Asian diplomacy, salvaging TPP and seeking to manage cooperation with the BRI. In the third period, Japan-US strategic cooperation reached unprecedented levels, while tensions with China continued to mount. From 2022 to 2023, Kishida has joined Biden in rolling out strategies for encompassing Southeast Asia in a still-unfolding framework inclusive of security, economics, and values. If Japan appears hesitant on some elements of the US framework, it has found much satisfaction in Biden’s deeper engagement. Some differences in the priority of security, the role of trade agreements, and the stress to be put on values remain to be reconciled.
2012 Abe Shinzo’s second administration
2013 Abe hosts ASEAN-Japan 40th year commemorative summit
Abe visits all 10 ASEAN members by the end of the year
2015 launch of Partnership for Quality Infrastructure focused on development project quality and sustainability
2016 launch of Free and Open Indo-Pacific strategy as Japan’s strategic vision for region
Announcement of Vientiane Vision for military cooperation with ASEAN
2019 Vientiane Vision 2.0 announced
2020 Suga Yoshihide takes office as Prime Minister
Visits Vietnam and Indonesia for first overseas visit as premier
2021 Kishida Fumio takes office as Prime Minister
2022 Kishida visits Cambodia for first visit to ASEAN as premier
2023 Kishida promotes expansion of Indo-Pacific Strategy to counter China
1. “Confluence of the Two Seas,” Speech by Shinzo Abe before the Indian Parliament, August 22, 2007, https://www.mofa.go.jp/region/asia-paci/pmv0708/speech-2.html
2. Shinzo Abe, “Asia’s Democratic Security Diamond,” Project Syndicate, December 27, 2012, https://www.project-syndicate.org/magazine/a-strategic-alliance-for-japan-and-india-by-shinzo-abe?barrier=accesspaylog
3. Japan Ministry of Defense, “Vientiane Vision: Japan’s Defense Cooperation Initiative with ASEAN”. November 2016. https://www.mod.go.jp/en/d_act/exc/vientianevision/index.html
4. Shinzo Abe press conference, March 15, 2013, https://japan.kantei.go.jp/96_abe/statement/201303/15kaiken_e.html
5. “The State of Southeast Asia 2023,” ASEAN Studies Centre at the ISEAS-Yusof Ishak Institute, February 9, 2023, https://www.iseas.edu.sg/wp-content/uploads/2025/07/The-State-of-SEA-2023-Final-Digital-V4-09-Feb-2023.pdf
6. “Japan Still Reins in Southeast Asia Infrastructure,” Infrastructure Investor, July 16, 2019. https://www.infrastructureinvestor.com/japan-infra-player-in-south-east-asia-china-belt-and-road-initiative/
7. Japan Ministry of Foreign Affairs, “Partnership for Quality Infrastructure,” May 21, 2015, https://www.mofa.go.jp/files/000081298.pdf
8. ”日ASEAN経済共創ビジョンの中間整理をまとめました,” January 6, ２０２３, 日本貿易振興機構,
9. White House, ”Fact Sheet：President Biden and the G7 Leaders Formally Launch the Partnership for Global Infrastructure and Investment,” June 26, 2022, https://www.whitehouse.gov/briefing-room/statements-releases/2022/06/26/fact-sheet-president-biden-and-g7-leaders-formally-launch-the-partnership-for-global-infrastructure-and-investment/
10. “Japan cries foul after Indonesia awards rail contract to China,” Financial Times, October 1, 2015, https://www.ft.com/content/eca4af84-67fa-11e5-97d0-1456a776a4f5
11. “Indonesia woos Japan as China-led high speed rail project stalls,” Asia Nikkei, June 8, 2020, https://asia.nikkei.com/Business/Transportation/Indonesia-woos-Japan-as-China-led-high-speed-rail-project-stal
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