Japan relaunches Foip with the West to contain China

After languishing for years, the change of administration in the US and a newly-receptive Europe has meant Japan’s idea for an infrastructure investment strategy to rival China’s can finally get off the ground. But it has much catching up to do, and Asian countries remain sceptical of getting involved with something too confrontational toward China.

Amid the flurry of statements declaring China to be an adversary of concern during US President Joe Biden’s visit to Europe in June – from the G7 to NATO to the EU – one bit of language in the EU-US joint statement caught China-watchers’ eye.

“We intend to work together with our partners for a free and open Indo-Pacific,” the statement reads. It was no accident that the language exactly referenced the name of the streategy developed by Japan and the United States as a Western response to China’s Belt and Road Initiative. That the EU leaders would choose to use those words is significant, because Europe has so far been skeptical of this Tokyo-developed plan. Has President Biden managed to unify the West around the Free and Open Indo-Pacific as the counterweight to the Belt and Road Initiative?

The FOIP concept was first introduced by Japan in 2016, three years after Chinese leader Xi Jinping first unveiled BRI during an official visit to Kazakhstan. BRI is meant to harken back to the Silk Road, a network of overland trade routes connecting Europe and China via Central Asia from the 2nd century BCE till the 18th century. The BRI seeks to revive those ancient land routes while also establishing a new “21st century maritime silk road” through Southeast Asia to South Asia, the Middle East and Africa. Since being unveiled it has become a centerpiece of Xi Jinping’s foreign policy, even being enshrined into the Chinese Constitution in 2017.

The United States and Japan have viewed this initiative with intense suspicion, believing it to be an effort to establish economic control over neighbors, particularly in Southeast Asia, and expand Chinese military activities. They fear “debt bombs”, where China lends money at mouth-wateringly low interest rates to developing countries for infrastructure projects, and then seizes control of the project when the country can’t repay the loan. This has already been seen in Sri Lanka, where the Hambantota Port came under Chinese control after the country was unable to pay its debt for a 99-year long-term lease agreement.

There are concerns that a similar fate will befall other Belt and Road projects, such as a 420-kilometre high-speed railway linking Kunming, China with Vientiane, the capital of Laos. The estimated construction costs are estimated at about $5.8 billion, which is nearly half of Laos’ GDP. The Laos government is taking on debt for 4/5 of that cost.

Another suspicion is that China is improving harbors with the intention if eventually acquiring the exclusive rights to use them and turn those harbors into naval bases for the Peoples Liberation Army. These suspicions are particularly strong for Gwandar in Pakistan, Hambantota in Sri Lanka, Vanuatu in the South Pacific and Koh Kong in Cambodia. Ideas floated to build a canal across Thailand’s portion of the Malay Peninsula, allowing Chinese ships to bypass the Malacca Strait, have raised alarm in Washington.

Japanese failure to convince

FOIP has languished since the idea was put forward by former Japanese Prime Minister Shinzo Abe in 2016. The biggest challenge so far was getting the United States interested.

Although President Trump did a lot of sabre-rattling against China in his visits with Asian leaders and embraced FOIP in theory, his administration didn’t do anything with it. For its part, Japan seemed to take its foot off the gas in pushing it after the change in US administration, perhaps not wanting it to be associated with the volatile Trump administration.

Trump’s bellicose language on China, which was backed up by little in the way of action, actually seemed to make Southeast Asian countries more wary of signing up to FOIP. A survey of Southeast Asian government, academic, business and media elites in 2018 by the ISEAS-Yusof Ishak Institute of Singapore found that over half of respondents said America’s power and influence had “deteriorated” during the Trump administration. Over 30% said they had no or little confidence in the US as a strategic partner and provider of regional security.

As FOIP gathered dust, other ideas for countering Belt and Road appeared. In 2019 the US, Japan and Australia together launched the “Blue Dot Network”, designed to provide assessment and certification of infrastructure development projects worldwide on measures of financial transparency, environmental sustainability, and impact on economic development, with the goal of mobilizing private capital as an alternative to Chinese debt. But it is far less ambitious than the FOIP idea.

Biden’s embrace

When Biden defeated Trump in the November 2020 US election, Japanese Prime Minister Yoshihide Suga, who had inherited FOIP from his predecessor, set out to revive the project and convince the Biden administration of its worth. After their first phone call on 28 January, the two leaders issued a joint statement that said they would “work side-by-side to address regional challenges and to realize a free and open Indo-Pacific”. The language elicited relief in Japan, where government officials had worried that during their communications with the Biden transition team they were associating the idea with Trump and perhaps even mistakenly thought his administration had come up with it. The Japanese were keen to point out that it was in fact developed by Japan at the end of the Obama administration.

Since then, the Biden team has embraced the concept. It was again mentioned in March at a meeting of the ‘quad’ – Japan, Australia, India and the US – where the four said in a joint statement they are “committed to promoting a free, open rules-based order, rooted in international law to advance security and prosperity and counter threats to both the Indo-Pacific and beyond”.

That Biden is now pushing the idea in Europe, and got the language into the conclusions of a summit that didn’t involve Japan at all, has Tokyo ecstatic. The question is, now that FOIP has its mojo back in the West, what can it really achieve?

Clearly, it would have a lot of catching up to do to really pose a threat to Belt and Road – not just in terms of investment, but also in terms of trust. The selling point of FOIP is that unlike BRI, it is supposed to be providing infrastructure investment free of political control. Free trade and infrastructure improvement are meant to go hand in hand with a guarantee to maintain regional order and freedom of navigation. In other words, FOIP is compatible with the world we live in now, and doesn’t require a geopolitical adjustment in China’s favor.

The problem is that Southeast Asian countries so far haven’t seen FOIP in this way. ASEAN, the body representing them, has repeatedly stressed that its main geopolitical objective is “balance” – they do not want to be forced to choose between the US and China. Singapore, the most developed country in the region, has been particularly skeptical of FOIP while it has enthusiastically embraced the business opportunities of BRI. The Duterte administration in the Philippines has also embraced BRI.

But enthusiasm for BRI varies by country. Vietnam, which has territorial disputes with Beijing in the South China Sea, has been very wary of deepening its economic dependence on China and has looked more toward Japan. Brunei and Cambodia have also been more welcoming to FOIP.

Shoji Tomotaka, head of the Asia and Africa division at the National Institute for Defense Studies in Japan, believes that for the moment ASEAN views FOIP as too explicitly confrontation with Japan. In 2018 the bloc put forward its own rival “Indo-Pacific Cooperation” strategy which he believes is trying to pull FOIP in a more neutral direction. Prime Minister Lee Hsien Loong of Singapore, the chair of ASEAN when that strategy was adopted, was expressing this desire when he said, “We do not want to end up with rival blocs forming or countries having to take one side or the other”. He said he hopes to see FOIP transform in a way that is sensitive to ASEAN’s concerns.

How can FOIP take on China’s Belt and Road initiative without being explicitly confrontational toward Beijing? That is the puzzle the Japanese and American governments must figure out if they want to revive the initiative in 2021. What is clear is that so far, the Indo-Pacific isn’t buying what Tokyo and Washington have been selling.