In September 2018, a Sino-Japanese committee on public and private investment along the new Silk Roads might be held in Beijing.
Japan and the BRI
Although Tokyo has not officially joined the “Belt and Road initiative”, some Japanese companies have already been involved in BRI projects. In June 2017, Shinzo Abe Japan’s Prime Minister declared that his country was ready to join the BRI if the Chinese initiative was open to other countries, and if the BRI did not jeopardize host countries’ financial situation .
Until now, Tokyo seemed to favor other options. In 2017, Japan, together with India, launched the Asia-Africa Economic Growth Corridor project to strengthen connectivity between the two continents. In fall 2017, Japan, with the United States, Australia and India re-launched the “Quad“, a multilateral cooperation agreement. But these different initiatives are not contradictory, and Japan could be involved in various projects, including the BRI.
Tokyo expects more free trade
US protectionist trade policies could also encourage Japan to improve bilateral relations with China. Tokyo doesn’t forget the 1980’s US trade war. The United States then sought to reduce its trade deficit with Japan; this trade war led to the Plaza accord and the depreciation of the US dollar against the Yen, reducing the competitiveness of Japanese companies (Japan experienced then a speculative bubble and from 1991; after the bubble burst, Japan had to bear a decade of low economic growth, the “lost decade“). As Jane Cai and Sarah Zheng from SCMP noted Japan, South Korea and Taiwan may suffer from US trade barriers on Chinese products, since these are made from parts produced in other Asian countries like Japan.
Tokyo’s willingness to join the BRI could be a signal sent to Washington to review its position on international trade. Japan, by participating in the BRI, aims at supporting its exports and promoting cooperation and trade in Asia.
Sino-Japanese Committee on the Belt and Road Initiative
The new committee is expected to be chaired jointly by Hiroto Izumi, adviser to the Japanese prime minister, and Ning Jizhe, vice director of the NDRC.
One of the first projects of the BRI for which Sino-Japanese cooperation is envisaged regards the modernization of the Thai railway network.
Railway construction projects are usually lengthy and complex to implement, particularly because of the expropriation procedures.
China and Japan competed in the construction of new rail lines in Southeast Asia, including Thailand and Malaysia.
The Sino-Thai line has been delayed. Launched in 2014, this project, whose construction began in December 2017, may finally be completed in 2022.
In Malaysia, too, railway projects are experiencing some slowdowns. Mahathir Mohamad elected in 2018, decided to review foreign investment projects, including Chinese ones in his country. The construction of new railway lines, including the one between Kuala Lumpur and Singpapore, will be delayed. The Japanese consortium led by East Japan Railway, which expected to win the bid, will have to wait for a final decision.
China and Japan could therefore cooperate in the rail sector to speed up these projects.
Sino-Japanese cooperation in Thailand
This Sino-Japanese cooperation could initially be carried out in projects such as the extension of the Bangkok subway, and the creation of a high-speed line between Suvarnabhumi airport and the country’s central region.
With Sino-Japanese cooperation, we can note that the BRI is no longer considered as a project that only promotes Chinese interests. If these investments are realized, they will benefit Chinese, Japanese and Thai companies. In a context of protectionism resurgence, thanks to this Sino-Japanese cooperation, the BRI will become a successful multilateral project.