While China's Belt & Road Initiative (BRI) has made certain progress in ASEAN countries, it is now facing a number of fluctuations and risks. In particular, several major projects have been tossed into the dark in ASEAN and this carries huge impact. To a certain extent, China's current BRI projects have gradually become a kind of widely-used diplomatic weight. In contrast, Japan has implemented its southward policy steadily for decades, and is not afraid of political risks as it constantly adjusts itself. It is then interesting to compare the two countries' achievements in ASEAN countries.
Although China has invested heavily in ASEAN countries, according to the latest data from Fitch Solutions, Japan still won the Southeast Asian infrastructure competition against China, and its project value is almost 1.5 times that of the Chinese. Relevant data shows that among the six major economies in the region, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam are worth USD 367 billion in projects related to Japan. On the other hand, the total value of related Chinese projects is USD 255 billion. These figures highlight the scale of potential demand for infrastructure development in Southeast Asian countries, and that Japan is more dominant than China.
According to estimates of the Asian Development Bank, from 2016 to 2030, Southeast Asia's economy needs USD 210 billion in infrastructure investment every year to maintain the momentum of economic growth. While the latest data provided by Bloomberg only includes pending projects, i.e. projects that are in planning, feasibility studies, bidding, and currently under construction; the data shows that as of February 2018, Japan's investment was USD 230 billion, while China's investment was only USD 155 billion. The result is an indication that in ASEAN countries, Japan's investment is much ahead than that of China.
Vietnam is by far the biggest focus of Japanese infrastructure participation, with ongoing projects worth USD 209 billion, more than half of Japan's total. This includes the USD 58.7 billion high-speed railway between Hanoi and Ho Chi Minh City. Therefore, one can only imagine future prospects of Japan-Vietnam relations. For China, Indonesia is its main customer. Some unconfirmed data show that China's investment in Indonesia is USD 93 billion, accounting for 36% of total foreign investment. The Kayan River hydropower plant alone is worth USD 17.8 billion.
From the perspective of the entire Southeast Asian region and the number of projects, Japan has obvious advantages, but its profit margin is low. A survey in ASEAN shows that 240 infrastructure companies in ASEAN have received funding from Japan, while China has supported 210 in all 10 Southeast Asian economies. From the perspective of future cooperation prospects, Japan continues to maintain its advantages, but China is catching up.
It is worth noting the strategic policy differences between China and Japan in ASEAN countries.
Japan has always attached importance to ASEAN countries, and this has never changed. From 1951 to 1977, low-interest Japanese yen loans were issued, while free economic assistance were provided to Southeast Asian countries. Although the post-war Japan itself required massive reconstructions, Japan has gradually connected long-term export channels to Southeast Asia with the export of manufactured products in replacement of war indemnities. Since then, Japan has gradually connected its import channels with natural gas resources from relevant Southeast Asian countries.
In the mid-1970s, Japan encountered crisis in its relations with Southeast Asia. Saigon, the capital of South Vietnam fell, the pro-American forces in Laos were also subverted; the Indo-China Peninsula had turned red. In response to the contingency, then Prime Minister Takeo Fukuda strategically proposed the "Fukuda Doctrine" in 1977, which stressed that Japan would not be a major military power and emphasized the establishment of an equal partnership with Southeast Asian countries. Japan showed "quantitative and qualitative changes" in its subsequent foreign aid. In the three years from 1978 to 1980 alone, the amount of foreign aid reached US$ 3.3 billion. Its ODA loans have changed from focusing only on securing raw materials and facilitation of investment by Japanese companies to simultaneously considering how to bring "positive externalities" to the local areas, hoping to win the trust of Southeast Asian countries.
Takeo Fukuda's successors Masahiro Ohira, Zenko Suzuki, and Kiichi Miyazawa all followed the "Fukuda Doctrine" and made every effort to promote Japan to the top level of ASEAN countries. In the 1990s, Japan began to actively work on the construction of a regional system. Japanese Prime Minister Kiichiro Miyazawa visited Indonesia, Malaysia, Thailand, and Brunei. In addition to emphasizing the liberalization and democratization of the regional economy, he also proposed that Japan will actively participate in issues related to politics and security in the Asia-Pacific region, in order to demonstrate Japan's diversified cooperation with Southeast Asian countries. This proposition was later called "Miyazawa Doctrine".
Japan's policy towards ASEAN is flexible and has better strategic inheritance. Comparing the strategic competition between China and Japan, some scholars in China also suggest that Japan's implementation of the "green" connectivity policy for Southeast Asian countries today deserves China's attention at least at two levels: First, the pursuit of the global interconnection in the BRI has strategic homogeneity competition with Japan's regional connectivity policy for Southeast Asia after the end of World War II. China needs to think about how to seek win-win nodes and avoid conflicts of interest. Second, Japan continues to adjust its connectivity policy, especially in the 21st century it has gradually emphasized the "green" label, and used environmentally friendly means to circumvent the negative externalities of economic development to win the hearts of the local people. Comparing the engagements of the two countries with ASEAN, historically the people of ASEAN have closer relations with Japan, and less so with China. Therefore, China needs to learn from relevant strategic operating models to promote its own "people-to-people bond" to resolve this issue.
Final analysis conclusion:
As ASEAN takes the position as China's largest trading partner, it has also become vital to China geographically. However, comparing China and Japan's influence in ASEAN, China still has to learn a lot from Japan's strategy, policies and long-term implementation in ASEAN. In the context of the current suppression of China's geopolitics and geo-economic space, this kind of reflection and reference is now crucial for China.
