Japan in the future to be caught between U.S., China: think tank

Kyodo

Japan will probably find itself caught between the United States and China over the next 17 years, with its foreign policy at the mercy of the policies of Washington and Beijing, a U.S. intelligence community think tank reported Thursday.

In an unclassified report, titled “Global Trends 2025: A Transformed World,” the National Intelligence Council also said U.S. power will decline by 2025, with the world becoming unstable as the post-World War II international system vanishes.

On Japan, the 120-page report said the country will face a “major reorientation” of its domestic and foreign policies yet maintain its status as an “upper middle rank power.”

It forecast Tokyo’s foreign policies “will be influenced most by the policies of China and the United States,” with a broad spectrum of options possible.

If China continues its current economic growth pattern, Japan will attach importance to maintaining healthy political ties and increase market access, possibly through forging a bilateral free-trade agreement, the NIC report said.

But if China’s growth stumbles or its policies become openly hostile toward neighbors, Tokyo would likely “move to shape political and economic forums in the region to isolate or limit Chinese influence” with support from Washington, it said.

Should the U.S. security commitment to Japan weaken, it said, Japan “may decide to move closer to Beijing on regional issues and ultimately consider security arrangements that give China a de facto role in maintaining stability in ocean areas near Japan.”

A substantially closer U.S.-China political and security partnership could lead to U.S. accommodation of a Chinese military presence in the region and a corresponding realignment or drawdown of U.S. forces there, the report said.

In such a scenario, it said, Japan would have no choice but to “follow the prevailing trend and move closer to Beijing to be included in regional security and political arrangements.”

The report also dwelt on the challenges Japan will face from the aging of its population, saying, “The shrinking workforce — and Japan’s cultural aversion to substantial immigrant labor — will put a major strain on Japan’s social services and tax revenues.”

It predicted “policy paralysis” will haunt Japan as a result of a “continual splitting and merging of competing political parties.” It also said, “Japan’s one-party political system probably will fully disintegrate by 2025.”

The NIC reports directly to the director of the CIA. Its mostly classified reports aim to support U.S. policymakers — this time for those in the incoming administration of President-elect Barack Obama.

As for the U.S. and the world, the new report said U.S. political and economic influence will ebb and the world will grow more unstable due to energy, food and water scarcity, as well as conflicts, terrorism and global warming.

“The international system — as constructed following the Second World War — will be almost unrecognizable by 2025 owing to the rise of emerging powers, a globalizing economy, an historic transfer of relative wealth and economic power from West to East, and the growing influence of nonstate actors,” it said.

“Although the United States is likely to remain the single most powerful actor, the United States’ relative strength — even in the military realm — will decline and U.S. leverage will become more constrained,” it said.

The report said China and India are expected to vie with the U.S. to lead a multipolar world. While noting Russia’s potential is less certain, it said the political and economic power of Indonesia, Iran and Turkey is likely to increase.

“China and India must decide the extent to which they are willing and capable of playing increasing global roles and how each will relate to the other,” it said.

“Russia has the potential to be richer, more powerful, and more self-assured in 2025 if it invests in human capital, expands and diversifies its economy, and integrates with global markets,” the report said.

“On the other hand, Russia could experience a significant decline if it fails to take these steps and oil and gas prices remain in the $50.00-$70.00 per barrel range,” it said.

Concerning the future of the Korean Peninsula, the NIC report said a “unified Korea” is likely by 2025, but it will not be a unitary state but more like a looser “North-South confederation.” Despite continuing diplomatic efforts, whether North Korea will be stripped of its nuclear capabilities at the time of reunification remains “uncertain,” it said.

“A loosely confederated Korea might complicate denuclearization efforts,” it said. “Other strategic consequences are likely to flow from Korean unification.”

As for Europe, the report said, “Europe by 2025 will have made slow progress toward achieving the vision of current leaders and elites: a cohesive, integrated, and influential global actor able to employ independently a full spectrum of political, economic, and military tools in support of European and Western interests and universal ideals.”

Continued failure to convince skeptical publics of the benefits of deeper regional integration and to enact painful reforms to curb a falling population could leave Europe a “hobbled giant” distracted by internal bickering and “less able to translate its economic clout into global influence,” it said.