Trade ministers from 16 nations gathered in Tokyo on July 1 to further their talks to flesh out a mega free trade agreement proposed for a region accounting for nearly half the population and 30% of the GDP of the world. The ministers agreed to make continued efforts to reach broad agreement by the year-end on what is known as the RCEP—the Regional Comprehensive Economic Partnership.

　　　　　The RCEP membership comprises the 10 member nations of the Association of the Southeast Asian Nations (ASEAN)—Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam—and the six nations that have free trade agreements with them：Australia, China, India, Japan, New Zealand, and South Korea.

　　　　　Under the partnership, Japan wants to see fairness and transparency of trade practices honored, in addition to a high standard of trade liberalization and the rule of international law symbolized by the protection of intellectual property rights (IPR). As was manifested in the lawsuit the US filed earlier this year with the World Trade Organization (WTO), China allegedly accounts for some 80% of IPR thefts in the world. Malicious IPR violations are a serious problem commonly shared by all advanced nations.

　　　　　This time, the RCEP nations were expected to agree to reach a final agreement by the end of 2018, but a deep chasm divided Japan and China. Critically important is how Japan can nurture the RCEP into a well-functioning, expansive regional free economic zone without being unduly swayed by China, which has been maneuvering to shape it to reflect its own values.

　　　　　Should Japan give in, a huge economic zone led by China would come about. From the outset of the negotiations, launched in 2012 at the ASEAN summit in Cambodia, Japan has been extremely cautious about its involvement with the RCEP, which it feared could end up as a “free trade” agreement neither Japan nor the world would desire.

　　　　　Having successfully helped put together the Transpacific Partnership (TPP) deal in 2016 after many tough rounds of negotiations among 12 Pacific nations, including the US, Japan had expected the RCEP to establish a free trade system under which fairness of business and trade practices would prevail. But Japan’s vision has clashed fiercely with China’s intentions.

　　　　　With the TPP, Japan and the US first aimed to form an expansive Pacific economic zone with a framework calling for its members to honor a high standard of fairness, transparency, and respect for international law—a setup China as a superpower could not refuse to join. It was an initiative designed to create a system based on the values of the world’s democratic camp, which would assume leadership of the projected initiative.

　　　　　But the situation reversed course with Donald Trump’s “revolt,” when he withdrew the US from the TPP. Trump also turned his back on the RCEP, rushing headlong towards protectionism. As is well known, Trump prefers bilateral trade deals to multilateral deals.

　　　　　When the leader of the world’s strongest nation raises demands in a one-on-one confrontation, most other countries have no choice but to give in. The “America first” hardline policy may perhaps protect America’s national interests in some narrow sense. But Trump’s near-sighted approach is already hurting America, as is evidenced by the decision by Harley-Davidson to shift some production of motorcycles for European customers out of the US to avoid retaliatory tariffs.

Declining Global US Influence

　　　　　Even more serious is the visible decline of America’s global influence, as the international community has begun to lose trust in and respect for America. That certainly is bad news for the world’s democratic camp.

　　　　　As Xi Jinping proudly declared at the 19th Congress of the Chinese Communist Party (CCP) last October, China is forging ahead with plans to supersede the US economically and militarily by 2049, the centennial of its founding, when Xi expects the Chinese to “tower above” the other peoples of the world.

　　　　　The “One Belt, One Road” (OBOR) initiative formally written into the CCP bylaws last October is a typical example of the international frameworks China has been working on to achieve this goal. Declaring that the Chinese will become the world’s strongest race by the middle of this century, the CCP has sought to spread its influence to all parts of the world in almost every conceivable field of endeavor. As a result, some quarters assert that the OBOR initiative should really be referred to as “Three Belts, Five Roads.”

　　　　　Komazawa University Professor Emi Mifune’s interpretation of China’s strategy is particularly insightful. In an article in the inaugural issue of JFIR World Review (published by the Japan Forum on International Relations), Ms. Mifune maintains that the OBOR is an initiative designed to prepare China for a new era of Pax Sinica, and that China’s influence is already spreading globally beyond the Silk Road regions.

　　　　　The OBOR initiative is a concrete example of a threat from China to the on-going world order under Pax Americana. Mifune explains the current situation roughly as follows:

　　　　　As it vigorously approaches various nations and organizations, such as the European Union, China is out to lead the political and economic order of the world by: 1) coming to a mutual understanding on basic policies; 2) developing infrastructure conforming to Chinese standards; 3) fostering smooth trade; 4) infusing capital; and 5) bringing people together. Determined to influence the world through such measures, China is committed to first creating a “bloc of friends,” with the ultimate aim of leading the world as “a human community with the same destiny.”

　　　　　China implements its strategy to expand its global influence, firmly keeping in mind regional politics. One such example is its participation in the China-CEE (Central and Eastern Europe) summit, also known as the “16+1 summit,” in which 16 Central and Eastern Europe nations confer annually with China.

　　　　　China has come up with the “16+1” summit in addition to its bilateral relations with European nations individually, as well as the European Union. Eleven of the nations participating in the summit are EU members, which are also on the list of nations in which China meticulously builds its influence by promoting infrastructure projects, investing lavishly, and seeking to build multilayered relationships. China is managing to adroitly advance its agenda region by region.

China en route to World Hegemony

　　　　　Meanwhile, China regards it as mandatory to not allow India to become a super power, keeping it to what it currently is—a regional power. That is why China has formed a net of encirclement around India known as the “String of Pearls” in the Indian Ocean. This net appears to have been neutralized by the “Indo-Pacific strategy” proposed by Japanese Prime Minister Shinzo Abe, which Washington has incorporated into its foreign policy.

　　　　　But Mifune calls our attention to what is happening on the continent itself, pointing out that the People’s Liberation Army has set up a garrison on Daklam Heights in Bhutan, with between 1,600 and 1,800 PLO soldiers stationed there at present.

　　　　　Both Myanmar and Bangladesh are subservient to China. The Chinese think that if PLO soldiers were to ally with soldiers from these two nations, the seven eastern states of India could easily be caught on both flanks. These Indian states, which would be cut off from India proper, include Arunachal Pradesh, a water-rich state that China claims as its own.

　　　　　If as many as seven Indian states were to be secluded and wrested from India all at once, the militarily inferior India would have no choice but to shift to diplomatic negotiations with China to try to end the crisis. I find Mifune’s question reasonable: should that time come, to what extent could India really be expected to cooperate with the Indo-Pacific strategies of the Abe and Trump administrations?

　　　　　China, which makes no secret of its desire to lay claim to the Arctic Ocean, has already announced its “Ice Silk Road” initiative under a partnership with Russian President Vladimir Putin. China would not be able to advance to the Arctic Sea without securing strongholds in certain areas of the Japan Sea and the Tsugaru and Soya Straits. What choices would Japan really have if push were to come to shove?

　　　　　China is steadily en route to world hegemony. Isn’t the fact that the OBOR net of encirclement is steadily being stretched around the globe proof that the world already is ready to shift from Pax Americana to Pax Sinica? All of us—not only politicians but every thinking Japanese—must consider what we must do to squarely grapple with this vitally serious problem.

(Translated from “Renaissance Japan” column #810 in the July 12, 2018 issue of The Weekly Shincho)