Millennium Post

For a free Indo-Pacific

Signalling a coming together over the common threat of China, this week Japan and Vietnam agreed to strengthen economic and military ties. Among these agreements is one that in principle would allow Japan to export military gear and technology to Vietnam.

As Japanese PM Suga explained, "Vietnam, which is serving as ASEAN (Association of Southeast Asian nations) chair this year, is key to realise a free and open Indo-Pacific." The two nations also used the opportunity to reiterate their commitment to ensuring peace and freedom of navigation in the South China Sea, a region where many South Asian nations have disputes over with China. To be clear, despite the clear undertones, Suga was careful to not use blatantly anti-China rhetoric. He instead emphasised a peaceful approach for the South China Sea area that is based on resolutions coming from international law.

Regardless of its subdued tones, the agreement to export military gear and technology is a significant step for Japan considering that its Government only ended the decades-long ban on exporting military tech in 2014. Coming hand in hand with the Abe administrations drive to change the pacifist Constitution of Japan, this decision saw Japan entering talks with regional partners such as Vietnam, Indonesia and Thailand for the sale of military equipment. The pushback against Japan's increasing willingness to develop its military complex has complicated such sales. Even now, the Foreign Ministry has issued statements like "We have to make sure the equipment and technologies transferred to Vietnam (are) to be used peacefully and contribute to regional peace."

Even leaving aside the military aspects, these agreements are also a sign that Japan is actively searching for ways to distance the Japanese economy from its significant dependence on China. Vietnam has always been an attractive alternative for the major Japanese firms, many of which have shown a marked preference for the nation as targets for investment. Indeed Suga and his Vietnamese counterpart Nguyen Xuan Phuc oversaw the signing of MOUs for a USD 1.3 billion investment in a power plant in Vietnam's Can Tho province and another USD 1.9 billion joint investment for the development of a gas-fired plant in Vietnam.

This coming together can only be credited to concentrated efforts by the Abe Government to court the Vietnamese Government over the last few years. When Abe left office, there were doubts regarding the capabilities of his successor to carry on his legacy, particularly in foreign relations. There was little doubt however that the relationship between Japan and Vietnam could only go up from this point based on their many shared interests and concerns. Both strongly complement each other on many fronts. While an advanced economy, Japan faces an uncertain future with its rapidly ageing population with a smaller future domestic market and labour force. Vietnam, on the other hand, is a relatively young nation with a huge labour force and a significant capacity to act as a major market for Japanese products and technology.

Suga's trip to Vietnam is part of a four-day tour that will next see him go to Indonesia for the express purpose of gaining meaningful economic and military ties amongst the nations of the Indo-Pacific. These developments are a clear sign that many of the regional players are now invested in developing supply chains that do not rely on China. While the nations of the greater ASEAN grouping are wary of China's economic and military intentions in the region, ultimately their economic dependence on its supply chains makes any meaningful anti-China groupings unlikely. It is in this regard that Japan's efforts to establish supply chains in link with Vietnam, Indonesia, Thailand, India, etc., become a major priority. For India, this provides an avenue to counter Chinese attempts to surround India with a 'string of pearls' strategy and achieve its new directive of weaning away its market dependence on China. Overall, the strengthening of ASEAN on several fronts counters an approaching future where all of the Indo-Pacific region languishes under the undeniable power and influence of China.

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