Japan and the U.S. embrace like-minded countries and exclude others, thus dividing the world

1. The Japanese and U.S. leaders’ diplomatic cooperation has caused division in the world

On July 21, U.S. President Joe Biden announced his exit from the presidential election. Less than one month later, on August 14, Japanese Prime Minister Fumio Kishida expressed his intention not to run in the LDP presidential race in September.

When Mr. Kishida visited the United States in April, the two leaders stressed that Japan-U.S. relations are stronger than ever. Both leaders are now stepping off the center stage of politics in a similar fashion.

What was common between them was that they emphasized democracy and the rule of law. Accordingly, they called for like-minded countries to unite.

Apparently, Japan and the U.S. has strengthened diplomatic ties.

Yet few experts in the West that I have interviewed said that democracies, including European countries, were more united than before.

The trusting relationship between the U.S. and Europe was marred during the Trump administration. Recovering it to a pre-Trump level was a tall order.

In his presidential campaign, Mr. Biden made a promise to unite American society, which was divided by escalating tensions between Democrats and Republicans. After being elected, however, the new president failed to deliver on that promise.

The two parties are still criticizing each other on most domestic issues, leaving few opportunities for constructive discussions. American society is suffering from a serious partisan divide.

On the diplomatic front, the Biden administration emphasized ideological rivalry. It called for unity among like-minded countries in a schema that pits democracies against autocracies.

The administration seemed to apply the schema of the domestic partisan rivalry to the international community. The Kishida administration strongly supported that call and strengthened Japan-U.S. cooperation in security. For example, it explored ways to advance cooperation among Japan, the U.S., and the Philippines and to support AUKUS, a military alliance among the U.S., the United Kingdom, and Australia.

Yet strengthening unity among like-minded countries meant excluding non-like-minded countries.

The result was a more fragmented global community. On the economic security front, for example, tensions escalated between Japan and the U.S. on one hand and China on the other.

2. Economic developments that help avoid division in the global community

The Biden administration takes the lead in advancing the policy of decoupling – economic bloc formation – that revolves around ideological rivalry. This makes it difficult to facilitate free trade, investment, and technical cooperation in the global economy.

The EU shows opposition to the decoupling policy as advocated by the U.S. government. It lays out the basic policy of de-risking in a show of emphasis on economic partnership with China.

The Kishida administration does not express clear support for the decoupling policy. In the context of cooperation with the U.S., however, it does show a hard-line stance toward China by adopting a pro-U.S. economic security policy.

There are marked differences in economic and diplomatic policies among Western countries. It seems, however, that the sphere of economic activity has not been so divided as yet because the irreversible advancement of economic globalization serves as a buffer against economic bloc formation.

Another unintentional factor also serves as a buffer.

That is the slowdown of the Chinese economy. The era of rapid economic growth came to an end by the end of 2021. The Chinese economy is now in a long, tight, and unstable transitional phase toward a soft landing in an expected era of stable growth in the 2030s.

Since China successfully maintained rapid economic growth for more than 30 years since 1991, almost no corporate executives have experienced a long-lasting sluggish economy.

Amid unexperienced and uncertain revenue prospects, most corporate executives have lost confidence in themselves. This holds true for Chinese consumers as their income prospects are uncertain as well.

Under these circumstances, the Chinese government has high expectations for foreign direct investment.

Local governments across China are more eager than ever to invite foreign corporations in an attempt to revitalize their local economies.

Beijing’s diplomatic stance toward the U.S. and the EU has been swayed by Chinese economic conditions.

The Chinese government tends to tilt toward diplomatic reconciliation when domestic business sentiment is deteriorating. By contrast, it tends to show a hard-line stance toward other countries when the sentiment is turning positive.*

Given this correlation, it is reasonable to assume that Beijing will continue its stance of proactively inviting foreign firms for some time to come.

* For details, see my essay originally posted on JBpress in March 2024, titled “China becomes softer under economic depression: Examining the relationship between the Chinese economy and diplomacy.”

On the diplomatic front, a headwind is blowing against free trade, investment, and technical cooperation. Nevertheless, no markets in the world can substitute the Chinese market.

China is the second largest economy following the U.S. The World Economic Outlook by the International Monetary Fund (IMF) predicts that the Chinese economy will continue to grow more than two times faster than Western developed economies at least for a few years.

If Chinese local governments’ commitment to inviting foreign firms is factored in, it will be a logical conclusion that blue-chip companies with high global competitiveness will continue to seize on opportunities available to increase their revenues in the Chinese market.

Diplomatically, the EU and the Japanese government are taking a harsh approach toward China. Economically, however, they value relationships with the country. Companies based in Europe – especially Germany – and in Japan are often eager to invest in China.

Even U.S. firms under strong pressure from the U.S. administration showing decoupling policy toward China often remain committed to China business.

As the Western media supports hard-line diplomacy toward China, public sentiment in Western countries is tilted toward a hard-line stance toward China.

For this reason, businesses eager to invest in China keep a low profile but shrewdly continue doing business in China anyway.

Thanks to them, the global economy is avoiding divides and maintaining stability.

3. The position Japan should take

Some may consider it more important to win the ideological conflict even if that puts people in poverty.

However, if they wish for world peace, sustainable economic prosperity is a prerequisite. The U.S. has valued such prosperity and led the global economy since World War II ended.

And yet, the U.S. government has always given top priority to maintaining its unipolar hegemony.

From the 1980s to the 1990s, when Japan became a threat to the economic hegemony of the U.S., Washington unilaterally exerted merciless pressure on Japan, a U.S. ally, in a way that ignored international rules, in order to hinder Japan’s economic development.

As a result, the Japanese economy came to a standstill. Now Japan was no longer a threat to the U.S. On that basis stand close relations between the two countries.

Now that China is a threat to U.S. hegemony in lieu of Japan, the U.S. is trying to co-opt Japan in an attempt to hinder China’s economic development.

How Tokyo was tormented by Washington’s unreasonable policy measures from the 1980s to the 1990s was recorded in its official documents.

If you read these documents, you may have a sense of discomfort about the way in which the Kishida administration works with the Biden administration in unquestioningly calling for unity among like-minded countries at the exclusion of China.

If Japan is to join hands with the U.S. and play a leading role in achieving world peace, it should go in the direction of contributing to the sustainable development of the global economy.

To that end, Japan should avoid division of the global community and promote free trade, investment, and technical cooperation.

Now that the two leaders who are not so committed to avoiding division are set to be replaced, it is hoped that the next leaders will take a new step toward supporting mutual understanding and coordinated development in the global community.

4. The guiding principle of global governance that promotes world peace should be rule of virtue

A prerequisite for current global order formation is governance based on rules and consensus building among nations. In other word, it is rule of law.

The intrinsic problem with the rule of law is that without a mechanism in place to control the power of the ruler, the ruler arbitrarily exercises his or her power, thereby making the weak who are forced to abide by law subject to his or her tyrannical rule.

Domestic politics in Western countries is based on the rule of law. It has a built-in mechanism whereby the separation of powers or a similar legal framework controls the power of their leader, be it the president or prime minister.

As for global governance, however, there are no such mechanisms in place for controlling the power of strong nations.

The permanent members of the United Nations Security Council are the U.S., the U.K., France, China, and Russia, which won WWII some 80 years ago. They still exercise special power.

On top of that, these five countries are divided into two camps: the U.S., the U.K., and France on one hand and China and Russia on the other. As a result, it continues to be difficult for them to cooperate in policy making and delivery based on consensus building through constructive discussions.

A similar challenge faces any international organization that provides an important basis for shaping the world order, be it the G20, the WTO (World Trade Organization), the COP (Conference of the Parties to the United Nations Framework Convention on Climate Change), etc.

There is no mechanism in place to control the power of leading countries even though it is necessary for the rule of law to function properly. For this reason, a situation persists in which the U.S., the EU, and China, all of which enjoy overwhelming political and economic prowess, eventually exercise their powers.

In his book Okina Mondo (Dialogue with an old man), Japanese philosopher Nakae Toju states:

“Rule of virtue means that you set your mind right first and then set others’ minds right. . . . Rule of law means that you try to set others’ minds right without setting your own mind right.”

(This writer’s interpretation: If the leader sets their mind right first and then asks people to have a righteous mind, then the leader abides by the principle of rule of virtue. If the leader tries to set people’s minds right without setting their own mind right, then the leader abides by the principle of the rule of law.)

I often exchange views on global governance with experts from different countries in the world. I find myself sharing with them a common understanding that the rule of law has its limits.

It is preferable that rule of virtue works instead. But we have no social basis for making it work and achieving its ideals.

The basis for governance by rule of virtue is not detailed written rules; it is collective voluntary efforts to achieve common altruistic goals.

The overriding requirement is the shared concept that solving problems for society brings happiness to you as well – an idea that there is no separation between me and others.

This concept is difficult to entertain at the state level. It is often the case, however, that the concept is adequately entertained and shared at the level of local mutual-help communities.

Recent years have seen growing developments in the education sector that try to instill the principle of altruistic contribution in mutual-help communities. One such development is the establishment of FC Imabari High School by Takeshi Okada, a former head coach of the Japan national soccer team.

Another is the establishment of Manabiya Mebuki, an organization in Nagano City that supports children who have lost their place in society or at school. The leading actors in these developments are non-state actors.

The internet, social media, and other recent communication technologies allow such a concept to be shared beyond national borders. Such a facilitating environment is gradually being put in place.

International cooperation among these and other mutual-help communities can be a basis for helping people better understand the value of governance based on altruistic ideals. If that happens, foundations for rule of virtue can spread around the world.

As it stands, there are no such foundations for global governance by rule of virtue. However, if educational efforts to train people who value altruism are accumulated over the long term and replicated in countries around the world, that will help shape the foundations for a hybrid type of global governance that is based both on the rule of law and rule of virtue.

If leaders share the responsibility for realizing governance based on rule of virtue, join forces across national borders, and continue to work to that end over the long term, then the time will surely come when such a new type of global governance will be a basis for world peace.