The Asia Shogi-board: Strategic Insights with Yoichi Funabashi

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Andrew Schwartz: Welcome to the Asia Chess Board, the podcast that examines geopolitical dynamics in Asia and takes an inside look at the making of grand strategy. I'm Andrew Schwartz at the Center for Strategic and International Studies.

Hannah Fodale: This week, Dr. Green is joined by Dr. Yoichi Funabashi, chairman of the Tokyo based think-tank Asia Pacific Initiative to discuss trends in the Indo-Pacific and Japanese grant strategy. Dr. Funabashi talks about the evolution of Japan's foreign policy from the Abe administration to the present day and the role of the US-Japan Alliance in Japan's strategic thinking. The two also touched on Japan's relationship with South Korea, economic security and Japan's prospects for acquiring strike capabilities.

Mike Green: Welcome back to the Asia Chess Board. I'm Mike Green. I'm joined by a friend and mentor of many decades, Dr. Yoichi Funabashi, who has held leadership positions in Japan's Asahi Shimbun, as the founder and now leader at the Asia Pacific Initiative, one of the most independent and influential think tanks in Tokyo and as an author of multiple books on broad geopolitical issues such as Asia-Pacific fusion and very detailed diplomatic histories of the North Korea crisis of the so-called Nye Initiative in the 1990s. He's combined the skills of an investigative journalist, an op-ed writer and an international relations theorist and we're delighted today to talk to Dr. Funabashi about trends in the Indo-Pacific, Japan's strategic trajectory and some of his thinking on geo-economics. Yoichi, welcome. Always good to spend time with you.

Yoichi Funabashi: Thank you, Mike. Thank you very much for inviting me.

Mike Green: Yeah, let's talk about you first. How did young Yoichi Funabashi decide to become both a journalist and a scholar and intellectual leader? Did you have some mentors or some event or some teachers who set you on this trajectory?

Yoichi Funabashi: Well, I was extremely fortunate to learn from professor Joe Nye at Harvard University in 1975 and 1976, when I was a Nieman Fellow at Harvard. I had covered the oil crisis in 1973, and I traveled with then-MITI Minister Yasuhiro Nakasone to several Middle Eastern countries for begging oil. And I really, keenly, I was aware how vulnerable Japan was in terms of economic security. Japan depended almost 90-some percent on that imported oil from the Middle East. And then Japan actually was hit, imposed embargo of oil export from Middle Eastern countries. So that's, I think for the first time, I really made up my mind of seriously studying that international relations and geopolitics and its impact on economy. So I think that I published a book titled “On Economic Security” after I came back to Japan, that was in 1978.

Mike Green: So my understanding is that visit by Nakasone had a big influence on him. He was a jishubouei, an advocate of autonomous defense and independence for Japan, and people who know him tell me that seeing how dependent Japan was on the Middle East, he became a stronger supporter of the US-Japan Alliance. Did you interact with him much or get that impression?

Yoichi Funabashi: Yeah, I think that was the first time I really was aware of that very delicate balancing act for diplomacy. It's not binary, not either-or. You can, and you should explore the ways to pursue both imperatives at the same time. Certainly you have to be mindful of the tradeoffs and the tensions between two, I think objectives. But it's doable and I think that it really requires political leadership and acumen. And I think that Japan certainly needed oil from Arab oil producing countries, but at the same time, it really needed strong US support for Japan's diplomacy to the Middle Eastern countries. And I think Nakasone skillfully achieved both goals at the same time.

Mike Green: So that trip to the Middle East you took as a young Asahi reporter with then MITI Minister Nakasone is a great place to start the discussion, and your career, of course, because you said there's not a dichotomy, but there's a tension. It was the Middle East where Japan first really asserted an independent farm policy from the US after the war because of the demands for energy. And now we're in a place in Japan's history where the careful balancing that you saw between the US and China or the US and the Middle East, is fading because of the Chinese challenge. For the past five, six years, the trend has been much stronger to embrace the Alliance to counter China. It struck me as quite significant when Abe changed Article 9 to allow collective self-defense “shūdan-teki jieken,” which a lot of us who are Japan scholars are saying is the end of the Yoshida Doctrine and a whole era. But historically, where do you think Japan is right now in the evolution of its foreign policy strategy in the Abe and post-Abe era?

Yoichi Funabashi: Yeah, I think I'll say also the Yoshida Doctrine is finally coming to an end with the Abe administration's political decision to reinterpret the collective self-defense. And I think that was a very significant move and strategy by the Abe administration. But Japan still stays handicapped of various fronts. We are just hearing a new debate on strike capability, whether Japan really should pursue to build a strike capability as its missile defense is now a much more precarious situation as China's missile capability has enhanced so significantly. And also, we still have serious base issues in Okinawa. And it's a part of that legacy of that opposed to World War II. But nonetheless, I think that getting back to your observation, I give a lot of credit to Abe administration’s policy to stabilize its relationship with the United States and with China simultaneously.

Yoichi Funabashi: But I think that's only made possible by the Abe administration learning lessons from that disastrous foreign policy diplomacy of the DPJ government, which caused that relationship with both the United States and China, spoiled it, deteriorated it simultaneously. So the lesson is that, if you want to really stabilize the relationship with China, you must strengthen that alliance with the United States and that's the lesson that they learned very well. And that's the only language that China understands too.

Mike Green: As former President Obama might have said that the Hatoyama administration was a teachable moment for Japan on the importance of having a strong alliance to deal with China. Let me ask you, Yoichi, I think of you as something of a realist, but also very much a liberal internationalist. And you and many others in Japan's academic and media world have generally been positive about the Abe foreign policy. It's an interesting merger. It seems that the liberal internationalists and Abe have converged in upholding a liberal international order and a Free and Opening Indo-Pacific. What happened, did Abe change, did you change? Did just the reality of China's pressure force everyone to get along?

Yoichi Funabashi: Yeah, I think it's because of reality and the effects on the ground really have been changing radically because Abe’s Indo-Pacific strategy was actually brought about in response to China's BRI, One Belt One Road Initiative, back in 2013. And under the Abe administration, Japan thought it was designed to expand its sphere of influence in Eurasia, as well as in the maritime region in the Pacific. At first, the South China Sea and the Western Pacific, China really wants to push against that United States’ dominance. So, I think that's the backdrop of the Abe administration putting forward the Indo-Pacific strategy. So it's really, I think, a combination of pursuing to uphold the international order and also a rebalancing strategy in which Japan needs to get India onboard and recruit India into this camp to strengthen that balance of power vis-à-vis China.

Mike Green: A lot of the free and open Pacific strategy had roots in, well, I like to tease friends in the Foreign Ministry and point out that it had its roots in Alfred Thayer Mahan and Commodore Perry who talked about a QUAD 150 years ago. But in the Japanese context, oh, and by the way, Sakamoto Ryōma and others, but in the recent Japanese context, it's interesting because Abe proposed a QUAD summit. He proposed the so-called “jiyū to hanei no ko,” the “Arc of Freedom and Prosperity”. Some similar kinds of ideas when he was prime minister the first time, in 2006. But the second time he did much better. I think maybe because the first Abe strategy was too anti-China, whereas the second Abe strategy was more, I would say, pro-Asia or pro-international order. But did you see an evolution from Abe one to Abe two, or like that? Or how do you explain the success the second time around? 

Yoichi Funabashi: I think Abe's view of China has not changed that much since the first administration through the second administration. Abe basically does not trust China. And he regards China's policy toward Japan and elsewhere much more becoming to be zero sum. And basically, its anti-alliance and harboring their ambition to drive the United States out of that region. So I think that's still the case in my view today, but Abe has certainly learned the lesson that is that, he really needs to swallow that pride, nationalism, and he really must be a realist at expense of all the other factors. He's a through and through realist. And he certainly is a nationalist, but he's not an ethnic nationalist. I think he's a civil nationalist in my view, as Ezra Vogel once remarked. And so, I think that's a reason why he has a strong backing from the Japanese public. I think that's the key that China at first portrayed, tried to portray him as a revisionist, a dangerous guy. And, but sooner or later, China had to acknowledge that Abe will not be that easily dismissed. And he’s the guy China has to talk about and make a deal.

Mike Green: What about Kishida, the prime minister now? Same general continuity, different ideology, how do you see the leaders after Abe?

Yoichi Funabashi: Prime Minister Fumio Kishida was a foreign minister in Abe administration for four years, eight months. So, I think it's basically a continuation. The Kishida administration's policy, foreign policy particularly is a continuation of Abe administration. I think it is very good. I think continuity of foreign policy is extremely now important. So that's a plus. He perhaps may be portrayed as a little bit more liberal compared to Abe, but I don't think he's that liberal.

Yoichi Funabashi: He's also a realist, but he had some emotional problem with dealing with South Koreans. When he was a foreign minister, he was very much instrumental in bringing about that agreement on what is called “comfort women” issues. And he, as well as Abe, put a tremendous political capital and stake on that. And they had a very difficult, found difficulty in reigning in and staving off that tremendous pressure from the conservatives, the right wingers, who are opposed to that. Then we had the Moon Jae-in government coming to power in Seoul, which scrapped the agreement almost literally. That really put Kishida on hot water and he actually felt betrayed and that’s very much unfortunate. So I think he perhaps feels very much compelled to deal with South Korea extremely sensitively and cautiously in my view.

Mike Green: If the Koreans elect the conservative candidate, the prosecutor Yoon, in the election next year, I think there will be a very different tone out of Seoul, but it's a close election and it may not be enough to wait and see what happens. I would rate, myself, I would rate the Abe Grant Strategy as an A, but the one category where I'd give the worst grade would be Japan-Korea relations because in a balance of power strategy built around the QUAD countries, the US, Japan, Australia, and India, around the Free and Open Indo-Pacific, and all of this very skillful use of external balancing of external relationships to compensate for China's growing power vis-à-vis Japan. In the middle of all of that, Korea is the biggest and most important vulnerability of all. It always has been for Japan. The dagger aimed at the heart of Japan.

Mike Green: For a thousand years Korea has been like Belgium is to Britain. And yet somehow Japan's strategic community is incapable of finding a way to improve relations with Korea, which from Washington's point of view, as you know, on a bipartisan basis, people think is crazy. Why don't Japan and Korea solidify the relationship so that both countries have more leverage vis-à-vis China and North Korea? And I understand the politics Kishida-san faces, but is anybody in Tokyo trying to break through the politics and say, "This is strategically really important for Japan,” or is it just going to have to wait for a better result in Seoul or something like that? You've heard me say this many, many times, and you know I'm not the only American expert who harps on this. You're probably sick of it.

Yoichi Funabashi: Mike, I'm afraid, not yet. I wish there would appear with different voices from particularly the younger generation political leaders, but not yet. But I think that even though I agree to what you said, but you also have to take into account of that geopolitical dynamics also changing between Japan and South Korea, not to that same extent to Japan-China. I think Korea is now developing so fast and in terms, for instance, of defense, national defense expenditure. Korea's defense expenditure is larger than Japan. And economic wealth also Korea is catching up Japan very much fast as Japan has remained to be deflated over the past 20 some years. So, I think that's one major factor why that some, many Koreans now feel that it's necessary for Japan-South Korea relationship to be rebalanced. And you just cannot underestimate this kind of national pride and also increasing power that Korea has acquired relatively vis-à-vis Japan.

Mike Green: It's true, at the same time in polls consistently over 70% of Koreans say they don't like or trust China. So, there's a lot of churn. There's a lot of continuity and change in Korean national identity and I wouldn't give up yet, but I hear you. It's difficult for the near term. What about strike? Kishida emphasized Japan's acquisition of strike capability in the LDP presidential election. Was that so that he could burnish his hawkish credentials or do you think there's real momentum towards serious strike capability? And what kind of strike capability do you think Japan would need against a China or North Korea? Presumably not a South Korea.

Yoichi Funabashi: Actually, when Abe resigned a year ago, in September 2020, that he made that remarks, shared farewell remarks just before he actually left the office and that was that a need to develop strike capability. He didn't say that Japan must develop that capability. He said time for Japan to seriously consider as an option, okay. And Kishida also has followed this line. So it's still in the exploratory stage, but I think that serious policy thinkers and makers in both Ministry of Foreign Affairs as well as Ministry of Defense are really now seriously considering acquiring that strike capability as a Japan's option, given that deteriorating strategic situation surrounding Japan. And at the core of that issue is how to really strengthen that deterrence power vis-à-vis China. So I think this will not just go away. We will keep being confronted with this critical issue for many years to come. And so strike capability is one of that, those issues in my view.

Mike Green: 15 years ago, even 10 years ago, this strike capability debate would've alarmed people in Washington, maybe in Australia, not this time. I think there's pretty broad support and recognition. The big questions are, how do you do it? Do you do it in a way where you're enhancing the alliance where we're operating better together with unity to deter China? But this will be a hot topic going forward. You're spending a lot of time at the Asia Pacific Initiative now on geo-economics and Japan's economic state craft has really taken off.

Mike Green: When Abe became prime minister, my assessment was that about 17% of Japan's trade was covered by economic partnership agreements or FTAs. When Abe left, it was like 82-83% of Japan’s trade, huge new leadership role that's as significant as what Abe did on collective self-defense. Meanwhile, the US gets an F, a failing grade for geo-economics and economics statecraft. Won't join TPP, can't seem to get any agreement inside the administration on a digital trade agreement, just a lot of symbolism so far, and China's asked to join CPTPP. So how do you see the overall geo-economic game in Asia right now? Is the US really losing badly? Is Japan holding things until we get back in the game? Is China skillful? How do you see the game right now on the geo-economic front?

Yoichi Funabashi: Yeah, on the geo-economic front, I think the critical need to develop a sensible, meaningful economic security strategy is long overdue. And I think belatedly, we really now appreciate how critical this geo-economic front is. And I think that's encouraging to see Biden-Suga summit now finally addressing these issues in their summit talks last April. I think that China's challenge to deliver international order is multifaceted, multi-layered I should say, but one of them is that they really want to use their market power as a leverage. And if possible, when necessary, weaponizing that market power and economic interdependence in their favor. So as China will continue to grow, albeit on lesser, slower speed, that China will not give away this leverage so easily. We will have to live with this China with proclivity to resort to economic state craft, or whenever they find necessary to use.

Yoichi Funabashi: So I think that Japan and the United States in alliance, as well as with the other like-minded countries, have to pool their resources and to integrate their strategy vis-à-vis China in a very, very critical field, such as semiconductor, 5G, and rare earths and also green technologies. So I think that we are agonizingly slow of appreciating this challenge, but finally, we actually now recognize that need to co-operate. But in the economic security field, it really requires a strong collaboration between the government and private sector companies, because the companies are main players, unlike the traditional national security policy. So even between the allies, that companies are often competitors and even rivals in some cases, and even though Japan and the United States were solid throughout 1970 and 80s, particularly in 1980s and early 1990s that trade friction, “trade war” quote-unquote, was so intense as exemplified in that agreement on semiconductors in 1986. So I think we should not underestimate the challenges ahead in forging the economic alliance between the US and Japan, vis-à-vis China.

Mike Green: Yeah. Do you think the new economic security minister Kobayashi-san is empowered to forge that kind of strategy inside Japan and with the US, or does he have the authority or not?

Yoichi Funabashi: I hope he is empowered sufficiently to exert leadership in formulating that economic security policy within Japan. Japan is so notorious, it was elsewhere, but particularly notoriously in silo structure among agencies in bureaucracy. And the economy security requires that integration of that related agencies to come up with that very much effective economic security policy. So I hope that he should be given a mandate to do that, but really prime minister Kishida must lend his support to Mr. Kobayashi. He's a very, very promising younger generation of Japanese politician and he's very much familiar with these issues. He was a team of Amari Akira, the former secretary general of the LDP, also in charge of economic security policy in LDP Policy Research Council. So he was very much familiar with that and he is very much, I think now in a very much good position to pursue a coherent economic security policy in Japan.

Mike Green: Let me wrap up by asking you about your experience, founding Asia-Pacific Initiative. It was called Rebuild Japan Initiative Foundation, RJIF, because you created it right after the March 2011 tsunami and nuclear disaster. But seems that independent think tanks in Japan, especially API are really making a mark in a way that wasn't possible 30 years ago or even 20 years ago. Is the government looking to think tanks more or are the problems bigger? How have you managed to have such a successful, and it really is a successful and well-regarded institution, shape Japan's policy debate? Which you didn't see in think tanks in Japan a generation ago.

Yoichi Funabashi: Mike, I'm grateful for your very generous remarks on the think tank. And I was very much privileged to have you as a distinguished guest scholar on the think tank from day one.

Mike Green: That's why you were successful, right?

Yoichi Funabashi: Yeah.

Mike Green: That's why, that was the secret.

Yoichi Funabashi: Exactly. But let me say it this way. Japan has gone through about 30 years of deflation in our “lost decades”. And we have seen the Japanese government one after another coming up with that new growth strategy. Some accounted 23 times of Japanese government coming up with that growth, new growth strategies. None has worked. Why? Well, for various reasons in my view, but that I think the most critical part of this problem is that nobody actually has done a serious review of what went wrong with that policy and the Japanese government doesn't have any strong incentive to do that.

Yoichi Funabashi: So I think that, somebody has to do that. It should not just leave that government, to the Blue-ribbon Commission, to do that. Independent scholars, researchers, and preferably think tanks I think are tasked with this, need to do this. And at our Institute, we have deliberately put forward an objective to critically review the public policy, particular when it comes to that national crisis and a big national agenda and I think that's what, it's very much now needed. Now we are still in process of fighting against that Covid-19.

Yoichi Funabashi: Japanese government policy is to set up that commission to review after the Covid crisis was over, will be over, okay. But I think that, there are some ways for the Japanese government to do that in a interaction review, if not that after action review, okay. So that's the reason why we published interaction review last October to critically review that Japanese government response to the Covid-19. The best practices as well as lessons learned, both. So that's very much important because as officials need to feel assured that we are not just attackers on them should must be good listeners to them and that's very much, what we really need is to ask the right questions and critical review of that government policies and actions. So I think that's certainly I'm biased here, but very much needed, critically needed in Japan in my view. So that's a perhaps that field that we excel among think tanks in Japan.

Mike Green: And listening to you, I'm realizing you excel in think, among think tanks globally. I mean, there are, I cannot think of other think tanks that do the kind of deep, deep probing, post-mortem analysis of policy failures and then using that to come up with best practices. You've done it on the nuclear disaster, on the lost decades, on the DPJ government's collapse and in a very blunt and honest way, and lengthy. I read your, I mean, your reports are long. They're detailed at these commissions. And maybe only a journalist could think of that kind of approach to running a think tank, but it's very, very influential. And frankly, it builds consensus around Japan's strategy. It's an important part of it. I encourage everyone to look on the API website, which of course has English and Japanese reports, which is another thing you do, which is make sure the global audience understands. So it's been a great lesson for us today, but also all the work you done at API. Thank you, Yoichi, always a pleasure. Really appreciate it.

Yoichi Funabashi: Likewise, thank very much for inviting me here to this podcast and I really, really appreciate your invitation. Thank you.

Hannah Fodale: Thank you for listening to the Asia chess board. We will be taking a break in December and we'll return with new episodes in January.

Andrew Schwartz: Thanks for listening. For more on strategy and the Asia program's work visit the CSIS website at csis.org and click on the Asia program page.