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Future Role of Japan in Asia and the World

Remarks by Yasuhisa Shiozaki, Member of the House of Representatives
and Co-Chairman of the UK-Japan 21st Century Group
(on the occasion of a Luncheon Meeting organised by the Japan Society on 5 February.)

Thank you very much Viscount Trenchard for your kind introduction. It gives me a great pleasure to have an opportunity to speak in front of distinguished members of the Japan Society in London.

Every time I visit London as a member of the UK - Japan 21 st Century Group and this is my second time to come here as a chairman, I always enjoy exchanging views personally with leaders of the United Kingdom. In these meetings I become aware of a lot of things to be learned from political wisdom and their sophistication in the history of democracy. I have already spent 10 years as a member of the Japanese Diet, and I have almost forgot the historical fact that Japan was the first Asian importer of the parliamentary cabinet system of the United Kingdom way over one hundred years ago.

1. Commonalties between U.K. and Japan

Japan's founding fathers in the days of the Meiji Restoration considered the United Kingdom to be one of the models on which the then new Japan to be built. One reason was obvious. The United Kingdom was the most advanced and successful country in the world in terms of power and prosperity. In addition, the new Japanese leaders found a few important similarities between Japan and the United Kingdom, which still remain the same. Both countries are surrounded by the sea; beyond channels there are continents, Europe for the United Kingdom, Asia for Japan.

Today, facing with Iraqi and global terrorism issues, the United Kingdom and Japan took the similar position with respect to the Weapons of Mass Destruction (WMD) problem. Many people point out that both the Blair Administration and the Koizumi Administration are attracting the same type of domestic political criticisms, where their degree and nature may differ. In Japan, some critics go so far as to say that policy actions under the Koizumi Administration seem to be in line with policy advice, proposed by the U.S. Deputy Secretary of State Richard Armitage, that the U.S.- U.K. model is the best prototype of future partnership of the U.S. and Japan.

Well, we all know, decades ago, the U.S. Ambassador Mike Mansfield characterized that the U.S. relationship with Japan as its "most important bilateral relationship in the world, bar-none," although I always wondered how "bar-none" got translated into Japanese. I suppose there may be no doubt that the United Kingdom also considers itself to have a Ospecial relationshipO with the U.S. We cannot deny that the United Kingdom and Japan have significant alliance links with the U.S., and at the same time, share high levels of economic interdependence and prosperity with the U.S.

But I would not go further into discussing our relationships with the U.S. today. Rather, I would like to speak on the subject of implications of our common standing against the respective region, that is, continental Europe and Asia. In my view, both the United Kingdom and Japan conceive of themselves as a distinctive cornerstone against any possible turbulence spread on the continent and somewhat distant from their respective continental neighbors.

Having said that, I have to mention, as characteristics of the region, Europe and Asia have a lot of differences.

First, Asia is a region of diversity with various ethnic, cultural, and religious backgrounds as well as in terms of its developmental stages. Unlike Europe, Asia is not one Asia yet in view of its diversified nature of the region. This could work for both positive and negative ways.

Second, Asian political and regional security environment is still volatile despite its rapid economic development. Some may argue that Asian people and society may not be ready to share common regional goals.

Third, unlike the Euro, quite a few Asian currencies are still inconvertible. There may be no clear political will built among Asian leaders in order to create a unified regional currency in Asia.

Last but not least, when we envisage a picture of future continental climate in Asia and Europe, China will obviously play a different role in Asia from France and Germany do in Europe. Looking back into history, China sometimes has tended to give a false impression to other countries, because China has always been regarded as a country with potentially overwhelming power.

I wonder if China will distinguish itself as a real superpower in the 21 st century. But one thing for sure, the contemporary Chinese recognize a priority in vitalizing the country. And for that reason they may not always be arrogant in diplomacy. They appear to be ready to study from others, particularly from other's mistakes.

2. Asia's Miracle and Japan

As a region, Asia seems to be young despite thousands of years' history. But you cannot deny the fact that Asia is becoming a key player in terms of influence over global prosperity and security. Also, the relationship among members of Asian region has strengthened by means of emulating, competing and cooperating among themselves.

Here, I would like to touch upon the basics. The success of Asia after World War II has often been referred to as a miracle in the world history, since Asian countries have achieved both economic prosperity and democracy at a time with some exceptions. If we take into account some comparable developments that took place in the rest of the world, for example, the collapse of the Soviet Union, sluggishness in East Europe, insecurity in the Middle East and Latin America, struggles in Africa, you may comprehend why continuous prosperity and democracy in Asia, especially East Asia, can be described as a miracle in the world history. As a person living in the political world, in particular of today's generation, I believe we must neither halt nor reverse this superb tradition of continuing success in Asia.

East Asia including Japan and China increased its share of world GDP by 10 percent during the past three decades, while the others, except for Europe, have reduced its proportion. As you may all know, a source of economic prosperity in Asia lies in the model of Oexport-drivenO economic growth. The term export-driven is often referred to with some negative tone, but I take it in a positive sense that they have been engaging themselves with the rest of the world by exporting goods and services. In other words, a unique characteristic of Asia is to keep their window open in the form of international division of labor and world trade system.

By the same token, rapid economic developments in China have been brought by its commitment to economic reform and access to its market from the outside including western countries, after Deng Xiaoping's dramatic visit to southern China in early 1992 and thus they have overcome the Tiananmen Incident in 1989. A famous word of Deng Xiaoping is Oas long as a cat captures rats it doesn't matter whether if it is black or white.O China's progress has not been brought about by any sort of ideology, rather by international trade.

If we compare Thailand with Myanmar, or South Korea with its northern neighbor, apparently the latter countries have heavily suffered from their isolation. You may realize how crucial it is for a country to keep open itself to the world in order to achieve not only economic prosperity but also democracy.

Japan's Meiji Restoration some one hundred and forty years ago was the first historic decision in Asia to open its window, and this determination exactly started Japan's amazing history of rapid modernization in the 20 th century. It was the United Kingdom and the United States that woke Japan up to do so. I think it is fair to say that the United Kingdom and Japan have special relationship. And then Japan's decision ignited other Asian countries thereafter.

3. New Stage of Asia

With rapid economic growth, dramatic improvement in standard of living of people, and accumulated wealth in the society, Asia has reached some sort of a threshold toward a new stage. Let me introduce a few words of two fairly young Asian leaders in this regard.

First, in a conference held in Asia, the former Thail Foreign Minister, Dr. Surin Pitsuwan , pointed out a "positive effect" of the Asian Currency Crisis in 1997. He said, after the currency crisis, Asian countries started to face each other, truly recognized the meaning of a phrase of "Asia is one," although they had tended to turn to the U.S. or Europe before the currency crisis happened. I agree with him. It was not until 1997 that Japan considers itself as a part of Asia.

Second, an another friend of mine, serving as a Governor of Malaysian Postal Savings, said to me that Malaysia has taken the "look east policy" under the direction of the former Prime Minister Dr. Mahathir and has tried hard to become like Japan. But he insisted that Japan also should start the "look west policy" to study from the East Asian experiences after the currency crisis in 1997. I think he is absolutely right.

In this way, it seems to me that the regional relationship in Asia is maturing, just like "from dating to wedding." In my experience of marriage, I know how difficult and sensitive it is to cooperate with your partner. One thing clear is just a dialogue is not enough.

Economic integration in Asian countries has been reinforced these days. As a matter of fact, an increase in intra-Asian trade during the past five years has outperformed that of world trade by a wide margin. The following few things will, I hope, enhance the basis for prosperity in this region.

First, integration in terms of commerce of goods and services. The Free Trade Agreements (FTA), more precisely, Economic Partnership Agreements including such broader services as educational or medical services, can strengthen integration of regional partnerships. With diversity in Asia, Free Trade Agreement-type regional partnerships can generate net benefits with each other. And this is what basic economics tells us.

Second, savings and investments. It is crucial for Asian economic integration to induce ample domestic savings in Asia into ample investment opportunities in Asia. I think both Asian Bond Initiatives started by the government ministers and Asian Bond Fund created by central bankers in the region are extremely productive.

Third, labor movements. Foreign workers' training programs not only assist human resource training on the side of developing countries, but also accelerate necessary domestic reform through structural adjustments in industrialized countries, such as Japan.

In the process of advancing these kinds of regional commitments, political leadership in each country is always indispensable not only on the domestic front but on the international area. For instances, while Free Trade Agreements can strengthen integration in the regional economy, domestic interest groups in some industries always put off the movement, which requires a strong political will to move forward. Also there are some historical geopolitical confrontations, where politicians without any doubt have to play a crucial role to stabilize it. Indeed, there is a lesser degree of political commitment within the Asian region for these issues than that in the economic areas. However, I would like to put an emphasis on the fact that, as far as I know there is no Asian political leader who wishes to halt the continuing economic success in Asia.

I believe political leaders should inherit wisdom nurtured among our predecessors and, in this way, Asian regional relationship will continue to roll a plus-sum game. It is true of security in this region, where we are bearing with a grave potential instability. For that reason I am proposing to establish multi-layered fora based on the nature of Asian diversity. For instance, in the cases of the North Korean issue not only Six Nations Talks but also bilateral or trilateral talks, such as summit meeting among Japan, Korea and China, could generate a new consensus in the region. Also the Taiwan Channel issue has significant implications for maintenance of sea lanes of the western part of the Pacific Ocean. In this context, too, I suppose, by launching multi-layered talks it would be possible to minimize regional confrontation.

As for Asian currencies, it is for China's long-term interests that China moves to a more flexible exchange rate policy. Without flexibility, it would be difficult to manage sustainable and healthy economic growth in China and other Asian countries. Let me note here that I am not necessarily suggesting to give China a pressure to OrevalueO the Renminbi. Nobody knows which way the Renminbi goes under more flexible exchange rate regime and freer trading system with such unproductive sector as Chinese agriculture.

4. Conclusion: Japan's role in Asia

Before I conclude, I would like to put an emphasis upon Japan's initiatives in Asia, which will be essential for building Oone AsiaO by promoting economic integration. I believe Japan has a responsibility to provide stable power base in the growing Asian region, just as United Kingdom offers to the European region. At the same time, that is the only way for Japan to survive in the 21 st century without shrinking its power. Japan's economic revival, therefore, is obviously crucial. Economic integration in Asia cannot simply be achieved without Japan's strong private domestic demand.

As a source of economic growth, it is vital for Japan to lead Asia in terms of opening its market. We have a lot of tasks to do in this regard. For example, Foreign Direct Investments (FDI) into Japan is still far below the average level of industrialized countries. Also, we have to catch up with the movements of international convergence of accounting and auditing standards. I think the new stage of Asia will not be established by simply exporting goods and services, but by accepting global markets into the Asian region, especially in Japan.

We may have a long way to go. We all must remember that the Euro was not created in one day. Compared with Europe, it may be safe to say that Asian economies are less integrated in terms of movements of goods and services, and a big disparity still remains among the economic structures. The Euro was introduced after fifty years' efforts in the European economic integration that was initially launched with European Coal and Steel Community (ECSC) in 1958. I have learned that the origin of the concept of "United Europe" can be observed even three hundred years ago, when Abbé de Saint-Pierre published a book titled 'Project of Perpetual Peace' (Projet des Paix Perpéuelle) in France in 1713. On the other hand, as far as I know, it was Tenshin Okakura , a well known Japanese philosopher and painter who wrote for the first time 'Asia is one,' in his book entitled An Ideal in the East' in 1903. Here, we see two hundred years' difference.

My conclusion at this moment can be boiled down to one phrase; economic integration with clear political leadership first. And Japan should bear the responsibility to lead the Asian economic integration. That's why we have to concentrate on the domestic reform in each country. I suppose this is what history of the United Kingdom taught us.

Thank you.

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