Future of East Asia and the Role of Hong Kong
Mr Hitoshi Tanaka, Former Deputy Minister for Foreign Affairs of Japan, was the Foundation's guest speaker on 21 February 2012. Below is his speech.
Thanks very much for the kind introduction. I was quite anxious to come to Hong Kong as the last time I visited Hong Kong was about 35 years ago. I remember I was quite intimidated by coming in from Tokyo to land in Hong Kong over the mountain and through the city centre. This time, I was quite impressed by the beautiful airport and Hong Kong has changed a lot.
Peter Qiu (Vice Chairman of HKDF and TV host of Phoenix TV) grilled me in his interview regarding China-Japanese relationships. Let me, today, talk about the "Future of East Asia and the role of Hong Kong". I happen to believe that there is a very substantive role Hong Kong can play in relation to the future stability of East Asia. When we think of the future of East Asia, people like me conclude that everything depends on the future of China. The growth on the part of China has been much, much higher that we had expected ten years ago.
Ten years ago, I was Director General for Asia (of the Foreign Ministry of Japan) covering all the regions in Asia. That was 2001 when China entered the WTO. Japan was amongst the first nations that concluded the bi-lateral agreement with China for accession into the WTO. We thought that we must be in a position to help China to come into the rule-based institution for the sake of growth in terms of trade and investment as well. It is surprising that China had attained 10% average growth rate for the past ten years after the entry into WTO. I take credit in letting the Japanese Government to agree on the early conclusion of bi-lateral agreement regarding tariff and non-tariff barriers which China needs to have for entry into the WTO.
China's aggressiveness and the "Pivot to Asia" strategy
Recently, to some extent, we were also worried about the aggressiveness on the part of China. If you take the past two to three years: China started a kind of an aggressive diplomatic move; China took a rather lukewarm attitude toward the military provocation of North Korean toward the South; China took very aggressive unilateral measures against Japan in relation to the question of Senkaku (Islands) in 2010. Unilateral and aggressive measures included arrests of Japanese citizen in China and stopping the rare earth exportation to Japan. In 2001, Japanese Prime Minister Junichiro Koizumi visited China and China made a strong protest to the Japanese Government. But China also stated a policy "Cool political relations, but hot economic relations" - meaning that China implement strong political measures but would like to leave economic relations intact. In 2001, China's GDP was one-fourth of that of Japan - while in 2010, Chinese GDP had surpassed Japanese GDP. In my view, that is the reason why China took very aggressive measures against the Japanese, knowing that Japan may be losing its influences. What I am talking about is the change - the growth and rise of China in a very aggressive way - corresponding with the relative decline of Japan, Europe and the USA. It was not just the rise of China and India, it was also the decline in economic power and moral power of the more advanced democracies. As a result, there has been change in the international structure. We saw a more aggressive China in the past two or three years which was met by reactions, first coming from South East Asia - Malaysia, Vietnam and the Philippines - that has to do with South China Sea; they rushed to Washington asking for help and the United States came up with a concept of "Pivot". I had never thought that the United States had left the region but it was described as a "Pivot to Asia" strategy, clearly as a response to the aggressive move on the part of China. We all know that the Chinese probably feel that America has come to the region with the intention to contain China - which I don't think so; probably the United States feel that they need to show their strengths in order to maintain the equitable relationships within the region, but yet China would see this as a containment policy.
Instead of confrontation, Japan would like to see a prosperous East Asia
So what do we see as our future in the Region? Is it going to be confrontation -- possible military confrontation as a result of the escalation or change in strategy? Also in the economic field, people are starting to talk about the different economic models -- China runs "State Capitalism" and we run a much freer economic system. Here in Hong Kong, you have a very impressive "Free Market System" which is very different from the Chinese model. So, we may have confrontation in the future in terms of the economic models. Do we wish to see confrontation? No, clearly a country like Japan - which one might think is declining - but Japan still has strong technological and economic capabilities. And I do think Japan is in the right position to claim to be an "Asia-Pacific Power". America calls herself as "Pacific Power" so does Australia. China is an "Asian Power" but Japan is probably the only nation that could calm to be an "Asia-Pacific Power" - not just geographically, but Japan can make use of its advanced economy and its identity as an Asian nation. We, as Japan, would like to avoid possible confrontation between China and the United States in future - or China and the Western Powers. The question is, what would be the best way to make sure that confrontation will not take place. Instead, we would like to see a prosperous East Asia.
What would be the right vehicle to do this? I would like to talk about two or three concrete bridges in order to avoid confrontations in future.
Japan prefers "Regionalism" and "Tri-lateralism"
First, I would like to see more "Regionalism" instead of "Bi-lateralism". We all know that the United States is clearly a "Bi-lateralist" - US seems to wish to take up issues in a bi-lateral context - including taking up China in a bi-lateral way. And we all know that even the power on part of the US is weaker and what is at stake is the future of East Asia. I would like to introduce a kind of "Tri-lateralism" - a similar sort of arrangement between Japan, China and Korea. You may know that the three nations have set up a permanent secretariat in Seoul. The "Tri-lateralism" between Japan, Korea and China has produced very substantive results, such as possible tri-lateral investment treaty and possible free trade agreement. So I would like to see this type of tri-lateral movement in terms of military confidence building between US, Japan and China. China talks about "US-Japan Alliance" and the question of security. So why don't we have "Tri-lateral" arrangements such as joint operations for natural disasters, counter piracy and transparency in terms of military budgets. By creating higher transparencies amongst opponents, better confidence can be created amongst each other.
TPP, East Asia Free Trade Agreement and Rule-based Cooperation
Secondly, it is better to try to create a "Rule Based" community. As I talked about China entering the WTO, the Chinese success has very much to do with their entry into the WTO. In future, China's prosperity must be dependent on how far they could improve their domestic systems, how far they could adjust to international standards. It appears that it is very difficult for us to create new rounds of negotiations in WTO. I would like to see two things taking place in the "Creation of Rules". One is TPP (Trans Pacific Partnership or Trans-Pacific Strategic Economic Partnership Agreement) which may be unfamiliar to some of you. It is not just a free trade agreement, but it also covers a wide range of issues, such as intellectual property protection, environment, labour and it is a very advanced set of rules America proposes. At this junction, nine nations including Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the United States are negotiating and Japan has intention to enter into negotiation. I think this type of cooperation is important in future because we need an advanced set of rules - not just in trade and services, but also intellectual property, government procurement and all aspects of economic and social lives. I am sure that, sometime in future, China wishes to join. And it will be good for China to join in that type of higher-standard rules. But at the same time, the TPP is not everything. I would like to see more economic integration in East Asia and Hong Kong clearly stands to gain from such integration - which I define as 16 nations: ASEAN (10 nations), Japan, China, Korea, Australia, New Zealand and India.
That is the right size of "East Asia" as I see it. If we were able to introduce the right kind of economic integration, there will be more economic vitality in the region. I would like to see more partnership agreements, similar to TPP, but not that as wide in scope as TPP. It will be more limited - limited to trade, services and investment type of things. At the end of the day, we may be able to combine the two - "TPP" and "East Asia Free Trade Agreement" in probably 20 or 30 years. So this creation of rule-based community would be very important for the future of the region as well.
Joint Exploration of Resources
Thirdly, I would like to see "Joint" cooperation in the region, particularly in relation to resources. Not many people have pursued the concept of joint exploration. Japan and China had indeed agreed to jointly explore natural gas in East China Sea. However, under the rather tense relationship between Japan and China, it has not been implemented. The question of South China may better be addressed in the form of joint exploration of resources. We have talked about a very desirable project, such as joint exploration of resources in Siberia. So by creating a concept of Joint Exploration, we may be able to get rid of this sort of conflict in the region as well.
The role of Hong Kong and a constructive China
So I would like to see "Tri-lateralism" instead of "Bi-lateralism", a "Rule-based Community" and "Joint" cooperation in the region in the scope of a sixteen nations "East Asia" -- having said that I would like to touch upon the role of Hong Kong. When I was dealing with South East Asia some thirty years ago, we think of Hong Kong as a good observation post. From Hong Kong, we can watch China and evolution in South East Asia. This is why I visited Hong Kong very often. But when I became the director general for Asian and Oceanian Affairs Bureau (in foreign ministry of Japan), Hong Kong has gone out of my sight. Hong Kong became part of China and I thought Hong Kong would be absorbed into China and losing its identity. And indeed, in the beginning of the year 2000, Hong Kong suffered the currency crisis and I thought my good friend Chris Patten would leave a declining Hong Kong behind - Hong Kong being absorbed by the great power of China.
Recently, Peter (Qiu) came to my office in Tokyo saying how strong Hong Kong is recovering and the economic growth Hong Kong is creating - with the identity of Hong Kong backed by China and the political progress made by Hong Kong. This is why I am quite anxious to come here to learn about Hong Kong's perspectives on China. I am now more convinced that Hong Kong needs to remain Hong Kong - with the freedom, free press, free economic market, the on-going political reform and the possibility of Hong Kong become the major international financial market in Asia. The greatest contribution Hong Kong could make is to preserve Hong Kong -- this capacity will be connected to the future of China. Instead of an "Aggressive China", I would like to see a "Constructive China". China abiding by rules, consistent political reform - not just economic reform would serve the purpose of all people in China better. And I am sure that China will become a great power in the region.
North Korea
Lastly, I would like to conclude by touching upon North Korea. I had negotiated with North Korea secretly, running 25 weekend sessions of negotiations on Saturday and Sunday with North Korea for ten hours each time -- all 25 times in total, not just with the foreign ministry but with the military as well. My impression I have today is, North Korea is in a dangerous state - we cannot dismiss the possibility of dangerous confrontation. North Korea is run by the military - it is not necessarily by a dictator. Even under Kim Jong-iI, I sensed that a collective decision-making process, but not in the political party (Worker's Party of North Korea). There was the "National Defense Committee" chaired by Kim Jong-il and they constantly debate amongst themselves what best serves the interests of the military of North Korea. Without Kim Jong-il, it would be extremely difficult for North Korea to make important decisions. For example, on abduction an act that was denied by North Korea for the past 25 years, it was Kim Jong-il who decided to acknowledge it, apologized and sent back survivors to Japan. I had pushed very hard to make sure that Kim Jong-il would do that. As the act was conducted by government agencies - intelligence people and these agencies are still active in North Korea. It was not an easy thing for Kim Jong-il to do, even though he had an authority to overrule government branches. This authority does not exist today in North Korea in the young successor of Kim Jong-il.
Therefore, collective military decision making is intact. Yes, they will make collective decision, but I bet no important decisions could be made. May be there are divisions within the military as well. In case there are, it will extremely be dangerous for the rest of the world. I sense that China could become much more influential in the absence of this supreme authority. In such absence, China will be the last resort - so there may be possibility for China to exert more constructive pressure on North Korea. And indeed China has been doing that. China wishes to see a "soft landing" in North Korea. There is no point for China to see Korea becoming aggressive. China might like to preserve North Korea as it is - even though North Korea is not the right sort of North Korea for today's world. There will be lots of disagreement with the United States, with South Korea and Japan. So things may have to change. Amongst all that, China can play a more significant role and this is a very crucial for the sake of stability in East Asia. While China is a long-term issue, North Korea may become a very uncomfortable short-term issue and we are watching the North Korea issue very attentively.
Thank you very much.
The above does not necessarily represent the views of the Foundation.
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