Dramatic shift in relations as Japan praises China’s Belt and Road

Japanese Prime Minister Shinzo Abe appears ready to reverse his position on cooperating with China’s One Belt, One Road (OBOR), a massive programme of infrastructure projects that may require between $4 trillion and $8 trillion of investment.

He also said he is willing to consider joining the Asian Infrastructure Investment Bank (AIIB), one source of funding for OBOR schemes.

In a speech in Tokyo earlier this month, Abe lauded the OBOR initiative as having the "potential to connect East and West as well as diverse regions found in between".

He added that Tokyo would cooperate with the initiative on condition that Japanese companies would have an equal chance of winning work, that Japanese goods were able to make use of the infrastructure when it was built, and that the finance model was sustainable.

The move signals a dramatic shift in Japanese policy. Before the decision of President Trump to kill off the Trans Pacific Partnership in January this year, Japan was set to join a trade pact designed to lessen its members’ dependence on Chinese trade and investment. Now it has joined a much larger initiative that is likely to have the opposite effect.

The OBOR initiative was launched by Chinese President Xi Jinping in 2013 to open China’s trade routes with Europe and Africa. It consists of a "belt" made up of road and rail corridors, and a "road" that is actually a sea route.

Abe’s remarks came after he sent Toshihiro Nikai, the leading supporter of closer Chinese relations within the ruling Liberal Democratic Party, to an international conference that Xi organized in Beijing in mid-May to promote the OBOR initiative.

Xi reportedly told the Chinese that Japan wanted to use OBOR as a "new platform" for cooperation.

Membership of the AIIB would also send a signal that Japan was reorienting its foreign policy in response to China’s increasing influence in Asia, and the US’ abandonment of the Obama administration’s "pivot to Asia". Until now Japan has been the only US ally to stay out of the AIIB.

AIIB membership would also be in line with the Abe government’s drive to use its financial and diplomatic muscle to boost its construction industry’s exports.

Japan opted out of membership when the AIIB was proposed, citing concerns over transparency and following the US’ lead. However, the AIIB has now reached a membership of 80, and some 130 countries sent delegates to the Beijing conference in mid-May.

Rumours are circulating that even the US itself may be considering applying for membership.

The Japan Times also reports that China has welcomed Abe’s recent statement, noting that participation in the OBOR could be a "testing field for China and Japan to achieve mutually beneficial cooperation and common development".

Further developments are expected during the G20 summit in Hamburg on 7 July, and there is talk of an exchange of official visits next year, which may lead to more concrete proposals being agreed.

Image: The two leading powers in Asia may be heading for a historic rapprochement (Rand Corporation)

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  1. OBOR is a visionary and gigantic trade and economic development initiative in the making. Countries which opt to stay out will do so at their great disadvantage. Please get on the band wagon and prosper together.

  2. Comment (6/29/2017) to GCR Editorial Staff —

    In your June 26, 2017 article “Dramatic shift in relations as Japan praises China’s Belt and Road”,
    probably “Nakai” (not “Xi”) was intended as the subject of the following sentence :

    Xi reportedly told the Chinese that Japan wanted to use OBOR as a “new platform” for cooperation.

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