Modi-Abe-Xi Jinping: A New Synergy Of Trilateral Relations In Asia In Wake Of Global Trade War – Analysis


Speculations sparked with the Japanese Prime Minster Shinzo Abe’s visit to China , which sought Chinese cooperation for third country development works – a volte-face to China, while tying a strong knot with India for strategic partnership to maintain peace in Indo-Pacific region during the visit of Indian Prime Minister Narendra Modi to Japan in tandem, given the fact that China is long –term political rival to both countries. Concerns were raised about the impact on India- Japan relations, which has a long way to fulfill their role in Indo-Pacific region.

Nevertheless, Indian Foreign Secretary was quick to rule out any adverse impact on the relation with Japan. Instead, he was hopeful for a favourable impact of the Sino-Japan deal, believing that this would play an important role in spearheading India- Japan strategic partnership to sustain peace and tranquility in Indio – Pacific regime. He asserted that the core point of Modi’s visit to Japan was to establish a close strategic partnership with Japan by deepening security and defence cooperation and play a prime role in maintaining peace in Indo-Pacific region.

Gone are the days when USA sneezes, Japan gets cold. Today, Japan can say “No” to US. Despite USA’s grave concern over Chinese Belt and Road Initiative, the recent visit of Japanese Prime Minister Shinzo Abe to China exhibits Japanese willingness to justify Chinese President Xi Jinping’s initiative. This will make a turning point in the Sino-Japan bilateral relation, which was shackled by agelong political hostility. The volte- face of Japan is viewed a silent negation to Trump’s protectionism. To this end, Modi’s visit to Japan , on the close heel of Abe’ visit to China , showcases a new pattern of trilateral relationships between the three Asian leaders.

This visit of Prime Minster Modi to Japan was a regular annual summit of India- Japan. Even then, this visit attached special significance, given the fact that summit was on the close heel of Abe’s visit to China – a formal visit of a Japanese leader after seven years, whose main aim was to rebuild political trust with China. The Chinese official media, Global Times, ushering the visit, said, “ China-Japan economic ties should lead to political trust’

Nevertheless, whether the rebuilt relationship between Japan and China will sustain or not, it is hard to say in the wake of ongoing dispute on Senkaku Islands, which erupted as a volcano.
India and Japan have several commonalities in their relations with China. Besides a long history of political enmity, China is the biggest trading partner of both. In both summits, Japan focused to take forward the relations in new direction through economic means by proposing joint partnerships for development of projects in third countries. With India, it pledged for joint partnership in India’s neighbours and with China , it proposed for joint partnership in ASEAN countries

To synergies Modi’s Act Asia policy, India and Japan entered into Memorandum of Cooperation for development of LNG related infrastructures in Sri Lanka, development of housing, education and electrification projects in Myanmar and enhancing connectivity with Bangladesh by way of constructing four-lane road and reconstructing bridges.

Parallel to it, Japan proposed for 50 private sector infrastructure projects jointly with China in Asia during the summit. A high speed railway and a smart city project in Thailand will be the first gainers of Sino-Japan joint partnership ventures in Asia.

How will the Sino-Japan deal prove salutary for new cooperation between the three Asian leaders ? The joint partnership with China will curtail the scope for under-cutting competition in Asia and will establish a fair ground for development of infrastructure. Indonesia was a case in point. Japan lost high speed railway project in Indonesia against the stiff completion from China, despite providing better technology and undergoing for half a decade hard negotiations with Indonesian government.

Thaw in Sino-Japan relation will bring ADB ( Asian Development Bank) and AIIB (Asian Infrastructure Investment Bank ) – the two big Asian multilateral financial institutions – closer to each other. Both are major funding agencies for development of infrastructures in Asia. ADB is dominated by Japan and AIIB is dominated by China. India is the second biggest stakeholder in AIIB. Sino-Japan deal will weed out competition between the two agencies and unleash a new scope for substantial fund for the development in Asia.

According to ADB, Asia requires US $ 8 trillion to meet its vast infrastructure fund by the end of this decade. Of these, India’s requirement is the biggest, amounting to US $ 1 trillion. The funding requirement are beyond the capacity of World Bank, IMF and ADB. This led India to join AIIB and become the second biggest stake holder in it. But, the undergoing proxy war between Japan and China used to act a deterrent to the borrowing countries. The thaw in Sino-Japan relation will pave the way for smooth availability of fund for India as well as other Asian countries.

Needless to say, after the trade war intensified, China dwarfed its aggression against India. It is tending to emerge a new important export destination for India.

For example , China will open a big market for India’s soybean meal after China restricted its imports from USA as retaliatory measure by imposing 25 percent tariff. China is the biggest importer of soybean in the world and USA has the biggest stake in Chinese soybean import market. The high tariff on USA soybean will make a space for new entrants in the Chinese market. To this end, India stands for a bigger chance to cut a big pie of Chinese soybean market, with the tariff expected to slip to zero from 3 percent. Recently, it dropped ban on import of rapeseed meal from India. The ban was imposed in 2011 due to quality concern.

Mr Narendra Modi was never averse to Chinese investment. His urge for foreign investment pitted China not a foe. During his Priministership, India signed MOUs for setting up four industrial parks for Chinese investment. China too is seemed to be comfortable to work with Mr. Modi.

China planned for a bigger role in infrastructure investment in India. Last year, China’s Sany Heavy Industry planned an investment of US$9.8 billion in India, while Pacific Construction, China Fortune Land Development and Dalian Wanda planned Investments of more than US$5 billion each.

Given the new silver line approaches between India and China, which was further spearheaded by USA protectionism, Japan’s volte face to China will act a boon to India.

Views expressed are personal

Subrata Majumder

Subrata Majumder is a former adviser to Japan External Trade Organization (JETRO), New Delhi, and the author of “Exporting to Japan,” as well as various articles in Indian media, including Business Line, Echo of India, Indian Press Agency, and foreign media, such as Asia Times online and Eurasia Review .

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