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Japan pushing 'quality' aid to counter China's clout in ASEAN

by Sophie Jackman

Kyodo

Unable to match dollar-for-dollar China’s massive investment in Southeast Asia, Japan’s future relevance in the region appears to hinge on it convincingly offering a “quality over quantity” approach.

Signs the government has picked up on this strategy could be seen in Prime Minister Shinzo Abe’s packed diary during a series of gatherings connected to the Association of Southeast Asian Nations in the Laotian capital of Vientiane from Tuesday through Thursday.

In a summit with ASEAN leaders, Abe stressed Japan’s resolve to continue to support enhanced economic integration in the 10-nation bloc with “high-quality” infrastructure investment.

“For Japan, it’s a race . . . it’s about investment and trade, and in every aspect China is forging ahead and trying to leave Japan behind, and Japan is trying to play a catch-up role,” said Purnendra Jain, professor of Asian Studies at the University of Adelaide.

During a flurry of bilateral meetings with ASEAN nations and a separate summit with leaders of five countries along the Mekong River, Abe sought to emphasize those areas where the country can offer more than sheer monetary might — innovation, training and personnel exchange among them.

Japan is right to appeal to its strength compared to China in these fields, said Termsak Chalermpalanupap, research fellow at the ASEAN Studies Centre at the Institute of Southeast Asian Studies in Singapore.

“(In the developing Mekong nations) Japan is very much favored over China when it comes to higher education, technology and science,” Termsak said.

The rivalry between Japan and China, ASEAN’s top external trade partner since 2009, may prove to be the hottest in the Mekong nations, which comprise Cambodia, Laos, Myanmar, Thailand and Vietnam.

Tokyo and Beijing are eager for a stake in their rapidly developing economies, which have strategic importance along major trade routes.

Abe’s summit with the Mekong leaders centered on reaffirming Japan’s commitment to providing quality infrastructure and following through on its pledge last year of fresh aid worth ¥750 billion over three years.

But that sum is eclipsed by the potential windfall to the Mekong region from the emergence of the Beijing-led Asian Infrastructure Investment Bank.

Such diverse members as Australia and South Korea signed up as founding members of the AIIB, with Canada announcing Wednesday in a leaders’ summit with China that it will apply to join. Apparently out of concern over China’s dominant influence in the organization, Japan and the United States have stayed out of the bank, at least for now.

As capital piles in on top of China’s own hefty pledges, the AIIB is set to dwarf the Asian Development Bank, in which Japan is the largest shareholder, followed by the United States.

The AIIB is expected to fund investment in China’s continent-spanning trade route initiatives, of which the “21st Century Maritime Silk Road” spans the sea around Southeast Asia.

Japan is picking its battles on the investment front, focusing on the East-West transport corridor through the Mekong region, while China is putting efforts into the North-South corridor, Jain said.

According to Kei Koga, assistant professor of public policy and global affairs at Nanyang University in Singapore, Japan is currently in the “implementation phase” of its development initiatives in Southeast Asia, focusing on pulling off existing projects to gain trust in the region rather than proposing new ideas.

Japan has also hinted at coordination with the United States and other major regional players to strike a point of difference with China.

In Laos, Abe promised to back ASEAN nations wishing to join the Trans-Pacific Partnership trade pact. Brunei, Malaysia, Singapore and Vietnam are the ASEAN members signed up to the TPP, which was led by the United States with China notably left out of its ranks.

According to Koga, in tandem with its economic and social cooperation, Japan is also building security alliances in the region through nontraditional means, taking care not to pinpoint the rise of China as its motivation so as to allow the ASEAN members involved to mediate ties with both Tokyo and Beijing.

“Providing humanitarian relief and disaster relief is one way to strengthen security ties, and in the future these alliances could get stronger, although they are not like (traditional) security alliances,” Koga said.

Japan has committed to providing patrol vessels to the Philippines and Vietnam, whose competing territorial claims with China in the South China Sea align with Japan on the contentious issue.

The South China Sea issue is one of several that have kept ASEAN nations from reaching a consensus on how to relate to China, the University of Adelaide’s Jain said.

But ASEAN’s ability to work with both Japan and China despite the deep divide between Tokyo and Beijing on maritime security suggests a pragmatism that provides for the separation of such issues from economic cooperation.

“Japan has to keep on its course in the Southeast Asian nations, because there are expectations from them that Japan will keep playing its important role,” Jain said.

Up against a great wall of money but valued within ASEAN as a crucial balancing agent, Japan is tasked with further diversifying its cooperation and offering solutions in the areas where China falls short in order to secure its future in the region.