Constitutional questions, regional security threats, and the role of an emerging China have all helped shape the economic relationship between New Zealand and Japan.
The North Asia Centre of Asia-Pacific Excellence (CAPE) recently held its final expert seminar of 2017. Dr Marc Lanteigne (Senior Lecturer on China, East Asia, and Polar Regions at Massey University’s Centre for Defence and Security Studies) presented a succinct analysis of Abenomics, a set of liberalising economic policies that continue under recently reelected Prime Minister Shinzō Abe, and what the future of Japan means for New Zealand.
The North Asia CAPE is committed to strengthening New Zealand’s economic and cultural ties with Greater China (including Hong Kong and Taiwan), Japan, and Korea.
Dr Lanteigne provided an overview of Japan’s unique business environment, and the role of culture and history in its construction. He explained that while two of the three "arrows" of Abenomics – monetary easing and fiscal stimulus - have been successfully implemented, the third arrow - structural reforms – has proven more challenging. Arguably the most important arrow from New Zealand’s perspective, its future is far from certain, as implementation requires overcoming decades of cultural expectations and business norms.
Another source of controversy, said Dr Lanteigne, is Prime Minister Abe’s reinterpretation of Article IX of the Japanese constitution. The clause restricts the Japanese armed forces from offensive combat operations. The reinterpretation, which has been officially approved by the Japanese government, is widely unpopular in Japan, and even more so amongst Japan’s closest neighbours – China and Korea. However, the growing North Korea missile threat has energised Prime Minister Abe’s agenda and has placed Japan’s responses at odds with Beijing. China strongly objects to the possibility of a remilitarised Japan, especially as long as historical grievances persist.
Dr Lanteigne said that should ties between China and Japan deteriorate, the challenge for New Zealand is how we balance our economic relationship between the two powers: do we align ourselves with Japan, a champion of free-trade and regional aid source, or with China, our second-largest trading partner? Or can this choice be avoided?
This is particularly pressing, noted Dr Lanteigne, as Japan has pushed forward the CP-TPP agenda.
"With the US out of the Comprehensive and Progressive Trans Pacific Partnership (CP-TPP), Japan has positioned itself as a leader in free trade negotiations, including working to improve its international stature as an aid nation to the Pacific. But the ‘cold politics, hot economics’ nature of Japan’s relationship with China presents a significant challenge for New Zealand: how do we balance relations with China and Japan?"
Further, said Dr Lanteigne, Prime Minister Abe and US President Donald Trump have renewed calls for the establishment of the "Quad" or "Security Diamond", a proposed security arrangement amongst the United States, Japan, India, and Australia.
"If an Indo-Pacific security arrangement that does not include China is actioned, the New Zealand government will be in a tough situation. We do not want to have to choose between nations to which we are either formally or not formally aligned," said Dr Lanteigne. Moreover, New Zealand does not want to see regional trade cooperation being eclipsed by emerging security alliances.
"The North Asia CAPE’s final seminar of the year continued the very high standard set by our previous speakers. Dr Lanteigne delivered to our valued stakeholders an evidence-backed analysis of an important and fast-changing regional market," said Anne French, Establishment Director, North Asia CAPE. "We look forward to sharing our 2018 programme of work from early in the New Year."