Prime Minister Kishida’s Catch-22 Situation

US-China Rivalry and Digital Connectivity in the Indo-Pacific

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The formal appointment of Fumio Kishida as Japan’s prime minister after the elections on Oct. 31 has brought to an end a period of intense flux in the Japanese political firmament. It all started with the resignation of former prime minister Yoshihide Suga in September as he battled declining popularity ratings. Many Japanese weren’t happy with his decision to go ahead with the Tokyo Olympics as the coronavirus pandemic in Tokyo and its suburbs was still raging.

 

In these general elections, the Liberal Democratic Party (LDP) secured 261 seats in the 465-member lower house of the Japanese Parliament, much more than the parliamentary majority of 233 seats. Its alliance partner Komeito secured 32 seats, giving the LDP-Komeito coalition a total of 293 seats.1 The opposition parties did not make much of an impact, showing that the voters were unwilling to upset the status quo.

 

However, there are challenges galore for the new prime minister and his ruling coalition.

 

Domestic Challenges

 

First, let us analyze the challenges for Kishida on the domestic front.
The economy presents the first one. The pandemic has hit the export-dependent Japanese economy hard. In addition, the tourism sector has borne the brunt of coronavirus-induced travel curbs. Although the government has eased entry restrictions slightly, there still remains a long way to go, particularly now with renewed fears over the Omicron variant. In 2019, before the pandemic, inbound tourists to Japan had reached an all-time high of 32 million.
Kishida has promised a shift in economic policy away from “neoliberalism” and toward a “new capitalism” by creating a virtuous cycle between income redistribution and growth.2 However, it is worth noting here that Japan’s gross domestic product (GDP) has not shown an upward trend since it peaked at US$5.5 trillion in 1995;3 it shrank by 4.8 percent in 2020 due to the pandemic. While former prime ministers Shinzo Abe and Suga had pushed “Abenomics,” with its “three arrows” — aggressive monetary easing, fiscal consolidation and a growth strategy — it has only produced limited results.

 

Recently, the Japanese government agreed to offer a combined 100,000-yen (US$880) worth of vouchers and cash payouts to children aged 18 or younger as part of its stimulus package. In addition, 100,000 yen in cash payouts will also be paid to low-income households that have been hit hard by the pandemic.

 

Climate change is also a major hurdle for Japan. In late 2020, Suga said, “we hereby declare that by 2050, Japan will aim to reduce greenhouse gas emissions to net-zero, that is, to realize a carbon-neutral, decarbonized society.”4 However, this will involve huge investments in green technologies and the government will have to foot a major part of the bill. In addition, most of the nuclear reactors in Japan have not been restarted after the Fukushima nuclear disaster of 2011, increasing the dependence on fossil fuels.

 

The second challenge is coronavirus, although vaccination levels have now picked up after a very slow start. Recently, it has been reported that some 76 percent of Japanese are now fully immunized.5 However, Japan’s aging population means that the government will be on its toes should newer variants like the Omicron one turn into a cause for worry.

 

Third is the growing divide between the rich and the poor in Japanese society. The average salary in Japan has remained more or less stagnant over the last three decades, which is a worrying sign for any economy. Then there is the challenge of getting more women into the Japanese workforce. However, in the absence of adequate childcare facilities, the government’s push to achieve this goal has not had the desired result. Japan also has a very strict immigration policy, as a result of which very few foreign nationals have actually received Japanese citizenship. The language barrier is also an issue for foreign nationals wishing to stay and work in Japan for a long time. In addition, as Japan grows older, the government will need to spend more on pensions and healthcare.

 

Fourth, Kishida will also have to contend with the factions within the LDP. Already, there are apprehensions within the different camps regarding the government’s initial moves. The Abe-led camp does not seem to be too happy with the choices made by the Kishida camp, especially the appointment of his trusted aide, Yoshimasa Hayashi, as foreign minister. Hayashi was the former leader of the Japan-China Parliamentary Forum and in this capacity has considerable knowledge of the problem areas in Japan-China ties, but is seen by many as being dovish toward China. Hayashi’s appointment, however, seems to indicate that Kishida may be prepared to go a little soft on China as opposed to Suga or even Abe.

 

Recently, Abe warned China over Taiwan. During a virtual keynote speech on Japan-Taiwan relations, he warned Beijing that an attack on Taiwan would be “economic suicide.” Beijing did not lose time in reacting, with a Chinese foreign ministry spokesperson saying that “if you challenge the bottom line of the Chinese people, your head will surely be smashed and start bleeding.”6 What was surprising, however, was the use of expressions such as a “smashed” and “bleeding” head. While this is in tune with Beijing’s recent “wolf-warrior” diplomacy, China seems to have crossed a red-line with its remarks on Abe.

 

External Challenges

 

There are even greater challenges on the foreign policy front for Kishida.
One of the biggest threats is from North Korea. Over the last couple of months, North Korea has launched a series of ballistic missiles, including a supposed “hypersonic” weapon. There is also the issue of Japanese nationals who have been abducted by North Korean agents — a very emotive issue in Japan. It seems North Korea has taken advantage of the situation after the election of US President Joe Biden, since Biden was preoccupied with the withdrawal from Afghanistan and fraught ties with China. Former US President Donald Trump had undertaken two rounds of talks with the North Korean strongman, Kim Jong Un. However, the process, already stalled, has come to a standstill under the Biden administration.

 

In addition, China represents a huge challenge because it is one of Japan’s largest trading partners. Under Abe, the Japanese government had already set in motion the process of moving supply chains away from China and had allocated approximately US$2.2 billion to assist the process, but this is easier said than done. There is the danger of political tensions with China spilling over into the economic front.

 

Ties with the US also deserve special attention. During the Trump administration, the US had been making demands on Japan to increase its financial support for the cost of basing US troops in Japan and these are likely to continue under Biden. It has been reported that Tokyo is planning to provide more than 1 trillion yen under its Host Nation Support program for the cost of basing US forces in Japan from fiscal 2022, which marks an increase from around 980 billion yen borne by the Japanese government between fiscal 2016 and fiscal 2020.

 

In addition, Russia will be a grave challenge. Japan under Abe had hedged its bets by not taking an aggressive line when it comes to Russia, but that did not work as Moscow instead militarized the Kuril Islands (known as the Northern Territories in Japan). The Kuril Islands stretch between the Japanese island of Hokkaido in the south, and Russia’s Kamchatka Peninsula in the north. Moscow also has levers of influence over North Korea, of which Japan needs to be aware.

 

Then there is the issue of Taiwan. In the case of war over Taiwan, Japan is likely to get pulled in. China has repeatedly intruded into Taiwan’s ADIZ Air Defense Identification Zone (ADIZ) in recent months, and this is only likely to increase in the days and months ahead. In response, the Biden administration has been talking tough and has already sent military trainers to Taiwan. Japan will have to work out its options in advance should hostilities break out over Taiwan. Already the Biden administration has reiterated that the US-Japan defense treaty applies to the Japanese-held Senkaku islands as well.

 

Options Open to Japan

 

After analyzing the challenges, let us look at the options for Japan and the Kishida administration.

 

First, Japan has no option but to work with its closest ally, the US, to rein in the recalcitrant North Korean regime. However, as of now, North Korea does not seem to be on the radar as far as US foreign policy is concerned. This could be a challenge for the new Japanese prime minister because Tokyo does not have too many options of its own when dealing with Pyongyang.

 

Second, Kishida will have to address tensions with China because relations are very delicate at the moment. Beijing has been on a belligerent path under the leadership of Xi Jinping. Chinese PLA Navy vessels and the so-called maritime militia have entered the waters off the Senkaku islands (known as Diaoyu in China). The LDP’s alliance partner Komeito, meanwhile, is seen as being soft toward China.

 

Third, Kishida will find it difficult to live up to the legacy of Abe, who had built a very close rapport with Trump during his term. The US under Biden has already announced a diplomatic boycott of the 2022 Beijing Winter Olympics. The question remains whether Japan will follow suit and if so, what the impact would be on Sino-Japanese ties.

 

The Japan-US alliance has held strong since 1945 and there is no denying that both countries will attempt to make it even stronger. However, the issue of basing American troops in Okinawa Prefecture has seen quite a lot of opposition from local residents. Overall, Kishida is seen as a moderate and may not be willing to take a very hard line on China, which may put him in a difficult position with regard to the US. Recently, Japan was left out of the Australia, UK, US strategic agreement known as AUKUS. This shows that America’s strategic calculations may not have space for Japan in some cases, although Japan is an integral part of the Quad, which involves Japan, Australia, India and the US.

 

Fourth, ties with Russia are not getting any better. Kishida will have to move fast when it comes to Moscow since it is in Japan’s interest to prevent Russia from getting even closer to Beijing and Pyongyang. Russia’s relations with China have been improving under Xi and Vladimir Putin. Warships from the two countries made almost a neat circle around Japan’s main island of Honshu recently in a joint drill for the first time.

 

Fifth, there is the issue of increasing defense spending. Kishida, in the run-up to the recent elections, had promised to increase defense spending to 2 percent of GDP. After the victory of the LDP-Komeito coalition, he will face calls to keep his promise. But this is easier said than done because he is likely to face severe opposition on the domestic front. Meanwhile, the Japanese cabinet recently approved a 770 billion-yen request for an extra defense budget allocation to expedite the purchase of missiles, anti-submarine rockets and other weapons, at a time of rising concern in Japan over the long-term intentions of China, Russia and North Korea. This will increase Japan’s military spending for this year to a record high of more than 6.1 trillion yen, which marks an increase of 15 percent from 5.31 trillion yen in 2020.7

 

The Road Ahead

 

There is no doubt that Kishida faces a plethora of challenges as he attempts to navigate a delicate path both in the domestic sphere as well as on the external front. He will have to walk a thin line as he straddles the challenges from China and attempts to keep up strong ties with the US. While he is generally seen as being dovish, due to his roots in Hiroshima, the current situation may not allow him much room for comfort. However, what may help him is the fact that he has already served as foreign minister and is familiar with the intricacies of international affairs.

 

But Kishida does not have much time. He will have to show results soon, or else Japan could return to the system of revolving-door prime ministers as seen in the past. While Abe was the longest-serving Japanese prime minister, his successor Suga was in office for just over a year. Meanwhile, on the domestic front, the economy is likely to keep Kishida busy. Hence, he is in an unenviable situation. How he fares is something we will have to wait and see. For now, he seems to be caught in a Catch-22 situation.

 


Notes

1 “Japan election: PM Fumio Kishida declares victory for ruling LDP,” BBC News, Nov. 1, 2021, www.bbc.com/news/world-asia-59110828

2 Takatoshi Ito, “Where Will Fumio Kishida Take Japan?,” Project Syndicate, Oct. 20, 2021, www.project-syndicate.org/commentary/fumio-kishida-economic-policy-plan-by-takatoshi-ito-2021-10

3 Naohiro Yashiro, “Can Japan’s economy recover under Kishida?” East Asia Forum, Nov. 22, 2021, www.eastasiaforum.org/2021/11/22/can-japans-economy-recover-under-kishida/

4 Prime Minister’s Office Japan, Policy Speech by the Prime Minister to the 203rd Session of the Diet, Oct. 28, 2020, japan.kantei.go.jp/99_suga/statement/202010/_00006.html

5 “Japan: From vaccine hesitancy to vaccine success,” BBC News, Nov. 20, 2021,www.bbc.com/news/world-asia-59342308

6 “China Threatens to Crack Skulls After Japan’s Shinzo Abe Speaks Up for Taiwan,” Newsweek, Dec. 2, 2021, www.newsweek.com/china-threatens-crack-skulls-after-japans-shinzo-abe-speaks-taiwan-1655198

7 “Japan seeks extra defense budget amid China, N Korea concern,” The Economic Times, Nov. 26, 2021, economictimes.indiatimes.com/news/defence/japan-seeks-extra-defense-budget-amid-china-n-korea-concern/articleshow/87932901.cms

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