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In his 1999 book "The Law of Peoples," the American philosopher John Rawls hypothesized a “realistic utopia” of “decent peoples” signed up for a social contract framed by principles of justice and right, to govern their domestic and international affairs. Rawls envisaged that this fraternity would consist of liberal democratic peoples and undemocratic peoples whose rulers respect human rights, uphold the rule of law and govern through consultation with national communities.

Rawls acknowledged there are “burdened peoples” suffering under failed states, and “outlaw states” outside his hypothetical utopia. Outlaw states are prepared to use military aggression to further their national interests, exert international influence by other means that violate the sovereignty of other nations, and systematically violate their citizens’ human rights. Where they act thus, Rawls believed decent peoples should have no traffic with them, except through multilateral efforts to induce them to reform and join their fraternity. In the worst case scenarios, just war can be waged against them.

Today, Rawls’ utopia appears unrealistic. The world’s leading liberal democracy, the United States, is drifting into chronic political crisis under an illiberal presidency, while Russia and China now alarmingly resemble Rawls’ image of an outlaw state.

As the world’s second-largest economy, China presents the greatest conundrum for a would-be league of decent peoples. It has become a powerhouse market for global capitalism and an essential link in international supply chains, as foreign companies have offshored production there to tap its reservoir of skilled, cheap labor. Its universities are also making major contributions to global scientific research. But should “business as usual” continue if liberal, democratic values are threatened?

For China has not been induced to reform by global capitalism. Under President Xi Jinping’s rule it is revealing itself as a revanchist autocracy, with a powerful modernized military at its command. Viewing the global prominence of liberal values as an existential threat, China’s Communist Party is leveraging its economic interdependence with other nations and deploying both soft and sharp power methods to bend them to its will.

Its aim, according to National Bureau of Asian Research analyst Nadege Rolland, is to “partially reshape” the global order. The recent passage of the draconian National Security Law in Hong Kong represents a further extension of this power, with consequences far beyond the white terror it portends for Hong Kong’s citizens.

Japan faces the same China engagement conundrum, as China’s autocratic self-assertion potentially impacts on its interests. China was Japan’s second-largest export market in 2019, generating $19 billion in revenue. Prior to the COVID-19 pandemic, 13,685 Japanese companies were operating in mainland China and Hong Kong and in 2019, 96,000 Japanese citizens were residing there. Japanese universities, like their Anglo-American peers, have entered collaborations with China’s well-funded bioscience, medicine and engineering research institutes amid domestic funding shortfalls, and some have come to see fee-paying Chinese students as an important revenue source.

Alarms are being sounded about the escalating risks of a “business as usual” outlook. Writing for Gendai Business magazine, business journalist Daisuke Kondo explained the ominous possibilities of the Hong Kong National Security Law’s articles for Japanese businesses. Articles hinting at more centralized CCP oversight of foreign organization’s interests in Hong Kong will leave Japanese companies “completely at a loss about what effect this will have.” Other articles “snatching away judicial independence” will undermine business confidence in the rule of law in Hong Kong, and “could destabilize Hong Kong’s status as a global financial center.”

Kondo and journalists at Toyo Keizai and Jiji Press have highlighted this law’s threat to human rights, extending to Japanese residents or visitors in Hong Kong who could be criminalized under its notorious 38th article for offenses committed outside Hong Kong.

Meanwhile, researchers at the Australian Strategic Policy Institute have shown how the Chinese supply chains of American, Japanese and European companies are implicated in the use of forced Uighur labour amid an ongoing cultural genocide against Uighurs and other Muslim minorities in China’s Xinjiang Autonomous Region.

Lastly, a disturbing picture is emerging of how the CCP subordinates scientific research to military and state security interests under its statist dictat, raising questions about whether international scientific collaborations could become complicit in China’s military development and human rights abuses.

In 1999, John Rawls warned of the dangers of accepting outlaw nations “as members in good standing in mutually beneficial cooperative practices.” Yet in 2020 here we are, and a rapid, complete decoupling from China is almost inconceivable.

What can happen in Japan is a piecemeal disengagement and debate over the criteria that should guide it, including financial risk, human rights and national security. Such disengagement should take place at the discretion of individuals and organizations, with government support. The Japanese government is now subsidizing companies looking to diversify their supply chains and move operations out of China. It can also penalize individuals and institutions for knowingly entering into collaborations that threaten national security or violate human rights.

I will consider some Japanese commercial and academic investments in China where questions about disengagement should be raised.

First, the Japanese retailer and fashion brand Muji. It has invested deeply in China over the past 15 years, opening 273 stores there; China is its biggest foreign market. It also sources some of its cotton from Xinjiang, a not uncommon practice in the global fashion trade since almost 30 percent of the world’s cotton is grown in China, and 80 percent of it is produced in Xinjiang. In January, Muji’s reported operating profits for domestic and international stores were down by 25 percent, amid slowing sales in China and instability in Hong Kong.

Muji has repeatedly experienced trouble in China’s opaque legal system, being successfully sued by Chinese competitors for trademark infringement over the use of a Chinese language brand name it had legally patented in 2005. In 2018 it was fined for product packaging that listed Taiwan as its “country of origin.”

In 2019 Muji also faced international human rights and media scrutiny over the branding of some of its apparel as “Xinjiang cotton,” just as evidence was published of the presence of possibly forced Uighur labor in mills producing Muji’s cotton.

However, the “Xinjiang cotton” label remains in Muji online advertisements. In response to Japanese media inquiries in January, Muji insisted that its cotton, “procured from many regions in the world,” is produced in compliance with labor standards of the International Labor Organization. It is difficult to see how such standards could be upheld in the carceral surveillance and forced labor system China has imposed on Xinjiang.

Brands like Muji must weigh up the financial risks of their investment in an autocratic nation with an undependable legal system, amid disruptions caused by the pandemic and growing business uncertainties over China’s domestic politics and the global trade war. Yet they must also reckon with the ethical costs of outsourcing their production to nations — like China — where labor and human rights are systematically violated.

My second example concerns the ethical and national security risks of Japanese academic research and educational collaborations with China. So far there have been few scandals over university's “China engagement,” compared to Australia or the United States. Overstating the dangers of such engagement may also stoke irrational fears of Chinese students and researchers as communist spies.

Nonetheless, universities need to be cautious about collaborations with an autocratic regime that harasses its dissident citizens abroad, and which arbitrarily detained two researchers from Japanese universities last year. Universities must rigorously review research collaborations and reject or terminate any that are connected to dual-use technological development for military applications that threaten Japan’s national security, or which are implicated in human rights abuses.

Universities should also reflect on how much they can protect the academic freedoms of Chinese students and researchers, and advocate for more robust asylum application policy for dissidents among them, given reasonable fears of persecution if they return home. Formal protests must be made and educational collaborations reviewed, or terminated, when harassment or persecutions occur.

But what can be the endgame of piecemeal institutional disengagement, and of present trends of multilateral pushback against China? We can hope that better angels will eventually prevail there. Xi may bask in the personality cult enveloping him, and even boast as an ancient king once did, “Is my life not secured by the decree of heaven?” Yet his fellow citizens should reflect on what happened to their country in the past under such personalized rule.

Shaun O’Dwyer is an associate professor in the Faculty of Languages and Cultures at Kyushu University.

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