Security Risks and Crisis Management in East Asia

The 2+2 summit between the US and Japan was an occasion for both Tokyo and Washington to firmly denounce China’s unilateral actions and the challenge it is posting to the status quo in the region, by "naming and shaming" together the country, thereby sending a strong signal to Beijing. The Allies must prepare for any eventualities. It is now very clear that the new Biden administration is sending a message of support to its Asian allies. But there are issues. South Korea is more reluctant to blame China. The lack of support from Seoul on the question of the denuclearization of North Korea is a matter of concern in Japan, as the Moon Jae-in government puts emphasis on the North-South Korean reconciliation instead. A similar potential obstacle or difficulty for a wider alliance on China policy can be noticed with India’s case. Although the latest Quad summit went quite well, the topics mainly focused on Covid-19 and climate change, rather than on China’s aggressive behaviour, and India does not seem to be fully on board on Quad joint China policy. 

How do you see the likelihood of China choosing rationally to provoke a security crisis in the region?

As China will be celebrating three centenaries - the 100th anniversary of the founding of the Chinese Communist Party this year, that of the People’s Liberation Army (PLA) in 2027 and of the People’s Republic of China (PRC) in 2049 - Xi Jinping needs to take a tough stand on foreign policy and vis-à-vis Taiwan. Xi seeks a third term as General Secretary of Party and strengthening his position on Taiwan can certainly help him gain support within the Party. 

Since 2013, China has become increasingly aggressive in East Asia, especially in the Taiwan Strait. The pressure on Taiwan is likely to grow and Tokyo and Washington are both wary of the risk of an open armed conflict with Taiwan in the five coming years. This scenario is a major security challenge for Japan. The Taiwan Strait is East Asia’s main hotspot and the other main theaters of conflict - the East and South China seas - are both constitutive of China’s strategy towards the reunification with Taiwan. The PRC’s operations in these two zones are directly linked to this strategic goal. However, a full-scale war on Taiwan is for the time being a too costly option from a military, economic and diplomatic standpoint. The PLA’s activities in Taiwan’s defense perimeter is basically a pressure campaign. 

Another scenario which needs to be considered is an invasion of the Dongsha Islands, which are uninhabited islands controlled by Taiwan in the South China Sea, with no military presence and only coastguards. In comparison with an invasion of the main island of Taiwan, the Dongsha Islands are an easy target from Beijing’s perspective. This easy catch could show Xi’s determination to invade Taiwan in the foreseeable future and the absence of civilians would dissuade the US from intervening militarily. Experts in Japan and Taiwan are really worried about this scenario and ask what the American response to such a move from China would be.

The Allies need to prepare, but to me an effective US policy should seek to assist Taiwan in defending itself - particularly through providing technological support to Taiwan’s development of indigenous submarine capabilities - instead of directly defending Taiwan. Taiwan needs to develop more asymmetric defense capabilities to deny possible Chinese raids on its main island. 

Considering this geopolitical environment, how do Japanese companies perceive the balance of risks and opportunities on the Chinese market? 

Although Japanese companies have always put economic interests first, there is a clear change of mindset and Japanese businesses are becoming more and more mindful of the implications of the ongoing US-China competition and potential American sanctions on Japanese companies dealing with China. The concern here is specifically on their reported links to forced labor in Xinjiang. It is worth noting that among the G7 countries, Japan is the only country that has not taken a stance yet nor imposed sanctions to China for human rights violations in Xinjiang. 

Japan’s economic bureaucracy is increasingly reflecting upon the impact of these human rights issues on the country’s economic activities in the years to come. Japan is slowly but surely adopting a decoupling approach, publicly framed as being in the name of supply chain resilience and without mentioning China. But in fact, Japan is trying to reduce its dependence on China, with financial help granted by the government to Japanese companies aiming to relocate their activities. 

Japan’s position would be to try to stay away from doing business with China in high tech sectors, for instance the aircraft industry or the semiconductor industry, a sector in which Japan is not a leading player anymore, but could be interested in joining the "techno-democratic" alliance with the US, Korea, Taiwan and some European countries. This path might open up new opportunities and avenues for cooperation between Japan and European industries. 

Copyright: Mark Schiefelbein / POOL / AFP