Since the onset of the post-Cold War period, East Asia has entered into an era of comprehensive engagements and is now widely regarded as the focus of the world’s attention. This transformation has been triggered, in particular, by the rise of the complicated yet constructive relationship of two of the well-known powers – not only in the region but in the world as well.
Japan and China, popular rivals and world’s greatest authorities (ever since that period), have faced each other as powers of relatively equal strength resulting to competing in areas such as military defenses, diplomatic strategies, international relations, economy, and historical legacy.
This love-hate relationship, the way both countries cooperate and (most specifically) how they compete, is very eminent and could obviously send a great impact in the evolution of the region as a whole; playing one of the factors that shaped both the countries’ respective nationalisms, history, and identity.
However, despite the fact that the whole Asia is affected by the rising competition between the two countries, it can be noticed that only a little work has been done as a response. And so, the question posed on the table is: how do the Sino-Japanese relations affect Southeast Asia, particularly its economy?
The Sino-Japanese rivalry is a “boon” for the region’s economy.
According to an opinion written by Dr Tang Siew Mun, a Senior Fellow at the Institute of Southeast Asian Studies (ISEAS) in Singapore, in the December 2014 policy report of the Nanyang Technological University; the Sino-Japanese relation is somehow an advantage for the whole region’s economy “especially considering the likelihood of the animosity devolving into a crisis or armed conflict in Southeast Asia.”
Although the political relations between the two countries have deteriorated – given that Prime Minister Shinzo Abe together with his cabinet members have inflamed the simmering animosity and distrust – trade relations have remarkably improved since 2008, with China becoming Japan’s largest export market. However, even though political and historical issues continue to cloud any step towards mending fences, it is to no deny that this relationship reverberates among Asia as “it is one of the most important bilateral relations undergirding the region’s stability and prosperity.”
The game changer, however – according to Dr. Tang Siew Mun – is China’s re-emergence as one of the region’s leading power, overtaking Japan as the world’s second largest economic power in 2010. But even though the power appeared to have tipped in China’s favor, the extent of its influence (especially in the “archipelagic” Southeast Asia) is not as pronounced (i.e., countries like the Philippines and Indonesia transacted higher level of trades with Japan than with China) – suggesting that “Southeast Asia would have greater latitude and policy flexibility in their approaches toward China and Japan.” because neither of the countries has a clear advantage over the other. Moreover, because of this, it gives opportunities for both major powers to deepen their relations with the region.
The rivalry has provided the CLMV countries aid streams and continuity in investments.
The CLMV countries, according to Dr. Huong Le Thu, a Visiting Fellow at ISEAS in Singapore, will benefit from the Sino-Japanese competition. Because these countries are undergoing rapid transformations because of the pressure of catching up with the original ASEAN members, both Japan and China realize the importance of engaging with the CLMV to improve their relationship with the ASEAN.
Japan supports the Initiative for ASEAN Integration (IAI) (which aims to reduce the development gap among the ASEAN members) and was the largest contributor of its first phase focusing on human resource development. China, on the other hand, has also contributed by focusing on the inland waterway improvement of the CLMV countries.
This intensified competition over the region might have had brought benefits to the beneficiary countries – providing continuity of investments and aid streams – and thus, is one step closer to could Asia’s economic advancement. However, As Dr. Huong Le Thu pointed out that “the growing and continuous dependence on external funding means that the beneficiaries of such help are both economically and politically tied to the donors.” – especially that the growing tensions between Japan and China “suggest that future investments and aid might have even more strings attached.”
The Sino-Japanese relations have been very much strained over the past (i.e. the Sino-Japanese wars and the Nanking incident) and is continuously becoming incrementally more competitive. It peaked during the 2010-2013 period because of the territorial disputes over the Diaoyu Islands.
However, despite these established facts, the “competition is arguably one of the most important structural force for the stability” of Asia. The rise of China’s economy, Japan’s political advancement, and their fight for power are the major catalysts to the emerging economic stability – playing the greatest roles in facilitating and pushing East Asian economic development father and faster.
It might be one step towards reconciliation but not until the daunting obstacles between the two countries are settled that the Asian economy will be in order.