Engaging the Dragon, Appeasing Uncle Sam

Engaging the Dragon, Appeasing Uncle Sam
Japan is walking a tightrope in its geo-strategic relationship with China and the U.S.

The intensifying confrontation between the U.S. and China as it escalates from trade to strategic realms creates a dilemma for other countries coupled to both through long-standing strategic and commercial linkages. A prime example of this is Japan, caught in the middle, with strong ties to both and unable to afford a dilution of relations with either.

With rising geopolitical and geo-economic power projections through ‘debt-trap diplomacy’; ambitious infrastructural projects such as the OBOR; and attempts to strengthen power in its immediate and extended neighbourhood (aggression on the LAC and the national security law in Hong Kong), China's relations with countries in the Asian region as well as globally, have soured. 

Against the backdrop of its hard-power projection, China’s new form of economic colonialism is evident. According to Stephen Nagy in The Japan Times, “China has been actively reshaping the regional power structure in the Indo-Pacific, fostering asymmetric economic relations, which Beijing seeks to leverage for strategic aims.”


While countries are viewing Chinese aggression with trepidation, no one seeks to confront it and thereby risk economic and other dependencies. Given traditional, deeply intertwined, regional economic ties in Asia, countries like Japan are opting for a more conciliatory and balanced foreign policy with China, a response which has become less tenable given Japanese military and security dependence on the U.S.

Japanese foreign policy, historically, has always employed a delicate balancing act between power axes in the region and the world, and this will now determine its behaviour in the current situation. “The top diplomatic priority for Japan in 2020 is figuring out how to navigate the ‘intensifying strategic competition’ between the U.S. and China,” says Stephen Nagy.


In 2017, a bilateral relationship involved banding together against an unpredictable Trump administration, and in 2018, on Japanese Prime Minister Shinzo Abe’s first visit to China, deeper economic and political cooperation was pledged. However, relations soured in 2019 with Chinese naval vessels intruding into the contiguous zone around the Senkaku/Diaoyu Islands (administered by Japan but contested by China) reached a record high with over 1,000 incidents. Sections of the Japanese government have highlighted China’s growing hostility and warned against increasing militarisation of the South and East China Seas, at the same time employing a muted diplomatic response to perceived aggression. 

To understand this mix of competition and cooperation, it is imperative to develop a broader framework of the foreign policy motivations of Asian countries in general and Japan in particular. A traditional Middle Power, Japan is a mediator, and the pacifist clause in Japan’s Constitution seeks to avoid direct conflict. Thus, navigating strategically across different dimensions, Japanese economic ties with Beijing determine its political response. 

According to Andrea Fischetti in the Tokyo Review, “In Japan’s case, there is much less of a policy shift since its approach to diplomatic engagement, together with strategic competition, is already founded on a realistic assessment and familiarity with the potential threat that China’s rise could represent.” Having trodden the same path in the 1930s when it challenged the U.S. in the Pacific with calamitous results, Japan fully grasps the implications for regional countries if China replicates a similar course of action.

Keeping avenues of dialogue open at all levels, Japan also seeks to counter China in security arenas. Thus, while often willing to respond to violations against international norms with its G7 allies, Japan maintains a more cautious stance bilaterally. 

Internally, there is consensus within Japan that the country cannot accept a hegemonic China. However, the military and economist policymakers differ on how to deal with a rising China, and therein lies the dilemma.


Rather than risk upsetting the global balance of power and its security environment, the Japanese response to the U.S.-China hostility has been muted. Tokyo is too deeply economically integrated with China to risk a full-scale decoupling. Japanese motives to follow the political rules-based order led by America and nourish bilateral military and defence support (including negotiations for Japan’s financial support for U.S. military forces which expires this fiscal year) have thus tempered Japan’s response to current Chinese offensives. This was indicated by the delaying of Chinese President Xi Jinping’s first state visit to Japan and drafting a statement for the G7 expressing ‘grave concern’ over the Hong Kong security law. 

However, the Japanese government has attempted some pushback in the economic front, by restricting foreign (read Chinese) investment in industries that the government designates as important to national security, offering financial subsidies to companies in crucial sectors to move operations out of China and into Japan, and proposing the ‘China Plus One’ strategy in an effort to diversify supply chains. Japan also has plans to make overseas researchers dealing with sensitive technology to divulge their funding sources and more thoroughly vet students from abroad, indicating concerns over alleged data theft by Beijing and Pyongyang.


  • Several factors will determine the rise of Japan as a geopolitical power offsetting China, including the Japanese pandemic response and economic recovery, as well as the fostering of strategic partnerships like the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (TPP) and Japan-EU ties. Japan can also leverage its primacy as a major player in infrastructure finance in Asia as an instrument for international economic statecraft.

  • Japan will have to shoulder a heavier burden within alliance structures to manage China’s re-emergence as the largest economy in the world while, at the same time, it will need to proactively build cooperation between the U.S. and China to address regional and global issues.

  • For middle powers like India and Japan, navigating in an environment where traditional superpowers are waning provides new opportunities to project power and shape the future, but they must guard against several pitfalls. Both countries need to bring a more robust strategic element into their bilateral relationship and push the agenda of the Quad to make it more aligned towards strategic balance in the Indo –Pacific.