Japan’s New Regional Reality: Geoeconomic Strategy in the Asia-Pacific

Abstract

The intensification of the US-China great power competition in the Indo-Pacific region is now drawing significant attention from the international community. This is understandably so as its strategic implications are tremendous. The great power rivalry shapes the global and regional balance of power both militarily and economically. The characteristics of international rules and norms are largely shaped by their political commitment to those regulations. Strategic alignments are also constructed by the will of those great powers. As a result, we tend to conclude that in the era of great power rivalry and power shift, the protagonists are essentially those global superpowers, and small and middle powers cannot help but being more ‘reactive’ to the changes created by the superpowers—shifting their strategies for survival. Saori Katada’s book, Japan’s New Regional Reality, defies this realist-oriented conventional wisdom, providing a more nuanced understanding of the formulation and reformulation of the geoeconomic strategy of a non-superpower, Japan. The book’s argument is clear and concise. Defining geoeconomics as ‘the use of economic instruments by governments in pursuit of national goals as they cultivate economic and political advantages in economic growth, competitiveness, and sustainability’ (2), Katada argues that Japan has spontaneously shifted its geoeconomic strategy from neomercantilism to a more liberal approach, the ‘state-led liberal strategy’, in the post-Cold War era. This state-led liberal strategy is different from a conventional liberal strategy, by which the West generally embraces the free market with less government intervention. Rather, the government attempts to set the formal, high-level economic rules and establish regional institutions through government initiatives.