Japan Institute for National Fundamentals

　　　　　Looking back international developments in the past year, the most significant movement affecting Japan’s fate might be that predictors of future U.S.-China relations have finally become available. My frank assessment is that the United States has further reinforced its “America First” policy while China, shocked by the U. S.’ trade offensive, has become unable to proceed with its “dangerous rise” amid growing anti-China criticism in the world.

Trump administration de-emphasizes alliances
　　　　　U.S. Vice President Mike Pence’s speech on October 4 came as a relief for Japan that is geopolitically positioned to search for its right course of action between the two big powers, the U. S. and China. Not only Japan welcomed Pence’s extensive criticism against a range of Chinese actions including military advances, unfair trade practices, forceful technology transfers and external influence activities. The anti-China criticism has caused repercussions in Asia, Europe and wider international community as a whole.
　　　　　However, the Pence speech lacked discussion about alliances. “While the U. S. remains the indispensable nation in the free world, we cannot protect our interests […] without maintaining strong alliances and showing respect to those allies,” says Defense Secretary Jim Mattis in his letter to President Donald Trump made public on December 20 after he offered his resignation.
　　　　　Mattis opposed President Trump’s decision to withdraw U.S. forces from Syria, which would tilt the balance of power in Syria to the advantage of Russia and Iran and lacks consideration to Kurds, some Persian Gulf countries, Britain and France that have fought along with the U. S. This decision indicates that President Trump could carry out his reiterated plan to withdraw U.S. forces from South Korea. In the remaining two years for first term of the Trump administration, U.S. leadership in international politics may be put into question anew.
　
Growing concern about future Chinese economy
　　　　　While Japan must keep close watch on Chinese threats as a matter of course, she must not be indifferent to China’s weakness. China is now blamed from all sides as Britain and France have indicated their interests in the freedom of navigation in the South China Sea and Germany has substantially toughened regulations on foreign investment, aiming at investment from China. In that context, concern is growing over the future course of the Chinese economy.
　　　　　Cornell University Professor Eswar Prasad, known for his book titled “Gaining Currency: The Rise of the Renminbi,” contributed an article to the December 21 international edition of The New York Times that says in essence that Chinese officials he interviewed recently in China were seriously concerned about economic conditions and hoped to see an early end to the trade war with the U. S. China has begun to make concessions over its alleged intellectual property infringement and the “Made in China 2025,” an industrial policy for integrating manufacturing with cutting-edge technologies, which have come under fire from the U. S. Won’t this end up without affecting China’s domestic politics?
　　　　　Sandwiched between the U. S. and China, the Japanese government led by Prime Minister Shinzo Abe may be forced to make complex responses.

Tadae Takubo is Vice President of Japan Institute for National Fundamentals and Professor Emeritus at Kyorin University.