The relations among Japan, China, and the United States of America are becoming increasingly important in the whole East Asia region’s future and the whole world’s, as well. Being the world’s most economically powerful countries and the strategic powers in East Asia, their relationships are the foundation of international stability. However, despite the advantages, these relationships might also become the major source of strategic conflict.
The Japan-China-U.S. trilateral ties have been the most important and complicated alliance in the history. The U.S.-Japan relationship has been enhanced in the recent years (i.e., trade conflict has been largely neutralized due to Japan’s stagnant economy and political/military cooperation has been strengthened) while the U.S.-China relationship has had a continued strategic competition and dissimilarity of values that cause friction in the relationship on a range of issues (i.e., trade disputes, human rights, cybersecurity, and the South China Sea). On the other hand, the Sino-Japanese relations are still colored by historical conflicts and animosity (i.e. wars, Nanking incident, and territorial disputes especially over the Diaoyu Islands) despite significant benefits that economic cooperation has brought.
Over the years, how have recent trends and developments affected and influenced each leg of the triangle and their economic relations?
THE U.S.-JAPAN ECONOMIC RELATIONSHIP
The Japan-U.S. relations can be traced back to the late 18th and 19th centuries during the era of imperialism when wars had taken over Japan. And not until the late 20th century and onwards that the United States of America and Japan developed a firm and very active alliance in political, military, and especially in economic relationships.
The United States considers Japan as one of its best and closest allies and partners. Japan, on the other hand, is one of the pro-American countries in the world. With 85%, 72%, 69%, 66%, 68%, 72%, and 57% (2011-2017) of the Japanese people with a favorable opinion of the United States – according to the Pew Research Center’s Global Indicators Database. Consequently, according to a survey done by Gallup, Inc., 81% (2013) of the Americans are in favor of Japan.
Nevertheless, Japan and the U.S. are two economic major power that accounts for over 30% of the world’s domestic product, international trade, and international investment. An economic clout that makes the two countries powerful actors in the world economy – as economic conditions have a significant impact on the rest of the world (i.e., can influence economic conditions in other countries).
The U.S.-Japan economic relationships are mutually advantageous because they are strongly and highly integrated through trade in goods and services and closely connected via capital flows. It is very important to note that Japan remains to be a major source of the U.S. national debt financing, and will likely continue to be for the foreseeable future. Japan, also, is a significant source of the foreign private portfolio and direct investment in the U.S. – and vice versa.
However, due to the rise of China and other countries’ economic powers, the significance of the economic relations of Japan and the U.S. diminished. Some other reasons for this trend to happen are: because of China taking over Japan as the largest source of foreign financing for the U.S. national debt, and the mediocre performance of the Japanese economy for the last two decades which has been exaggerated by national disasters and accidents.
But despite the friction, the U.S. and Japanese leaders seem to have made a deliberate effort to drastically resolve the conflicts that somehow hindered a prosperous economic relationship between the two countries. This paved the way to stabilize bilateral relationship and focus more the attention on certain issues, such as national security.
But as many have argued, the friendlier the environment, the more serious problems requiring more attention are masked. More specifically, the issue of the free trade agreement called the “Trans-Pacific Partnership” (TPP) from which America has recently withdrawn.
THE U.S.-CHINA ECONOMIC RELATIONSHIPS
Since 1949, the relationship between the U.S. and China has been a very “complex mix of intensifying diplomacy, international growing rivalry, and increasingly intertwined economies.”
After a series of events and conflicts, the “Shanghai Communiqué” – that sets the stage for improved U.S.-China relations by allowing the U.S. to discuss difficult issues, particularly about Taiwan – was signed by President Richard Nixon and Mao Zedong in February 1972. However, the improved relationship between the two countries made slow progress.
In 1979, China was granted a full diplomatic recognition by U.S. president Jimmy Carter, while also acknowledging China’s One China principle. In April of the same year, the “Taiwan Relations Act” was approved by the Congress that allowed continued commercial and cultural relations between the U.S. and Taiwan – requiring Washington to provide Taipei with defensive arms without officially violating the One China policy.
In July 1982, in the Reagan era, the “Six Assurances” to Taiwan including pledges that acknowledge the Taiwan Relations Act, was issued by the administration. In August, a “third joint communiqué” to normalize relations between the U.S. and the China was signed. Reagan’s administration then continued to work to improve the Washington-Beijing relations.
Normalized trade relations were then achieved when U.S. president Bill Clinton signed the “U.S.-China Relations Act of 2000” in October that granted Beijing the permanent trade relations with the U.S. In the next year (2001), China had the opportunity to join the World Trade Organization surpassing Mexico as U.S.’ second-biggest trade partner.
From 2001-2011, China became the world’s second-largest economy, surpassing Japan. Alarmed by China’s growing clout, the U.S. under Obama’s administration, announced the agreement on the Trans-Pacific Partnership (TPP) with the aim to counter China’s economic growth. This led to rising trade tensions from 2012-2017 heightened by issues which include – U.S. indicting Chinese nationals (hackers) who were suspected to be behind the major online breach of the Office of Personnel Management and data theft of the 22 million current and former federal employees and U.S. warning over the South China Sea opposing any further militarization.
