“API Geoeconomic Briefing” is a weekly analysis of significant geopolitical and geoeconomic developments in the post-pandemic world. The briefing is written by experts at Asia Pacific Initiative (API) and includes an assessment of burgeoning trends in international politics and economics and the possible impact on Japan’s national interests and strategic response. (Editor-in-chief: Dr. HOSOYA Yuichi, Research Director, API & Professor, Faculty of Law, Keio University)
This article was posted to the Japan Times on September 27, 2020:
API Geoeconomic Briefing
September 27, 2020
Establishing resistance to overseas influence
Senior Consulting Fellow, Asia Pacific Initiative (API)
China’s influence-building operations have been receiving increased global attention in recent years.
Clive Hamilton, who published a book, “Silent Invasion: China’s Influence in Australia,” in February 2018, warned at a talk in Washington about China’s campaign of influence in Australia, saying that his book almost went unreleased after China pressured the publisher to refrain from publishing the book.
In the United States, the Hoover Institution released a report, “Chinese Influence & American Interests — Promoting Constructive Vigilance,” in October 2018, raising alarm over the growing challenge posed by China’s influence-seeking activities in the U.S. across a number of important sectors ranging, from Congress and the media to universities and think tanks.
And, on July 23, the Washington-based Center for Strategic and International Studies released “China’s Influence in Japan,” a report by Devin Stewart, a senior fellow at the think tank Carnegie Council for Ethics in International Affairs.
The paper explores two types of influence-building operations: benign schemes, like public diplomacy, and malign ones, including activities that fall under the “three Cs” — covert, coercive and corrupt.
The paper concludes that despite the long historical and cultural relationship between the two nations, China’s influence in Japan remains limited compared with other democracies.
As to why that should be, Stewart looks at traits that are unique to Japan as well as policies that could be shared with other democracies.
He says the former include those that make the nation a relatively “closed democracy.”
Japan-specific characteristics that he says help it to resist influence from overseas include: Japan’s long history of armed conflict with China (including five wars) that ingrained a suspicion of its neighbor into the nation; a history of relative economic and cultural isolation from the world; a politically apathetic, detached public and a homogenous, de facto single-party political environment; and a tightly controlled media environment.
The report also says efforts in Japan that other democracies could introduce to combat such influence-building include: the consolidation of power in the central government and Prime Minister’s Office; the launching of a country’s own global public relations campaigns; the enactment of regulations that minimize influence from overseas, such as limiting foreign ownership of sensitive industries and legislation that bans foreign nationals from making political donations.
Stewart’s paper is a valuable report that introduces numerous cases based on a number of interviews, but it includes some debatable arguments.
For instance, the paper points out that Japan’s unique traits have made the nation a closed democracy, but describing Japan’s democracy as closed is disputable.
He also says Japan’s long history of armed conflict with China has led to an ingrained suspicion, but it is not correct to say the Japanese people have always been vigilant regarding China.
As a matter of fact, the Japanese public maintained a positive sentiment towards China for a long time after normalizing diplomatic ties with Beijing in 1972.
However, the bilateral relationship deteriorated significantly following the Tiananmen Square incident and China’s adoption of hard-line policies against Japan over issues including territorial disputes regarding the Japan-controlled, China-claimed Senkaku Islands.
A public opinion poll on diplomacy which was conducted by the Prime Minister’s Office (currently the Cabinet Office) for the first time in 1978 — the year when the Japan-China Peace and Friendship Treaty was signed — showed that 62.1 percent of the Japanese people who responded said they felt an affinity towards China.
The percentage rose as time went on, peaking and plateauing at around 70 percent in the 1980s as the two nations kept a friendly relationship. But in the poll conducted in October 1989, following the Tiananmen Square incident in June that year, the figure dropped sharply from 68.5 percent from a year before to 51.6 percent.
It continued to decline further to less than 40 percent in the mid-2000s. The reasons behind the drop from the 1990s through the 2000s can be attributed to the rise of nationalistic movements in China and the Japanese people getting tired of responding to repeated calls to apologize over their nation’s conduct during World War II.
Furthermore, the rate slumped to 20 percent in the poll conducted in 2010, when China started taking an offensive approach on the issue of Senkaku Islands, while the percentage of respondents who said they do not feel affinity towards China rose to 77.8 percent that year.
The ratio of those who feel affinity towards China has remained low ever since.
Looking at those figures, it is clear that Japan’s vigilance towards China is not something that has remained unchanged in history ever since the former’s loss in the 663 Battle of Baekgang, but something that changes according to the times and the situation.
Therefore, it is important to develop resistance to China’s influence systematically without depending on anti-Chinese sentiment.
It is also necessary to pay attention to Japan’s vulnerability toward Chinese influence from the economic viewpoint, considering Japan’s strong economic ties with the country through trade and direct investment.
China was Japan’s top trade partner in 2019, occupying 21.3 percent of Japan’s total trade in terms of value, followed by the United States with 15.4 percent.
The ratio of trade with China rose from 20.7 percent in 2010, and the increase was larger than that of the ratio of trade with the Association of Southeast Asian Nations, which rose from 14.6 percent in 2010 to 15 percent in 2019.
Furthermore, Japan’s direct investment flows in China have been steadily rising from $6.9 billion in 2009, $7.3 billion in 2010, $12.6 billion in 2011, and $14.4 billion in 2019.
This is quite expected as the Chinese economy continued to expand, but it would be interesting to consider why there is a gap between the low percentage of Japanese people having favorable feelings towards China despite the close economic ties between the two countries.
Close economic ties give China opportunities to implement influence operations. For instance, many experts think the German government has been slow to condemn China over its national security law imposed on Hong Kong because China is the most important market for German automakers.
It is also not easy and not beneficial for Japan to cut economic ties with China considering the vast business opportunities the country offers to Japanese companies.
Political judgments at risk
The notion of economic interdependence having the effect of a war deterrent is nothing new, having been explored by Norman Angell in his 1910 book, “The Great Illusion.” But at the same time, we should constantly be aware that deep economic ties pose a risk of hampering independent political and diplomatic decision making based on principles and values.
Following the COVID-19 outbreak, many started calling for the need to review Japan’s supply chain, which is heavily dependent on China.
The Japanese government allocated ¥243.5 billion in the fiscal 2020 supplementary budget to help companies shift their production from areas where manufacturing factories are concentrated. Although it does not explicitly use the word “China,” this allocation is understood to be aimed at relocating Japanese companies’ supply chains outside of that country to Japan or other countries.
Some companies in such sectors as medical items and other key commodities are expected to shift production out of China. But it is difficult to imagine the whole Japanese manufacturing industry pulling out of the country.
Many of the Japanese companies which have set up plants in China to expand their share in the Chinese market are unlikely to move their factories elsewhere.
This means it is important to increase resistance to China’s influence operations on the premise that economic ties will remain.
Moreover, not many cases of spying or intellectual property theft by Chinese agents in Japanese companies or universities have been reported, compared with such cases in the U.S.
This could be because Japan’s “closed democracy” prevented Chinese influence, as Stuart pointed out, but there is also a possibility of Japan lacking sufficient information management or counterintelligence systems to detect China’s influence operations.
In particular, Japan needs to strengthen its cybersecurity to detect cyberattacks.
We should also keep in mind that, as Russel Hsiao of the Global Taiwan Institute pointed out, while it may be true that Japan’s government and society are less affected by China’s influence operations than some other countries, it is not for a lack of China’s capability to conduct political warfare and related activities in Japan.
The European Union has also been tightening its guard against China’s influence operations, with the European Commission officially mentioning Beijing in a high-level report released in June as a source of online disinformation aimed at undermining Western democracies.
In the U.S., the Department of Justice has been working to identify and prosecute those engaged in trade secret theft, hacking and industrial espionage under the so-called China Initiative.
U.S. State Secretary Mike Pompeo, in his speech at the Richard Nixon Presidential Library and Museum in California on July 23, using rather rough language, said too many Chinese students come to the U.S. to steal intellectual property.
The U.S. has been strengthening efforts to prevent sensitive technological information outflow that runs counter to national interests, targeting researchers at universities and other institutions as “nontraditional collectors” of intellectual property.
The global rise of vigilance towards China, brought about by the new coronavirus pandemic and China’s approval of a controversial national security law for Hong Kong, will become a headwind for that country’s influence operations in the short term.
However, such an environment could lead China to develop more strategic and sophisticated influence operations.
Fortunately enough, the so-called “elite capture” — the effort by Beijing to curry favor with highly placed members of the political class in other countries to entrench its influence — is not so prominent in Japan. But that does not mean Japan can just stand by and do nothing about China’s activities.
As pointed out by Stewart, although the U.S. has blocked Chinese purchases of properties in close proximity to military or energy facilities under the Committee on Foreign Investment in the U.S., Japan lacks foreign capital restrictions on land acquisitions irrespective of sensitivity.
In order to share information closely with its allies, Japan is faced with the urgent task of creating a security clearance system that includes not only government officials but also individuals in the private sector.
It is also necessary to start discussing the adoption of an invention secrecy system which allows the government to keep patents deemed detrimental to national security under lockdown, as well as strengthening of counterintelligence capabilities.
The creation of systems based on constructive vigilance is inevitable to maintain stable and mutually beneficial exchanges with China.
Disclaimer: The views expressed in this API Geoeconomic Briefing do not necessarily reflect those of the API, the API Institute of Geoeconomic Studies or any other organizations to which the author belongs.