“ Japan will offer its utmost support for efforts by Asean member countries to ensure the security of the seas and skies and rigorously maintain freedom of navigation and overflight.” So said Japanese Prime Minister Shinzo Abe in his keynote speech at the Shangri-La Dialogue in 2014. The pledge was part of his commitment to the Free and Open Indo-Pacific strategy touted by the United States and Japan and unveiled in 2016 in the face of rising challenges to the international rules-based order established after World War II. Nowhere is this order being challenged more than in Southeast Asia . China ’s nine-dash line claim to exclusive sovereignty in the South China Sea not only brings it into conflict with the territorial claims of other coastal states, but also repudiates freedom of navigation under international law. Beijing’s assertive use of its growing maritime paramilitary and naval power to enforce its claimed governance rights threatens the maritime security of other states, as well as regional stability. Spearheaded by its Belt and Road Initiative , Beijing is accompanying its territorial push by cultivating excessive economic control and dependence in partner economies in the region. These Chinese political, military and economic policy objectives converge in Southeast Asia and strong-arm governments into obeying Beijing’s dictates rather than standing up for their nations’ lawful rights and interests. Japan is attempting to meet this challenge even as it seeks to maintain profitable bilateral relations with China and regional stability. CARROTS AND STICKS To survive and prosper, Japan needs open and secure connectivity as well as open and rules-based trade and investment relations. Abe is seeking to partner with like-minded nations to reinforce the rules-based order. But to gain new partnerships and strengthen existing ones, Japan must bring something new to the table. One of Abe’s first actions upon taking office in December 2012 was to invite Asean leaders to Tokyo for a special commemorative summit the next year. He was anxious to blunt China’s use of historical issues to ostracise Japan, and to introduce Japan’s new strategic agenda and its “proactive contribution to peace”. A two-year, 2 trillion yen overseas development assistance package included money for new forms of aid, as well as “quality infrastructure”, maritime patrol vessels, and support for the rule of law. G20 leaders reaffirm ‘rules-based international order’ SEA CHANGES Sea lane security is a strategic priority for Tokyo. Japan has increased the capabilities of the coastguard and its Maritime Self-Defence Force to expand partnership roles and missions with like-minded nations. The key aim is to build the capacity of Southeast Asian coastal states to monitor and protect their own maritime jurisdictions and rights, and to use a strengthened alliance with the US as the foundation. Japan’s 2016 Defence White Paper accused China of attempting to alter governance in the maritime domain by “changing the status quo by coercion based on its own assertions incompatible with the existing order of international law”. The paper said: “These actions include dangerous acts that could cause unintended consequences. China is poised to fulfil its unilateral demands without compromise, which has included making steady efforts to turn these coercive changes to the status quo into a fait accompli.” Abe in 2016 invited Indonesian President Joko Widodo to Japan where Widodo agreed to set up the Japan-Indonesia Maritime Forum to provide Jakarta with enhanced port and infrastructure development, maritime patrol capabilities, and bilateral naval cooperation to strengthen Indonesia’s maritime sovereignty. Philippine President Rodrigo Duterte met with Abe in Tokyo in October 2016 after visiting Beijing, and received 10 small patrol boats as well as a Japanese development assistance pledge to supply two 90-metre coastguard patrol vessels. In return, Duterte promised to resolve South China Sea disputes in accordance with international law. Abe soon met Duterte again and pledged 1 trillion yen over five years for infrastructure, investment and rehabilitation of the victimised city of Marawi, which has been largely destroyed by fighting between Islamic militants and Philippine security forces. Duterte agreed to enhance maritime and security cooperation. Abe then moved on to Vietnam to offer financing for six new patrol vessels on top of a previous pledge to grant six older ships, and both sides agreed to enhance coastguard and naval cooperation. Europe seeks an open, rules-based trading system. So should China MILITARY MATES Until 2015, Japan’s post-war “peace constitution” was understood to categorically forbid “collective defence”, which was defined as threatening or using force to defend other states. The US has since complained that under their so-called alliance, America will defend Japan against attack while Japan will not defend the US. One piece of landmark legislation pushed by Abe and passed by the Japanese Diet in September 2015 reinterpreted the constitution to permit the Self-Defence Force to use military might as a final resort. The implications are important. If free transit under international law throughout the Indo-Pacific is a vital Japanese interest, then the Self-Defence Force can under certain circumstances forcefully defend allies that come under attack defending sea lanes. In view of the mounting threat to the security of these sea lanes in Southeast Asia, Japan is focusing on defence partnerships with countries inside and outside the region whose self-interests align with Japan’s vital interests in the South China Sea. Japan will be using enhanced military capabilities such as helicopter carriers converted to stealth jet aircraft carriers to support new partnership roles and missions in a collective defence of Southeast Asian sea lanes. Japan still leads in Southeast Asia infrastructure race, even as China ramps up belt and road investments: report In the economic sphere meanwhile, Japan’s current infrastructure projects in Southeast Asia are valued at US$321.8 billion, more than current Chinese projects, which are worth US$255.3 billion, notwithstanding China’s highly touted Belt and Road Initiative . In 2018, Southeast Asia accounted for about 15 per cent of Japan’s two-way trade. Southeast Asian economic initiatives draw Japanese investor interest. These include the Regional Comprehensive Economic Partnership agreement that promises to form the world’s largest trade bloc if signed. At 2015 and 2018 summits Abe used long-standing Mekong-Japan cooperation to pledge 750 billion yen for connectivity projects and to elevate Japan’s relations with Cambodia , Myanmar , Laos , Vietnam and Thailand . TRICKY TRADE TIES Japan’s efforts to resist China’s ambitions in Southeast Asia and elsewhere might seem to contradict Tokyo’s interest in maintaining robust bilateral trade relations and regional stability. Japan squares the circle in several ways. It has taken to heart former Chinese leader Deng Xiaoping’s dictum to “never take the lead” in foreign affairs. Regional stability is maintained by a robust US strategic presence that deters adventurism. Japan’s role is to support and augment this US presence in non-provocative ways. It may indicate concern and anxiety over Chinese threats to the rules-based order, but it hardly reciprocates the animosity that China shows Japan. Tokyo has been willing to explore potential cooperation in the Belt and Road Initiative, especially after Chinese Premier Li Keqiang visited Japan in May 2018. Meanwhile, Japan has reassured other states that the Free and Open Indo-Pacific initiative will not force them to limit cooperation with China. To show sincerity, Japan has, with Thailand’s blessing, tried to coordinate its east-west railway connectivity projects in Thailand with China’s north-south railway connectivity projects. But despite the political will among the three governments to achieve joint planning, the mismatch of profit needs, risk tolerance, and project execution protocols between Chinese state-owned enterprises and Japanese private corporations has been and will continue to be difficult to overcome. As things stand today, China’s leverage over Japan is limited. Abe’s active partnership diplomacy has frustrated China’s campaign to ostracise, isolate and subordinate Japan. Current Chinese military and paramilitary pressures on Tokyo cannot escalate further without inviting both a US response under the US-Japan security treaty and a critical change in domestic Japanese opinion regarding the need for constitutional revision and military rearmament. And China cannot easily find ways to punish Japan economically because, even leaving aside the US-China trade war , it is too dependent on Japanese economic cooperation. David Arase is a resident professor of international politics with the Hopkins Nanjing Centre for Chinese and American Studies at Nanjing University in China. This is an edited version of a paper titled “Japan’s Strategic Balancing Act in Southeast Asia”, published in ISEAS Perspective No 94 by the ISEAS-Yusof Ishak Institute in Singapore