New York: Columbia University Press, 2020. xvi, 319 pp. (Tables, graphs.) US$35.00, paper. ISBN 978-0-231-19073-2.
In the period until the mid-1990s, when the Japanese economy was performing relatively well and was much larger than those of other Asian countries (especially mainland China), the government of Japan embraced an old-style regional geoeconomic strategy, whose characteristics were bilateralism, informal rules, and embedded mercantilism. However, the Japanese government has been forced to change its strategy due to the collapse of the bubble economy in Japan and the long-term economic stagnation that ensued; the global expansion of Japanese big businesses; and the emergence of China. New features that emerged in the new millennium denoted a more regional, formal, and liberal economic approach with an emphasis on rule-making and institution-building. This book provides a detailed discussion of the old and new characteristics of the economic policy in Japan called the state-led liberal strategy, addressing trade and investment, money and finance, and development and foreign aid. Furthermore, it analyzes the reasons for the occurrence of these transformations. In the field of trade and investment, Japan previously hesitated to conclude a free trade agreement with any country. However, beginning with a free trade agreement (FTA) with Singapore, which posed less domestic damage, since 2000 Japan has gradually increased the number of bilateral FTAs it has signed. Finally, with the conclusion of the mega FTA called the Trans-Pacific Partnership Agreement in 2018, this book argues that Japan has accepted the liberal global standard for the economic issue of trade and investment. In terms of money and finance, traditional bilateralism has shifted to new regional cooperation, as represented by the Chiang Mai Initiative. However, certain initiatives, such as the internationalization of the yen, have failed to actualize. The author calls this phenomenon the uneven path. Finally, in the field of development and foreign aid, Japan has also accepted international development norms that emphasize human security but has continued to display strong bilateralism and to pursue assistance in relation to the traditional economic infrastructure. In other words, as of 2020, this book argues that a hybrid situation is observable for this economic policy issue.
A major feature of this book is that it convincingly discusses the vertical depth of the history of Japan’s economic foreign policy and the horizontal spread of three major economic issues using a surprising amount of information (a hundred pages of citations and references that occupy one-third of the book). The author has conducted in-depth analyses of each of the three economic issues and has published high-quality articles and books with prestigious journals and publishers for 25 years. This book is based on the results of research undertaken by the author to date, and is a must-read for those wishing to understand the regional geoeconomic strategy of Japan.
However, this book does not provide much systematic theoretical consideration of these three issues. Each chapter does carefully address each economic issue, and the descriptions of the transformation of Japan’s geoeconomic strategies and analysis of the reasons behind these changes are convincing. In the final chapter, the author also summarizes these shifts in a unified manner. For example, this book offers a large framework to explain the reason trade has become more liberal and formal, whereas finance and aid have become uneven or hybrid. Factors include the emergence of China, the pressure of the United States, and the discrepancy between Japanese big businesses and the government. The author argues that the institutional interests of Japan exert influence in a complex manner. However, their explanations are inductive and a posteriori rather than theoretical. In my view, analysis that is more deductive, and therefore has strong external validity, is possible, but this book does not pursue this aspect in detail. I wanted the book to consider changes in Japan’s strategy from the perspective of international security. Although this notion may be overly demanding, it is well known that in the twenty-first century Japan’s security policy has moved away from the so-called Yoshida Doctrine. This change and Japan’s geoeconomic strategy as discussed in this book are seemingly intertwined. The reason is that changes in security occurred against the background of the emergence of China and the establishment of the superior position of politicians over bureaucrats in Japan. If this book included and discussed Japan’s foreign economic and security policies, it would attract even more readers.
In any case, Japan’s New Regional Reality is a great guide for understanding economic regionalism in Asia and the Pacific at the beginning of the twenty-first century and Japan’s position in it. This book will prove handy in understanding such new developments as the disruption of supply chains due to COVID-19 and the Free and Open Indo-Pacific.
Hiroyuki Hoshiro
University of Tokyo, Tokyo