The Determinants of Leadership: China, Japan and the United States in East Asia (Contributions to International Relations) 3031125541, 9783031125546

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Contributions to International Relations

Fei Su

The Determinants of Leadership China, Japan and the United States in East Asia

Contributions to International Relations

This book series offers an outlet for cutting-edge research on all areas of international relations. Contributions to International Relations (CIR) welcomes theoretically sound and empirically robust monographs, edited volumes and handbooks from various disciplines and approaches on topics such as IR-theory, international security studies, foreign policy, peace and conflict studies, international organization, global governance, international political economy, the history of international relations and related fields.

Fei Su

The Determinants of Leadership China, Japan and the United States in East Asia

Fei Su Ruhr University Bochum Bochum, Germany

ISSN 2731-5061 ISSN 2731-507X (electronic) Contributions to International Relations ISBN 978-3-031-12554-6 ISBN 978-3-031-12555-3 (eBook) https://doi.org/10.1007/978-3-031-12555-3 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Doctoral Dissertation from the Ruhr University Bochum

Acknowledgments

This book would not have been completed without the active support and encouragement of many people. I cannot express enough thanks to all of them. First and foremost, I would like to express my deep and sincere gratitude to my doctoral supervisor Prof. Dr. Stefan Schirm for giving me the opportunity to do research and taking over the supervision of the work. During the writing, he not only guided the project in the right direction, but also provided constant help throughout my entire Ph.D. study. His enthusiasm for academic research and immense knowledge has deeply inspired me. It was a great privilege and honor to study and work under his guidance. I am also deeply appreciative of Prof. Dr. Jörn-Carsten Gottwald, my second supervisor. He was always willing and enthusiastic to encourage, guide, and provide invaluable suggestions for the research project from a different perspective. Many thanks go to Dr. Aukje van Loon, Yuan-Juhn Chiao, Dr. Michael Franke, Dr. Jan-Ulrich Rothacher, Melis Baydag, Roman Novak, Inna Andreeva, and other participants in the colloquium for their constructive criticism. Finally, I am extremely grateful to my parents for their continuous encouragement and loving consideration. They constantly have confidence in me, give advice, and let me do what I want. Hence, I would like to thank my husband Daikang Wei for his love, support, encouragement, and patience. They kept me going on and made this all possible.

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Contents

1

2

3

4

China, Japan, and the USA in East Asian Economic and Security Dynamics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Profile of the Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Introduction and Research Questions . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . .

1 1 2 5

The Significance of Followership in Successful Leadership Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Existing Literature on Leadership in East Asia . . . . . . . . . . . . . . 2.2 Different Approaches to Leadership in East Asia . . . . . . . . . . . . 2.2.1 The Leader-Centered Approach . . . . . . . . . . . . . . . . . . . 2.2.2 The Follower-Oriented Approach . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . .

9 9 13 13 14 18

Inclusive Leadership and Societal Approach as the Theoretical Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Inclusive Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Domestic Politics and Societal Approach . . . . . . . . . . . . . . . . . . . 3.3 Inclusive Leadership and Societal Approach in East Asian Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.1 The Dependent Variable: Followership . . . . . . . . . . . . . . . 3.3.2 The Independent Variable: Inclusiveness of Leadership Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 Hypotheses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Systematic Process Analysis and Multi-step Analysis . . . . . . . . . . . . 4.1 Study Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1.1 Defining the East Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1.2 Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1.3 Case Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23 23 24 26 27 27 31 31 33 33 33 33 34 ix

x

Contents

4.2

Systematic Process Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.1 The Plausibility of Systematic Process Analysis . . . . . . . . . 4.2.2 The Employment of Systematic Process Analysis . . . . . . . . 4.3 Multi-step Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.1 Leadership Project and Its Impacts on Potential Follower Country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.2 Domestic Actors’ Responses in Potential Follower Country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.3 Governmental Preference Formation and Testing Hypotheses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.4 Inclusiveness of Leadership Project and Followership . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

6

Leaders Need Followers: South Korea and the Leadership Competition Between China and the USA in the Establishment of the AIIB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Chinese Leadership Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 American Leadership Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Domestic Responses in South Korea . . . . . . . . . . . . . . . . . . . . . . 5.4.1 Domestic Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4.2 Societal Ideas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 South Korean Governmental Preferences Toward the AIIB . . . . . . 5.6 Multi-step Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6.1 Chinese/American Leadership Project and Their Impacts on South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6.2 Domestic Actors’ Responses in South Korea . . . . . . . . . . . 5.6.3 Governmental Preference Formation and Testing Hypotheses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6.4 Inclusiveness of Leadership Project and Followership . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Leaders Need Followers: An Analysis of American Leadership and Japanese Followership in the TPP . . . . . . . . . . . . . . . . . . . . . . . 6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 American Leadership Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3 Domestic Responses in Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3.1 Domestic Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3.2 Societal Ideas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4 Japanese Governmental Preferences Toward the TPP . . . . . . . . . . 6.5 Multi-step Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5.1 American Leadership Project and Its Impacts on Japan . . . . 6.5.2 Domestic Actors’ Responses in Japan . . . . . . . . . . . . . . . . 6.5.3 Governmental Preference Formation and Testing Hypotheses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5.4 Inclusiveness of Leadership Project and Followership . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35 36 36 37 38 39 41 42 43

45 45 46 52 56 56 60 67 69 69 72 75 78 80 87 87 89 93 93 114 121 123 123 125 129 132 133

Contents

7

8

9

Leaders Need Followers: Non-followership of South Korea and the Failure of Japanese Leadership in Pursuing the Permanent Seat on the UNSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Japanese Leadership Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3 Domestic Responses in South Korea . . . . . . . . . . . . . . . . . . . . . . 7.3.1 Domestic Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3.2 Societal Ideas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4 South Korean Governmental Preferences Toward the UNSC . . . . . 7.5 Multi-step Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5.1 Japanese Leadership Project and Its Impacts on South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5.2 Domestic Actors’ Responses in South Korea . . . . . . . . . . . 7.5.3 Governmental Preference Formation and Testing Hypotheses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5.4 Inclusiveness of Leadership Project and Followership . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Leaders Need Followers: China and the Philippines in the Joint Development in the SCS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 Joint Development in the SCS (2010–2016) . . . . . . . . . . . . . . . . . 8.2.1 Chinese Leadership Project . . . . . . . . . . . . . . . . . . . . . . . 8.2.2 Domestic Responses in the Philippines . . . . . . . . . . . . . . . 8.2.3 Aquino Governmental Preferences Toward the SCS Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2.4 Multi-step Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 Joint Development in the SCS (2016–2018) . . . . . . . . . . . . . . . . . 8.3.1 Chinese Leadership Project . . . . . . . . . . . . . . . . . . . . . . . 8.3.2 Domestic Responses in the Philippines . . . . . . . . . . . . . . . 8.3.3 Duterte Governmental Preferences Toward the SCS Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3.4 Multi-step Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 The Main Arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3 The Most Important Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.1 Four Interrelated Findings . . . . . . . . . . . . . . . . . . . . . . . . 9.3.2 Detailed Findings of Case Studies . . . . . . . . . . . . . . . . . . . 9.4 Future Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

xi

139 139 141 144 144 144 150 153 153 154 156 159 160 165 165 168 168 172 179 180 186 186 187 192 194 199 205 205 206 209 209 211 214 215

List of Acronyms and Abbreviations

ACCS ADB ADBI AIF AIIB AJA AJHA AoA APEC ARF ASEAN ASEAN+6 BAJ BRI CAFTA CCAJ CEC CEO CJK FTA CNOOC CPTPP DFA DOC DOE DPJ EEZ EHP EPA FKI

Association of Copyright for Computer Software Asian Development Bank Asian Development Bank Institute ASEAN Infrastructure Fund Asian Infrastructure Investment Bank Association of Japanese Animations All Japan Hospital Association Article of Agreement Asia-Pacific Economic Cooperation ASEAN Regional Forum Association of Southeast Asian Nations ASEAN plus Australia, China, India, Japan, Korea, and New Zealand Brewers Association of Japan Belt and Road Initiative ASEAN-China Free Trade Area Chocolate and Cocoa Association of Japan China Enterprise Confederation Chief Executive Officer Japan-China-Korea FTA China National Offshore Oil Company Comprehensive and Progressive Agreement for Trans-Pacific Partnership Department of Foreign Affairs Declaration of Conduct Department of Energy Democratic Party of Japan Exclusive Economic Zone Early Harvest Program Economic Partnership Agreements Federation of Korean Industries xiii

xiv

FMA FPMAJ FT FTA FTAAP G8 GDP GIAJ ICAK ICG ICT IMF IOSC IPE IR ITLOS JA Zenchu JAAA JALoT JAMA JANE JAPPI JAREA JASRAC JBA JBSA JCA JCBA JCCI JCIA JCIC JCMA JCPA JCSIA JDA JDIA JEMA JF Zengyoren JFA JFA* JFBA

List of Acronyms and Abbreviations

Flour Millers Association Federation of Pharmaceutical Manufacturers’ Associations of Japan Financial Times Free Trade Agreement Free Trade Area of the Asia Pacific Group of Eight Gross Domestic Product General Insurance Association of Japan International Construction Association of Korea International Crisis Group Information and Communication Technology International Monetary Fund Information Office of the State Council International Political Economy International Relations International Tribunal for the Law of the Sea Central Union of Agricultural Cooperatives Japan Advertising Agencies Association Japan Association for Logistics and Transport Japan Automobile Manufacturers Associations Japan Association of New Economy Japan Association for the Promotion of Pottery Industry Japan Association of Real Estate Appraisers Japanese Society for Rights of Authors, Composers and Publishers Japan Biscuit Association Japan Beet Sugar Association Japan Chicken Association Japan Commercial Broadcasters Association Japan Chamber of Commerce and Industry Japan Chemical Industry Association Japan Cattle Industry Cooperative Japanese Electric Wire and Cable Makers’ Association Japan Crop Protection Association Japan Cane Sugar Industry Association Japan Dental Association Japan Dairy Industry Association Japan Electrical Manufacturers’ Association National Federation of Fisheries Co-operative Associations Japan Fisheries Association Japan Ferroalloy Association Japan Federation of Bar Associations

List of Acronyms and Abbreviations

JFCPTAA JFGA JFIA JFJA JFMDA JForest/Zenmoriren JFSSLA JFTC JFWIA JICPA JISF JLIA JLIA* JMA JMC JMIA J-milk/JDA JMSU JPA JPA* JPAA JPCA JPH JPMA JPPA JSBA JSIA JSRA JSSMA JTF JUSBC JVSA JWA JWSIA KBIZ KCCI Keidanren Keizai Doyukai KITA KOBAR KORASS

xv

Japan Federation of Certified Public Tax Accountants’ Associations Japan Flower Growers Association Japan Food Industry Association Japan Fruit Juice Association Japan Federation of Medical Devices Associations National Federation of Forest Owners’ Co-operative Association Japan Federation of Shiho-Shoshi (Judicial Scriveners) Lawyer’s Associations Japan Foreign Trade Council Japan Federation of Wood Industry Association Japanese Institute of Certified Public Accountants Japan Iron and Steel Federation Japan Livestock Industry Association Japan Leather and Leather Goods Industries Association Japan Medical Association Japan Machinery Center for Trade and Investment Japan Marine Industry Association Japan Dairy Association Joint Marine Seismic Undertaking Japan Pharmaceutical Association Japan Poultry Association Japan Patent Attorneys Association Japan Photographic Copyright Association Japan Post Holding Japan Plywood Manufacturers’ Association Japan Pork Producers Association Japan Satellite Broadcasting Association Japan Salt Industry Association Japan Sugar Refiners’ Association Japan Sake and Shochu Makers Association Japan Textile Federation Japan-US Business Council Japan Video Software Association Japan Wineries Association Japan Wines and Spirits Importers’ Association Korea Federation of SMEs Korea Chamber of Commerce and Industry Japan Business Federation Japan Association of Corporate Executives Korea International Trade Association Labor Revolutionary Command Korea Railway Association

xvi

LDP LIAJ MDBs MMMF MOSF MoU NAKA NCA NFESIA NFSBA NFSC NGCA NHK NIDS Nikkenren Nikko NMIF Nokyo OCAJI ODA P4 P5 PECC PHP PNOC RCEP RCRS RIAJ ROK SCMP SCO SCS SLOC SMEs SOEs TPP UfC UN UNSC US USCC USDOS

List of Acronyms and Abbreviations

Liberal Democratic Party Life Insurance Association of Japan Multilateral Development Banks The Maureen and Mike Mansfield Foundation Ministry of Strategy and Finance (South Korea) Memorandum of Understanding All Nippon Kashi Association National Chamber of Agriculture National Federation of Environmental Sanitation Industry Associations National Federation of Small Business Associations National Federation of Starch Cooperatives National General Contractors Association of Japan Japan Broadcasting Corporation National Institute for Defense Studies (Japan) Japan Federation of Construction Contractors Japan Federation of Certified Administrative Procedures Legal Specialists Associations National Milling Industry Federation Japan Agricultural Corporation Association Overseas Construction Association of Japan Official Development Assistance Pacific-4 Permanent Five Pacific Economic Cooperation Council Preferential Handling Procedure Philippine National Oil Company Regional Comprehensive Economic Partnership Reformed Center for Religion and Society Recording Industry Association of Japan Republic of Korea South China Morning Post Shanghai Cooperation Organization South China Sea Sea Lines of Communication Small and Medium-sized Enterprises State-owned Enterprises Trans-Pacific Partnership Uniting for Consensus United Nations United Nations Security Council the United States US Chamber of Commerce US Department of State

List of Acronyms and Abbreviations

USGS USIA USJBC USTR VOGC WB WSJ WTO WWII Zenbaren Zenrakuren Zenshuren Zenyaren

xvii

US Geological Survey Iron and Steel Industry Association US-Japan Business Council Office of the United States Trade Representative Vietnam Oil and Gas Corporation World Bank Wall Street Journal World Trade Organization World War II National Federation of Barley Industry Cooperatives Japan Dairy Political Federation National Federation of Staple Food Collection Cooperative Associations National Federation of Building Lots and Buildings Business Associations

List of Figures

Fig. 4.1 Fig. 4.2 Fig. 5.1

Fig. 5.2

Fig. 5.3

Fig. 6.1 Fig. 6.2

Two levels of examining the determinants of leadership. Sources: Own illustration based on Schirm (2010, 2013) . .. . .. .. . .. 37 Causal mechanism in multi-step analysis. Sources: Own illustration based on Schirm (2010, 2013) . . . . . . . . . . . . . . . . . . . . . 43 South Korean opinions: the strongest economic influence in global affairs. Sources: Author’s compilation based on Asan (2015, pp. 14–17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 South Korean opinions: the strongest political influence in global affairs. Sources: Author’s compilation based on Asan (2015, pp. 14–17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 South Korean opinions: the impact of international trade and investment. Sources: Author’s compilation based on Pew (2014b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Composition of Japan’s GDP (2014). Sources: Author’s compilation by Statistics Bureau (2016, p. 30) . . . . . . . . . . . . . . . . . . . . . . 95 Japanese opinions: the impact of international trade and investment (percentage). Sources: Author’s compilation based on Pew (2014b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

xix

List of Tables

Table 4.1 Table 4.2 Table 5.1 Table 5.2 Table 5.3 Table 5.4 Table 5.5 Table 5.6 Table 5.7 Table 5.8 Table 5.9 Table 5.10 Table 5.11 Table 5.12 Table 5.13 Table 6.1 Table 6.2 Table 6.3

Case studies in this research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The societal ideas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Key dates on the AIIB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Composition of goods and services exports in South Korea in 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . South Korea process ideas concerning democracy (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . South Korea process ideas concerning government and people responsibility (percentage) . . . . . . . . . . . . . . . . . . . . . . . . . . . . South Korea process ideas concerning market economy (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . South Korea content ideas concerning government’s priority (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . South Korea content ideas concerning priority of foreign policy issues (percentage) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . South Korea’s content ideas concerning the importance of neighbors (percentage) . .. . . .. . .. . . .. . . .. . . .. . . .. . . .. . .. . . .. . . .. . . .. . South Korea’s content ideas concerning free trade and investment (percentage) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Correlation between South Korea’s domestic interests and governmental preference for the AIIB . . .. .. . .. .. . .. .. . .. .. . .. .. . .. Correlation between South Korean societal ideas and governmental preference on the AIIB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Correlation between inclusiveness of the Chinese leadership project and South Korean followership . . . . . . . . . . . . . . . Correlation between inclusiveness of American leadership project and South Korea’s non-followership . . . . . . . . . Key dates on the TPP . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .. . . . . Industry share of employment and GDP (1950–2015) . . . . . . . . . . International comparison of average tariff rates in 2013 (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. .

34 40 46 57 61 62 62 63 63 65 65 76 77 79 80 88 95 97 xxi

xxii

Table 6.4 Table 6.5 Table 6.6 Table 6.7 Table 6.8 Table 6.9 Table 6.10 Table 6.11 Table 6.12 Table 6.13 Table 6.14 Table 7.1 Table 7.2 Table 7.3 Table 7.4 Table 7.5 Table 7.6 Table 7.7 Table 7.8 Table 7.9 Table 7.10 Table 7.11 Table 7.12

List of Tables

Japanese sectoral interest groups’ opinions during TPP negotiations (2013–2015) .. . . . . . .. . . . . .. . . . . . .. . . . . . .. . . . . .. . . Japanese process ideas concerning democracy (percentage) . . . . Japanese process ideas concerning government and people responsibility (percentage) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Japanese process ideas concerning market economy (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . Japanese content ideas concerning economic priorities (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . Japanese content ideas concerning free trade (percentage) . . . . . . Japanese content ideas concerning swaying public opinions about the TPP (percentage) . .. . .. . .. . .. . .. . . .. . .. . .. . .. . .. . .. . .. . .. . Japanese content ideas concerning environment protection (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . Correlation between Japanese domestic interests and governmental preference on the TPP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Correlation between Japanese societal ideas and governmental preference on the TPP . . . . . . . . . . . . . . . . . . . . . . . . . Correlation between inclusiveness of the US leadership project and Japanese followership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Key dates on the Japanese bid for a permanent seat on the UNSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . South Korean process ideas concerning democracy (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . South Korean process ideas concerning essential characteristics of democracy (percentage) . . . . . . . . . . . . . . . . . . . . . . . . South Korean process ideas concerning government and people responsibility (percentage) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . South Korean content ideas concerning government’s priority (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . South Korean content ideas concerning views of Japan (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . South Korean content ideas concerning barriers to South Korea–Japan relations (percentage) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . South Korean content ideas concerning historical issues and bilateral relations (percentage) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . South Korean content ideas concerning Japanese Prime Minister Shinzo Abe and his visits to Yasukuni Shrine (percentage) . . . . . South Korean content ideas concerning confidence in the UN (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . Correlation between the South Korean societal ideas and its governmental preferences on the UNSC . . . . . . . . . . . . . . . . . . . . . . . . . . Correlation between inclusiveness of the Japanese leadership project and non-followership of South Korea . . . . . . . . . . . . . . . . . . . .

105 115 116 116 117 118 119 120 130 131 133 140 145 145 146 146 147 148 148 149 149 158 160

List of Tables

Table 8.1 Table 8.2 Table 8.3 Table 8.4 Table 8.5 Table 8.6 Table 8.7 Table 8.8 Table 8.9 Table 8.10 Table 8.11 Table 8.12 Table 8.13 Table 8.14 Table 8.15 Table 8.16 Table 8.17

xxiii

Key dates on the joint development in the SCS . . . . . . . . . . . . . . . . . . Philippine process ideas concerning democracy (percentage) . . . Philippine process ideas concerning government and individual responsibilities (percentage) . . .. . .. .. . .. . .. .. . .. . .. Philippine content ideas concerning government’s priority (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . Philippine content ideas concerning war and armed forces (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . Philippine content ideas concerning territorial disputes (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . Philippine content ideas concerning worry of armed conflict (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . Philippine content ideas concerning approaches of resolving the SCS disputes (percentage) . . . . . . . . . . . . . . . . . . . . . . . . . . Philippine content ideas concerning the satisfaction with the actions of Aquino administration (percentage) . . . . . . . . . . . . . . . . . . . Correlation between societal ideas of the Philippines and Aquino governmental preference on the SCS disputes . . . . . . . . . . Correlation between inclusiveness of Chinese leadership project and Aquino government’s non-followership . . . . . . . . . . . . . Philippine process ideas concerning democracy (percentage) . . . Philippine content ideas concerning economic growth and strong stance on territorial disputes (percentage) . . . . . . . . . . . . . . . . . Philippine content ideas concerning business with China (percentage) . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . . .. . .. . .. . . .. . .. . .. . Philippine content ideas concerning approaches to shelve the SCS issues (percentage) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Correlation between societal ideas of the Philippines and Duterte governmental preference on the SCS . .. . .. .. . .. .. . .. Correlation between inclusiveness of Chinese leadership project and Duterte government’s followership . . . . . . . . . . . . . . . . . .

167 173 174 174 175 176 176 176 178 184 185 190 191 191 192 197 198

Chapter 1

China, Japan, and the USA in East Asian Economic and Security Dynamics

1.1

Profile of the Research

Nowadays, China, Japan, and the USA have presented aspirations and various initiatives to extend their clout in East Asia. However, they sometimes reach and sometimes fail their goals? The underlying question behind the success and failure of a leadership project is the question of the basic conditions for leadership. This book analyzes the determinants of leadership in East Asia, more specifically, the conditions for three leading countries China, Japan, and the USA to generate followership concerning their respective initiatives and leadership projects. Four case studies, including the Asian Infrastructure Investment Bank (AIIB), the Trans-Pacific Partnership Agreement (TPP), the United Nations Security Council (UNSC), and the South China Sea (SCS), are selected for investigation, so as to answer the following research questions: which factors motivate potential followers to accept or oppose the leadership claims from China, Japan, and the USA, and under which conditions do potential followers in East Asia support China’s, Japan’s and USA’s bids for leadership? And under which conditions do domestic interests and societal ideas prevail in shaping governmental preferences of potential followers? To answer the questions, inclusive leadership and the societal approach will be employed to provide a concept to explore the determinant influence of domestic demands on governmental preference formation in potential follower countries, and to display the conditions for the prevalence of domestic interests and societal ideas. Thus, in this book, followership is considered as a necessary but not sufficient condition for successful leadership performance of regional power in East Asian economic and security dynamics. The inclusive leadership and the societal approach seem promising for the explanation of Chinese, Japanese, and American leadership in securing the acceptance of potential follower countries in East Asia, because they could theoretically conceptualize and empirically scrutinize the endogenous societal demands of follower countries in explaining their governmental preference

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 F. Su, The Determinants of Leadership, Contributions to International Relations, https://doi.org/10.1007/978-3-031-12555-3_1

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1 China, Japan, and the USA in East Asian Economic and Security Dynamics

formation, which were included in the leadership projects proposed by China, Japan, and the USA.

1.2

Introduction and Research Questions

Since the end of the Cold War, East Asia has become one of the “world’s most dynamic, diverse and important regions [. . .] through the interplay of various integrative economic, political and cultural processes” (Dent, 2010, p. 3). Along with China’s high-speed economic growth and American pivot or balancing toward Asia-Pacific, the regional environment has changed dramatically in East Asia. The rise of China has not only changed the power structure of East Asia, but it also influenced global development in terms of economy and security. Based on the “three arrows” of fiscal stimulus, monetary easing, and structural reforms, Japan tried to accomplish the goal of Abenomics, while attempting to make up for its deficiency in military power and pave the way for loosening restrictions on the country’s military (Harding, 2015). With Obama’s rebalancing policy and endeavor on the TPP agreement, the USA tried to not only promote economic prosperity but also to maintain and strengthen its leading role in East Asia. Accounting for nearly half the world’s real economic power collectively, China, Japan, and the USA are taken for granted that they ought to be the potential leaders in East Asia (Beeson, 2017, p. 567). However, apart from statistics and indicators of measuring national power, such as gross domestic product (GDP), population, defense spending, and technology innovation (Treverton & Jones, 2005), the questions that attracted the scholars and political observers are not only the power over resources but also the three countries’ abilities to transform their power into political influence. In other words, which country can lead; or in which ways can they lead? Some scholars argue that China would play the role of international leadership in a very similar way as the USA did in the twentieth century (Zhang, 2012; Jacques, 2009). On the contrary, others conclude that a comparison with China, the USA still has great advantages in economics, military, and technology, it “has not declined; in fact it is now wealthier, more innovative, and more militarily powerful compared to China than it was in 1991” (Beckley, 2012, p. 43). Moreover, some argue that despite its declining material power relative to China’s rapid rise, Japan still has significant ambitions and means to lead the East Asian region while keeping the USA engaged in the region (Black, 2017), hence Japan still maintains the ability to influence the preferences of Southeast Asian countries (Wallace, 2019). Until now, the three world’s largest economies, China, Japan, and the USA, have presented aspirations and various initiatives to extend their clout in East Asia. China is pressing for a region centered on its role as the driving force economically, and also with other aspects of leadership to follow. Chinese Presidents repeatedly emphasized China’s role as a responsible great power (Jiang, 2000; Hu, 2004; mfa.gov.cn, 2014). From China’s perspective, more responsibility is accompanied with more rights. In 2013, Chinese President Xi Jinping pointed out that the

1.2

Introduction and Research Questions

3

international economic governance system must reflect the profound changes in the global economic reality, and emerging markets/developing countries deserve more representation and bigger voices (Xinhuanet, 2013). The lack of voting rights in the International Monetary Fund (IMF) and the World Bank (WB) signifies the direction of Chinese aspirations. China has proposed a regional development outlook for the Belt and Road Initiative (BRI), underpinned by the Asian Infrastructure Investment Bank (AIIB). At the United Nations (UN) conference held in New York in 2013, Chinese Foreign Minister Wang Yi carefully elaborated on the prospect of China’s provision of more public goods in the domain of global security: “We will utter China’s voice, contribute China’s wisdom, put forward China’s proposals, demonstrate China’s role, and work hard to provide more public goods for the international community” (Wang, 2014b March). The Chinese state media People’s Daily said the 2014 Asia-Pacific Economic Cooperation (APEC) agenda showcased China’s leadership, signaling that “the center of world power is shifting towards the east” (Wang, 2014a November). The USA has reasserted its claim to leadership militarily while equally rebalancing other aspects of leadership. In a speech at the University of Queensland, on the sidelines of the G20 Summit in November 2014, the US President Barack Obama assured Washington’s “ironclad commitment” to its regional allies, saying that the USA, “as the world’s only superpower,” has unique responsibilities to other nations. “I’m here today to say that American leadership in the Asia Pacific will always be a fundamental focus of my foreign policy” (RT, 2014). He also stressed that “the United States is and always will be a Pacific nation. America’s security and prosperity are inseparable from the future of this region, and that is why I’ve made it a priority to renew American leadership in the Asia Pacific” (The White House, 2014). In contrast to Obama’s broad “internationalism,” the US President Donald Trump advocates an “America First” strategy, however, the Trump administration’s strategic emphasis on the Asia-Pacific region will continue as well (Lee, 2017). Japan also has its own designs of regional architecture. The Japanese National Institute for Defense Studies (NIDS) viewed the Sino-Japanese relationship as a rivalry of regional leadership (NIDS, 2003). Some Japanese officials also emphasized the leadership role of Japan in East Asian cooperation (Park, 2013). In his meeting with US President George Bush in 2007, Japanese Prime Minister Yasuo Fukuda stated that he “would like to exert leadership in Asia by strengthening Japan’s relationship with its neighboring countries and by activating regional cooperative frameworks” (us.emb-japan.go.jp, 2007). Japanese Prime Minister Shinzo Abe said he envisioned a resurgent Japan taking a more assertive leadership role in Asia to counter China’s power. More specifically, in 2013, he said: “I’ve realized that Japan is expected to exert leadership not just on the economic front, but also in the field of security in the Asia-Pacific” (Baker & Nishiyama, 2013). Under the circumstances, the regional environment has changed dramatically in East Asia and has shown economic and security dynamics. It is reported that the share of East Asia in the global economy was only 6% in the early 1990s, but it grew to 52.23% in 2007 (mfa.gov.cn, 2012). It is estimated that “Asia’s GDP will overtake the GDP of the rest of the world combined. [Moreover] by 2030, the region is

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1 China, Japan, and the USA in East Asian Economic and Security Dynamics

expected to contribute roughly 60% of global growth” (Yendamuri & Ingilizian, 2019). Since the launch of comprehensive economic cooperation in 1997, East Asian economic cooperation has constantly moved forward. Many mechanisms are wellfunctioning, such as the Chiang Mai Initiative and Chiang Mai Initiative multilateralization, the establishment and expansion of East Asian foreign exchange reserves. Moreover, East Asian countries experienced an explosion of the Free Trade Agreements (FTA), with a surge of bilateral and multilateral FTAs among and beyond the region. China’s proposal for an ASEAN–China FTA snowballed into the signing of ASEAN+1 FTAs with Japan, South Korea, and other countries outside the region, as well as the proposal of the Regional Comprehensive Economic Partnership (RCEP) and the TPP. After the global financial crisis, Japan struggled to revitalize its economy and overcome the long depression under Abenomics. While China’s BRI has gained tremendous interest as a strategic pathway to intensify trade and investment flows as well as lift global growth (Wolff, 2016). The USA responded to the growing importance of the Asia-Pacific with “pivot to Asia” under the Obama administration and “America first” under the Trump administration. In the security sphere, mechanisms also appeared in succession, such as the ASEAN Regional Forum (ARF), the Six-Party Talks, and the Shanghai Cooperation Organization (SCO) with the basis of coordination of great powers, and a large number of Track II security mechanism with the lead of nongovernmental organizations. The US military presence has been widely considered as the main factor in East Asian security and stability (Liu & Liu, 2019). However, despite the powerful US presence, regional security and stability have not solely depended on the USA. According to Hughes (2016), against the backdrop of the rise of China, Japan seems to be the only country in East Asia, which firmly employs a balancing strategy against it. While the small and middle powers in the region seek to avoid choosing between China and the USA, with the reluctance of neither being over-dependent on the US security umbrella nor damaging the relationship with China. In contrast, they try to maintain “greater socialization and interconnectedness with international community, as well as the ability to negotiate with China from a position of strength” (Liu & Liu, 2019, p. 982). Along with East Asian economic and security dynamics, China, Japan, and the USA dedicated a considerable contribution to regional development. However, facing a gap between aspirations and abilities, all three countries partially failed to reach their goals. Whereas the USA successfully obtained the support of all TPP members after 5 years of negotiation and concluded the agreement, it did not manage to hinder its closest allies from joining the China-led new bank, the AIIB. Equally, Japan failed to obtain a permanent member seat on the UNSC due to the resolute opposition in East Asia, especially from South Korea and China. While China, on the one hand, secured the acceptance of 56 other countries to establish a new regional multilateral development bank, the AIIB, it did not obtain the support of its neighbor the Philippines on the issues of the SCS from 2010 to 2016. This success and failure of China, Japan, and the USA demonstrate that being an economic weight does not always support in acquiring control over other states in East Asia. Hence, a gap between aspirations and abilities is supplemented by a gap

References

5

between power over resources and power over outcomes. Moreover, leadership is supposed to be built on motivation rather than coercion. Why do China, Japan, and the USA sometimes reach and sometimes fail their goals? What are the determinants to reaching leadership in economic and security dynamics in East Asia? To answer these questions, this book will elaborate the determinants of leadership based on the inclusive leadership (Schirm, 2010), which emphasizes the significance of followership. Concerning the specific research questions of which factors motivate potential followers to accept or oppose the leadership claims from China, Japan, and the USA, and under which conditions do potential followers in East Asia support China’s, Japan’s and the USA’s bids for leadership? It is argued, that in order to successfully achieve their goals/conclude their projects, leaders would need to secure the acceptance of potential followers (either neighboring or distant countries) in East Asia. It is therefore necessary for these leaders to include domestic interests and/or societal ideas dominant in potential followers in their leadership projects (see more details in Chap. 3). Moreover, the additional research question will be asked as well: under which conditions do domestic interests and societal ideas prevail in shaping governmental preferences of potential followers? To answer this question, the societal approach, developed by Schirm (see more details in Chap. 3), will be employed to specify the prevalence conditions of these domestic forces in potential follower countries. For hypotheses testing, case studies will be presented, which focus on whether China, Japan, and the US leadership projects have obtained the acceptance of potential followers in East Asia. The aim of this book is neither to differentiate global or regional power, nor is it to predict which states will eventually obtain a unique or collective leadership position in East Asia. It aims to contribute to the literature on the determinants for leadership in East Asia, specifically, the nascent literature motivated by the acceptance of leadership activities. This book seeks to empirically and theoretically investigate inclusive leadership which focuses on how to motivate followership.

References Baker, G., & Nishiyama, G. (2013, October 26). Abe says Japan ready to counter China’s power. Wall Street Journal. https://online.wsj.com/article/SB10001424052702304799404579157210 861675436.html Beckley, M. (2012). China’s century? Why America’s edge will endure. International Security, 36(3), 41–78. https://doi.org/10.1162/ISEC_a_00066 Beeson, M. (2017). Why has leadership in the Asia–Pacific proved so elusive? Chinese Political Science Review, 2(4), 567–581. https://doi.org/10.1007/s41111-017-0074-y Black, L. (2017). Japan’s aspirations for regional leadership—Is the goose finally cooked? Japanese Studies, 37(2), 151–170. https://doi.org/10.1080/10371397.2017.1330117 Dent, C. M. (2010). China, Japan and regional leadership in East Asia. Edward Elgar. Harding, R. (2015, May 13). Japan military reform poses threat to Abenomics. Financial Times. https://www.ft.com/content/38c170aa-f87a-11e4-8e16-00144feab7de

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Hu, J. T. (2004, April 23). China’s development is an opportunity for Asia. China.Org.Cn. http:// www.china.org.cn/english/features/93897.htm Hughes, C. W. (2016). Japan’s ‘resentful realism’ and balancing China’s rise. The Chinese Journal of International Politics, 9(2), 109–150. Jacques, M. (2009). When China rules the world: The end of the Western world and the birth of a new global order (2nd ed.). Penguin. Jiang, Z. M. (2000, November 15). Speech by president Jiang Zemin at the sixth APEC informal leadership meeting. Fmprc.Gov.Cn. https://www.fmprc.gov.cn/mfa_eng/wjb_663304/zzjg_ 663340/gjs_665170/gjzzyhy_665174/2604_665196/2606_665200/200011/t20001115_ 598414.html Lee, B. (2017, April 28). Trump’s first 100 days in Asia, continuities and discontinuities in Trump’s Asia policy. The Diplomat. https://thsediplomat.com/2017/04/trumps-first-100-days-in-asia/ Liu, F., & Liu, R. (2019). China, the United States, and order transition in East Asia: An economysecurity nexus approach. The Pacific Review, 32(6), 972–995. https://doi.org/10.1080/ 09512748.2018.1526205 mfa.gov.cn. (2012, October 24). East Asia cooperation—Challenges and opportunities, speech by ambassador Liu Zhenmin at GCSP. Mfa.Gov.Cn. https://www.mfa.gov.cn/ce/cegv//eng/hom/ t982239.htm mfa.gov.cn. (2014). Xi Jinping welcomes distinguished guests for the fourth summit of the conference on interaction and confidence-building measures in Asia (CICA) from participating countries. Mfa.Gov.Cn. https://www.mfa.gov.cn/ce/cebb/eng/zgyw/t1158132.htm NIDS. (2003). East Asian strategic review 2003—The National Institute for defense studies. NIDS. http://www.nids.mod.go.jp/english/publication/east-asian/e2003.html Park, J. (2013). Political rivals and regional leaders: Dual identities and Sino-Japanese relations within east Asian cooperation. The Chinese Journal of International Politics, 6(1), 85–107. https://doi.org/10.1093/cjip/pot001 RT. (2014, November 15). World’s only superpower’ pledges “ironclad commitment” to Asia Pacific at G20 summit. RT. http://rt.com/usa/205759-obama-speech-g20-australia/ Schirm, S. A. (2010). Leaders in need of followers: Emerging powers in global governance. European Journal of International Relations, 16(2), 197–221. https://doi.org/10.1177/ 1354066109342922 The White House. (2014, April 24). Joint press conference with President Obama and prime minister Abe of Japan. Whitehouse.Gov. https://obamawhitehouse.archives.gov/the-pressoffice/2014/04/24/joint-press-conference-president-obama-and-prime-minister-abe-japan Treverton, G. F., & Jones, S. G. (2005). Measuring national power. RAND Corporation. https:// www.rand.org/pubs/conf_proceedings/CF215.html us.emb-japan.go.jp. (2007, November 16). Japan-U.S. Summit Meeting (Summary). Us.EmbJapan.Go.Jp. http://www.us.emb-japan.go.jp/english/html/japanus/japanusSummit1116.htm Wallace, C. (2019). Japan’s strategic contrast: Continuing influence despite relative power decline in Southeast Asia. The Pacific Review, 32(5), 863–897. https://doi.org/10.1080/09512748.2019. 1569115 Wang, X. W. (2014a, November 17). Towards a new order, Xi Jinping touts Asia-Pacific dream. South China Morning Post. https://www.scmp.com/news/china/article/1641627/towards-neworder-xi-jinping-touts-asia-pacific-dream Wang, Y. (2014b, March 21). China’s new foreign policy: Transformations and challenges reflected in changing discourse. The Asan Forum. https://theasanforum.org/chinas-newforeign-policy-transformations-and-challenges-reflected-in-changing-discourse/

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Wolff, D. P. (2016). China’s ‘belt and road’ initiative—Challenges and opportunities. German Development Institute. Xinhuanet. (2013, March 19). Xi Jinping: Unswervingly take the road of peaceful development and unswervingly promote world peace and development. Xinhuanet. http://news.xinhuanet.com/ world/2013-03/19/c_115083820_2.htm Yendamuri, P., & Ingilizian, Z. (2019, December 20). In 2020 Asia will have the world’s largest GDP. Here’s what that means. World Economic Forum. https://www.weforum.org/agenda/201 9/12/asia-economic-growth/ Zhang, W. W. (2012). The China wave: Rise of a civilizational state. World Scientific.

Chapter 2

The Significance of Followership in Successful Leadership Performance

2.1

Existing Literature on Leadership in East Asia

This book focuses on the determinants of leadership by exploring the following questions: (1) the leadership roles of China, Japan, and the USA in regional politics, i.e., the leadership conditions in East Asia; (2) the explanation of these countries’ aspiration–achievement gaps in dealing with respective issues, focusing on the effectiveness of translating power over resources into power over outcomes, and; (3) the conditions of motivating followership within the region, focusing on the determinants for China, Japan, and the USA to secure the acceptance of East Asia countries. In recent years, a growing number of International Relations (IR) researches concerning leadership conditions and regional leadership are noticeable. However, some important areas still remain under-researched, therefore an additional explanation is necessary. In this context, the following section will review the existing literature concerning the above-mentioned questions and categorize them into three different sets of research. Firstly, the literature on leadership and leadership in East Asia will focus on a general introduction regarding leadership research and those works highlighting East Asia. Secondly, a focus is on studies illustrating the leadership roles of China, Japan, and the USA in regional politics, which apply different approaches to measure and assess the respective power and power shifts of the three countries, as well as their influence on a single country and in the East Asia region. Thirdly, attention is paid to the observation of leadership dynamics of China, Japan, and the USA concerning various economic and security issues, as well as explanations of gaps between their aspirations and achievements. The first strand of literature includes the growing number of studies on regional leadership in general as well as those concentrated on leadership in East Asia, with a large focus on regional powers and their roles in global and regional governance. A growing number of books and journal articles in the IR discipline in the last two decades have focused on regional leadership (Dent, 2010; Destradi, 2010; Ebert et al., 2014; Ebert & Flemes, 2018a, 2018b; Flemes, 2009, 2016; Flemes & © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 F. Su, The Determinants of Leadership, Contributions to International Relations, https://doi.org/10.1007/978-3-031-12555-3_2

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Wojczewski, 2011; Kang, 2012; Malamud, 2011; Nabers, 2010; Nolte, 2010; Park, 2013; Prys, 2010; Schirm, 2010; Williams et al., 2012) and leadership in East Asia (Beeson, 2017; Black, 2017; Bünte, 2018; Chan, 2012; Gill et al., 2016; Strand et al., 2016; Truong, 2017). Various aspects of leadership have been studied, such as the prerequisites for leadership efforts (Truong, 2017; Langenhove et al., 2016; Zwartjes et al., 2012), the motivations of regional power for seeking leadership positions (Zhao, 2011; Saito, 2018), the relationship between leadership dynamics and leadership modes (Park, 2014), the regional power and its role in promoting regional cooperation (Terada, 2001), the factors influencing regional leadership competition (Hsiao & Yang, 2009), the ways secondary countries respond to leadership bids (Ebert et al., 2014; Parker et al., 2015; Scholvin, 2017), the relative likelihood for regional powers to secure followership at a regional and global level (Flemes & Wojczewski, 2011), and the relations between regionalism and leadership dynamics (Park, 2012). Among this literature, the research scope has ranged from various regions to subregions. A single regional power’s influence within its region has been studied, such as Brazil’s leadership bids in Latin America (Malamud, 2011), as well as German leadership in a crisis-ridden Europe (Hellmann, 2016). A large number of researches focus on subregions and contribute to our knowledge toward leadership in international affairs as well, such as Nigeria’s role in South Africa (Hulse, 2016), the influence of Angola and Kenya in sub-Saharan Africa and South Africa (Hellmann, 2016; Scholvin, 2017). Japan, China, and their leadership in East Asian and Southeast Asian economic cooperation have equally been studied as well (Terada, 2001; Truong, 2017). Moreover, scholars have turned their focus from countries-based studies to comparative studies due to the recognition that “only very seldom are emerging powers analyzed in a comparative perspective” (Schirm, 2010, p. 198). Contrary to the countries-based studies, which concentrated on the influence of a major power over a single country, a growing number of studies has moved to the comparative method which is composed of different perspectives, such as the influence of different states within a specific region (Dent, 2010; Hellmann, 2016; Malamud, 2011), the influence of different states over divergent regions (Ebert & Flemes, 2018b; Williams et al., 2012; Flemes, 2016; Flemes & Wojczewski, 2011; Schirm, 2010), the influence of one single power over different countries within one region (Park, 2012, 2014; Truong, 2017). Despite the various aspects, large scope and comparative trend of leadership literature, a new tendency in the recent leadership research is observed: the leadership literature not only focuses on the status, conditions, and modes of successful leadership (Dent, 2010; Nolte, 2010; Destradi, 2010; Park, 2012; Williams et al., 2012; Zwartjes et al., 2012), but has also started to examine the reasons for the failure of regional leading countries in exerting their influence (Flemes, 2016; Schirm, 2010; Malamud, 2011; Truong, 2017). Various perspectives have been studied including the comparison between the success and failure of leadership bids (Schirm, 2010; Truong, 2017), as well as the comparison between different failed leadership bids (Ebert et al., 2014). The reasons for failing to obtain regional

2.1

Existing Literature on Leadership in East Asia

11

leadership have been partially studied by scholars. Based on divergent arguments and suggestions from these scholars, different approaches are employed to investigate the use of leadership with reference to potential leaders’ material resources and their way to transform their power into influence. Therefore, it is necessary to look into the existing leadership research regarding East Asian issues and to conduct an in-depth analysis of leadership determinants of China, Japan, and the USA in East Asia, in order to provide an explanation on how to cultivate leadership and followership in the region within the context of the evolving economic and security development. The second strand of literature highlights the power capacities of China, Japan, and the USA. Their power shifts at the global and regional levels have been widely researched by a growing number of studies, which employ divergent IR theories and concentrate on various case studies (Fels et al., 2012; Xuetong, 2006; Beeson, 2009; Lemke, 2016). For instance, Fels et al. (2012) provide a comprehensive analysis of measuring power and power shifts in the fields of IR, International Political Economy (IPE), economics, and security studies. Lemke (2016) investigates the role of hard power capabilities in identifying which states dominate in their regions, and concludes that the distribution of hard power resources has not only an important impact on the characteristics of regional states, but also strongly influences the amount of conflict in the region experiences. In the context of East Asia, Xuetong (2006) develops a power-class approach to measure China’s power status, specifically through “comprehensive national power” which includes military, economic, and political features. Beeson (2009) shows the tendency of “the decline of long-distance leadership” and “the rise of lone-term leadership competition”. He argues that despite the impact of China’s rise and the USA excluding East Asian regionalism, the erosion of American leadership in East Asia is mainly attributed to its own political, economic, and strategic problems. Otmazgin (2008) explores the connection between Japanese popular culture and soft power by analyzing the activities of such industries in East Asia and by examining the images of their products. He argues that the impact of this culture lies in shaping regional cultural markets and disseminating new images of Japan, but not in exerting local influence or in creating a Japanese-dominated regional system. Dobson (2008) examines the roles of China and Japan in the Group of Eight (G8) and the UN by tracking Japanese claims for leadership and measuring their possession of material and ideational power resources, hence concluding that it is unlikely for China to pursue a leadership role in the summit process of the G8 and the UN. Referring to the ups and downs of China, Japan, and the USA in East Asia, Shambaugh (2005) claims that no matter what China is always among the most important concerns. Goh (2011, 2013) suggested that the hierarchy of East and Southeast Asia will be formed through an ongoing negotiation between China and other powers such as the global superpower of the USA, the regional powers of Japan and South Korea as well as other weaker states in Southeast Asia. Terade (2001) examines Japan’s role in the establishment of the Pacific Economic Cooperation Council (PECC) and the APEC forum, and concludes that they could be considered as an example of Japanese leadership within the region. Black (2017)

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refutes the insight of a declining Japan, conceptualizes power in terms of discursive as well as material resources and argues that Japan still has significant leadership ambitions, as well as the means to bring them to fruition. Contrary to Shambaugh’s prediction (2015) that China will be brought closer to a breaking point due to the government’s ruthless measures, White (2012) believes that the USA is orienting itself toward sharing the Asia-Pacific with China. Subramanian (2011, p. 66) suggests that “China’s dominance is a sure thing” in line with “an index of dominance combining just three factors: a country’s GDP, its trade (measured as the sum of its exports and imports of goods) and the extent to which it is a net creditor to the rest of the world.” Singh et al. (2017) examine Southeast Asian elites’ views of SinoJapanese competition and concluded that the Sino-Japanese competition is, on the one hand, viewed to present some opportunities for Southeast Asian countries and, on the other hand, it is generally not perceived as an issue of critical significance. Instead, the concern lies more with major power dynamics such as the Sino-US relationship. To answer whether the USA has been in decline relative to China due to globalization, Beckley (2012, p. 43) compares economic, technological, and military indicators between the USA and China over the past 20 years and concludes that “the United States has not declined; in fact it is now wealthier, more innovative, and more militarily powerful compared to China than it was in 1991.” Challenging the assumption that the USA acts as a global economic stabilizer in times of crisis, Norrlof and Reich (2015) test whether the USA performs this role. They suggest that the American unique role in the global economy is in need of a critical reassessment, and claim that “China played an increasingly important role in supporting the global economic system over time and the trend line suggests they will continue to do so in the future” (p. 227). The third strand of literature observes an increasing number of scholars have published their works on the roles of China, Japan, and the USA in East Asia. There is no doubt that these researches enrich the knowledge of leadership dynamics in the region. However, regarding the influence over policy outcomes of these three countries, these studies are surprisingly limited. Only a few authors focus on the leadership dynamics of China, Japan, and the USA concerning various economic and security issues, and on developing theoretical frameworks to explain the political outcomes in terms of their aspiration-achievement gaps. For instance, Xuefeng (2010) reviews the Chinese endeavor to shape a more favorable regional environment after the Asian financial crisis and finds out that China’s policy outcomes are strongly determined by “the dominant United States wary of China’s rapid rise” and “the substantial power gaps between the two states” (p. 515). Goh (2011) explores China’s power over influences in Southeast Asia. She argues that “even though China’s power resources have increased significantly, the way in which it has managed to convert these resources into control over outcomes is uneven” (ibid, p. 1). Truong (2017) also concentrates on China’s influence in Southeast Asia and comes to a similar conclusion: even though China has been somewhat successful, Southeast Asia is still far from a China-led system or a Sino-centric regional order.

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Different Approaches to Leadership in East Asia

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These studies explore the power transformation of East Asia and the activities of China, Japan, and the USA in enhancing their influence within the region. In addition, they distinguish power over resources and power over outcomes in detail in East Asia’s context. Even though these scholars have a different understanding of the regional positions of China, Japan, and the USA, as well as divergent predictions on the regional hierarchy in the future, it is obvious that the regional order in East Asia is formulated along with an ongoing engagement of China, Japan, and the USA, as well as their interaction with other states within and outside the region. Therefore, it is necessary to discover more specific examples and aspects about the determinants for leadership in East Asia. This book complements the growing existing literature on regional leadership in East Asia. The highlight of this book, however, is its analysis employing a concept of inclusive leadership, in which it examines the leadership determinants for China, Japan, and the USA in projecting their leadership projects. The second distinguished point contrary to other studies is that, instead of focusing on studying one particular country or one specific field, this book not only examines the influence of China, Japan, and the USA over different countries in East Asia, but also conducts a comparison among them regarding their leadership position in the region. Moreover, instead of focusing on one specific issue, this book also covers the economic and security dynamics of the leadership bids.

2.2

Different Approaches to Leadership in East Asia

Considering the question of the determinants for China, Japan, and the USA to obtain leadership in economic and security dynamics in East Asia, the existing literature is divided into two categories: the leader-centered approach and the follower-oriented approach.

2.2.1

The Leader-Centered Approach

Regarding leadership determinants, it is obvious that the potential leader should have the requisite power capabilities to exercise its power in an appropriate way. Realists (Morgenthau, 1967; Waltz, 1979) posit that power capabilities are the main determining factors of state behavior. Dominant states with necessary power can exert control over the system and advance their self-interest including sets of political, economic, or other types of interests. According to Gilpin (1981, pp. 29–34), three kinds of elements determine who controls the international system. First, the distribution of power as the principal form of control in every international system. Second, the hierarchy of prestige rested on economic and in particular military power. And third, the set of rights and rules determined by the dominant powers, which could govern and influence the interactions among states.

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Besides power capabilities, scholars also explore the determinants of leadership through other perspectives. Turning the research focus from systematic factors to internal factors, Schoeman (2003) explains how the internal dynamic of the state’s political system and economy should allow it to play a stabilizing role in the region. Flemes (2016) suggests that ideas, interests, and strategies of regional powers influence their foreign policies and determine their classification and rank in the regional hierarchy. Although a number of studies predict the future leadership status in East Asia, as well as emphasize the key factors of exerting influence, however, when discussing the topic of leadership conditions, aspects like standard indicators of national power and internal factors of potential leaders cannot provide sufficient explanations on the failure of leadership projects, which demonstrates the weakness of leader-centered explanations on power over outcomes. Consequently, it is necessary to explore a more comprehensive approach to the determinants of leadership.

2.2.2

The Follower-Oriented Approach

It is widely acknowledged that there is a preposition for obtaining leadership: a predominance of power capabilities compared to other actors within the region. This is largely explained by the relative dominance of material and rationalist approaches to the study of IR, which to a large extent have excluded or downplayed the role of followership (Cooper et al., 1991; Stubbs, 1991). The leader-centered approach, or in other words, the supply-side literature of leadership, exclusively concentrates on the leader or the hegemon, and ignores the interests and motivations of followers, thereby inherently disregarding followership in examining the determinants of leadership. In contrast to the leader-centered approach, some scholars highlight the significant role played by followership in securing leadership (Cooper et al., 1991; Dent, 2010; Huntington, 1999; Nolte, 2010; Schirm, 2010; Stubbs, 1991; Zwartjes et al., 2012). Scholars have different answers about which factors motivate potential followers to accept or oppose the leadership claims. Williams et al. (2012) suggest that followers follow (or not) because of (1) external security threats (realism), (2) coercion or inducement by a leading state in the region (neorealism), (3) its perceived ability to use the institutions to constrain leader’s ability to take particular actions (liberal institutionalism), (4) shared norms, values and identities about how the regional and international system should be ordered (constructivism), or due to domestic politics (liberalism). Concerning how to generate followership, some argue that in order to get others to comply and follow, states strive to maximize relative power, because only the most powerful state can guarantee its survival (Mearsheimer, 1990). Therefore, states seek opportunities to “weaken potential adversaries and improve their relative power positions” (ibid, p. 12); in other words, states cultivate followership by increasing the power gap. Others suggest that states strive to maximize relative

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Different Approaches to Leadership in East Asia

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security rather than relative power (Waltz, 1979), therefore state’s behavior is induced by the system. “Whether political actors balance each other or climb on the bandwagon depends on the system’s structure” (ibid, p. 125). Thus, on the one hand, the state motivates followers and eliminates the number of challengers through moderate behavior and credible reassuring to others, on the other hand, secondary states can build, strengthen, and enlarge coalitions with intra- and extra-regional actors to balance the regional powers (Williams et al., 2012, p. 9). Fels (2017) focuses on substantial power shifts and transitions in the Asia-Pacific through examining the rise of China, Sino-US competition, and “regional middle power allegiance.” Adopting a realist theory, Fels emphasizes the importance of middle powers in providing crucial value for great powers and suggests that middle powers can easily become swing states or semi-consequential states in the context of great power rivalries. Therefore, winning the “allegiance of regional middle powers” can greatly strengthen the legitimacy of great powers and provides them considerable support in achieving their strategic goals and objectives. He points out that China was able to substantially improve its position and status vis-a-vis the USA, thereby the latter has become far less dominant than two decades ago. However, China was unable to gain stronger allegiance from the relevant middle powers. In line with institutionalism, Ikenberry and Kupchan (1990) underscore the significance of the diffusion of a set of normative beliefs. Hegemons should go beyond material capacities and socialize the secondary states into cooperating through altering the substantive beliefs of leaders in those states. According to them, hegemony through socialization is more cheaply achieved than that solely through coercion and preponderant material resources, because in this case the secondary states agree to comply with the hegemon due to the basis of shared normative beliefs. Terada (2001) examines Japan’s leadership role in the establishment of the Pacific Economic Cooperation Council (PECC) and the APEC, and emphasizes the importance to offer an “institutional blueprint” so as to setting up common goals and persuading secondary states to join new regional institutions. He suggests that a leader should not impose intentions on followers by force, instead the leader should “promote collective goals by directing follower’s behavior” (ibid, p. 214). Beeson and Higgott (2005) argue that in the past the US dominance stems from its institutionalized position at the center of liberal economic order, however, contemporarily the US experiences diminution of systematic legitimacy. This is evidenced by the willingness of its potential followers in Asia, who “seem intent on creating an institutional order less dependent on American power, more dependent on rules and principles and in which the USA is granted less prerogative and license than in the past” (ibid, p. 1179). In the perspective of constructivists, “the structures of human association are determined primarily by shared ideas rather than material forces” (Wendt, 1999, p. 1). Moreover, “the identities and interests of purposive actors are constructed by these shared ideas rather than given by nature” (ibid). Since material resources only acquire meaning for human action through the structure of shared knowledge in which they are embedded, a material position is untenable without shared

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understandings, expectations, and knowledge. Thereby, constructivists suggest that material resources cannot constitute themselves as causes of action, while norms specify standards of appropriate behavior for a given identity since it involves “collective expectations for the proper behavior of actors” (Katzenstein, 1996, p. 5). Since a state’s foreign policy behavior can be “conceptualized as normconsistent foreign policy” (Boekle et al., 2001, p. 132), the leading country can obtain the support of potential followers by cultivating advantageous social norms to internalize into the decision makers of potential followers. Correspondingly, the leading country must act in agreement with the identity as a regional or global leader, otherwise, the potential followers would wind up its acceptance of a leading position and suspend its assistance in achieving common goals. In line with constructivism, Cooper et al. (1991) specify followers’ motivation and underscore the importance of cultivating common goals and beliefs. It is argued that in spite of the seeming “following” of the subordinate state, a leader does not certainly exercise real leadership due to a lack of common interests and goals between a leader and a follower. Considering foreign elites’ acknowledgment and internalization of a leader’s version of international order as intersubjectivity, Nabers (2008) suggests that leadership relies on the intersubjective internalization of ideas, norms, and identities. He adds that discourse is the key to tracing intersubjectivity since discourse control could convert ideational resources into political influence and reformulate interests and identities. Wang (2003, p. 101) argues that leaders’ ideas about international order should be embraced not only by elites of the follower country, but also accepted by people in general. Wang (ibid, p. 99) examines Japan’s relations with the USA on China policy in the post-Cold War period, and concludes that there is too much attention on “the beliefs and values of ruling elites in secondary states” and too less attention on “the socialization of the mass public in secondary states with hegemonic ideas.” Some other scholars recognize the deficiency of traditional theories or approaches in explaining the determinants of leadership, as well as how to motivate potential followers to accept or oppose the potential leader’s bid for leadership. They also acknowledge the necessity to combine different theories and allude to the determinant of leadership and followership. They, however, do not provide an empirical analysis. For instance, Zwartjes et al. (2012) argue that the determinant of regional leadership is the willingness to act as a regional leader, the capacity to mobilize internal resources and the acceptance of leadership action within and beyond the region. Park (2012, 2013, 2014) examines the Sino-Japanese relations within East Asian cooperation, affirms the importance of followers’ acceptance, and points out that the dual identities of regional leaders define their interests and then shape their regional policies and bilateral relations in regional cooperation. Flemes and Wojczewski (2011) explore the factors motivating secondary powers to accept or contest leadership claims. They suggest that a potential regional leading state is supposed to focus on the provision of common interests benefitting both leaders and followers, projection of norms and values including ideational

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Different Approaches to Leadership in East Asia

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characteristics of potential followers, allocation of material resources such as regional public goods, as well as the construction of inclusive and democratic institutions. Truong (2015) argues that secondary states tend to accept leaders’ projects due to three reasons: power sharing, incentive sharing, and vision sharing. Because secondary states’ perceptions about a leader’s intentions are based not only on the growing capabilities, but also on leader’s application of power. Moreover, the leader could impact secondary states’ decisions by “changing their material incentives,” and changing their substantive beliefs through “inducing other states to accept the international norm it proposes” or “attracting other states to follow its suit” (ibid, p. 70). The above-mentioned literature on leadership and followership as well as divergent approaches of analysis reveal that many researches on leadership have been studied in general, and some of them can also account for leadership conditions. However, the leader-centered approach exclusively focuses on the importance of power capabilities and domestic factors of leading countries which, to a large extent, exclude or downplay the role of followership. The follower-oriented approach divides into tendencies of emphasizing material, ideational, and institutional resources of followership. Realism and neorealism underscore the significance of power capacities of leaders and followers. Institutionalism and constructivism emphasize the significance of projecting a broad version of common goals and beliefs, and provide insights into cultivating followership through institution constructions, socialization, and intersubjective internalization. What is missing in this literature is a particular focus on followership as determinant of leadership in East Asia, as well as the conditions of motivating the acceptance of potential followers in the region, in other words, motivating followership through framing Chinese, Japanese, and American leadership projects. Leadership literature focuses too much on the leaders, thereby failing to provide a systematic understanding of the role of followership. Once focusing on the significance of followership, literature still shows some omission. Firstly, the existing follower-oriented literature partially focuses on the material resources of leadership, which refers to the deterministic impact of the distribution of power. The exclusive focus on structural factors and power capacities fails to recognize the importance of domestic factors, especially in investigating the preferences formations of potential followers in East Asia economic and security dynamics. It is not possible to better understand followership without taking into account the influence of societal factors on the decision-making process of potential follower countries. Secondly, the existing follower-oriented literature partially concentrates on ideational factors as a way to socialize or internalize values, norms, and identities. Institutionalists consider institutions, organizations, and regimes as deterministic to the outcome of leadership dynamics. Constructivists view rules, norms, and standards of international legitimate order as part of social mechanisms used by leading countries to persuade potential followers to change preferences. However, leadership and followership literature overemphasize constraints on state behavior emanating from distribution of power, configuration of information and institutions, as well as

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social mechanisms. Meanwhile, the literature on leadership and followership ignores or downplays the role of domestic politics in shaping follower countries’ preferences and motivating followership, hence the importance of domestic politics on determinants of leadership should not be ignored. Thirdly, research on applying empirical analysis to explore the leadership of China, Japan, and the USA in the context of East Asia economic and security dynamics is relatively thin and could thus be enhanced by an in-depth analysis. Therefore, it is necessary to establish a theoretical framework that concentrates on both material and ideational factors of motivating followership, in addition, conducts an in-depth empirical analysis of the leadership projects of China, Japan, and the USA, as well as the reaction of states with lesser power in the region within the context of new evolving regional economic and security order.

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Waltz, K. N. (1979). Theory of international politics. McGraw-Hill. Wang, Q. K. (2003). Hegemony and socialisation of the mass public: The case of postwar Japan’s cooperation with the United States on China policy. Review of International Studies, 29(1), 99–119. https://doi.org/10.1017/S0260210503000068 Wendt, A. (1999). Social theory of international politics. Cambridge University Press. White, H. (2012). The China choice: Why America should share power. Black Incorporated. Williams, K. P., Lobell, S. E., & Jesse, N. G. (2012). Beyond great powers and hegemons: Why secondary states support, follow, or challenge. Stanford University Press. Xuefeng, S. (2010). The efficiency of China’s multilateral policies in East Asia (1997–2007). International Relations of the Asia-Pacific, 10(3), 515–541. https://doi.org/10.1093/irap/lcq011 Xuetong, Y. (2006). The rise of China and its power status. The Chinese Journal of International Politics, 1(1), 5–33. Zhao, S. (2011). China’s approaches toward regional cooperation in East Asia: Motivations and calculations. Journal of Contemporary China, 20(68), 53–67. Zwartjes, M., Van Langenhove, L., Kingah, S., & Maes, L. (2012). Determinants of regional leadership: Is the European Union a leading regional actor in peace and security? Southeast European and Black Sea Studies, 12(3), 393–405.

Chapter 3

Inclusive Leadership and Societal Approach as the Theoretical Framework

3.1

Inclusive Leadership

In order to determine the conditions under which the potential followers in East Asia support leadership bids from China, Japan, and the USA, inclusive leadership and the societal approach will be employed to combine the domestic material and ideational factors. This book will theoretically and empirically investigates inclusive leadership which focuses on how to motivate followership. Inclusive leadership is developed by Schirm (2010) who emphasizes the significance of followership as a core condition to determine leadership performance. Schirm points out that research on leadership has focused “too much on great powers, on the material capabilities and the activism of emerging powers, and too little on followership” (ibid, p. 199). Therefore, inclusive leadership holds that in order to perform successfully, any leadership must be accepted by followers in the context of non-coercive and benign leadership. Additionally, followership is a necessary condition to provide leading states “the power base for both regional and global power projection” (ibid). In order to proceed deductively from this argument, Schirm states that “including the interests and ideas of other countries in the leadership project triggered followership, whereas neglecting them resulted in criticism or opposition” (ibid, p. 214). In his innovative paper “Leaders in need of followers: emerging powers in global governance,” the correlation between inclusiveness of leadership projects and followership has been empirically investigated. Several case studies have been conducted through analyzing the inclusiveness of Brazil’s and Germany’s leadership projects and mainly focus on global governance issues, including their aspiration for upgrading positions on the UNSC through defining this goal as an improvement of representativeness and legitimacy, their bids for directorship in international organizations such as the World Trade Organization (WTO) and the International Monetary Fund (IMF) and their performance in influencing global trade policy within G20. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 F. Su, The Determinants of Leadership, Contributions to International Relations, https://doi.org/10.1007/978-3-031-12555-3_3

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Following the introduction of inclusive leadership, domestic politics and the societal approach will be presented in the next section. The employment of inclusive leadership in the circumstances of East Asia economic and security dynamics will be specified in the third section of this chapter.

3.2

Domestic Politics and Societal Approach

Domestic politics is shaped by Peter Katzenstein with his seminal works in “Between Power and Plenty” (Katzenstein, 1977). He bridges the “dualism between state and society” (ibid, p. 601), and stops viewing states as “undifferentiated and unitary actors” (ibid, p. 11). Instead, he stresses that “in both the interest group model and the democratic model, foreign economic policy is seen primarily to reflect societal pressures” (ibid, 1977, p. 602). Moravcsik (1997, p. 513) opens the black box, and holds that state preference, rather than state capabilities is the primary determinant of state behavior, or rather, the fundamental actors in world politics are individuals and private groups rather than states (ibid, p. 516). He considers governmental preferences as “analytically prior to an analysis of strategic interaction” (ibid, p. 544). According to him, “endogenize changes in state preferences” (ibid, p. 549) matter, because “states do not automatically maximize fixed, homogeneous conceptions of security, sovereignty, or wealth per se [. . .] they pursue particular interpretations and combinations of security, welfare, and sovereignty preferred by powerful domestic groups” (ibid, p. 519). In addition, Milner (1997) claims that mechanisms for achieving cooperation depend on the internal struggle between domestic supporters and opponents. She states, “cooperation among nations is affected less by fears of other countries’ relative gains or charting than it is by the domestic distributional consequences of cooperative endeavors. Cooperative agreements create winners and losers domestically; therefore, they generate supports and opponents” (ibid, pp. 9–10). Based on domestic politics, the investigation of governmental preference formation has been advanced by either theoretically developing an analytical framework or systematically operationalizing the insights of the “bottom-up view of politics” (Moravcsik, 1997, p. 517). Further developed domestic politics theories, the societal approach, which will be employed in this book, shares the grounded argument that governmental preferences are shaped by domestic influences, because it does not only emphasize the role of domestic interests and ideas by examining the preferences of economic sectors and attitudes of voters, but also considers the role of domestic institutions. Treating the demands of societal actors as analytically “prior to international strategies and interstate negotiations” (Schirm, 2011, p. 50), the societal approach assumes that “governments in democratic political systems seek re-election and are therefore responsive to dominant societal influences ranging from specific lobby groups to the attitudes of voters in general” (ibid). Since the preferences of elected governments mirror the preferences of societal actors, the investigation of the endogenous

3.2

Domestic Politics and Societal Approach

25

governmental preferences of potential followers seems promising to analyze the determinants for leadership and followership. The societal approach not only employs the variables of interests, ideas, and institutions, but also innovatively conceptualizes the conditions for their prevalence. Schirm (2018b, p. 308) hypothesizes that if domestic economic sectors are directly affected by proposed governance initiatives, leading to cost and benefit calculations of relevant societal interests, then lobbying will be intense, and material interests will prevail in shaping governmental preferences. Conversely, if a governance issue raises fundamental and long-term questions about the role of the government in steering the economy, and domestic sectoral interests are affected in a diffuse way, then ideational societal expectations will prevail in shaping governmental positions. The extended version of the societal approach views domestic institutions as determinants shaping governmental positions. Domestic institutions are defined as “formal regulations of socio-economic coordination” (ibid, 2019a, p. 108), which “represent the codification of previous sets of ideas and interests [. . .] may influence current societal ideas and interests” (Schirm, 2016, p. 69). Regardless, it is necessary to point out that domestic institutions will not be considered in this book, because there is neither corresponding domestic patterns of socioeconomic regulations related to the analysis of this book nor corresponding institutions structured domestic political and socioeconomic coordination. Various case studies have been conducted through employment of the societal approach regarding divergent global and European economic governance issues: the divergent governmental positions of Germany and the USA on the necessity and form of global governance, as well as the ability of governments to compromise internationally (Schirm, 2009); the variation of national strategies of Britain and German regarding stimulus packages and financial market regulation (ibid, 2011); the different governmental positions of Germany and the USA concerning the core G20 issues of stimulus/public debt and global imbalances exchange rates (ibid, 2013); the prevalence conditions of ideas, interests, and institutions in shaping divergent governmental positions of Germany and the USA in stimulus, fiscal prudence, exchange rates, and global imbalances in the context of the G20, as well as in the governance reform of the IMF (ibid, 2016); the examination of the societal foundations of persistent divergence of governmental preferences of European Monetary Union members toward the management of the Eurozone crisis with regard to public debt, monetary stability, and financial aid issues (ibid, 2018a); the examination of role of interests, ideas and institutions in shaping EU member states’ divergent positions on public debt to stimulate growth and global trade imbalances (ibid, 2018b); the investigation of ideas, interests, and institutions in shaping convergent and divergent governmental preferences of Brazil, Germany, and the USA in issues debated in the G20, including public debt and currency manipulation (ibid, 2019a); the role of domestic politics in emerging powers and western countries about their voters’ pursuit of self-determination and redistribution for traditional liberal international order (ibid, 2019b); the impact of domestic politics on the rise of both emerging powers and the rise of anti-establishment movement in Western countries, as well as the strategies of improving the legitimacy and adequacy of global

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economic governance through establishing a more inclusive distribution of power and wealth on national and international levels (ibid, 2020a).1

3.3

Inclusive Leadership and Societal Approach in East Asian Leadership

Applying both inclusive leadership and the societal approach seems promising for comparative analysis of the determinants for China, Japan, and the USA to perform as leaders in East Asian economic and security dynamics. Inclusive leadership not only provides concept to explore the determinant influence of domestic demands on governmental preference formation in potential follower countries, based on the societal approach, it can equally display the conditions for prevalence of domestic interests and societal ideas. This section will describe the employment of inclusive leadership and the societal approach that emphasize both the significance of followership and the endogenous nature of governmental positions. First of all, leadership is defined as the ability of China, Japan, and the USA “to make others [East Asian countries] follow goals and positions which these others did not previously share and/or to make others support an increase in status and power (Schirm, 2010, p. 200), i.e., the ability to “get what you want through attraction rather than coercion or payments” (Nye, 2004, p. 34). Followership refers to “supporting the goals and positions of another country [China, Japan and the US in this case] which were not shared previously and/or as accepting a relative loss of status and power” (Schirm, 2010, p. 200). The establishment of theoretical and methodological framework of this book is based on this understanding of leadership and followership. Inclusive leadership considers followership as a necessary but not sufficient condition for successful leadership performance of regional power (ibid, p. 199). Moreover, leaders can secure followership through credibly incorporating potential followers’ interests and/or ideas into their leadership project so as to neutralize potential resistance and stimulate support for this project (ibid). The underlying causes behind this assumption are articulated in the societal approach that domestic interests and societal ideas of potential followers in East Asia shape governmental preferences toward economic and security issues. The exogenously given changes on the international and regional level—such as leadership projects—anticipatedly affect voters and interest groups in potential follower countries. In turn, these voters and interest groups, who are interested in improving their positions, shape the governmental preference formation of potential follower countries. In this perspective, the inclusion of the interests and/or ideas of potential follower into leadership project is a necessary condition for cultivating followership.

1

The investigation of the societal approach to governmental preferences, instead of the examination of case studies, has been specified in an article developed by Schirm (2020a).

3.3

Inclusive Leadership and Societal Approach in East Asian Leadership

27

Moreover, the acceptance of potential follower, i.e., followership, is a necessary condition for a potential leader to exercise their leadership project. The independent variable, the inclusiveness of leadership project (whether a leadership project includes domestic interests and/or ideas dominant in potential follower countries in East Asia) will be applied to explain followership as the dependent variable. The domestic interests and societal ideas in a leadership project are examined in the field of economic and security cooperation in East Asia. Consequently, followership, as the dependent variable, will be used as a necessary condition for successful performance of leading countries.

3.3.1

The Dependent Variable: Followership

Faced with leadership projects, potential followers could have different responses ranging from accommodation and neutral to resistance and opposition. To simplify the analysis, followership refers to (1) potential followers supporting a leadership project and (2) potential followers choosing neutrality, in other words, do not oppose or undermine leadership project. As aforementioned, the acceptance of potential followers in East Asia concerning specific leadership projects represents followership, which is necessary for China, Japan, and the USA to exert their leadership. Therefore, it is important to examine governmental preference formation of potential followers.

3.3.2

The Independent Variable: Inclusiveness of Leadership Project

The inclusiveness of a leadership project serves as independent variable in this book, which refers to whether a leadership project includes domestic interests and/or societal ideas dominant in potential follower countries in East Asia.

3.3.2.1

Domestic Interests

Domestic interests are defined as “material considerations of economic sectors” of potential follower countries, “whose cost-benefit calculations can change rapidly according to changing economic circumstances such as economic crisis, competitiveness, and new global, regional as well as national economic policies” (Schirm, 2018b, p. 307). It stems from the literature concerning the “interaction of economic internationalization with domestic sectors and politics” (ibid, 2013, p. 691). Specifically, “the exogenous changes in the costs and rewards of international economic exchange”

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affects domestic politics, in other words, it decides “what trade policy a particular firm, sector, or group will favor” (Frieden & Rogowski, 1996, p. 28). On the contrary, domestic politics matter to international cooperation. Explicitly, “states are not unitary actors [. . .] they are [. . .] composed of actors with varying preferences who share power over decision making” (Milner, 1997, p. 11). Hence, domestic groups compete for influence over policy. Therefore, the internal struggle among these domestic groups “shapes the possibility and nature of international cooperative agreements” (ibid, p. 10). Moravcsik (1997, p. 528) also underscores the significance of domestic interests by taking a “bottom-up” view of politics, and considers the demands of individuals and societal groups as prior to state behavior. He links foreign economic policy to economic incentives by claiming that “changes in the structure of the domestic and global economy alter the costs and benefits of transnational economic exchange, creating pressure on domestic governments to facilitate or block such exchanges through appropriate foreign economic and security policies” (ibid). Domestic interests can be evidenced by “structurally assessing an economic sectors’ competitive position” (Schirm, 2019a, p. 108). Here, the empirical examination of the domestic interests must concentrate on “specific sectors’ calculations of costs and benefits” (ibid, 2013, p. 692) induced by leadership initiatives. Concretely speaking, domestic interests can be traced by examining statements of interest groups. Interest group is “an organized association which engages in activity relative to government decisions” (Dietrich, 1999, p. 280). Business interest groups examined in this book could “define, aggregate and promote the political interests of a distinct group of producers or employers” (Eising, 2007, p. 337). They behave as a rational unit, try to maximize its members’ income, and reflect members’ preferences (Milner, 1997, p. 37). Moreover, interest groups are perceived as “a major channel” for voters to express their opinions to decision makers. According to Dür and De Bièvre (2007, p. 1), the participation of interest groups in policymaking may “improve decision-making processes by supporting policies that are in line with citizen preferences and blocking policies that solely reflect the interests of the governing elite.” The focus on the statements of interest groups is because it “allows to include the interpretation of circumstances in order to assess the motivation for sectoral lobbying vis-à-vis the governments” (Schirm, 2019a, p. 108). In assessing the inclusiveness of leadership projects, domestic interests of potential follower countries will be evidenced by statements of business interest groups, whose costs and benefits calculation “provides a map for understanding which groups will be for cooperation and which will be against it” (Milner, 1997, p. 61). The impact of leadership projects “leads interest groups to pressure the government into establishing competitive conditions” (Schirm, 2018b, p. 307). Therefore, in this book, attitude of business interest groups toward further trade liberalization and globalization could be positive or negative on account of their competitive positions in international trade. Consequently, the proponent or opponent attitude could be triggered along with being threatened by foreign competitors or losing profits and jobs.

3.3

Inclusive Leadership and Societal Approach in East Asian Leadership

3.3.2.2

29

Societal Ideas

It is necessary to consider ideational factors in this book as well, as the interest-based explanations of governmental preference formation may lead to ignoring the fact that voters with similar economic positions have different interpretations of their interests (Hall, 1997, p. 180). Like Hall and Thelen (2009, pp. 27–28) underscore, “although the interests of firms and workers are crucial to particular modes of coordination, capacities for coordination also depend on [. . .] a set of shared understandings about how other actors will behave under a variety of circumstances [. . .] which are crucial to resolving the distributive conflicts.” Therefore, in line with Schirm (2013, p. 692), ideas are defined as path-dependent and value-based collective expectations of voters in potential follower countries, regarding appropriate and acceptable governmental positions, such as how to organize the international system and how to steer the economy and security. Societal ideas refer to those analyses which emphasize the significant role played by ideas in determining foreign policy (Goldstein & Keohane, 1993; Hall, 1997, p. 184; Jepperson et al., 1996, p. 54). It is necessary to consider ideational factors in examining decision-making process, as viewing domestic interests as sole determinant of the governmental preferences may lead to ignoring that voters with similar economic positions have different interpretations of their interests (Hall, 1997, p. 180). Campbell (1998) specifies the roles that ideas play in policymaking. On the one hand, ideas constrain political options that seem acceptable to decision makers. On the other hand, ideas provide decision makers with the reasons to adopt explicit action. Goldstein and Keohane (1993, p. 3) argue that ideas can influence policy through providing “road maps that increase actors’ clarity about goals.” Moreover, motivated by reelection, politicians “seize on popular ideas to propagate and to legitimize their interests” (ibid, p. 4), which eventually guarantees future electoral success. According to Blyth (2002), “ideas matter because they can actually alter people’s conception of their own self-interest” (ibid, p. vii), moreover, ideas serve as blueprints that “tell agents what to do and what future to expect” (ibid, p. 11). Societal ideas can be traced to “attitudes on appropriate governance, which can be empirically evidenced in public opinion polls” (Schirm, 2018a, p. 65). Voters’ attitudes refer to the fundamental attitudes about the role of the government in dealing with the international system and in steering the economy. According to Schirm (2013, p. 692), “in addition to the examination of attitudes via polls, the possible role of ideas can be empirically evidenced by societal practices [. . .] Different societal practices in cross-country comparison plausibly reflect different societal expectations about the appropriate role of the government in the respective policy area.” Like domestic interests, societal ideas in potential followers also change, but it takes longer time than interests faced with the changed economic conditions imposed on domestic actors by new proposed initiatives and confronted with

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changing regional security dynamics because ideas are rooted in the past and displayed long-term fundamental character, i.e., path dependent. Societal ideas concentrate on fundamental collective expectations of voters. Here, voters interpret which policies correspond with their expectation of appropriate policies, then they could on the one hand articulate their preferences through public opinion polls, and on the other hand, set the limit for governmental positions on specific issues (Blyth, 2002, p. 699). Public opinion polls are “one of the few opportunities that offer the mass public equal voice” (Moy & Rinke, 2012, p. 225), which offer voters a mechanism to express their attitudes on specific issues while providing policymakers with information revealing the appropriate and acceptable policies desired by voters. In this way, polls convey voters’ preferences to the government, and governmental decision makers respond to domestic demands to remain in office or secure reelection. According to Schirm (2009, p. 505), societal ideas can theoretically and empirically be divided into process ideas and content ideas. Process ideas relate to the political process and are defined as “dominant expectations about the way political decision-making should be conducted.” Content ideas relate to the political content and are defined as dominant expectations about “what a society sees as a core task of the state in a given policy area.” In this book, the relevance of societal ideas is examined from two perspectives (ibid): first, “shared by a large number of citizens”; second, “precise” meaning. Only if relevant societal ideas are shared by a majority, governmental actors would mobilize on the issues to stay in power, otherwise, the pressure on the government will be weakened, since reelection can be secured without addressing these issues. Similarly, only if societal ideas are precise, government could perceive voters’ concerns on specific issues and deal with it, otherwise, government regards them as diffuse. In line with the societal approach (Schirm, 2018a, p. 65), “ideas and interests can interact with one another and can mutually constitute each other.” Ideas and interests can reinforce each other, on the one hand, while differ and compete in determining governmental preferences, on the other hand. More specifically, if the issue at stake raises both questions on “the role of the government in steering the economy and cost-benefit calculations of specific well-organized economic sectors, both ideas and interests will reinforce under the conditions of compatible demands, whereas ideas and interests will compete with each other under the circumstances of opposed demands (ibid, 2020b, p. 404). The analytical and theoretical separation of domestic interests and societal ideas in this section, actually “serves the purpose of identifying sui generis characteristics” (ibid, 2018b, p. 308) of them, which facilitates empirically investigate the prevalence of either ideas or interests which is not conceptualized by other theories of domestic politics, accordingly highlight the contribution of inclusive leadership and the societal approach.

References

3.4

31

Hypotheses

After having defined both the independent and dependent variables, it is necessary to articulate the main hypotheses of this book. Three hypotheses are presented in order to answer the research questions (1) what are the determinants for China, Japan, and the USA to reach leadership in economic and security dynamics in East Asia? Or, under which conditions do potential followers in the region support leadership bids of these three countries? (2) under which conditions, domestic forces (domestic interests and societal ideas) prevail over each other in shaping governmental preferences of potential follower? In Hypothesis 1 (H1), the conditions for the acceptance of regional leadership have been underscored. In line with inclusive leadership, H1 accordingly claims that the inclusion of the domestic interests and/or societal ideas dominant in potential follower country into leadership projects of China, Japan, and the USA is a necessary condition to secure followership. Hypothesis 2 (H2) analyzes the condition of prevalence of the independent variable domestic interests. In line with the societal approach, H2 accordingly claims that if leadership project directly affects specific economic sectors in East Asian potential follower country, and raises cost/benefit questions of international competition, then domestic interests will be most influential in shaping potential follower’s governmental preferences because lobbying will be strong. Hypothesis 3 (H3) investigates the condition of prevalence of the independent variable societal ideas. In line with the societal approach, H3 accordingly claims that if the leadership project raises concerns on the fundamental questions and collective expectations about how politics should govern the economy and security, then societal ideas will prevail in shaping potential follower’s governmental positions, this link will be strengthened if the project has only a diffuse impact on specific sectors in potential follower, because then lobbying will be weak.

References Blyth, M. (2002). Great transformations: Economic ideas and institutional change in the twentieth century. Cambridge University Press. Campbell, J. L. (1998). Institutional analysis and the role of ideas in political economy. Theory and Society, 27(3), 377–409. Dietrich, J. W. (1999). Interest groups and foreign policy: Clinton and the China MFN debates. Presidential Studies Quarterly, 29(2), 280–296. Dür, A., & Bièvre, D. D. (2007). The question of interest group influence. Journal of Public Policy, 27(1), 1–12. https://doi.org/10.1017/S0143814X07000591 Eising, R. (2007). Institutional context, organizational resources and strategic choices: Explaining interest group access in the European Union. European Union Politics, 8(3), 329–362. Frieden, J. A., & Rogowski, R. (1996). The impact of the international economy on national policies: An analytical overview. In R. O. Keohane & H. V. Milner (Eds.), Internationalization and domestic politics (pp. 25–47). Cambridge UP.

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Goldstein, J., & Keohane, R. O. (1993). Ideas and foreign policy: An analytical framework. In Ideas and Foreign policy: Beliefs, institutions, and political change (pp. 3–30). Cornell University Press. Hall, P. (1997). The role of interests, institutions and ideas in the comparative political economy of the advanced industrial state. In Comparative politics: Rationality, culture and structure (pp. 174–207). Cambridge University Press. Hall, P. A., & Thelen, K. (2009). Institutional change in varieties of capitalism. Socio-Economic Review, 7(1), 7–34. Jepperson, R. L., Wendt, A., & Katzenstein, P. J. (1996). Norms, identity, and culture in national security. In The culture of national security: Norms and identity in world politics (Vol. 33, p. 34). Columbia University Press. Katzenstein, P. J. (1977). Introduction: Domestic and international forces and strategies of foreign economic policy. International Organization, 31(4), 587–606. Milner, H. V. (1997). Interests, institutions, and information: Domestic politics and international relations. Princeton University Press. Moravcsik, A. (1997). Taking preferences seriously: A Liberal theory of international politics. International Organization, 51(4), 513–553. https://doi.org/10.1162/002081897550447 Moy, P., & Rinke, E. M. (2012). Attitudinal and behavioral consequences of published opinion polls. In C. Holtz-Bacha & J. Strömbäck (Eds.), Opinion polls and the media: Reflecting and shaping public opinion (pp. 225–245). Palgrave Macmillan. https://doi.org/10.1057/ 9780230374959_11 Nye, J. S. (2004). Soft power: The means to success in world politics. Public Affairs. Schirm, S. A. (2009). Ideas and interests in global financial governance: Comparing German and US preference formation. Cambridge Review of International Affairs, 22(3), 501–521. https:// doi.org/10.1080/09557570903103992 Schirm, S. A. (2010). Leaders in need of followers: Emerging powers in global governance. European Journal of International Relations, 16(2), 197–221. https://doi.org/10.1177/ 1354066109342922 Schirm, S. A. (2011). Varieties of strategies: Societal influences on British and German responses to the global economic crisis. Journal of Contemporary European Studies, 19(1), 47–62. https:// doi.org/10.1080/14782804.2010.535716 Schirm, S. A. (2013). Global politics are domestic politics: A societal approach to divergence in the G20. Review of International Studies, 39(3), 685–706. Schirm, S. A. (2016). Domestic ideas, institutions or interests? Explaining governmental preferences towards global economic governance. International Political Science Review, 37(1), 66–80. https://doi.org/10.1177/0192512114540190 Schirm, S. A. (2018a). Societal foundations of governmental preference formation in the Eurozone crisis. European Politics and Society, 19(1), 63–78. https://doi.org/10.1080/23745118.2017. 1340397 Schirm, S. A. (2018b). The domestic politics of European preferences towards global economic governance. New Global Studies, 12(3), 303–324. https://doi.org/10.1515/ngs-2018-0014 Schirm, S. A. (2019a). Domestic politics and the societal approach. In T. M. Shaw, L. C. Mahrenbach, R. Modi, & X. Yi-chong (Eds.), The Palgrave handbook of contemporary international political economy (pp. 103–117). Palgrave Macmillan. https://doi.org/10.1057/ 978-1-137-45443-0_7 Schirm, S. A. (2019b). In pursuit of self-determination and redistribution: Emerging powers and Western anti-establishment voters in international politics. Global Affairs, 5(2), 115–130. https://doi.org/10.1080/23340460.2019.1603079 Schirm, S. A. (2020a). Parallel orders? Emerging powers, Western discontent, and the future of global economic governance. In M. Rewizorski, K. Jędrzejowska, & A. Wróbel (Eds.), The future of global economic governance: Challenges and prospects in the age of uncertainty (pp. 15–28). Springer International. https://doi.org/10.1007/978-3-030-35336-0_2 Schirm, S. A. (2020b). Refining domestic politics theories of IPE: A societal approach to governmental preferences. Politics, 40(4), 396–412. https://doi.org/10.1177/0263395719896980

Chapter 4

Systematic Process Analysis and Multi-step Analysis

4.1 4.1.1

Study Design Defining the East Asia

For the purpose of this book, East Asia is defined here as including the subregions of both Northeast Asia (China, Japan, South Korea, and North Korea) and Southeast Asia (ten ASEAN countries). The region includes the USA as well, because on the one hand the USA “has been a resident power in East Asia since the late 19th century,” and on the other hand it “has become deeply involved in the region’s dynamics with major stakes in East Asian stability, as well as growing economic interests” (Atanassova-Cornelis & Putten, 2016, p. 3).

4.1.2

Case Studies

At the broadest level, this book seeks to explain why leaders sometimes succeed while in other cases they fail in obtaining the acceptance of followers in East Asia. The comparative analysis of the following cases are conducted: (1) Chinese successful leadership project in the AIIB, (2) its successful project in the SCS (2016–2018) and, (3) its failed project in the SCS (2010–2016); (4) American successful leadership project in the TPP and, (5) its failed one in the AIIB, as well as (6) Japanese failed leadership project in the UNSC.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 F. Su, The Determinants of Leadership, Contributions to International Relations, https://doi.org/10.1007/978-3-031-12555-3_4

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4.1.3

4

Systematic Process Analysis and Multi-step Analysis

Case Selection

The specific cases to be explored have been chosen based on variation on the dependent variable to exhibit cases of economic and security dynamics in East Asia. Therefore, China, Japan, and the USA serve as leaders and East Asian countries (including the Philippines, Japan, and South Korea) as potential followers will be scrutinized. According to Nye (2008), the boundaries between leaders and followers are very vague; the leaders and followers could exchange according to the change in the external environment or the pursuit of specific objectives. Therefore, Japan serves as leader in the case study of the UNSC, while serves as a follower in the case study of the TPP. The potential followers will diverge in respective case studies (see Table 4.1), including South Korea as a potential follower responded to the Chinese bid for establishing the AIIB; the Philippines as a potential follower responded to Chinese bids for joint development of the SCS; South Korea as a potential follower responded to American bid for banning the AIIB; Japan as a potential follower responded to American bid for negotiating the TPP; South Korea as a potential follower responded to Japanese bid for the UNSC. The choice of China, Japan and the USA as potential leaders is due to their capacities and aspiration of exerting leadership in East Asia, since they are considered as “ought to be well placed to offer [. . .] leadership to others” (Beeson, 2017, p. 567). The choice of the Philippines, Japan, and South Korea as potential followers in respective case studies is based on the following reasons: (1) they are all democratic countries, which is within the scope of the societal approach and, (2) they are either the biggest economies or one of most active stakeholders in relative case studies (see details in each case studies). The selected potential follower countries meet four criteria for classifying democratic regime, which are set by Cheibub et al. (2010, p. 69): (1) the chief executive is chosen by popular election, (2) the legislature is popularly elected, (3) more than one party competes in the elections, and (4) an alternation in power takes place through elections under the same rules bring the previous one to office. All case studies occurred in the twenty-first century, and the time frame is the first two decades of this century. Therefore, it seems necessary to explore the determinants of obtaining leadership within the context of ongoing changing regional order

Table 4.1 Case studies in this research Case studies AIIB AIIB TPP UNSC SCS (2010–2016) SCS (2016–2018) Sources: Author’s compilation

Potential leader China (successful) The USA (failed) The USA (successful) Japan (failed) China (failed) China (successful)

Potential follower South Korea South Korea Japan South Korea The Philippines The Philippines

4.2

Systematic Process Analysis

35

in East Asia by exploring the engagement of China, Japan, and the USA and their interactions with other states within the region. It has to be mentioned that in each case studies, the AIIB, TPP, UNSC, and SCS, whether potential followers decide to follow or against the leadership projects of China, Japan, and the USA is strongly embedded in the overall foreign policies of potential followers. Besides domestic interests and societal ideas, potential followers’ behavior might be influenced by other different calculations, such as systematic factors, political willingness of elites, and the capacity to mobilize internal resources. Therefore, all the above-examined cases have to fit into the big picture of both leaders’ and potential followers’ foreign policies. All the related context issues are important, but the research has to be parsimonious and focused and cannot consider all possible aspects of policy-making process, thus these context issues are beyond the scope of this book. The key interest here is the interactions between dependent and independent variables, and the specification of the causal mechanism within the inclusive leadership.

4.2

Systematic Process Analysis

Systematic process analysis is employed as the methodology of this book. Systematic process analysis is selected for an assessment of complex causal processes. It mainly suggests drawing observations from empirical cases looking at the principal value of the causal variables together with the processes that connect causal variables to the outcomes (Hall, 2003, p. 394). Hall (2013, p. 3) defines systematic process analysis as a method “attentive to the general causal inferences that can be drawn from observing the sequence and timing of events and contemporary interpretations of those events.” There are three kinds of approaches providing causal explanations for social or political phenomena, which cover much of the work done in political science (ibid, p. 2), including historically specific explanations, multivariate explanations, and theory-oriented explanations. Historically specific explanations focus on interpreting the occurrence of a specific set of events through identifying the full set of causal factors leading up to an outcome. Historians not only investigate “a long chain of causal factors in which one development conditions another (x1! x2 ! x3 . . .)” (Hall, 2008, p. 305), but also concentrate on why the outcome happened in a particular time and place. Multivariate analysts focus on a small set of variables, which cause the outcome in a general class of time and place, rather than identifying a full set of variables generating the specific spatial and temporal outcome. Instead of asserting the effect of each key variable important to an outcome, a theory-oriented explanation “identifies regularities in the causal chain through which the relevant outcome is generated. The focus is on elucidating the process whereby the relevant variables have effects” (ibid, p. 306).

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4.2.1

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Systematic Process Analysis and Multi-step Analysis

The Plausibility of Systematic Process Analysis

Systematic process analysis is plausible for this book due to the following reasons. First, this book tries to identify what kinds of causal factors matter to securing acceptance of potential follower countries, in other words, what kind of regularities in the causal chain matter to the determinants for leadership in East Asia. Therefore, systematic process analysis, as providing a theory-oriented mode of explanation, is chosen as the appropriate method to be employed in this book. As Hall (2008, p. 314) suggests, systematic process analysis is suitable for examining the causal processes a theory invokes, allowing those interested in social explanation to move beyond a focus on simple correlations between a set of outcomes and a small set of “explanatory variables.” Second, as aforementioned, this book investigates only limited cases to conduct a comparative qualitative study among China, Japan, and the USA to investigate a broad class of outcomes, namely leadership in East Asia. Therefore, systematic process analysis, in combining a small-n research design and a comparative method, is valuable for testing causal propositions. Third, this book tries to display the causal mechanism behind the relationship between leadership and followership, followership and inclusiveness of leadership projects, domestic politics of follower countries, and their governmental preference formation. Therefore, using systematic process analysis as a methodology is plausible because the current ontologies and conceptualizations of possible causal relations are more compatible with systematic process analysis, since it better unlocks an understanding of the causal mechanism (ibid, 2003, p. 387). According to Hall (2013, p. 4), the causal mechanism is not only a list of intervening variables, which explain “where x cause y because x causes w and w causes y.” Rather, it is “a theoretical formulation, one that adduces properties of the relationships among phenomena with the potential to recur, which helps explain why x causes y.”

4.2.2

The Employment of Systematic Process Analysis

Hall (2008) emphasizes the significance of specifying the causal process behind an outcome as well as “a coherent rationale for the operation of each variable” within that causal process. Accordingly, the strength of systematic process analysis rests on “the multiplicity of the observations, and hence tests of the theory, that it allows” (p. 312). Any theories, which identify causal variables as causes of the main outcomes, must specify the operational process bridging them. For assessing the validity of a theory, correlation between an outcome and a small set of variables is not the only way. Rather, in the method of systematic process analysis, the validity of a theory is based on the observations of whether the operational process is present. Therefore, the relevant observations include:

4.3

Multi-step Analysis

37

ones about the events that can be expected to occur if a theory is valid, the sequence of those events, the specific actions taken by various types of actors, public and private statements by those actors about why they took those actions, as well as other observations designed to establish whether the causal chain that each theory anticipates is present in the cases. (ibid, pp. 310–311)

Based on the data collected through observation, one can empirically examine “the conditions for the influence of ideas [. . .] interests and [. . .] their bearing on governmental preferences in case studies” (Schirm, 2016, p. 67), on the other hand, empirically examine the independent variable (inclusiveness of leadership project) to explain government’s followership as dependent variable. In addition, Hall (2008, p. 314) emphasizes, by comparing the statements and actions of the key participants who are crucial to the outcome, systematic process analysis could figure out more precise factors which had an impact on the decisions or actions of key participants than those developed by statistical analysis.

4.3

Multi-step Analysis

In this section, the causal mechanism in multi-step analysis and its operationalization will be scrutinized. As aforementioned in the theoretical framework section, this book could be seen as “two-level” (see Fig. 4.1). At the international level, leaders must have followers, and the followership depends on the credible inclusion of the domestic interests and/or societal ideas of potential follower into the leadership project. At the domestic level, domestic interests and/or societal ideas shape governmental preference formation. In general, the research will be processed through a multi-step analysis. To specify the causal mechanism, a leadership project proposed by leading countries (China, Japan, and the USA) will be investigated in the first step. Following this, a second step will display the responses of domestic actors in potential follower countries toward that leadership project. In a third step, the governmental preference of potential follower countries concerning the leadership project will be examined. Here, the correlation between domestic interests and societal ideas on the one hand

International Level

necessary Inclusiveness of Leadership Project

Followership

Domestic Interests

Domestic Level

shape and/or

Governmental Preferences of Potential Follower

Societal Ideas

Fig. 4.1 Two levels of examining the determinants of leadership. Sources: Own illustration based on Schirm (2010, 2013)

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4 Systematic Process Analysis and Multi-step Analysis

and governmental positions, on the other hand, will be examined. Moreover, the conditions of prevalence of either domestic interests or societal ideas will be tested. In a fourth step, the hypothesis of followership and the inclusiveness of leadership project will be tested as well, which also illuminates the determinants for obtaining leadership in East Asia. By employing multi-step analysis, the inclusive leadership and the societal approach are examined through testing all the hypotheses.

4.3.1

Leadership Project and Its Impacts on Potential Follower Country

The first step of the causal mechanism concerns the impact of a leadership project on potential follower country from two perspectives. The leadership initiative impacts potential follower country with anticipated distributional consequences, and/or arises fundamental questions in follower country about the structural role of politics. The first perspective implies a leadership initiative’s anticipated distributional consequences. Leadership initiatives could result in structural economic changes at the domestic and international levels. Thus, the anticipated distributional consequences from a leadership project could “alter the costs and benefits of transnational economic exchanges” (Moravcsik, 1997, p. 528), which result in variation of economic benefits or losses of powerful private actors in potential follower country. Moreover, the costs and benefits calculations result in anticipated winners and losers in relative economic sectors. Therefore, the causal mechanism assumes that a leadership project impacts the economy of potential follower country, and generates anticipated winners and losers in different sectors. The second perspective is relevant to the issue area affected by a leadership project. A leadership initiative can “affect principle-based collective expectations about appropriate governmental behavior and political regulation” (Schirm, 2013, p. 692) within potential follower country. Since the fundamental expectations of voters in potential follower country are prone to be affected by a leadership initiative, hence the society of follower country is confronted with the questions concerning the structural role of politics, such as how politics should govern the economy and security. Therefore, the causal mechanism assumes that a leadership initiative impacts fundamental expectations of the appropriateness of governance, hence arises into questions on the role of politics in potential follower country. In this book, leadership projects by China, Japan, and the USA are under scrutiny. In investigating these leadership projects, this book will refer firstly to quotes from responsible politicians of leading countries (including the heads of governments and ministers of respective departments) as well as governmental declarations and official documents. Secondly, this book will refer to analyses and reports from specialized and well-known media, including but not limited to, the Economist, the Diplomat, Financial Times, Philippine Daily Inquirer, Korea Herald, Japan Times, New York Times, Wallstreet Journal, and Xinhua Net. Thirdly, this book

4.3

Multi-step Analysis

39

will refer to studies by academic experts from think tanks and universities. The aim is to investigate not only the content of leadership project, but also its impact on potential follower country.

4.3.2

Domestic Actors’ Responses in Potential Follower Country

The second step of the causal mechanism occurs at the domestic level of analysis. It assumes that domestic actors of potential follower country are expected to respond to the impact arising from leadership projects. It seems plausible that material interests within potential follower countries decisively shape governmental preferences in a specific issue area. Because policies promote or restrain transnational economic exchanges, this could lead to different beneficiaries among societal actors. And rational societal actors, such as interest groups, seek to maximize their beneficiaries. In addition, interest groups are considered as pressure groups and information providers in the process of decision-making (Milner, 1997). By providing campaign funds, helping mobilize voters, as well as providing information, interest groups pressure decision makers to choose the policies to maximize their advantages. Hence, it assumes that with the incentives of maximizing gains, interest groups exert pressure on the government to formulate relative foreign economic and security policies, subsequently “facilitate or block [transnational economic] exchanges” (Moravcsik, 1997, p. 528) as well as expand benefits and obtain business opportunities. In this book, it is necessary to firstly figure out the relevancy of sectors by examining whether they are affected by leadership projects of China, Japan, and the USA. Specifying the relevancy of sectors is the basis for determining which domestic interests are most likely to appear in the respective case studies. To clarify the relevancy of sectors, the examination of a leadership project in the first step of the analysis has already provided some clues. The relevancy of sectors relies on the analysis of a large amount of economic data about the trade relations between potential followers and leaders, as well as the analyses and reports from academic research and specialized and well-known media. On the one hand, these data reveal whether interest groups are affected by leadership projects. Interest groups who are in the position to gain or lose economically from a specific leadership project should be paid more attention, while those who are not influenced are irrelevant in the analysis. “Those who stand to lose should block or try to alter any international agreement, whereas those who may profit from it should push for its ratification” (Milner, 1997, p. 63). On the other hand, financial exposure of these interest groups to the international economic changes should be considered as well. Interest groups tend to be proponent of specific leadership project, if they have high degree of exposure to the international economy, such as those have more international exports and multinational operations, and those “derive much of their income from

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Systematic Process Analysis and Multi-step Analysis

Table 4.2 The societal ideas Process ideas • Democracy and its characteristics • Strong and weak responsibilities of the government and the individual • Market as a process primarily driven by private actors or the government

Content ideas • Priority of the country • Favorable views of leading country • Role of the market and liberalization in international trade and investment-related case studies (i.e., AIIB, TPP) • Other societal attitudes in given policy areas (for all the case studies)

Sources: Author’s compilation

international markets” (ibid, p. 64). On the contrary, “groups that derive their income primarily from domestic markets are often the opponents of international cooperation” (ibid). After providing the information about relevant sectors, the concentration will be focused on the speeches, statements, and position papers of umbrella business associations and relevant sectoral interest groups, which represent material interests and positions of these domestic sectors. Concerning the impact leadership projects have on issues at stake of potential follower countries, a leadership initiative could “affect principle-based collective expectations about appropriate governmental behavior and political regulation” (Schirm, 2013, p. 692) within a potential follower country. Therefore, societal ideas are considered as fundamental expectations of voters in potential follower country concerning the relative issue areas. This is because, on the one hand, the voters of potential follower country can be affected economically by a leadership project in their daily life. On the other hand, under the circumstances of the impact of leadership project, voters express their concerns regarding how politics should govern regarding economic and security issues, in order to make sure that the country is in the right direction. Therefore, confronts with the questions concerning the structural role of politics, voters of follower country express fundamental expectations on the way to govern economy and security. In this book, societal ideas express themselves in societal attitudes, especially public opinion polls. Therefore, the “commonality” and “specificity” (Schirm, 2009, p. 504) of societal ideas will be used to indicate “the relevancy for the re-election of a government.” Here, commonality refers to societal ideas shared by a large number of citizens, while specificity refers to precise meaning of societal ideas. The societal ideas (see Table 4.2) are separated into process ideas and content ideas (ibid, p. 505). The former refers to dominant expectations of voters in follower country about the way political decision-making should be conducted. In general, the process ideas in this book mainly focus on democracy and its characteristics of potential follower countries (Van Loon, 2017, p. 159), the strong and weak responsibilities of the government and the individual (Schirm, 2009, p. 509). Moreover, the process ideas concerning the role of the market will also be applied in the case studies regarding leaders’ economic initiatives, since this represents whether the “market as a process [is] driven predominantly by either private actors or the government” (ibid). Content ideas refer to what a society sees as a core task of potential follower countries in a

4.3

Multi-step Analysis

41

given policy area. The aims and priorities of countries in general, attitudes toward liberalization in international trade and investment-related case studies, attitudes toward defense and armed forces in security and territory-related case studies, as well as the public perception regarding specific issues, will be explored to represent the content ideas of potential follower countries.

4.3.3

Governmental Preference Formation and Testing Hypotheses

The third step of the causal mechanism equally occurs at the domestic level of analysis as it is based on the standard assumption of “self-interest to remain in office, public statements by politicians accountable to the populace give evidence for what they consider acceptable to crucial societal forces and therefore legitimate” (Schirm, 2019, p. 110). In other words, the elected politicians in democratic political systems respond to domestic demands (of potential follower country), ranging from specific lobby groups to the voter’s attitudes, so as to remain in the office and secure reelection. This is echoed by Moravcsik: states do not automatically maximize fixed, homogeneous conceptions of security, sovereignty, or wealth per se, as realists and institutionalists tend to assume. [. . .] they pursue particular interpretations and combinations of security, welfare, and sovereignty preferred by powerful domestic groups. (Moravcsik, 1997, p. 519)

In this book, speeches and statements of the leaders of governments and politicians of the responsible ministries (finance, economy, and foreign affairs) will be used as representatives of governmental preferences of potential follower countries. Speeches from elected political decision-makers will be focused on since they are responsive to interest groups and voters, and thus, to analyze whether these positions and responses represent societal actors’ domestic interests or societal ideas. According to Schirm (2016, p. 70), elected politicians’ speeches and statements can only provide plausibility but do not prove real motivations behind governments’ positions, those explanatory statements “in principle reflect what a society considers legitimate ideas [and] interests.” Moreover, through the examination of the correlation between governmental preference of potential follower countries and their domestic interests and societal ideas, the hypotheses regarding the conditions of prevalence of the independent variables will be tested in this step. It is worth mentioning here, that according to the definition of followership, the acceptance of a leadership project from potential follower countries implies its followership.

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4.3.4

4

Systematic Process Analysis and Multi-step Analysis

Inclusiveness of Leadership Project and Followership

The fourth step of the causal mechanism occurs at international level of analysis. As Schirm (2010, p. 216) states, “leadership [. . .] gains followership only if it is credibly framed as a project also representing the goals of others.” The main hypothesis (H1) will be tested in fourth step, through examination of (1) whether leadership project includes the domestic interests and/or societal ideas of potential follower countries, (2) the correlation between the followership status and the inclusiveness of leadership project. Correspondingly, it illustrates the determinants for obtaining leadership in East Asia. Specifically, followership is one of the determinants shaping leadership, and coherently, serves as necessary but not sufficient conditions for leadership. To sum up, the causal mechanism could be simplified as follow (see Fig. 4.2): leadership project exerts an impact on potential follower through the anticipated distributional consequences and the influence of leadership initiative on voters’ fundamental expectations (first step); domestic actors of potential followers (ranging from interest groups to voters) are assumed to respond to the impact arising from leadership projects, as so to improve their own competitiveness and express fundamental expectations on the way to govern the economy and security (second step at domestic level); elected politicians of potential follower country are assumed to respond to societal demands so as to remain in office or secure reelection (third step at domestic level); leading country includes domestic demands of potential follower country into its leadership project, which serves as a necessary condition to secure followership (fourth step at international level).

References

43

Step 1 Impact of leadership project on potential follower country Impact on sectors ¾ ¾

Raises cost/benefit calculation Generates anticipated distributional consequences, as well as winners and losers domestically

Issue at stake ¾ ¾

Diffusely impact on specific sectors Raises fundamental questions about how politics should govern the economy and security Societal ideas affected

Domestic interests affected

Step 2 The domestic actors’ responses in potential follower country ¾ ¾

Generates supporters and opponents Sector-specific interest groups pressure the government through lobbying

¾

Voters express fundamental valuebased expectations of appropriate governmental behavior

Step 3 Governmental preferences of potential follower country and testing hypotheses on conditions of prevalence ¾

Government responds to lobbying so as to remain in office and secure reelection

¾

Government responds to voters’ expectations so as to remain in office and secure re-election

Step 4 Inclusiveness of leadership project and testing hypothesis of followership ¾

Leadership gains followership only if there is inclusiveness of leadership project

Fig. 4.2 Causal mechanism in multi-step analysis. Sources: Own illustration based on Schirm (2010, 2013)

References Atanassova-Cornelis, E., & van der Putten, F.-P. (2016). Changing security dynamics in East Asia: A post-US regional order in the making? Springer. Beeson, M. (2017). Why has leadership in the Asia–Pacific proved so elusive? Chinese Political Science Review, 2(4), 567–581. https://doi.org/10.1007/s41111-017-0074-y Cheibub, J. A., Gandhi, J., & Vreeland, J. R. (2010). Democracy and dictatorship revisited. Public Choice, 143(1), 67–101. https://doi.org/10.1007/s11127-009-9491-2 Hall, P. A. (2003). Aligning ontology and methodology in comparative research. In Comparative historical analysis in the social sciences. Cambridge University Press. Hall, P. A. (2008). Systematic process analysis: When and how to use it. European Political Science, 7(3), 304–317. https://doi.org/10.1057/palgrave.eps.2210130

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Hall, P. A. (2013). Tracing the Progress of process tracing. European Political Science, 12(1), 20–30. https://doi.org/10.1057/eps.2012.6 Milner, H. V. (1997). Interests, institutions, and information: Domestic politics and international relations. Princeton University Press. Moravcsik, A. (1997). Taking preferences seriously: A Liberal theory of international politics. International Organization, 51(4), 513–553. https://doi.org/10.1162/002081897550447 Nye, J. S. (2008). The powers to lead. Oxford University Press. Schirm, S. A. (2009). Ideas and interests in global financial governance: Comparing German and US preference formation. Cambridge Review of International Affairs, 22(3), 501–521. https:// doi.org/10.1080/09557570903103992 Schirm, S. A. (2010). Leaders in need of followers: Emerging powers in global governance. European Journal of International Relations, 16(2), 197–221. https://doi.org/10.1177/ 1354066109342922 Schirm, S. A. (2013). Global politics are domestic politics: A societal approach to divergence in the G20. Review of International Studies, 39(3), 685–706. Schirm, S. A. (2016). Domestic ideas, institutions or interests? Explaining governmental preferences towards global economic governance. International Political Science Review, 37(1), 66–80. https://doi.org/10.1177/0192512114540190 Schirm, S. A. (2019). Domestic politics and the societal approach. In T. M. Shaw, L. C. Mahrenbach, R. Modi, & X. Yi-chong (Eds.), The Palgrave handbook of contemporary international political economy (pp. 103–117). Palgrave Macmillan. https://doi.org/10.1057/ 978-1-137-45443-0_7 van Loon, A. (2017). Variation in preferences: Domestic interests and ideas in British and German governmental trade positions in EU FTA negotiations [Doctoral dissertation]. Ruhr-Universität Bochum.

Chapter 5

Leaders Need Followers: South Korea and the Leadership Competition Between China and the USA in the Establishment of the AIIB

5.1

Introduction

The AIIB (Yazhou Jichusheshi Touzi Yin Hang 亚洲基础设施投资银行) is part of China’s consistence policy of “going out” (Zou Chu Qu 走出去) (Yeo, 2018), and is one of a series of Chinese major policy initiatives to expand its influence overseas, including the “Silk Road economic belt” (Ershiyi shiji haishang Sichou Zhi Lu 二十 一世纪海上丝绸之路) and the “21st-century maritime Silk Road” (Sichou Zhi Lu jingji 丝绸之路经济), known as BRI (Yi dai yi lu 一带一路). The Chinese government proposed the creation of the AIIB in October 2013 and launched the initiative in October 2014 (see Table 5.1). Twenty one countries attended the launching ceremony, however, none of them are major developed countries. The deadline for becoming a founding member of this institution was March 31, 2015. By that date, 57 countries including 37 from Asia had expressed interest in joining the bank as founding members. The Articles of Agreement (AoA) were signed on June 29, 2015. The bank started operation on January 16, 2016, and released publicly its prospective first loans and projects in April 2016. During this process, the USA continuously showed strong concerns over the construction of the AIIB, and lobbied its allies not to join. Faced with the leadership competition between China and the USA, South Korea showed a certain ambiguity about the new China-led infrastructure bank and, in the beginning, kept its option of joining open. Eventually, South Korea applied for membership in the AIIB on March 27, 2015. China is widely acknowledged for exercising leadership in the establishment of AIIB, through securing 57 prospective founding members and transforming itself into a rule-maker (He & Feng, 2019, p. 154; Knoerich & Urdinez, 2019, p. 339; Morris, 2017; Wilson, 2019, p. 170). Meanwhile, the USA “suffered an embarrassing defeat” (Harris, 2015, p. 43), when US allies stampeded to join the AIIB before the March 31 deadline for becoming a prospective founding member. “Washington’s ham-fisted efforts to dissuade its allies from joining, is not about

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 F. Su, The Determinants of Leadership, Contributions to International Relations, https://doi.org/10.1007/978-3-031-12555-3_5

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Leaders Need Followers: South Korea and the Leadership Competition. . .

Table 5.1 Key dates on the AIIB Dates 2013 2014 2015 2015 2016

Events Chinese government proposed to establish the AIIB The memorandum of understanding (MoU) of the AIIB South Korea announced joining the AIIB The Articles of Agreement (AoA) of the AIIB The operation of the AIIB

Sources: Author’s compilation

complementary, but about positional indivisibility; it is not so much about rules, but about leadership” (Åberg, 2016, p. 1155). By employing the inclusive leadership and the societal approach, this case study will test the main hypothesis (H1) on the correlations between followership and the inclusiveness of the leadership project, which claims that the inclusion of the domestic interests and/or societal ideas dominant in South Korea into the Chinese/American leadership project of the AIIB is a necessary condition to secure South Korean followership. Additionally, hypotheses on the conditions of prevalence of domestic interests and societal ideas will be tested in this case study as well, with H2 stating that if the Chinese/American leadership project directly affects specific economic sectors in South Korea, and raises cost/benefit questions of international competition, then domestic interests will be most influential in shaping South Korea governmental preferences because lobbying will be strong; and with H3 claiming that if the Chinese/American leadership project raises concerns on the fundamental questions and collective expectations about how politics should govern the economy, then societal ideas will prevail in shaping South Korea governmental positions, this link will be strengthened if the project has only a diffuse impact on South Korea’s related sectors, because then lobbying will be weak. It has to be mentioned that the AIIB issue has to be put into the big picture of Chinese, American, and South Korean foreign policies. The context issues such as Korean Peninsula stability and general Sino–USA–Korea relations are important. Yet, the research has to be parsimonious and focused and cannot consider all possible aspects of policy-making processes, thus these context issues are beyond the scope of this book. The key interest here is the interactions between dependent and independent variables in the case study of the AIIB, and the specification of the causal mechanism within inclusive leadership.

5.2

Chinese Leadership Project

Chinese President Xi Jinping initially proposed the AIIB in October 2013 during his attendance at the APEC CEO Summit in Bali, Indonesia, where he delivered an important speech titled “Deepen Reform and Opening up to Build a Better Asia-

5.2

Chinese Leadership Project

47

Pacific.” In this speech, he emphasized the importance of improving trade and investment environment in the Asia-Pacific. He said: At present, Asian countries, especially emerging markets and developing countries, are in great financial needs to develop infrastructure. Particularly in the face of such severe challenges as mounting downward pressure and financial volatility, it is necessary for us to mobilize more funds for infrastructural development to maintain sustained and steady economic growth and promote connectivity and economic integration in the region. To this end, we propose to establish an Asian infrastructure investment bank to help fund the infrastructural development of ASEAN countries and other developing countries in the region. This proposed bank will work together with the existing multilateral development banks in and outside the region and complement one another to fuel the sustained and steady growth of the Asian economy. (Xi, 2013)

Afterward, China speeded up the process of constructing the AIIB and intensifying consultations with relevant parties in and outside Asia on the preparations for the new bank. On 7 March 2014, Chinese Financial Minister Lou Jiwei gave a blueprint of the AIIB when answering the questions of correspondents, and then reiterated and complemented China’s views on the AIIB in the following months. Lou’s talks in the first half-year of 2014 could be seen as the preliminary blueprint of China’s leadership project regarding the AIIB, which composes of several points. According to Lou Jiwei, Asia, as one of the most dynamic and potential regions of the world, had rapid development in economy and deepening regional financial cooperation. However, some Asia countries are faced with a huge gap between supply and demand in infrastructure development, even though they had already stepped up their investments in infrastructure (Boao Forum, 2014a). Estimated by the 2009 report of the Asian Development Bank (ADB) and ADB Institute (ADBI) on the infrastructure needs of Asian economies, Asia’s infrastructure gap will amount to around USD8 trillion in total between 2010 and 2020, of which USD2.5 trillion will be required for transport investment, USD4.1 trillion for energy and electricity, USD1.1 trillion for telecommunications such as mobile phones and landlines, and USD0.4 trillion for water and sanitation (ADB & ADBI, 2009, p. 167). In this context, nobody would doubt the huge appetite for infrastructure investment in Asia. Thus, Lou Jiwei remarked that, with the dire need for infrastructure improvement and the limited funds of the existing Multilateral Development Banks (MDBs), there is a necessity to build a new regional investment and financing platform so as to mobilize more funds for infrastructure development (Lou, 2014). Lou Jiwei indicated that the establishment of the AIIB is “a move to achieve winning results for all the parties involved” (Boao Forum, 2014a). According to him, for the developing countries in the region, the establishment of the AIIB could strengthen infrastructure construction, maintain steady and rapid economic development, constantly enhance self-development capacity and infuse economic development with lasting power. For developed countries, it helps to expand investment goods demand and stimulate economic recovery. Globally, it helps to promote world economic recovery. Moreover, he pointed out that, located in the center of Asia, China is in a good position to boost the regional connectivity and infrastructural

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5 Leaders Need Followers: South Korea and the Leadership Competition. . .

development, furthermore to bear more international responsibility, promote cooperation in Asia, and achieve mutual benefit and common development (ibid). After expounding the reasons for the establishment of the AIIB, Lou Jiwei introduced that the “AIIB will be an intergovernmental multilateral development bank and will be run in the mode and based on the principles designed for multilateral development banks” (Boao Forum, 2014a). The AIIB regards supporting investment in Asian infrastructure and other productive areas to promote regional economic cooperation and development as the vision it seeks for Asia. In addition, the AIIB would also explore conducting outside business when conditions are ripe. Concerning AIIB’s membership, China would promote the establishment of the AIIB based on open regionalism and the principle of regional countries prior to outside countries. After signing the intergovernmental framework memorandum, countries outside Asia would be gradually involved in the new bank (ibid). Concerning the relationship between the AIIB and the existing MDBs, China affirmed the contribution of the World Bank (WB) and the ADB to Asian economic development and underscored that the AIIB and the existing MDBs are supplementary and cooperative with each other. Unlike the WB and the ADB, which put their priority more on poverty alleviation, the AIIB focuses on infrastructure construction, which could indirectly reach the goal of poverty alleviation. Accordingly, the AIIB will not challenge the roles of existing MDBs, but play a complementary role through strengthening cooperation and joint financing with them (Boao Forum, 2014a). This is echoed by a speech of Jin Liqun, who served as Head of the Working Group for Establishment of the AIIB, and later became the first President of the AIIB. Jin Liqun said that “the existing multilateral development banks have well served the region, and therefore we will build on their achievements, learn from their lessons and best design the function of the AIIB” (ibid, 2014b). Concerning the equity structure of the AIIB, the preliminary capital stock scale of the AIIB would be USD50 billion, which would be subscribed by member countries. Thereinto, China could “contribute up to 50 percent of the total investment, which demonstrates its resolution to promote AIIB.” Specific capital stock scale and proportion of capital stock will be decided through consultation among member countries. Thus, “the final investment by China is not necessarily to reach 50 percent.” Along with the involvement of more countries, “the proportion of Chinese investment can be lowered accordingly” (Boao Forum, 2014a). Concerning the business operation, “AIIB is oriented to carry out quasi-commercial operation. At its initial stage, AIIB will mainly offer sovereign loans to the infrastructure projects of sovereign countries. Later, it will consider the establishment of the trust fund and introduce public-private partnership mode (PPP) for the projects that cannot offer sovereign credit guarantee” (ibid). Moreover, the AIIB will get involved in investment with private sectors as well as through channeling the infrastructure construction of Asian countries. Concerning AIIB’s governance structure and guarantee policy, China showed the willingness to work with member countries, and build the AIIB as a professional and efficient infrastructure investment and financing platform featuring equality, inclusiveness and high efficiency, and make a joint contribution to Asian economic

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Chinese Leadership Project

49

development. Responding to the queries of other countries, especially America, regarding lending policies and standards AIIB will adopt (Santos, 2014a), Lou Jiwei pointed out that there is only the “good practice” instead of the so-called “best practice,” which is demonstrated by the constant reform of the WB and the ADB since their establishment (Boao Forum, 2014a). Moreover, Jin Liqun emphasized China’s ambition to strengthen the transparency by saying that, With zero-tolerance of corruption, we have every confidence to establish a high-standard bank [. . .] We will dutifully follow every standard set for a project or a product. We will observe the international standards while assessing the effects of a project on the local environment, culture, sustainable development and standards of living. Meanwhile we will also do our best to grasp every new opportunity to establish innovative business models and gain more experience. (ibid, 2014b)

After five rounds of multilateral negotiations, China and 20 other countries1 signed the MoU to form the AIIB on October 24, 2014. By signing the MoU, the prospective founding members specified that the AIIB would be capitalized with USD100 billion, with the initial capital expected to be around USD50 billion. The paid-in capital ratio will be 20%. The prospective founding members agreed on a set of core principles, with Beijing as the location of headquarters, with GDP as the basic parameter of determining share allocation among members, with China as the largest shareholder accordingly. Moreover, the governance structure of the AIIB consists of three levels, including the Board of Governors, the Board of Directors, and the Management. Besides, the selection procedure of the President and senior management of the AIIB is based on the principle of “open, inclusive, transparent and meritbased process” (China Daily, 2014). When 21 countries signed the MoU in October 2014, none of them were major developed countries. However, after the United Kingdom’s submission of its application to become a prospective founding member of the AIIB, other European countries such as Germany, France, and Italy, and regional countries such as Australia and South Korea displayed their willingness to join the China-led AIIB. By the deadline of becoming a prospective founding member on March 31, 2015, a total of 57 countries applied to join the bank, including 37 Asian and 20 non-Asian countries. After 57 prospective founding members participated in negotiations, the representatives of these countries gathered on June 29, 2015, in Beijing to sign the AoA, which entered into force on December 25, 2015. Afterward, the AIIB was declared open for business on January 16, 2016. To keep the bank’s regional focus, at least 70–75% of share votes are reserved for regional members, giving Asian countries a greater say than they have in other global organizations. Meanwhile, the bank also had innovation in governance arrangements with a 12-person nonresident Board of Directors, which would be

1

The 21 countries signed the Memorandum of Understanding (MoU) on establishing AIIB on October 24, 2014, including Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan, and Vietnam.

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composed of nine directors from Asia and three from non-regional members. The president must come from a regional member country. The first President is Jin Liqun, a former Vice Minister of Finance in China’s Ministry of Finance and a former Vice President of the ADB. As the largest shareholder, China holds a 30.34% stake in the bank as it contributed USD29.78 billion to the bank’s USD100 billion capital base. India (USD8.36 billion), Russia (USD6.53 billion), Germany (USD4.48 billion), and South Korea (USD3.74 billion) round out the top five. According to the AoA, the AIIB calculates members’ voting power by taking the sum of their basic votes, share votes, and founding member votes. Therefore, Beijing dominated the bank with a voting right of 26.06%, giving it effective veto power over critical issues, such as electing AIIB’s president, increasing or decreasing the authorized capital stock, determining reserves, amending the agreement, and approving major operational and financial policies. Furthermore, China’s voting power will be diluted eventually. More specifically, Jin Liqun said that “there are still many countries on the waiting list, and when the new members join, China’s voting power will be reduced” (China Daily, 2016a; UPI, 2016). Equally important, China had no intention to exercise its veto power with its right based on economic size (ibid). Based on the composition of China’s leadership project of establishing the AIIB, its contribution and significance will be elaborated as follows. As the starting point of China’s initiative of establishing the AIIB, the enormous infrastructure investment gap is an indisputable fact. In 2009, the ADB estimated Asia will need to invest “approximately USD8 trillion in overall national infrastructure” over the period 2010–2020, more specifically, “about 290 billion US dollars in specific regional infrastructure projects—an average overall infrastructure investment of 750 billion US dollars per year” (ADB & ADBI, 2009, pp. 10–11). According to the WB, the infrastructure needs of South Asia are estimated to reach USD2.5 trillion by 2020, so as to improve power, roads, and water supplies to serve its growing population (WB, 2014). Meanwhile, according to OECD Infrastructure Project, the investment needs for infrastructure including telecommunications, road, rail, electricity, and water up to 2030 are estimated to reach 2.5% of world GDP (OECD, 2007). In addition, the McKinsey research (2014) has also shown that Southeast Asia needs about USD7 trillion by 2030 to cover urban infrastructure needs, covering transport (road, rail, ports, and airports), power, and water, as well as communications infrastructure. Accordingly, the infrastructure investment will stimulate regional economic development by adding USD520–930 billion to the region’s annual GDP. According to Bhattacharyay (2012), more than one-third of countries in Asia need to invest more than 8% of GDP from 2010 to 2020. The vast need for infrastructure investment focuses on transport, electricity, and information and communication technology (ICT), while some economies need to invest heavily in water and sanitation as well. All the above-mentioned estimated infrastructure investment needs, including those in Asia, South Asia, and Southeast Asia, are within the scope of the AIIB’s potential business. Under this circumstance, the lending capacity of the existing MBDs, including the WB and the ADB, is simply far less than the estimated infrastructure investment

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needs in Asia (USD8 trillion). According to the ADB (2012), “with projected 70 percent co-financing by ASEAN Infrastructure Fund, ADB planned to leverage more than 13 billion US dollars in infrastructure financing by 2020.” Meanwhile, the WB planned to provide USD15 billion for infrastructure investment in Asia (Syadullah, 2014). The elaborated huge gap between Asia’s massive infrastructure needs and the available multilateral financing resources has great significance for Asian countries. Owing to infrastructure investment’s role as a new source of growth outside the trade, the economic success of any country partly depends on infrastructure investment. The importance of infrastructure investment is backed by its strong economic spillover effects as well. According to Syadullah (ibid), “every 1 US dollar investment in infrastructure can result in the need to invest 3–4 US dollars in other economic sectors. In Asia, every 1 billion US dollars investment in the infrastructure sector creates 18,000 employment opportunities.” As ADB and ADBI (2009, p. 10) reported, “the required investment in regional infrastructure for pan-Asian connectivity would produce large real income gains of around 13 trillion US dollars for developing Asia during 2010–2020 and beyond.” Except for the benefit from economic gains, infrastructure improvement could also particularly contribute to Asian development, improving regional connectivity, promoting greater regional integration, reducing the cost of regional trade, and enhancing the competitiveness of regional production networks, thereby promoting economic growth and sustaining social development, as well as helping create a single Asian market (ibid, p. 22). With enormous infrastructure investment needs and the lack of lending capacity of the existing MDBs, China could help in bridging the vast gap by establishing the AIIB, which is expected to lend USD10–15 billion a year for the first 5 years, with approximately USD1.2 billion in 2016 (Wong, 2016; China Daily, 2016b). Therefore, the conclusion can be drawn that China’s leadership project of establishing the AIIB can not only benefit the member countries through giving their companies the best opportunity to work and invest in the world’s fastestgrowing markets, but also benefits regional countries with dire needs in infrastructure investment by mobilizing “much needed additional resources from inside and outside Asia”, removing “the financing bottlenecks faced by the individual economies in Asia” and thereby promoting “sustained and stable growth in Asia” (AIIB, 2015a, p. 1). Moreover, the AIIB “may also serve as a very strong, but positive external pressure [. . . to foster] further economic, trade and investment liberalization” (China.org.cn, 2015), boost “free trade, open borders and economic co-operation” (AIIB, 2019, p. 18), and “work as an active promoter of economic globalization and regional integration” (Xi, 2015).

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Leaders Need Followers: South Korea and the Leadership Competition. . .

American Leadership Project

Confronted with China’s proposal to establish the AIIB, the US administration viewed the AIIB as redundant with the existing international financial institutions on regional infrastructure development, and stressed the central role of the existing MDBs, including the WB and the ADB led by the USA and Japan (Yonhap News, 2014b). Moreover, the USA was concerned about the Chinese ability of governance and operation, and questioned whether the AIIB would meet the high standards and best practices (CNBC, 2015). Additionally, the USA lobbied its allies not to join the AIIB (Dyer & Parker, 2015; Gale, 2015; Kim & Yoo, 2015; Telegraph, 2015). Against the backdrop of the growing interest “among [American] traditional allies in Asia, specifically South Korea and Australia, and key nations in the G7 finance grouping, in joining the new Beijing-backed Bank” (Freeman, 2019, p. 669), the USA emphasized the importance for its allies to push for the adoption of high standards underscored by the Obama administration (Higgins & Sanger, 2015), in other words, underscored to use “its own platforms to pressure the new Bank to integrate such standards” (ibid, p. 670). The USA ignored the Chinese proposal of creating the AIIB in October 2013, and began to react until China fleshed out the detailed proposal (Harris, 2015, p. 44). Realizing that probably nothing could be done to prevent the creation of the AIIB, the Obama administration’s approach “shifted from trying to block its creation to trying to limit its influence and prevent wealthy, democratic US allies from joining and providing it with greater legitimacy” (ibid, p. 46). On July 8, 2014, the White House spokesperson Jen Psaki answered the question about the American attitude toward the Chinese project to set up the AIIB as a regional development bank. Jen Psaki emphasized that “we believe any proposal for a new international development financial institution should clearly explain how it will complement and add value to existing institutions. As you know, there is already an existing institution that does some of the same work” (The Korea Herald, 2014). Except for the skepticism and reservations about the added value of the AIIB to the existing financial institutions, the Obama administration also doubted Beijing’s governance ability and the possibility of the AIIB living up to the high environmental, labor, and procurement standards of existing financial institutions. On July 8, 2014, Jen Psaki expressed serious concerns that a China-led new infrastructure bank might not abide by high standards of governance and environmental and social safeguards, saying, We believe that any international institution involved in infrastructure investment and development should incorporate high standards of governance, environmental and social safeguards, procurement, and debt sustainability that have been established over decades of experience at multilateral development banks. [. . .] so the AIIB—excuse me [. . .] obviously, [faces] the bar we believe it should pass. (ibid)

Furthermore, other senior officials in the Obama administration also expressed their reservations about the AIIB. It is reported in October 2014 that the US official in the Treasury Department believed that the China-led new infrastructure bank would fail

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to meet “environmental standards, procurement requirements and other safeguards adopted by the World Bank and the Asian Development Bank, including protections intended to prevent the forced removal of vulnerable populations from their lands” (Perlez, 2014). In March 2015, the US National Security Council spokesman Patrick Ventrell expressed American concerns that the AIIB would not meet the high standards of the WB and the regional development bank (Gale, 2015). In the same month, the US concerns were articulated by a statement of the White House National Security Council to the Guardian, Our position on the AIIB remains clear and consistent. The United States and many major global economies all agree there is a pressing need to enhance infrastructure investment around the world. We believe any new multilateral institution should incorporate the high standards of the World Bank and the regional development banks. [. . .] Based on many discussions, we have concerns about whether the AIIB will meet these high standards, particularly related to governance, and environmental and social safeguards. [. . .] The international community has a stake in seeing the AIIB complement the existing architecture, and to work effectively alongside the World Bank and Asian Development Bank. (Watt et al., 2015)

Besides the US officials’ reiteration of its concerns and reservations about the governance, operation, and practices of the AIIB on different occasions, it is widely reported that the USA has exerted pressure on its close allies not to join the AIIB (Dyer & Parker, 2015; Gale, 2015; Kim & Yoo, 2015; Telegraph, 2015). The New York Times (NYT) repeatedly reported US opposition to the AIIB and its efforts of lobbying against this Beijing-backed bank. By quoting remarks of anonymous senior US officials in October 2014, it made clear that “in quiet conversations with China’s potential partners, American officials have lobbied against the development bank with unexpected determination and engaged in a vigorous campaign to persuade important allies to shun the project” (Perlez, 2014). Furthermore, it argued, “the US lobbied its allies not to join the new China-based bank. The US has argued that the bank at best duplicates, and at worst undermines, the role of the Washingtonbased WB and the ADB” (ibid, 2015). According to the Wall Street Journal (WSJ), “US officials have cautioned allies against putting their imprimatur on an institution that could fall shy of Western standards. They worry about a new rival to the WB that might conduct itself by different standards amid already growing competition for development-project funding from the private sector. Officials have also expressed concern the bank could undercut US influence through the WB and the ADB” (WSJ, 2015a). When the UK announced its decision to join the AIIB as a founding member on March 12, 2015, a White House official even delivered a rebuke (HM Treasury, 2015). A senior US administration official told the Financial Times (FT) that “we are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power” (Dyer & Parker, 2015). It reflected the Obama administration’s negative attitudes toward the AIIB and lobbying against the AIIB on the side. Nevertheless, the UK’s decision of joining the AIIB led to a stampede of other US allies (France, Germany, and Italy) confirming their applications to become founding members of the AIIB by the end of March 2015 (Higgins & Sanger, 2015;

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WSJ, 2015a). Under this situation, US Treasury Secretary Jack Lew said on March 17 in Washington: “I hope before the final commitments are made anyone who lends their name to this organization will make sure that the governance is appropriate” (Kim & Yoo, 2015). Jack Lew emphasized that it was “urgent that we address prior unmet commitments, which have grown to levels that raise significant questions about US credibility and leadership in the multilateral system” (ibid). Consequently, he warned about the consequence of failing to do so, and said it could “result in a loss of US shareholding at a time when new players are challenging US leadership in the multilateral system” (Higgins & Sanger, 2015). A similar situation happened in South Korea as well. South Korea’s biggest news agency Yonhap reported in June 2014 that the USA put huge pressure on Seoul not to join the AIIB through combining Seoul’s decision on the AIIB with Seoul–Washington relations. It reported, “Washington told the US Embassy in Seoul it is deeply concerned that Korea might join the AIIB. The US government said China is highly likely to use the bank for political purposes, and if Korea joins, its credibility as a US ally might be affected” (Yonhap News, 2014a). In a telephone interview in July 2014 with Yonhap News Agency, a senior White House official Sydney Seiler expressed strong skepticism and reservations about the China-led infrastructure bank, since the USA perceived the AIIB as a rival to the USA-dominated international financial institutions established after World War II (WWII), such as the WB and the ADB (ibid, 2014b). Sydney Seiler is the Director for Korea at the US National Security Council and the Senior Korea Specialist in the White House, who is considered as one of the most authoritative experts on Korean issues in the Obama administration. His remark was viewed as a message to South Korea not to join the China-led infrastructure bank, hence not support China’s endeavor of establishing the AIIB as a counterbalance to the ADB dominated by the USA and Japan. Sydney Seiler refuted the perception that improved Korea–China ties are a zero-sum game vis-à-vis Seoul–Washington relations. However, he doubted whether the AIIB would add value to the existing MDBs. He said: When it comes to the need for a financial institution that would be involved in infrastructure development, we do have the World Bank, the Asia Development Bank, and they are established development banks. [. . .] They have maintained high standards on issues such as governance, environmental, social safeguards, procurement and etc., and it is not really clear at this point [. . .] how the AIIB would implement these practices, or particularly how the AIIB would either work with or add value to these multilateral development institutions that have existed for so many years. (ibid)

In addition, Sydney Seiler stressed that it is the WB and the ADB playing the central role in regional infrastructure development. He said, “we see the existing institutions as extremely viable, central ways to contribute to the needs of the region. And that is why we continue to wait and see just how the AIIB might actually add value to that” (ibid). Moreover, answering the question of whether Washington would be comfortable with South Korea’s inclination of joining the AIIB on March 17, 2015, the Assistant Secretary of the US Bureau of East Asian and Pacific Affairs, Daniel R. Russel reiterated the concerns about “the principles, the standards, the good governance, and the transparency” of the AIIB, which should be the “hallmarks of

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truly multilateral development banks” (US Embassy & Consulate in the Republic of Korea, 2015). Daniel R. Russel said that every government including South Korea should think about if joining the AIIB is a way of “expansion for economic and financial support for the infrastructure and needs of the Asia Pacific region” (ibid). He added that to achieve this goal South Korea has another choice of “waiting to see what the evidence looks like as the bank starts to operate” instead of “joining [the AIIB] before the Articles of Agreement are clarified” (ibid). It could be observed that Washington put pressure on its allies not to join the AIIB. The USA continuously urged South Korea not to support China’s endeavor of establishing the AIIB through doubting its added values to the existing MDBs and its governance and practice. The credibility of South Korea as a USA ally has been connected with its admission to the new Bank. Moreover, after the UK announced joining the AIIB, the US official told South Korea that another choice would be waiting instead of joining the Bank. As aforementioned, the USA faced its allies’ growing interest in joining the AIIB. Thus, the Obama administration’s position evolved “only marginally from the grudging disapproval [. . .] to grudging acceptance” of the China-led new bank (Harris, 2015, p. 49). An op-ed written by Nathen Sheets in January 2015 is considered as “the first official statement by the Obama administration in response to the AIIB” (ibid, p. 45). Nathan Sheets was then Under-Secretary for International Affairs at the US Department of the Treasury. His commentary mainly focused on explaining the American conception of best practices for MDBs, which says “the US stands ready to welcome new institutions into the international development architecture, provided that they share the international community’s strong commitment to complementing the existing institutions and maintaining time-tested, and everimproving, principles and standards” (CNBC, 2015). Nathen Sheets did not admit the huge infrastructure gap in Asia, nor did he acknowledge the Chinese contribution to shrink it. Instead, he insisted that “any new institution—to add constructively— must incorporate the principles that we have described, which have helped ensure that activities of the existing institutions remain effective and responsive, and must implement sound governance policies at the outset” (ibid). This is echoed by the remarks of the US State Department Spokeswoman Jen Psaki on March 17, 2015. He expressed concerns about the AIIB and criticized the countries that sought to participate in the Bank. Moreover, he said that “it will be important for prospective members of the AIIB to push for the adoption of those same high standards that other international institutions abide by, including strong board oversight and safeguards” (Higgins & Sanger, 2015). Moreover, in a joint press conference with Japanese Prime Minister Abe on April 28, 2015, US President Barack Obama answered the question of the strategic significance of China’s intention to enhance its influence in the international economy and finance through establishing the AIIB. On the other hand, Barack Obama sought to dispel the notion that the US government opposes other countries participating in the AIIB. He said that “Asia needs infrastructure. There are a lot of countries that have difficulty financing infrastructure, but if they got that infrastructure put in place and developed, they can grow much more rapidly. [. . .] So to the

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extent that China wants to put capital into development projects around the region, that is a positive. That is a good thing” (The White House, 2015). However, the remarks of Barack Obama were “far from an endorsement” (Freeman, 2019, p. 669). Barack Obama questioned the operation guidelines of the AIIB, and stressed the importance of high governance and lending standards. He pointed out that “the projects [of AIIB] themselves may not be well-designed” and added that it is necessary to run it “based on best practices” (The White House, 2015). Harris (2015, p. 46) noted that the USA “welcome AIIB but with extensive caveats pertaining to standards,” due to the reasons that “[the US] focused on citing the shortcomings of the nascent China-led MDB than offering a constructive response to Asia’s need for infrastructure investment.” To prevent close allies to join the AIIB, the US leadership project was lacking essential attraction. The Obama administration only focused on the underlining of best practices of the MDBs, the central role of USA-led financial institutions, and the shortcomings of the AIIB. Meanwhile, the USA ignored that China acted as a responsible stakeholder by seeking to shrink the Asian infrastructure gap. It is reported by the New York Times (Perlez, 2014) that the WB and the ADB will take steps to increase their lending capacity. However, faced with USD8 trillion infrastructure funding gap, the USA did not offer concrete proposals to address the dire needs of infrastructure investment (Harris, 2015, p. 46).

5.4

Domestic Responses in South Korea

5.4.1

Domestic Interests

Domestic interests are defined here as South Korean “material considerations of economic sectors, whose cost-benefit calculations can change rapidly according to changing economic circumstances” (Schirm, 2018, p. 307), i.e., the involvement of the AIIB.

5.4.1.1

South Korean Economic Data

South Korea and China have advanced their political, economic, diplomatic, and cultural relations with an unprecedented speed and scope during the past two decades. Driven by expanding bilateral economic cooperation and its resulting benefits, trade between the two countries has increased approximately 90 times, from USD6.37 billion in 1992 to USD572.66 billion in 2014 (The Korea Herald, 2015a; Business Korea, 2017). Currently, China is not only South Korea’s largest trading partner, but also the largest destination for Korean goods globally. South Korea’s export to China accounted for more than one quarter (USD145.28 billion) of Korea’s overall exports (USD572.66 billion) in 2014, which has exceeded its

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Table 5.2 Composition of goods and services exports in South Korea in 2014 Types Manufactures Fuels and mining products Other commercial services Transportation Travel Agricultural products Other goods exports

Share of the exports (percentage) 70.4 10.5 8.3 6.2 2.2 1.9 0.5

Sources: Oxford Economics (2014, p. 14)

combined trade with the second and third-biggest markets the USA and Japan, with 11 and 6% of Korea’s total exports (The Korea Herald, 2015a). Concerning the AIIB, the manufacturing and construction sectors were crucial for South Korea’s exports. In 2014, manufactures, fuels and mining products, and transportation respectively accounted for 70.4, 10.5 and 6.2% of South Korea’s goods and services exports (see Table 5.2). Moreover, in 2013, South Korea was the major exporter and importer of construction in the world. South Korea ranked second of the leading construction exporters as its share in the top ten economies2 accounted for 23.3% (WTO, 2015, p. 136). Regarding construction imports, South Korea ranked fifth and accounted for 7.5% share of the top ten economies.3 According to the OECD (2016), South Korea’s infrastructure investment in roads and transport soared up since 2011, resulting in economic growth. However, as the third-largest economy in Asia, the “South Korean infrastructure deal market represented just 6 percent of all deals on the continent since 2010” (Preqin Infrastructure Online, 2015, p. 2), which showed a broad development space. According to Preqin report (ibid, p. 1), on the South Korean infrastructure market, “South Korea-based institutions, which actively invested in the infrastructure asset class, collectively represented 2.8 trillion US dollars in total assets. [. . .] In terms of their geographic preferences, the largest proportion of South Korea-based investors will target unlisted infrastructure funds focused on their domestic region Asia (84 percent), followed by North America (57 percent) and Europe (39 percent),” (Preqin Infrastructure Online, 2015). Faced with a low market share and main investment target in Asia, South Korea’s infrastructure sectors were anticipated to obtain great development opportunities from joining the AIIB. More specifically, the AIIB could not only facilitate South Korea’s infrastructure investment, but also its infrastructure companies, which could undertake AIIB-

2

Top ten major exporters of construction in 2013: European Union (37.2%), South Korea (23.3%), China (12.2%), Japan (11.1%), Russia (6.8%), the USA (3.0%), Singapore (2.0%), Switzerland (1.6%), Iran (1.6%), and India (1.4%). 3 Top ten major importers of construction in 2013: European Union (36.0%), Russia (14.5%), Japan (11.6%), Angola (7.8%), South Korea (7.5%), China (6.0%), Saudi Arabia (5.6%), the US (4.1%), Malaysia (3.9%), and Kuwait (3.1%).

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funded infrastructure building projects. With the booming of the infrastructure market and large-scale infrastructure work in Asia accompanied by the AIIB, South Korea’s membership in the China-led multilateral financing institution was expected to pave the way for local companies with extensive experience in construction to participate in regional infrastructure projects and expand their market presence, and eventually resulting in a boost of Korea’s sluggish infrastructure industry (The Korea Herald, 2015b). The AIIB supports economic and social development by investing in infrastructure and other productive sectors. Its focus areas include sound and sustainable projects in energy and power, transportation and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, and urban development and logistics. According to well-known media (Kim & Yoo, 2015; Panda, 2015; The Korea Herald, 2015b), construction, communications, energy, and transportation sectors of South Korea were expected to benefit enormously from the AIIB, thereby stimulating the job creation and revitalization of economy in South Korea.

5.4.1.2

South Korean Umbrella Business Associations

With the same perspective, South Korean financial markets welcomed the AIIB, with the stock price leap of its iron and steel producers.4 Furthermore, the South Korean industry circle expressed their enthusiasm for the AIIB as well, including business groups with more access to and strong influence on the government’s decision-making, such as national umbrella federations as well as sectoral interest groups. The Korea International Trade Association (KITA) is one of the largest South Korean umbrella business associations, with more than 70,000 member companies. It represents almost the entirety of the South Korean international trade community and shares the position to promote trade liberalization through supporting overseas marketing and investment, developing new foreign markets, fostering global trade professionals and international cooperation, providing information and research on national trade competitiveness. KITA expressed expectation of AIIB’s role in encouraging Sino-ROK cooperation and anticipated that the establishment and operation of the AIIB would promote the recovery of Korean economy and co-prosperity of Asian economies. It explained that: The AIIB will be a platform on which Korean builders and engineering companies take a leading role in infrastructure projects in Asia worth 8 trillion US dollars in total, which will result in the revitalization of the Korean economy. (Business Korea, 2015b)

The Federation of Korean Industries (FKI) is the voice of the interests of South Korean major conglomerates and associated members from all industrial sectors, 4 Histeel Co (071090.KS) steep raised 14.8% and Hanil Iron & Steel (002220.KS) steered up about 6%. See Kim and Yoo (2015).

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which is considered as one of the most powerful business organizations in South Korea. It represents the position of large businesses by prioritizing stronger industrial competitiveness and advocating globalization. Moreover, the FKI emphasizes the objective of promoting sound economic policies and internationalizing the economy to further enhance the free market economic system and development of the nation. During a meeting of business officials from the China Enterprise Confederation (CEC), Huh Chang-soo, head of the FKI, expressed the expectation of Sino-ROK cooperation in infrastructure, and saying that “the AIIB would provide an opportunity for Seoul and Beijing to work together in upgrading necessary infrastructure in other parts of Asia” (Yonhap News, 2015b). He also stressed that South Korea and China should “collaborate towards the further development of Asian economies, sharing their respective know-how in the manufacturing sector to build related infrastructure systems in other countries” (ibid). The Korea Chamber of Commerce and Industry (KCCI) is the largest business federation in South Korea, speaking for more than 45,000 businesses of all sizes, sectors, and regions. It embraces open market economies and holds a high reputation in government’s policymaking process. Park Yongmaan, Chairman of the KCCI, praised Chinese willingness to cooperate, and emphasized the need for Sino-ROK cooperation through the AIIB. He stressed AIIB’s values to South Korea infrastructure builders and lenders with extensive experience in overseas projects and added “by allowing Korean businesses which have high competitiveness in the infrastructure sector to participate, we can expect to expand three-way cooperative opportunities between Korea, China, and AIIB and bring Asia’s prosperity and development forward” (Korcham, 2015). In a joint statement, South Korea’s major umbrella business associations, such as KITA, KCCI, FKI, and the Korea Federation of SMEs (KBIZ), expressed advocacy to join the AIIB due to its merits to Korea’s economic revitalization. Business leaders welcome [. . .] to participate in the initiative as a founding member and will do our best to take full advantage of it in job creation and economic recovery. With 30 countries, including India and the U.K., confirming their willingness to participate, we expect the AIIB to complement the World Bank and the ADB. By giving support to infrastructure construction projects of Asian developing nations that have suffered from chronic lack of capital, the AIIB will be able to contribute measurably to developing the region by expanding regional trade and economic cooperation. As it is likely to open up the 8 trillion US dollars market for infrastructure construction, Korea’s construction and engineering contractors may benefit enormously, thereby helping the economy in the process. Our business community is welcome [. . .] joining [the AIIB] as founding members, we will once again lead to strong job creation and economic revitalization. (KITA, 2015)

5.4.1.3

South Korean Sectoral Interest Groups

Besides umbrella business associations, South Korea sectoral interest groups, which were directly affected by the AIIB, articulated their support for participation. In August 2014, director of the project development Department at the Korea Railway Association (KORASS), Ko Chang-nam, published a signed article in the Korea

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Times to analyze the merits and demerits of joining the AIIB, and made the conclusion that “in order to narrow the gap between the infrastructure demand and supply in Asia, the establishment of the AIIB is kind of a must. In consideration of huge merits [. . .] there will be no disagreement that South Korea should join the AIIB” (Ko, 2014). In addition, it is reported that in the process of considering participating in the AIIB, the dominant opinion in South Korea is that the industry can benefit from it (ChosunBiz, 2015). According to its local media, major Korean construction firms would benefit from South Korea’s participation in the AIIB, including Hyundai Engineering & Construction, Daewoo Engineering & Construction, and Samsung Construction & Trading (Business Korea, 2015a). South Korea “has gained a foothold in infrastructure development projects in the Asian region. Therefore, local companies are expected to participate in the projects according to the shares of the AIIB” (ibid). Moreover, the main consensus of construction industry is that South Korea’s participation could “have a positive effect on diversification of the overseas construction market,” because “the biggest benefit to AIIB participation is market expansion” (ChosunBiz, 2015). The International Construction Association of Korea (ICAK) represents the interests of more than 700 companies in all matters relating to overseas construction and development activities, and serves as the primary link between member companies and the Korean government. According to the ICAK, “demands for roads, railways and airports are high in the continent but most of the overseas projects led by Korean builders have been based on private investment due to the lack of government’s resources” (Business Korea, 2015b). The ICAK believed that the AIIB will become a “foothold for business in Asian infrastructure markets,” and “will make reliable financial resources for infrastructure projects in Asia and Korean companies will be able to benefit from it” (ibid). Furthermore, Choi Jun-suk, Director of Policy Planning of the ICAK, displayed, it is not exaggeration to say that the Asian infrastructure construction project is the largest in the world, but Korea has not been able to attract it well. [. . .] In the overseas construction field, there was a high demand for infrastructure investment, mainly in developing and emerging countries in Asia, but there was a limit to financing. [Therefore] the order size can be expanded [through joining the AIIB]. [. . .] It is certain that Korea’s participation in the AIIB will have a positive impact on overseas construction. (ChosunBiz, 2015)

5.4.2

Societal Ideas

Societal ideas are defined here as path-dependent and value-based collective expectations of voters in South Korea, regarding appropriate and acceptable governmental positions, such as how to steer the economy. With regard to societal ideas of South Korea, the concentration will be focused on both process ideas and content ideas. Moreover, the commonality and specificity of societal ideas indicate the relevancy for government reelection (Schirm, 2009, p. 504). The former refers to whether societal ideas are shared by a large number of citizens, while the latter refers to

5.4

Domestic Responses in South Korea

Table 5.3 South Korea process ideas concerning democracy (percentage)

Survey questions The importance of democracy Having a democratic political system Having a strong leader Democraticness in own country

61 2005 93.6 77.1 47.6 68.9

2010 90.9 74.4 48.7 59.6

Sources: Author’s compilation based on WVS (2005, 2010)

whether they have a precise meaning. Since societal ideas express themselves in societal attitudes (ibid), a combination of public opinion polls is used to represent both process and content ideas of South Korea, including the World Values Survey (2005, 2010), Pew Research Center surveys (2009, 2014a, 2014b), and Asan surveys (2015). WVS is a global research project, which conducts the largest non-commercial, cross-national, time series surveys. It aims to display the changing human values and beliefs over time in almost 100 countries and their social and political implication. In this case study, it refers to the fifth and sixth waves of surveys regarding South Korea. The surveys conducted by Pew Research Center generally show information on social issues and public opinion shaping the USA and other parts of the world. In this case study, it refers to public views of South Korea toward China, the USA as well as trade and investment. Surveys conducted by the Asan Institute mainly focus on peace and stability in the Korean Peninsula, as well as Korean reunification. In this case study, it refers to South Korean public opinion on its neighbors and the USA.

5.4.2.1

Societal Ideas: Process Ideas

The process ideas here refer to dominant expectations of South Korean voters about the way political decision-making should be conducted. Several process ideas are under scrutiny, including democracy and its characteristics (Van Loon, 2017, p. 159), as well as the responsibilities of the government and individuals (Schirm, 2009, p. 509). The first category of process ideas, democracy, and its characteristics, is relevant for societal actors’ role in influencing government reelection. The significance of democracy implicates the possibilities and opportunities of societal actors to express their opinions and influence governmental decision-making. According to the WVS (2005, 2010), majority of South Korean respondents thought it is “fairly bad”/“very bad” to have a strong leader who does not have to bother with parliament and elections, whereas nine out of ten believed that it is absolutely important for a country to be governed democratically (see Table 5.3). Data also echoed South Korean respondents’ opinion on the significance of democracy, with more than 70% showing their support for “having a democratic political system.” Additionally, beliefs of respondents on the democraticness in South Korea slightly decreased from 68.9% in 2005 to 59.6% in 2010.

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Table 5.4 South Korea process ideas concerning government and people responsibility (percentage) Survey questions The government should take more responsibility People should take more responsibility Do not know

2005 71.4 25.7 3.0

2010 76.4 18.4 5.2

Sources: Author’s compilation based on WVS (2005, 2010) Table 5.5 South Korea process ideas concerning market economy (percentage)

Survey questions Competition is good High confidence in major companies Low confidence in major companies

2005 77.5 50.2 49.8

2010 79.8 55.9 43.8

Sources: Author’s compilation based on WVS (2005, 2010)

The second category of South Korea process ideas refers to responsibilities of the government and individuals. Concerning who should take more responsibility, a strong majority of respondents advocated that “government should take more responsibility to ensure that everyone is provided for,” while a minority of respondents believed that “people should take more responsibility to provide for themselves” (see Table 5.4). With regard to South Korea government’s role in steering the economy, in specific, whether the market is considered as a process driven by private actors (trust in market forces) or by the government (trust in governmental regulation) (Schirm, 2009, p. 509), surveys data (see Table 5.5) from the WVS showed that eight out of ten respondents in South Korea agreed with the statement that “competition is good, it stimulates people to work hard and develop new ideas.” In addition, more and more respondents showed trust in market forces, as they expressed confidence in major companies (50.2% in 2005 and 55.9% in 2010).

5.4.2.2

Societal Ideas: Content Ideas

Content ideas here refer to dominant expectations about core tasks of the South Korean government before and during the construction of the AIIB. Content ideas will be traced through public opinion polls on the priorities of South Korea, views of China, and the USA, views on trade and investment. Table 5.6 illustrates South Korean public opinions on the top priorities of their own country. From surveys conducted by WVS from 2005 to 2010, “a high level of economic growth” was always considered as the most important aim of the government, followed by the willingness to have more say on issues and have a more beautiful environment. A survey conducted by Asan Institute during March 18–20, 2015 (see Table 5.7) showed that the majority of South Korea believed the most important foreign policy issue for the Park administration is improving inter-Korean relations (26.8%),

5.4

Domestic Responses in South Korea

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Table 5.6 South Korea content ideas concerning government’s priority (percentage) Survey questions: aims of country A high level of economic growth Seeing that people have more say about how are done at their jobs and in their communities Trying to make our cities more beautiful

2005 46.5 28.6

2010 56.2 17.6

12.4

11.4

Sources: Author’s compilation based on WVS (2005, 2010) Table 5.7 South Korea content ideas concerning priority of foreign policy issues (percentage)

Survey questions Improving inter-Korean relations Maintaining ROK–US alliance Strengthening ROK–China cooperation Denuclearizing North Korea Engaging in multilateral diplomacy Repairing ROK–Japan relations Others Do not know/refused

2015 26.8 21.4 16.9 13.8 9.4 5.1 0.1 6.5

Sources: Author’s compilation based on Asan (2015, p. 10)

followed by maintaining the ROK–USA alliance (21.4%), strengthening ROK–China cooperation (16.9%), denuclearization of the Korean peninsula (13.8%). South Korean aspiration of improving inter-Korean relations showed that the public was eager to see concrete outcomes through practical policies instead of abstract achievement such as mutual trust. Regarding favorability, South Koreans generally held positive views of the USA. It is reported by Pew survey (2014b, p. 38), 82% of South Korean respondents expressed a favorable view of the USA, while only 56% said this about China. This is equally backed by results from Asan surveys (2015, p. 8), which asked South Korean respondents to rate the favorability of the USA, China, Japan, and North Korea. It showed that the USA has been continuously ranked as the most favorable country in South Korea from 2010 to 2015. China’s favorability ranked the second, with a slight rise from 2013 to 2015. Also notable, referring to Figs. 5.1 and 5.2, is that South Korean respondents showed a dramatic shift in their opinions about the influence of China and the USA. When asked to assess economic influence of China and the USA in global affairs, a substantial majority of South Korean respondents chose the USA as the current greatest economic power (61.4% in 2013, 64.7% in 2014, 63.6% in 2015). Whereas there was a slight rise among South Korean respondents who claimed China as current most influential economically, but the proportion was still limited to 25.4% in 2013, 25.2% in 2014, and 29.9% in 2015. However, survey results showed a dramatic shift when asking “which country will have the strongest economic influence in global affairs.” The biggest gap was in 2015, with 70.5% choosing China to be the future economic influencer and only 20.2% picking the USA. In contrast, concerning the current political influence, the USA enjoyed an overwhelming

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100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

China

Others

Don't know/Refused

29.90

25.20

25.40

64.70

61.40

63.60

23.90

Current

Future

70.50

66.70

60.40

22.00

Current

2013

Future

20.20

Current

2014

Future 2015

Fig. 5.1 South Korean opinions: the strongest economic influence in global affairs. Sources: Author’s compilation based on Asan (2015, pp. 14–17) US

100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

China

Others

Don't know/Refused

4.90

5.20

7.40 35.10

84.60

81.80

76.90 47.80

Current

Future 2013

39.50

39.30

47.60

45.00

Current

Future 2014

Current

Future 2015

Fig. 5.2 South Korean opinions: the strongest political influence in global affairs. Sources: Author’s compilation based on Asan (2015, pp. 14–17)

support rate among South Korean respondents, with eight out of ten claiming the USA as the greatest political power today, while not much saying the same about China (7.4% in 2013, 5.2% in 2014, and 4.9% in 2015). Compared to 84.6% of South Korean respondents picking the USA as most influential politically in 2015, only 47.6% believed that “the US will continue to wield political superiority in the future.” Meanwhile, only 4.9% of respondents said China possess the strongest current political influence in 2015, but 39.5% predicted that the future political influencer will be China instead of the USA. Thus, data from Asan survey (2015, p. 11) illustrated that an overwhelming 81.2% of South Korean respondents viewed

5.4

Domestic Responses in South Korea

Table 5.8 South Korea’s content ideas concerning the importance of neighbors (percentage)

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Most important for ROK economy China USA Most important for ROK security China USA

2015 55.1 34.3 2015 21.1 60.6

Sources: Author’s compilation based on Asan (2015, p. 25) Table 5.9 South Korea’s content ideas concerning free trade and investment (percentage) Survey questions Trade is good for our country Most people are better off in a free trade market economy, even though some people are rich and some are poor

2002 90 81

2007 88 72

2008 88 –

2009 92 76

2010 88 78

2014 90 78

Sources: Author’s compilation based on Pew (2014a, 2014b)

the relationship with the USA as cooperative while 61.3% assessed Sino–ROK relationship as cooperative as well. These data thus showed a high commonality that in South Korea people were in favor of cooperating with both China and the USA, while more and more believed the influence of China in global affairs will dramatically grow in the future. Equally, a 2015 Asan survey showed that 55.1% respondents identified China as the most important economically to South Korea, whereas only 34.3% named the USA (see Table 5.8). This is backed by evidence from a Pew survey (2014b, p. 28), where 57% of South Korean respondents believed that China’s growing economy is good for their own country. Furthermore, 60.6% of respondents chose the USA as South Korea’s most important security partner, while a lower proportion (21.1%) named China. Another question posed in Asan polls (2014, p. 21), but more specific with regard to the importance of the USA in South Korea security issues, was whether it is necessary to maintain the ROK–USA alliance. The data suggest that 93.3% of South Korean respondents showed a positive assessment ROK–USA alliance through citing it as a necessity, whereas only 66.0% of respondents supported maintaining it in a post-reunification scenario. With regard to South Korean societal attitudes toward free trade and investment, a series of surveys conducted by Pew Research Center from 2002 to 2014 (see Table 5.9) showed that respondents overwhelmingly embraced economic globalization by voicing the opinion that growing international trade and global business ties are good for their country (nine out of ten). Moreover, almost 80% of respondents were in favor of a free market economy, because they agreed with the statement “most people are better off in a free trade market economy, even though some people are rich and some are poor.” To measure these attitudes, a Pew survey (see Fig. 5.3) also asked very specific questions to South Korean respondents about whether international trade and investment have a positive impact. The data showed that 53% held the view that growing

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Our country

Jobs Very good

Job creaon

4%

1% 8% 1% 24%

Somewhat good Somewhat bad

Job losses

24% 53%

Does not make a difference DK/Refused

19%

Very bad 66%

Prices

DK/Refused 6% 17%

Foreign Investment in new factories in ROK

Increase Decrease

40%

Does not make a difference DK/Refused

37%

Very good 4%2% 14% 21%

Somewhat good

Wages 25%

Very bad

59%

DK/Refused

Increase

5%

Somewhat bad

25%

45%

Decrease Does not make a difference DK/Refused

Fig. 5.3 South Korean opinions: the impact of international trade and investment. Sources: Author’s compilation based on Pew (2014b)

trade ties with other countries lead to job creation, while only 19% thought trade was destructive to employment. Likely, 45% of those surveyed considered growing international business ties as a way to increase wages, while only 25% believed trade undermines domestic incomes. Moreover, concerning the impact of trade on prices, South Korean respondents were divided, with 40% saying trade raises price levels and 37% contending that it enables consumers to enjoy lower prices. Additionally, 90% of respondents expressed the opinion that trade is beneficial for the society, including 24% who said it is very good. Similarly, a strong majority of 90% of respondents advocated greenfield investment through the construction of new plants. Thus, data showed a high commonality that South Korea was in favor of liberalization of trade and investment.

5.5

5.5

South Korean Governmental Preferences Toward the AIIB

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South Korean Governmental Preferences Toward the AIIB

Along with China’s proposal of establishing the AIIB and American opposition, South Korea followed the USA at the first stage by taking the similarity in the phrasings of American concerns over the standards and governance of the AIIB. Meanwhile, it also displayed certain ambiguity by avoiding answering about joining the AIIB and keeping its option open. When Chinese President Xi Jinping formally invited South Korea to join the AIIB at Xi-Park Summit in July 2014, it is reported that Xi Jinping had personally lobbied South Korean President Park Geun-hye to join the bank (Keck, 2014), however, Park demurred Xi’s proposal despite the warm Sino–ROK relations, expressed that South Korea would decide on joining the AIIB after further coordination with China (Perlez, 2014). Even though Seoul expressed the willingness to actively studying on issues related to joining the AIIB, the studying attitude instead of supporting China’s initiative was viewed as Seoul’s reluctance. “We didn’t decide yet whether to join or not. There are only discussions. No official agreements yet,” Kayoung Hong, Deputy Director of Financial Cooperation at South Korea’s Ministry of Strategy and Finance, indicated Seoul’s concerns on governance, capital issues and international relations regarding the AIIB, and saying, “but yes, we are considering it [. . .] we think governance should be more heightened in an international institution” (Santos, 2014b). Just before the ceremony of signing the MoU to establish the AIIB by 22 Asian countries on October 24, 2014, South Korea was under great pressure from both China and the USA. When South Korean Finance Minister Choi Kyung-hwan met with Chinese Finance Minister Lou Jiwei 4 days before the ceremony, the AIIB was put on the top agenda of talks. Choi Kyung-hwan said there was still a wide gap between the two nations. He expressed South Korea’s concerns over governance structure of the AIIB and referred to some unresolved issues related to investment guarantee. “Rationality as an international financial institution is our precondition,” said Choi Kyung-hwan, and adding “we agreed to continue talks because there has been no clear progress over the issue. [. . .] If such issues are resolved, there will be no reason for us not to join the AIIB” (Yonhap News, 2014). Following similar decisions to joining the AIIB by the UK, France, Germany, Italy, and Switzerland,5 the Ministry of Strategy and Finance of Korea (MOSF) issued a statement claiming that Seoul decided to apply to join the AIIB as a prospective founding member on March 27, 2015 (MOSF, 2015a). The statement quoted the ADB’s prediction of a tremendous Asian infrastructure investment gap, 5

On March 12, 2015, the British Chancellor of the Exchequer George Osborne announced that the UK intends to become a prospective founding member of the AIIB, becoming the first major US ally to sign on the initiative. Britain’s involvement of AIIB had a ripple effect on other countries’ decisions. Later, France, Germany, Italy, and Switzerland also agreed to join the AIIB.

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and affirmed the AIIB’s contribution to meeting the Asian dire need for infrastructure investment to boost development, and its role of “driving regional growth and strengthening financial and economic cooperation among regional members” (ibid). The statement pointed out that the AIIB, as a regional MDB, would not only “effectively channel infrastructure investment into the region to facilitate sustainable growth and social development,” but also complement “the efforts of existing MDBs to provide the much-needed investment capital into this region” (ibid). After mentioning the AIIB’s contribution, the statement underscored South Korea’s benefit from joining it. On the one hand, the AIIB could “open new doors for the Korean companies with substantial experience in wide-ranging projects such as construction, telecommunication, and transportation” (MOSF, 2015a). On the other hand, the AIIB is the first international financial institution in which South Korea “join as a major member country from its inception (ibid). The founding membership of the AIIB would give Seoul more say and influence within the new international bank, since South Korea intended to take on more responsibilities required by its growing economic role in the world. In the end, the statement also emphasized that South Korea would continue to “voice the need to improve the design of the AIIB especially in its governance structure and safeguards” and ensure that “the AIIB satisfies the highest standards in accountability, transparency, and governance to drive the economic development of not just Asia but the world” (ibid). Moreover, at a press briefing on March 27, 2015, the Deputy Minister of International Affairs at the Finance Ministry of South Korea, Choi Hee-nam, also stressed that South Korea could benefit from joining the AIIB. “Once the AIIB starts its operations, Asia’s large infrastructure market will be opened up to us. Korean companies with ample experience in the construction, transportation and information communications sectors are expected to win business opportunities,” he said, by adding “Korea is in a position to put forward its views on various [regional economic] issues and make the most of it by offering premium [experiences] to the bank’s founding members for our national interest” (The Korea Herald, 2015b). On June 29, 2015, South Korea’s Deputy Prime Minister Choi Kyung-hwan attended the signing ceremony and formally signed the AIIB Agreement. MOSF (2015b) summarized the AIIB agreement and indicated that the AIIB will have an authorized capital stock of USD100 billion, with 75% of voting rights held by regional members. With total contribution of USD3.74 billion, South Korea accounted for 3.81% of the total shares and 3.5% of share of voting rights, “ranking fourth among the 37 regional member states and fifth among all members,” following after China, India, Russia, and Germany. According to the MOSF, the AIIB “will provide opportunities for Korean businesses to participate in more overseas infrastructure projects based on their expertise in construction, transportation and telecommunications. The Bank will also have a positive impact on other related industries. For instance, a large-scale financial market will be created to support various infrastructure projects under the Bank, thereby increasing business opportunities for Korean financial institutions” (ibid). Moreover, South Korean President Park Geun-hye also said that “I welcome the AIIB to play an active role in increasing infrastructure investments and promoting

5.6

Multi-step Analysis

69

economic development in the Asian region. [. . .] Korea will continue to give its full support to the development of the Bank and we have many companies, financial institutions and experts who are keen to work with AIIB in the years ahead” (AIIB, 2015b).

5.6

Multi-step Analysis

The causal mechanism in this case study is scrutinized as follows, which consists of four parts, including the impact of Chinese and American leadership projects on South Korea concerning the construction of the AIIB, the domestic actors’ responses in South Korea, governmental preferences of South Korea and testing hypotheses on conditions of prevalence, inclusiveness of Chinese and American leadership project and testing hypothesis of followership.

5.6.1

Chinese/American Leadership Project and Their Impacts on South Korea

The first step of causal mechanism assumes that Chinese leadership project of establishing the AIIB has an impact on South Korea’s economy and hence generates anticipated winners and losers among relevant economic sectors on the one hand. On the other hand, the Chinese leadership project of the construction of the AIIB impacts fundamental expectations of South Koreans about the appropriateness of governance, hence arises questions on the role of politics within South Korea. Likewise, the American leadership project of opposing the AIIB will be analyzed in the same way.

5.6.1.1

Chinese Leadership Project and Its Impact

As illustrated before, the 2009 ADB report estimated an USD8 trillion gap in Asia’s infrastructure needs between 2010 and 2020, while the ADB and the WB planned to leverage only USD28 billion in total for Asia infrastructure investment by 2020 (ADB, 2012; Syadullah, 2014). Therefore, with the dire need for infrastructure improvement and the limited funds of the existing MDBs, China proposed its leadership project to build a new regional investment and financing platform (the AIIB) so as to mobilize more funds for infrastructure development. It initially proposed a capital stock scale of USD50 billion, and eventually capitalized with USD100 billion. Unlike the WB and the ADB, which put their priority more on poverty alleviation, the Chinese leadership project AIIB focuses on infrastructure construction,

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5 Leaders Need Followers: South Korea and the Leadership Competition. . .

which could indirectly reach the goal of poverty alleviation. Moreover, it emphasizes open regionalism and the principle of regional countries prior to outside countries. More specifically, at least 70–75% of share votes are reserved for regional members, giving Asian countries a greater say than they have in other global organizations. Concerning the equity structure of the AIIB, China agrees to contribute up to 50% of the total investment to demonstrate its resolution to promote the AIIB, while underscoring that the proportion of Chinese investment will be lowered along with the involvement of more countries. Additionally, share allocation among members will be determined by GDP as the basic parameter. Furthermore, the business operation of the AIIB is a quasi-commercial operation. The governance structure of the AIIB involves innovation in governance arrangements with a 12-person nonresident Board of Directors, which is composed of nine directors from Asia and three from non-regional members. The governance procedure is based on the principle of open inclusive, transparent, and merit-based process. The Chinese leadership project AIIB could not only narrow Asian infrastructure investment gap, but also contribute to Asian development due to the strong economic spillover effects of infrastructure investment. It is reported that “the required investment in regional infrastructure for pan-Asian connectivity would produce large real income gains of around 13 trillion US dollars for developing Asia during 2010–2020 and beyond” (ADB & ADBI, 2009, p. 10). Moreover, the AIIB could not only benefit the member countries through giving their companies the best opportunity to work and invest in the world’s fastest-growing markets (AIIB, 2015a, p. 1), but also “may also serve as a very strong, but positive external pressure [. . . to foster] further economic, trade and investment liberalization” (China.org.cn, 2015), boost “free trade, open borders and economic co-operation” (AIIB, 2019, p. 18), and “work as an active promoter of economic globalization and regional integration” (Xi, 2015). Concerning the anticipated distributional consequences of the Chinese leadership project on the South Korean economy, the AIIB supports economic and social development by investing in infrastructure and other productive sectors. Its focus areas include sound and sustainable projects in energy and power, transportation and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, and urban development and logistics. Accordingly, construction, energy, and transportation sectors of South Korea are expected to benefit enormously from the AIIB and become the winners once South Korea decides to join the AIIB (Kim & Yoo, 2015; Panda, 2015; The Korea Herald, 2015b). Concerning the anticipated distributional consequences of Chinese leadership project on South Korean society, the AIIB would impact the fundamental expectations of the appropriateness of governance, hence arise questions on the role of politics such as how politics should govern the South Korean economy.

5.6

Multi-step Analysis

5.6.1.2

71

American Leadership Project and Its Impact

Confronted with China’s proposal to establish the AIIB, the USA consistently expressed concerns about whether the AIIB will meet the high standards adopted by USA-dominant existing MDBs, such as the WB and the ADB (Yonhap News, 2014b). Besides the skepticism and reservations about the AIIB’s added value to the existing MDBs, the USA only focused on their doubts about Chinese governance ability and so-called best practices of international multilateral financial institutions (CNBC, 2015). American concerns displayed the intention to defend China’s challenge to the existing MDBs, because these institutions are built, sustained, and dominated by the USA and its allies, and more important is that the existing institutions played an important role in preserving and extending American leading position (Harris, 2015). Additionally, even though the US officials denied their obstruction to the creation of Beijing-based new bank, it is widely reported by well-known media that the USA explicitly asked its allies not to join the AIIB (Dyer & Parker, 2015; Gale, 2015; Kim & Yoo, 2015; Telegraph, 2015). In the case of South Korea, the USA not only lobbied it against the AIIB, but also considered a decision over whether to join the China-led AIIB as “a fresh test of South Korea’s [. . .] security alliance with the US” (WSJ, 2015b). Moreover, on March 17, 2015, 10 days before South Korea’s announcement of joining the AIIB, the Assistant Secretary of the US Bureau of East Asian and Pacific Affairs, Daniel R. Russel remained lobbying South Korea to “wait to see what the evidence looks like as the bank starts to operate” instead of “joining before the Articles of Agreement are clarified” (US Embassy & Consulate in the Republic of Korea, 2015). Against the backdrop of growing interest “among [American] traditional allies in Asia, specifically South Korea and Australia, and key nations in the G7 finance grouping, in joining the new Beijing-backed Bank” (Freeman, 2019, p. 669), the US administration on the one hand dispelled the notion of US opposition. On the other hand, the USA stressed the importance of high governance and lending standards, and emphasized the importance for its allies to push for the adoption of high standards underscored by the Obama administration (Higgins & Sanger, 2015), in other words, underscored to use “its own platforms to pressure the new Bank to integrate such standards” (Freeman, 2019, p. 670). Thus, the US leadership project experienced a slight shift “from the grudging disapproval [. . .] to grudging acceptance” of the China-led new bank (Harris, 2015, p. 49). However, this shift came “only after the US government suffered an embarrassing defeat” (ibid, p. 43), when US allies stampeded to join the AIIB before the March 31 deadline of becoming a prospective founding member. “Washington’s ham-fisted efforts to dissuade its allies from joining, is not about complementary, but about positional indivisibility; it is not so much about rules, but about leadership” (Åberg, 2016, p. 1155). Some scholars suggested that the creation of the AIIB “can not be characterized as a total failure,” due to the reasons that the USA convinced key allies (such as South Korea) to withhold participation in the AIIB’s signing ceremony in

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October 2014 (ibid, p. 48), and later pressured “China, US allies in the Bank, and the AIIB itself to operate according to established MDB norms and standards” (Freeman, 2019, p. 670). Focusing on the case study of South Korea, it is an undeniable fact that the USA eventually failed to keep its close ally to stay out of the AIIB. Thus, the creation of the AIIB is perceived by other scholars as a failure of the USA and a political and diplomatic triumph for China (Morris, 2017; Yuliantoro & Dinarto, 2019, p. 173; Hameiri & Jones, 2018, p. 574; Zhang, 2016, p. 126), especially “for those who equate membership in the AIIB with endorsing China’s elevated global and regional prestige, and who see it as part of a zero-sum Chinese struggle for influence with the US” (Freeman, 2019, p. 673), because it strengthens global perceptions about waning US power (Hameiri & Jones, 2018, p. 574). The US leadership project did not offer concrete proposals to address the dire needs of Asian infrastructure investment. Even though the WB and the ADB took steps to increase their lending capacity, it is far less than the dire needs in Asia. Therefore, the US leadership project could have impacts on South Korean society, for example, resulting in the anticipated distributional consequences (which generates winners and losers in South Korea), and impacting fundamental expectations of the appropriateness of governance (which arises into questions on the role of politics such as how politics should govern the South Korean economy).

5.6.2

Domestic Actors’ Responses in South Korea

The second step of the causal mechanism occurs at the domestic level of analysis, and it assumes that South Korean domestic actors are expected to respond to the impact arising from both Chinese and American leadership projects.

5.6.2.1

Responses from South Korean Interest Groups

As aforementioned, concerning the impact of leadership projects on specific sectors of South Korea, the construction of the AIIB is anticipated to create winners and losers, then generate supporters and opponents. Accordingly, rational domestic actors such as business groups struggle for political power in the process of decision-making to maximize their advantages and improve their own competitiveness. A large amount of South Korean economic data, as well as related analyses and reports, reveal whether business associations are affected by Chinese and American leadership projects concerning the AIIB. After clarifying the relevant sectors, documents (speeches, statements, and position papers) of umbrella business associations and relevant sectoral interest groups will be used to represent material interests and positions of these affected domestic sectors. South Korea and China have advanced their relations rapidly in the past two decades. South Korea’s export to China accounted for more than a quarter of its overall exports in 2014 and exceeded its combined trade with the USA and Japan.

5.6

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Under these circumstances, the proportion of the South Korean infrastructure deal was relatively low (6%) on the Asian continent since 2010, while South Korean investors shared high preferences to target unlisted infrastructure funds in Asia (84%) (Preqin Infrastructure Online, 2015). Moreover, the AIIB could facilitate South Korean local companies to participate in regional infrastructure projects and expand their market presence, hence revitalizing its sluggish infrastructure industry. Therefore, construction, energy, and transportation sectors are anticipated to benefit from the membership of the AIIB, and job creation, as well as economic revitalization, are expected to occur due to the strong economic spillover effects of infrastructure investment. Thus, a welcome to the AIIB could be observed in the South Korean industry circle. South Korea’s biggest umbrella business associations, including KITA, FKI, KCCI, and KBIZ, expressed their support for the AIIB through individual speeches and joint statements. These umbrella business associations represent the domestic interests of nearly all South Korean companies, including major conglomerates and SMEs from all industrial sectors. According to them, the AIIB is firstly a platform for South Korean companies to take a leading role in the Asia infrastructure market; secondly is an opportunity for South Korean infrastructure builders and lenders to participate in and expand regional trade and economic cooperation; and thirdly is a way that leads to strong job creation and economic revitalization. Moreover, South Korean sectoral interest groups articulated their support for participation in the AIIB as well. Representing the interests of the South Korean railway industry, the KORASS emphasized the merits of joining the AIIB, saying that “the establishment of the AIIB is kind of a must. [. . .] there will be no disagreement [. . .for us to] join the AIIB” (Ko, 2014). Representing the interests of the construction industry, the ICAK claimed that the AIIB could bridge the gap between infrastructure needs and investment, hence benefit Korean companies and impact overseas constructions positively.

5.6.2.2

Responses from South Korean Voters

As aforementioned, concerning the impact leadership projects have on issues at stake for South Korean voters, whether to join the AIIB could “affect principle-based collective expectations about appropriate governmental behavior” (Schirm, 2013, p. 692). On the one hand, South Korean voters can be affected economically by the AIIB in their daily life. On the other hand, voters express their fundamental expectations on how politics should govern economy. Accordingly, public opinion polls represent South Korean societal ideas including both process and content ideas. Additionally, the relevance of the reelection of the South Korean government will be indicated through the commonality and specificity of its societal ideas (ibid, 2009, p. 504). The possibilities and opportunities of South Korean voters to express their opinions and influence governmental decision-making are represented by their overwhelming support for democracy (WVS, 2005, 2010). Moreover, South Korean

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voters are in favor of more government responsibility than individual responsibilities (ibid). They believe that a democratic country should display some characteristics including free election, unemployment aid, equal incomes, free from state oppression, as well as taxed rich and subsidized poor. More important, South Korean voters view that a democratic country must have a prosperous economy (85.2%). Moreover, concerning the role of the market, surveys data (ibid) show a high commonality that strong majorities trust in market force, as eight out of ten in South Korea believe competition is good, and more and more people have confidence in major companies. Therefore, in South Korea, market is considered as a process driven by private actors (trust in market forces). With regard to the fundamental expectations of South Korean voters concerning the AIIB, several categories of content ideas show the opinion about how politics should govern the economy. The survey data (ibid) show a high commonality that South Korean voters considered rapid economic growth as the top aim of the country. More specifically, concerning the foreign policy issues, they believe that the top priority of the government is improving inter-Korean relations, with ROK– US alliance as the second, ROK–China cooperation as the third, and denuclearizing North Korea as the fourth aim (Asan, 2015). Concerning South Korea’s priority to improve inter-Korean relations, the AIIB is considered by the Park administration as a new approach to strengthen inter-Korea cooperation in order to resolve Peninsula issues. “North Korea could achieve economic development through support of an international financial institution and the South Korean government is willing to actively cooperate in the international community’s aid to the isolated country,” said South Korean President Park Geun-hye, and adding, “we could help the North construct facilities directly connected to lives of ordinary people and infrastructure for economic development while we also could help the secluded country plan to establish its economic zone with our experience” (Pulse Asia, 2015). Moreover, in an interview with Yonhap News (2015a), South Korea’s National Assembly Speaker Chung Ui-hwa suggested, “a system centered around the ADB and the AIIB to help the North Korean economy develop could be formed, on the condition North Korea agrees to halt its production of nuclear weapons” (UPI, 2015). These are based on the conditions that North Korea seeks to maintain its regime through economic development and tries to find an economic breakthrough while there is little investment there. Thus, reconstruction of its social infrastructure and a wide-scale influx of foreign investment is a necessity (Asan, 2015). In this case, South Korea can exert huge leverage on Pyongyang through building an inter-Korea economic community and developing industrial infrastructure in North Korea in the medium to long term, such as railways, roads, electricity, and information communication (KEI, 2015). Moreover, regarding the views of other countries, South Korea holds more favorable views of the USA (82%) than that of China (56%) (Pew, 2014b). However, there is a dramatic shift when it comes to their opinions on the current and future international influence of these two countries. The surveys data (Asan, 2015) show a high commonality that even though the USA enjoys the strong support of its current economic (63.6%) and political (84.6%) influence, more and more South Koreans believe that China’s economic influence will surpass the USA in the future (70.5%)

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and its political influence will overweigh the USA as well (39.5%). Therefore, both China and the USA are considered as cooperative by South Korean voters. In addition, China is considered as more important to the South Korean economy, and the USA is more important for security. Furthermore, concerning views on trade and investment liberalization among South Korean voters, survey data show a high commonality that respondents overwhelmingly believe growing international trade ties are good for their country. Meanwhile, they have confidence in the merits of international trade and investment in job creation and wages increasing.

5.6.3

Governmental Preference Formation and Testing Hypotheses

The third step of the causal mechanism equally occurs at the domestic level of analysis, it is based on the standard assumption of elected politicians in democratic political systems respond to domestic demands, ranging from lobby groups to the voters. The impact of the Chinese/American leadership project and South Korea’s domestic responses have been analyzed in the first two steps, in the third step, the hypothesis on conditions of prevalence will be tested through reviewing the South Korean governmental preferences, recalling the hypotheses and examining interactions between discourses. As aforementioned, South Korea firstly expressed concerns over the standards and governance of the AIIB, while it displayed a certain ambiguity so as to keep its option open. President Park Geun-hye expressed that South Korea would decide on joining the AIIB after further coordination with China. Kayoung Hong, Deputy Director of financial cooperation at the South Korean Ministry of Strategy and Finance also specified that there are no official decisions regarding the AIIB due to concerns over its governance. After European countries’ decisions to join the AIIB, South Korea eventually participated in the China-led new bank as a prospective member. The Park administration considered as the AIIB as an opportunity to win business and infrastructure market in related industries on the one hand, and to have more say and influence as a founding member, on the other hand. Before examining the correlation between domestic ideas and the South Korean governmental preferences toward the AIIB, it is necessary here to recall the hypotheses. Concerning this case study, H2 states that if the Chinese/American leadership project directly affects specific economic sectors in South Korea, and raises cost/ benefit questions of international competition, then domestic interests will be most influential in shaping the South Korean governmental preferences because lobbying will be strong. While H3 claims that if the Chinese/American leadership project raises concerns on the fundamental questions and collective expectations about how politics should govern the economy, then societal ideas will prevail in shaping the South Korean governmental positions, this link will be strengthened if the project

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Table 5.10 Correlation between South Korea’s domestic interests and governmental preference for the AIIB Domestic interests KORASS: “The establishment of the AIIB is kind of a must. [. . .] there will be no disagreement [. . . for us to] join the AIIB” (Ko, 2014) KITA, KCCI, FKI, KBIZ: “The AIIB will be able to contribute measurably to developing the region by expanding regional trade and economic cooperation” (KITA, 2015) KITA, KCCI, FKI, KBIZ: “Business leaders welcome [. . .] to participate in the initiative as a founding member” (KITA, 2015)

KITA: “The AIIB will be a platform on which Korean builders and engineering companies take a leading role in infrastructure projects in Asia worth 8 trillion US dollars in total, which will result in the revitalization of the Korean economy” (Business Korea, 2015b) FKI: South Korea and China should “collaborate towards the further development of Asian economies” (Yonhap News, 2015b) ICAK: “the biggest benefit to AIIB participation is market expansion” (ChosunBiz, 2015) KITA, KCCI, FKI, KBIZ: “Korea’s construction and engineering contractors may benefit enormously, thereby helping the economy in the process [. . .] we will once again lead to strong job creation and economic revitalization” (KITA, 2015)

Governmental preference MOSF: “The Republic of Korea has decided, on March 27, 2015, to apply to join the AIIB” (MOSF, 2015a) President Park Geun-hye: The AIIB “plays an active role in increasing infrastructure investment and promoting economic development in the Asian region” (AIIB, 2015b) MOSF: AIIB is the first international financial institution in which South Korea “join as a major member country from its inception”. The founding membership of the AIIB would give Seoul more say and influence within the new international bank (MOSF, 2015a) MOSF: “According to the ADB, the potential annual infrastructure investment need in Asia until 2020 is estimated to be as much as 730 billion US dollars. The amount of financing available from existing MDBs such as the World Bank and ADB falls considerably short of the required amount” (ibid) MOSF: The AIIB plays the role of “driving regional growth and strengthening financial and economic cooperation among regional members” (ibid). Finance ministry: “Once the AIIB starts its operations, Asia’s large infrastructure market will be opened up to us” (The Korea Herald, 2015b) MOSF: The AIIB “will provide opportunities for Korean businesses to participate in more overseas infrastructure projects based on their expertise in construction, transportation and telecommunications. The Bank will also have a positive impact on other related industries” (MOSF, 2015b)

Sources: Author’s compilation

has only a diffuse impact on South Korean related sectors, because then lobbying will be weak. Firstly, Table 5.10 shows that there is a strong degree of governmental responsiveness to South Korean domestic demands of interest groups in the participation of

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Table 5.11 Correlation between South Korean societal ideas and governmental preference on the AIIB Societal ideas • The top priority of the country: Economic growth • The top priority of foreign policy issues: Improving inter-Korean relations • More positive views of the USA than China • A strong majority believes China will be more influential economically in the future • A strong majority believes the USA is most influential economically and politically today • Overwhelming support for international trade and investment • View both China and the USA as cooperative

Governmental preference • Join the AIIB as a prospective founding member, which gives Seoul more say and influence • The AIIB could channel infrastructure investment into the region to facilitate sustainable growth and social development • The AIIB complements the existing MDBs • South Korea intends to improve the design of the AIIB, especially in its governance structure and safeguards • South Korea tries to ensure that the AIIB satisfies the highest standards in accountability, transparency, and governance

Sources: Author’s compilation

the AIIB. The South Korean government was responsive to domestic interests, such as the AIIB contributes to bridging the gap between infrastructure needs and investment; the AIIB could facilitate further development of Asia economies; the AIIB could benefit South Korea’s construction, transportation, telecommunications, and engineering industries through market expansion, hence leading to job creations and economic revitalization; and joining the AIIB as prospective founding members could give South Korea more say and influence. The above-mentioned evidence shows strong support for H2, under the conditions of (1) domestic interests of specific economic sectors directly affected by the cost/benefit questions of international competition arising from the Chinese/American leadership project on the construction of the AIIB, and (2) a high degree of South Korean governmental responsiveness to its domestic interests. Eventually, South Korean domestic interests dominated governmental preference formation. More specifically, under the rapid expanding bilateral economic cooperation between China and South Korea, Seoul’s involvement in the AIIB would not only contribute to its infrastructure investment in Asia, but also benefit its infrastructure companies through providing expanding infrastructure market, more infrastructure deals overseas, as well as more job opportunities, thereby boosting its sluggish economy. All the merits of South Korea’s membership of the AIIB stimulated the support of its domestic interest groups, which have a huge cloud on lobbying and policy-making. Correspondently, the Park administration eventually decided to join the AIIB under the aspiration of being reelected by constituencies. Secondly, Table 5.11 shows that there is a moderate degree of governmental responsiveness to South Korea’s domestic demands of voters concerning the participation of the AIIB. With regard to the process ideas, dominant expectations of South Korean voters about the conducting of political decision-making, respondents from South Korea displayed a high acceptance of democracy, government responsibility, and market force. The high commonality and specificity show a large

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opportunity for South Korean voters to participate in the political process. With regard to the content ideas, the South Korean government was only partially responsive to content ideas with high commonality and specificity, such as achieving the top priority of economic revitalization, strengthening cooperation, as well as enhancing international trade and investment. Concerning the rest of related societal ideas, South Korea’s involvement in the AIIB under the conditions of US opposition showed a low degree of governmental response, for example, there is a high commonality in the overwhelming trust of South Korean voters in American current global influence, and more respondents share the favorability of the USA than China. Therefore, the evidence analyzed above shows moderate support for H3, because (1) affected by the Chinese/American leadership project, South Korean voters share collective fundamental expectations on appropriate governmental behavior concerning the AIIB, (2) a moderate degree of South Korea governmental responsiveness to its societal ideas. Specifically, with China’s significant role in the South Korean economy and Washington’s essential role in security, Seoul eventually decided to join the China-led infrastructure bank under the pressure of public opinion in South Korea. Its involvement in the AIIB corresponds with the aspiration of majority South Koreans in strengthening economic revitalization, promoting international trade and investment, improving the inter-Korean relation and having leverage on North Korea. Under the background of Pyongyang’s desperate need for infrastructure, the Park administration not only expected to revitalize its own economy but also tried to exchange infrastructure investment in North Korea with its more openness and denuclearization. Whether this objective can be accomplished depends on the Park administration’s diplomacy efforts, Pyongyang’s calculation, and the specific operation of the AIIB. Based on the above analysis, South Korean domestic interests and societal ideas reinforce each other in shaping governmental decision on joining the AIIB.

5.6.4

Inclusiveness of Leadership Project and Followership

The fourth step of the causal mechanism occurs at the international level of analysis. As Schirm (2010, p. 216) states, “leadership [. . .] gains followership only if it is credibly framed as a project also representing the goals of others.” Therefore, the main hypothesis (H1) is necessary to be recalled here, which claims that the inclusion of the domestic interests and/or societal ideas dominant in the potential follower country, South Korea, into the Chinese/American leadership project of the AIIB is a necessary condition to secure South Korean followership. Table 5.12 illustrates the correlation between inclusiveness of Chinese leadership project and South Korea’s followership. The Chinese leadership project obviously includes South Korean domestic interests and societal ideas, providing more overseas infrastructure deals for interest groups, more job opportunities for constituencies, more expanding infrastructure market for industry circles, and more say in international institutions for the government, as well as more opportunities for

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Table 5.12 Correlation between inclusiveness of the Chinese leadership project and South Korean followership Chinese leadership project • Propose the establishment of the AIIB to bridge gaps between Asian infrastructure needs and investment • Focus on infrastructure construction, which could indirectly reach the goal of poverty alleviation • 70–75% of share votes are reserved for regional members, with GDP as a basic parameter for share allocation • Benefit companies of member countries by providing the best opportunity to work and invest in the World’s largest markets • Foster trade and investment liberalization, promote economic globalization and regional integration • Contribute to Asian development due to strong economic spillover effects of infrastructure investment

ROK domestic interests • The establishment of the AIIB is kind of a must, thus ROK should join it as a founding member • The AIIB could contribute to further development of Asian economies • The AIIB is a platform for South Korean companies taking a leading role in Asian infrastructure projects worth USD8 trillion in total • South Korea’s infrastructure, construction, and transportation sectors may benefit enormously from the AIIB through market expansion • The AIIB will lead to strong job creation and economic revitalization

ROK societal ideas • The top priority of the country: Economic growth • The top priority of foreign policy issues: Improving interKorean relations • More positive views of the USA than China • A strong majority believes China will be more influential economically in the future • A strong majority believes the USA is most influential economically and politically today • Overwhelming support for international trade and investment • View both China and the USA as cooperative

ROK governmental preference • Join the AIIB as prospective founding member, which gives Seoul more say and influence • The AIIB could channel infrastructure investment into the region to facilitate sustainable growth and social development • ROK will benefit enormously from the AIIB through market expansion • The AIIB complements the existing MDBs • South Korea intends to improve the design of the AIIB, especially in its governance structure, and standards of accountability and transparency

Sources: Author’s compilation

economic revitalization. The evidence analyzed above shows a strong support for the main hypothesis (H1) concerning Chinese leadership in this case study, because (1) China credibly included South Korea’s domestic interests and societal ideas in its leadership project, (2) hence it obtained South Korea to follow its leading by joining the AIIB as a prospective founding member. Table 5.13 indicates the correlation between inclusiveness of American leadership project and South Korean non-followership. Compared to the merits resulting from the Chinese leadership project, the USA only focused on the shortcomings of the AIIB on its governance, operations, and standards, and the central role of the

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Table 5.13 Correlation between inclusiveness of American leadership project and South Korea’s non-followership Chinese leadership project • Asking its close allies to stay away from the AIIB • Consider South Korean decision over whether to join the AIIB as a fresh test of ROK-USA alliance • Skepticism and reservations about AIIB’s added value to the existing MDBs • Concern about shortcomings of the AIIB on its governance, operation and standards

ROK domestic interests • The establishment of the AIIB is kind of a must, thus ROK should join it as a founding member • The AIIB could contribute to further development of Asian economies • The AIIB is a platform for South Korean companies taking a leading role in Asian infrastructure projects worth USD8 trillion in total • South Korea’s infrastructure, construction, transportation sectors may benefit enormously from the AIIB through market expansion • The AIIB will lead to strong job creation and economic revitalization

ROK societal ideas • The top priority of the country: Economic growth • The top priority of foreign policy issues: Improving interKorean relations • More positive views of the USA than China • A strong majority believes China will be more influential economically in the future • A strong majority believes the USA is most influential economically and politically today • Overwhelming support for international trade and investment • View both China and the USA as cooperative

ROK governmental preference • Join the AIIB as a prospective founding member, which gives Seoul more say and influence • The AIIB could channel infrastructure investment into the region to facilitate sustainable growth and social development • ROK will benefit enormously from the AIIB through market expansion • The AIIB complements the existing MDBs • South Korea intends to improve the design of the AIIB, especially in its governance structure, and standards of accountability and transparency

Sources: Author’s compilation

USA-dominated existing MDBs. Even though the USA shares high favorability and enjoys high support for its current economic and political influence among South Korean voters, these cannot overweigh the actual benefit from joining the AIIB. Therefore, the evidence shows a strong support for the main hypothesis (H1) concerning American leadership in this case study, because (1) the USA did not credibly include South Korea’s domestic interests and societal ideas in its leadership project, (2) hence it failed to keep South Korea to stay out from the AIIB, and lost followership from South Korea regarding the AIIB.

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Chapter 6

Leaders Need Followers: An Analysis of American Leadership and Japanese Followership in the TPP

6.1

Introduction

The TPP is a trade agreement among 12 countries, which did not take effect eventually due to the withdrawal of the USA. In the beginning, New Zealand, Singapore, Brunei Darussalam, and Chile formed a trade bloc known as the Pacific-4 (P4) in 2006, which aimed to eliminate all tariffs between the parties. In 2008, the USA, along with Australia, Peru, and Vietnam, announced to join negotiations for an expanded TPP agreement, and in 2010 Malaysia joined the negotiations. In November 2011, the leaders of these nine nations announced that they had achieved the broad outlines of an ambitious agreement, which could be a model for future free trade agreements (FTA) (USTR, 2011b). As a part of the rebalancing policy to the Asia-Pacific region, the USA supported high-standard regional economic integration in Asia and across the Pacific. The scope of the TPP includes the labor, environment, compatibility of regulatory systems, and new emerging issues such as digital technologies. The TPP objectives include the elimination of tariffs and some nontariff measures among the members and the strengthening of ties among some of the world’s major agricultural importers, exporters, and producers. In this case study, Japan is chosen as the potential follower, and Japanese followership will be scrutinized through investigating the inclusiveness of the American leadership project and Japanese governmental preference formation regarding the TPP. Among 12 TPP members,1 four are East Asian countries, including Brunei, Japan, Singapore, and Vietnam. Japan is chosen as a potential follower because (1) it meets four criteria for classifying a democratic regime set by Cheibub et al. (2010, p. 69); (2) it is one of the closest allies of the USA; (3) it is the third-largest economy in the world; (4) Japanese membership of the TPP could 1

Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the USA. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 F. Su, The Determinants of Leadership, Contributions to International Relations, https://doi.org/10.1007/978-3-031-12555-3_6

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Table 6.1 Key dates on the TPP Dates 2008 2010 2011 2013 2015 2016

Events The USA announced joining the TPP negotiation Japan started to express interest in the TPP The broad outlines of the TPP agreement were announced Japan joined the TPP negotiation TPP participants reached an agreement in principle 12 countries signed the TPP agreement (The TPP agreement was signed on February 2016 by 12 countries including the USA. However, the TPP was not ratified as required and never entered into force, because the US President Donald Trump signed a presidential memorandum in January 2017 to withdraw from it. After that, the other 11 countries signed the revised version of the agreement, Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in March 2018, which came into force in December 2018.)

Sources: Author’s compilation

“significantly boost the potential impact of an agreement,” more specifically, “the US and Japan account for more than 80 percent of the GDP of all TPP partners” (Corning, 2016, p. 796), and; (5) Japan’s participation in the TPP is essential for the USA “to expand the member base, [to] push forward common policy agendas at negotiation table, and [to] achieve better access to the Japanese market” (Yoshimatsu, 2016, p. 1151). The Japanese government started to express its interest in the TPP in 2010. After several years of consultation, the Japanese Prime Minister Shinzo Abe announced joining the TPP negotiations in 2013, and eventually Japan signed the TPP agreement in February 2016 (Table 6.1). Not only is Japan important for the TPP, the TPP is also essential for Japan, since it is perceived as the center of Abenomics and plays the role of stimulating the declining Japanese economy (The Economist, 2014). Nevertheless, the issue of whether to join the TPP arose in domestic debates in Japan and split the country into two (Urata, 2014; Naoi & Urata, 2013). Against this backdrop, this case study will employ inclusive leadership and the societal approach to investigate the questions under which conditions did the USA successfully obtain the acceptance from Japan in signing the TPP agreement? And under which conditions did domestic interests and societal ideas prevail in shaping governmental preferences of Japan?. Accordingly, in line with inclusive leadership, the main hypothesis (H1, the inclusion of the domestic ideas and/or interests dominant in the potential follower country, Japan, into the American leadership project of the TPP is a necessary condition to secure followership of Japan) displays the conditions for the USA to motivate Japan to join the TPP. Two hypotheses explain the conditions of the prevalence of domestic material and societal ideas in this empirical case study. H2 claims that if American leadership project of the TPP directly affects specific economic sectors in Japan, and raises cost/benefit questions of international competition, then domestic interests will be the most influential in shaping governmental preferences of Japan, because lobbying will be strong. H3 claims that if American

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leadership project of the TPP raises concerns on the fundamental questions and collective expectations about how politics should govern the economy, then societal ideas will prevail in shaping governmental positions of Japan, this link will be strengthened if the project has only a diffuse impact on related sectors of Japan, because then lobbying will be weak. It has to be mentioned that the TPP issue has to be put into the bigger picture of American and Japanese foreign policies. The context issues such as American pivot to Asia, the general US–Japan relations, and Japanese agriculture reform are important, but the research has to be parsimonious and focused. It cannot consider all possible aspects of the policy-making process, thus these context issues are beyond the scope of this book. The key interest here is the interactions between dependent and independent variables in the case study of the TPP, and the specification of the causal mechanism within the inclusive leadership.

6.2

American Leadership Project

In November 2009, President Barack Obama announced that the USA would engage itself in negotiations over TPP: The United States will also be engaging with the Trans-Pacific Partnership countries with the goal of shaping a regional agreement that will have broad-based membership and the high standards worthy of a 21st century trade agreement. (USTR, 2009)

That same day in Singapore, the USA Trade Representative Ron Kirk applauded Barack Obama’s announcement and detailed the key goals for TPP engagement: We will seek with current and future TPP nations to shape a platform with the scope, coverage, and standards to successfully integrate the Asia-Pacific economies [. . .] The further engagement in the Trans-Pacific Partnership gives us the opportunity to address gaps in our current agreements, and to set the standard for 21st-century trade agreements going forward. (ibid)

The basic concept of the TPP was presented in the TPP Leaders’ Statement and “Outlines of the Trans-Pacific Partnership” released in Honolulu in 2011. First, in terms of the level of ambition, the TPP aims to adopt high standards and achieve robust market liberalization. Second, in terms of coverage, the TPP aims to comprehensively cover emerging trade issues and cross-cutting issues. Based on those purposes, the TPP had been negotiated as an ambitious and comprehensive agreement covering a broad range of areas, including the existing FTA fundamentals (such as market access in goods and services trade), and the rules on nontariff areas (investment, competition, intellectual property rights, government procurement, labor, and environment). The TPP objectives include eliminating tariffs and nontariff measures among the members, and strengthening ties among some of the world’s major agricultural importers, exporters, and producers. According to the Trans-Pacific Partnership Leaders’ Statement, “we are confident that this agreement will be a model for

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ambition for other free trade agreements in the future, forging close linkages among our economies, enhancing our competitiveness, benefitting our consumers and supporting the creation and retention of jobs, higher living standards, and the reduction of poverty in our countries” (The White House, 2011). Although the Obama administration had secrecy policies in the TPP negotiations (Maher, 2016; The Washington Post, 2015), it is not hard to find out that the negotiating countries had major differences over market access, protection of intellectual property rights, labor standards, environmental protection, provisions of state-owned enterprises, and other areas. In the case of Japan, the main obstacles to the negotiations were agriculture, automobile, and insurance (Yoshimatsu, 2016, p. 1153). To promote Japan to participate in the TPP negotiations, the US leadership project experienced a process of change. With regard to Tokyo’s participation in the TPP negotiations, Washington reiterated the important role of enhanced market access and balanced rules in the preliminary negotiations with Japan. On November 13, 2011, US Trade Representative Ron Kirk commented on the announcement made by Japanese Prime Minister Yoshihiko Noda regarding the TPP: “the United States welcomes Prime Minister Noda’s important announcement expressing Japan’s intention to begin consultations with Trans-Pacific Partnership countries towards joining the TPP negotiations” (USTR, 2011a). He continued pointing out: In close consultation with Congress and our domestic stakeholders, we look forward to engaging with the Japanese in these discussions. To join the negotiations, Japan must be prepared to meet the TPP’s high standards for liberalizing trade and to address specific issues of concern to the United States regarding barriers to agriculture, services, and manufacturing trade, including non-tariff measures. Japan’s interest in the TPP demonstrates the economic and strategic importance of this initiative to the region. (ibid)

According to 2012 trade policy agenda report of the Office of the United States Trade Representative (USTR), the USA urged Japan to meet the high standards of market-opening rules shared by the nine countries involved in the TPP negotiations if it wanted to formally join the free trade talks. As we consider Japan’s expression of possible interest in joining the TPP negotiations, the administration [of President Barack Obama] will work closely with Congress and stakeholders to assess Japan’s readiness [. . .] The U.S. continues to make clear that any new participants must be able to meet the high standards agreed by all TPP negotiating partners and be prepared to address specific issues of concern. (USTR, 2012)

In May 2012, US President Barack Obama told Japanese Prime Minister Yoshihiko Noda that Washington had concerns over the auto, insurance, and beef sectors (Japan Times, 2012d). In terms of agriculture, the US senior trade official Wendy Cutler, in charge of US trade issues relating to Japan, South Korea, and the Asia-Pacific Economic Cooperation forum, mentioned Japanese sensitive agriculture items, in a meeting with Japanese agriculture officials in early 2012 (ibid, 2012c). Wendy Cutler said that for such items as rice, it would be possible to consider removing tariffs in a phased manner over a long period, or to introduce a system allowing

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restrictions to be imposed if imports soared drastically. Whereas it was emphasized that Washington would allow no exceptions to remove tariffs under the TPP, with respect that abolishing all tariffs without exception is a fundamental rule (ibid). In terms of automobiles, the US government expressed concerns about the overall lack of access to Japan’s automotive market for US automotive companies. In the USTR’s 2013 National Trade Estimate Report on Foreign Trade Barriers, “a variety of nontariff barriers have traditionally impeded access to Japan’s automotive market. Overall sales of US-made vehicles and automotive parts in Japan remain low, which is a serious concern” (USTR, 2013). According to the report, the main barriers include “standards and certification, the lack of sufficient opportunities for stakeholder input in the development of standards and regulations, barriers that hinder the development of distribution and service networks, and the lack of equivalent opportunities for US models imported under the preferential handling procedure (PHP) certification program to benefit from temporary fiscal incentive programs,” which should be addressed by Japan (ibid). On the other hand, “US tariffs on motor vehicles will be phased out in accordance with the longest staging period in the TPP negotiations and will be backloaded to the maximum extent” (Yoshimatsu, 2016, p. 1154), which means that “the period of [US] tariff reduction would be longer than five years for passenger cars and 10 years for trucks” (ibid). In terms of insurance, it had been rumored that the USA might put the deregulation of Japan’s national healthcare system on the TPP agenda, which would force Japan to mix the national healthcare system with market-oriented pricing of medical care and drugs. To clarify this, the Assistant US Trade Representative Wendy Cutler told Japanese government officials in January 2012 that Washington had no problem with Japan’s universal health insurance system with regard to the TTP initiative, and would not raise the issue of Japan’s insurance coverage rules for advanced medical treatment during trade talks (Japan Times, 2012a). The focus on insurance is owing to the fact that in most cases the Japanese government, under the insurance rules on “mixed treatment,” denies public insurance coverage even for eligible services when a patient opts to use an uninsured method as part of overall treatment. Due to the high demand for uninsured treatment, which is usually expensive and beyond the reach of average consumers, US insurance companies were keen on entering Japan’s private insurance market to cover uninsured treatments in Japan (Japan Times, 2012a, 2012b). According to the USTR’s report (USTR, 2013), the Japanese private insurance market is the world’s second-largest (after the USA), with direct net premiums of about USD462.5 billion (in the Japanese fiscal year 2011). The report added, “given the size and importance of Japan’s private insurance market as well as the scope of the obstacles that remain, the US government continues to place a high priority on ensuring that the Japanese government’s regulatory framework fosters an open and competitive insurance market” (ibid). The US leadership project of the TPP, which emphasized no exceptions to removing tariffs, provoked violent actions among political parties and stakeholders in Japan. The campaign for the Japanese Lower House election in December 2012 brought the Liberal Democratic Party (LDP) back to power. The LDP party pledged

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that as long as “abolition of tariffs without any sanctuaries” is the prerequisite for joining the TPP talks, Japan would not participate in them. The President of the LDP Shinzo Abe restated this during the election campaign, reflecting opposition from Japanese domestic farmers—a core constituency of his ruling LDP that fears an influx of cheap agricultural imports (Japan Times, 2013b). Owing to Tokyo’s backlash, the USA stance retreated in 2013. After their meeting in February 2013, US President Barack Obama and Japanese Prime Minister Shinzo Abe confirmed that Japan would not have to vow to remove all trade tariffs as a prerequisite to joining talks for the TPP initiative (Japan Times, 2013a), and they set a stage for Japan’s early entry into the ongoing talks. “The two governments confirm that should Japan participate in the TPP negotiations, all goods would be subject to negotiation, and Japan would join others in achieving a comprehensive, high-standard agreement,” Barack Obama and Shinzo Abe said in the joint statement, adding, “recognizing that both countries have bilateral trade sensitivities, such as certain agricultural products for Japan and certain manufactured products for the United States, the two Governments confirm that, as the final outcome will be determined during the negotiations, it [Japan] is not required to make a prior commitment to unilaterally eliminate all tariffs upon joining the TPP negotiations” (The White House, 2013). This means that all items would be on the table of TPP negotiations, but the tariffs elimination of these items would depend on the actual negotiations. Since the USA successfully attracted Japan to join the TPP negotiations in March 2013, the two countries conducted 11 rounds of negotiations in total until concluding a broad agreement along with other participants at the TPP ministerial meeting in October 2015, and eventually signed the TPP agreement with other participants in February 2016. The American and Japanese governments negotiated various issues including “market liberalization for automobiles, non-tariff barriers in insurance, postal services” (Yoshimatsu, 2016, p. 1154), and so on. However, the main controversial issues still focused on “bilateral trade sensitivities, such as certain agriculture products for Japan and certain manufactured products for the US” (Kantei, 2013a). Two countries “take into account the degree and period of tariff phase-out as well as the introduction of safeguard systems and tariff quotas” (Yoshimatsu, 2016, p. 1159). The TPP ministers’ statement claimed that the TPP agreement could “liberalize trade and investment among members; [. . .] promote economic growth, support higher-paying jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in our countries; and promote transparency, good governance, and strong labor and environmental protections” (USTR, 2015b). To set new standard for global trade, the TPP follows five features (USTR, 2015a). First, comprehensive market access through “eliminating or reducing tariff and non-tariff barriers across substantially all trade in goods and services and cover[ing] the full spectrum of trade” (ibid). Second, regional approach to commitments, i.e., promoting “the development of production and supply chains, and seamless trade, enhancing efficiency and supporting our goal of creating and supporting jobs, raising living standards, enhancing conservation efforts, and facilitating cross-border integration,

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as well as opening domestic markets.” Three, addressing new trade challenges to promote innovation, productivity, and competitiveness, such as digital economy and the role of state-owned enterprises. Four, inclusive trade to benefit “economies at all levels of development and businesses of all sizes.” Five, platform for regional integration with the willingness to “include additional economies across the Asia Pacific region” (ibid). Besides the above features, the TPP includes issues related to “the internet and the digital economy, the participation of state-owned enterprises in international trade and investment, the ability of small businesses to take advantage of trade agreements” (ibid). Moreover, the TPP extends its scope to trade and traderelated issues in 30 chapters, which refer to “trade in goods [. . .] customs and trade facilitation; sanitary and phytosanitary measures; technical barriers to trade; trade remedies; investment; services; electronic commerce; government procurement; intellectual property; labor; environment; [. . .] dispute settlement, exceptions, and institutional provisions” (ibid). Overall, it could be summarized that in terms of agriculture, the US leadership project changed from abolishing all tariffs without exception to canceling this kind of prerequisite to attract Japan to join the TPP negotiations. In terms of automobiles, the US leadership project focused on the mutual expansion of market access. In terms of insurance, US leadership was keen on entering Japan’s private insurance market to cover uninsured treatments instead of revising its universal health insurance coverage. During the TPP negotiations, the US leadership project considered the bilateral trade sensitivities of both countries. They eventually made compromises to conclude the TPP agreement, with Japan abolishing tariffs on 8575 items including 174 sacred five/sensitive five agricultural items2 (Ishiguro, 2017, p. 182), which means 95% of Japan’s tariff abolition rate and 81% of tariff abolition rate in agriculture, forestry (ibid, p. 172), and fisheries, and with the USA agree to “immediately abolish more than 80 percent of the 2.5 percent tariff on auto parts” (Yoshimatsu, 2016, p. 1164).

6.3 6.3.1

Domestic Responses in Japan Domestic Interests

Domestic interests are defined here as Japanese “material considerations of economic sectors, whose cost-benefit calculations can change rapidly according to changing economic circumstances” (Schirm, 2018, p. 307), i.e., the TPP. In order to figure out Japanese domestic response toward the US leadership project of the TPP, the economic data will be examined to figure out whether interest groups are affected by the US leadership project. The financial exposure of these interest groups

2 Sacred five (also called sensitive five) of Japanese agriculture refer to rice; wheat; beef and pork; dairy products; and sugar, which is heatedly debated regarding Japan’s participation of the TPP.

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to the international economic changes should be considered to display the relevance of interest groups. Moreover, the material cost and benefit calculations of various specific sectors of Japan will be examined as well. As indicated by inclusive leadership and the societal approach, the statements of business associations of specific sectors will serve to verify Japanese domestic interests.

6.3.1.1

Japanese Economic Data

Japan had pursued a single-track approach to its foreign economic approach for a half century, which “focusing its trade negotiating efforts exclusively on the multilateral forum and had shunned regionalism as harmful to the WTO system” (Solís & Katada, 2007, p. 282). However, since the early 1990s, mounting pressures of trade liberalization have emerged under the conditions of Japanese sluggish GDP growth rates (Maclachlan & Shimizu, 2016, p. 171). Meanwhile, trade protectionism from agriculture sectors has weakened due to “a shrinking farm vote caused by rural population decline and electoral reform, and the increasing influence of reformist politicians in the LDP” (ibid). Japanese endeavor of promoting FTAs with its trade partners displayed this significant shift in its trade policy (Kim, 2013, p. 194). Along with the trade liberalization, Japanese economy in the post-war period showed the tendency of shrinking primary industry and expansion of tertiary industry. Japanese agriculture faced “a deepening and multi-faceted crisis” as heavy and chemical industries became the driving force of Japanese economic growth in postwar period (Nam, 2017, p. 22). Nowadays, Japanese agriculture as the primary industry accounted for 4.0% of employed persons, which dramatically decreased compared to 48.6% in 1950. Similarly, the share of agriculture industry of the overall Japanese GDP accounted for only 1.1% in 2015 while 19.2% in 1955. The secondary industry’s shares of employed persons and GDP have also fallen gradually since 1975. Contrasting this, the tertiary industry’s shares have risen consistently. By the time of 2015, the primary, secondary, and tertiary industries accounted, respectively, for 4.0%, 25.0%, and 71.0% of employed persons, while their corresponding shares of the total GDP were 1.1%, 26.2%, and 72.7%, respectively (see Table 6.2 and Fig. 6.1). Besides the characteristics of the decline of the primary industry and the rise of the tertiary industry, there is another tendency of world economy: services represent more and more share of GDP, with more than 50% for most economies and more than 75% for the advanced industrial economies (Corning, 2016, p. 779). According to international trade statistics of WTO (2015, p. 51), the main destinations of Japan’s trade in goods in 2014 are Asia (56.6%), North America (21.7%), and Europe (11.3%), while the main origins of Japan’s trade in goods are Asia (51.4%), Middle East (18.2%), and North America (11.0%). According to the data of WTO (2014, p. 35), the main destinations of Japan’s trade in services in 2012 are the USA (23.9%), European Union (21.3%), and Singapore (10.5%), while these three are also the main origins of Japan’s trade in services with the share of 30.0%, 18.5%, and 6.6%, respectively.

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Table 6.2 Industry share of employment and GDP (1950–2015)

Year 1950 1999 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Employed persons (percentage) Primary Secondary Tertiary industry industry industry 48.6 21.8 29.7 41.2 23.4 35.5 32.7 29.1 38.2 24.7 31.5 43.7 19.3 34.1 46.6 13.9 34.2 52.0 10.9 33.6 55.4 9.3 33.2 57.5 7.2 33.5 59.4 6.0 31.3 62.7 5.2 29.5 65.3 4.9 26.4 68.6 4.2 25.2 70.6 4.0 25.0 71.0

GDP (percentage) Primary Secondary industry industry – – 19.2 33.7 12.8 40.8 9.5 40.1 5.9 43.1 5.3 38.8 3.5 36.2 3.0 34.9 2.4 35.4 1.8 30.4 1.6 28.4 1.2 25.8 1.2 25.2 1.1 26.2

Tertiary industry – 47.0 46.4 50.3 50.9 55.9 60.3 62.0 62.2 67.8 70.0 73.0 73.6 72.7

Sources: Statistics Bureau (2017, p. 29) Others: 0.7% Agriculture, forestry & fishing: 1.2%

Producers of private non-profit services to households: 2.3%

Mining: 0.1%

Manufactring: 18.5%

Producers of govermment services: 9.0% Primary industry: 1.3% Service activities: 19.6%

Construction: 6.1% Secondary industry 24.6% Tertiary industry: 74.1%

Information & communications: 5.5%

Electricity, gas & water supply: 2.0%

Wholesale & retail trade: 14.1%

Transport: 5.0%

Finance & insurance: 4.3% Real estate: 11.6%

Fig. 6.1 Composition of Japan’s GDP (2014). Sources: Author’s compilation by Statistics Bureau (2016, p. 30)

Regarding trade in goods, the agriculture products accounted for only 1.5% of share in Japan’s total trade in goods exports in 2014, but 10.0% of imports (WTO, 2015, pp. 78–79). In the contrast, manufacturers counted up to 87.4% of share in Japan’s total trade in goods exports, and only 49.6% of imports (ibid, pp. 91–92).

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Specifically, the share of Japan’s automotive products amounted to 21.2% of its total trade in goods exports, while only 2.6% of imports (ibid, pp. 114–115). Regarding trade in services, Japan is one of the top 15 major exporters and importers of all trade in services, including goods-related services, transport, travel, and other commercial services (ibid, p. 127). Moreover, the share of the services in international trade is relatively small than in domestic trade. On the other hand, traditional services such as wholesale/retail, hospitality, and transport represent the largest share of the services market, while the share of the modern services such as information and communication technology services and financial services is relatively small (ibid, p. 783). However, Japanese firms in the services sector are still considered as “lagging in efficiency and penetration of foreign markets” (Corning, 2016, p. 779), with only 6.6% of world services trade in 2913 (ibid, p. 784). Thus, “there is considerable opportunity for Japanese services firms to improve their market position in East Asia” (ibid). After introducing the economic data of Japan, it is possible to examine the anticipated distributional consequences of the US leadership project regarding the TPP. The TPP aims to promote trade liberalization through eliminating tariffs on all items without exception within 10 years. According to academic studies (Mulgan, 2016, p. 128; Fan, 2013, p. 266; Naoi & Urata, 2013, p. 333; Urata, 2014), the TPP would lead to the gains of export-oriented manufacturing sectors and losses of lesscompetitive industries such as agriculture and medical services in Japan. Manufacturers benefited the most in the previous from trade liberalization through Japanese Economic Partnership Agreements (EPA) with other Asian countries (Fan, 2013, p. 266). Therefore, the TPP could “not only enable Japanese companies to expand markets in Asia, but also help [. . .] to build up regional supple chains” (ibid). It is estimated that “Japanese manufacturing industries will lose 10.5 trillion yen which is equivalent to 1.5 percent of GDP and 0.8 million jobs by not joining the TPP” (Naoi & Urata, 2013, p. 333). In the contrast, those less-competitive sectors would suffer from Japan’s participation in the TPP, especially the highly protected agriculture commodities such as sacred five (also known as sensitive five, including rice, wheat, beef and pork, dairy products, and sugar), because trade liberalization of the TPP would result in vast reductions in tariffs and expansion of imports. It is estimated that the cost of joining the TPP would be “7.9 trillion yen and 3.4 million jobs lost” (ibid). As mentioned earlier, the manufacturers accounted for 87.4% share of Japan’s total trade in goods exports, while agriculture products only 1.5% in 2014 (WTO, 2015). Concerning tariff elimination, Japan maintained high tariff rates on agricultural goods (19%) and low tariff rates on manufacturing goods (2.5%) compared to some other developed and developing countries (see Table 6.3). Concerning the imports, the manufactures and agriculture products respectively amounted up to 49.6% and 10.0% (ibid). The agriculture products only occupied a very small proportion of Japan’s total trade in goods, and the imports demands of agriculture product are almost 7 times of export volume, thus the Japanese farmers would be the biggest losers of joining the TPP, hence becoming the vehement opponents. The share of exports and imports of manufacturers are 87.4% and 49.6%, respectively. Even though there is still a large amount of manufacturers’ imports, the losses of

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Table 6.3 International comparison of average tariff rates in 2013 (percentage)

Agricultural goods Manufacturing goods Total goods

Developed countries USA EU 4.9 13.5 3.3 3.9 3.5 5.2

Japan 19.0 2.5 4.7

Developing countries China Brazil 15.8 35.4 9.1 30.8 10.0 31.4

India 113.5 34.6 48.6

Sources: Nam (2017, p. 31)

import-competing manufacturing industries are expected to be small (Naoi & Urata, 2013, p. 333). It is because, on the one hand, their levels of existing tariffs are low, on the other hand, “major manufacturing industries have shifted their production locations abroad since the 1970s, [. . .] around 18.4 percent of Japanese manufacturing production value was generated abroad [in 2010]” (ibid). Therefore, manufacturing industries would be the winners of joining the TPP, hence becoming the staunch proponents. Therefore, it is not a surprise that Japanese interest groups showed different positions after Japanese Prime Minister Naoto Kan of the Democratic Party of Japan (DPJ) indicated an interest in joining the TPP negotiations. It became one of the most disputative issues that divide Japan into two (Urata, 2014; Naoi & Urata, 2013): TPP proponents considered joining TPP as a golden opportunity for the country to open wider to trade, whereas TPP opponents viewed the country’s involvement in the TPP as “an act of betrayal” (Japan Times, 2012c).

6.3.1.2

Japanese Umbrella Business Associations

After specifying the distributional consequences of the US leadership project regarding the TPP and the most affected sectors in Japan, Japanese domestic interests will be scrutinized. According to the societal approach, “statements by associations and lobby groups” are used to “ensure that interest groups’ interpretations of cost-benefit calculations and circumstances are included in assessing interests” (Schirm, 2020, p. 402). The statements analyzed in this case study are firstly concentrated on Japanese umbrella business associations, because statements from these associations display compromised positions between different sectors with diverse interests. The main umbrella business associations investigated in this case study include the Japanese Business Federation (Keidanren) and Central Union of Agriculture Cooperatives (JA Zenchu), which tended to dominate the debate concerning the TPP, as well as other umbrella federations.

6.3.1.2.1

Keidanren: Proponent

Keidanren is a comprehensive umbrella business association, which represents 1412 Japanese companies, 109 nationwide industrial associations. It aims at supporting

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corporate activities, contributing to the sustainable development of the Japanese economy, as well as improving Japanese life quality. To achieve this purpose, Keidanren, on the one hand, tries to establish consensus in the business community regarding domestic and international issues, on the other hand, it communicates with a wide range of stakeholders so as to conduct the resolutions of those issues through policy dialogue with the governments.3 Since its founding, the Keidanren has been the nation’s largest and most powerful business lobby, representing the interests of big companies. Its head is often called “the prime minister of the business world” (Japan Times, 2009). Since the USA joined the TPP, the Keidanren had considered it as a good opportunity for Japan to change its free trade policy. In June 2010, the Keidanren submitted a policy proposal to the government with recommendation of a new free trade strategy (Keidanren, 2010). According to this proposal, the Asia-Pacific region was significant for Japanese companies, however, there was still a lack of systematic trade infrastructure covering the region as a whole despite numerous FTAs in the region. Against the backdrop of the US leadership project of construction of the TPP, Japan’s core strategy for achieving sustainable growth should be the promotion of economic integration. In order to achieve it, Keidanren suggested that to expand economic integration throughout the Pacific Rim and build bridges with the USA, Japan was to participate in the TPP to form a large core for economic integration before 2015 (ibid). In November 2010, immediately prior to the Yokohama APEC summit, Keidanren, gathered with two other major Japanese economic associations, the Japan Association of Corporate Executives (Keizai Doyukai) and the Japan Chamber of Commerce and Industry (JCCI), and jointly urged the government to participate in the TPP negotiations as early as possible, and promote structural reforms in agriculture at the same time (Japan Times, 2010). According to the joint statement, missing the chance of joining the TPP implies that Japan “may be left out from the world’s growth and prosperity” (ibid). In April 2011, Keidanren proposed to rebuild the national economy and industrial infrastructure through a new trade strategy, which suggested actively liberalizing trade and investment as well as creating new rules for the future. The proposal articulated that “if Japan fails to join the TPP or is slow in doing so, the resulting competitive disadvantage would not only lead to a decline in Japanese companies’ sales in TPP member countries, but might also necessitate the transfer to TPP member countries of production bases for finished products and essential components that embody Japan’s advanced technologies. This would be a grave situation for Japan both as a nation built on trade and investment and as a nation built on technology, and might even shake the foundations of the Japanese economy” (Keidanren, 2011). In June 2012, Keidanren issued an urgent proposal titled “For Promotion of Economic Partnerships by Leveraging TPP” (Keidanren, 2012). It emphasized the

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https://www.keidanren.or.jp/en/profile/pro001.html, retrieved on May, 29, 2020.

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importance “to promote liberalization of trade and investment by further opening of the country” (ibid). More specifically, joining the TPP is considered as a must for Japan’s economic prosperity, because “the TPP will contribute to Japan’s catch up in economic partnerships through realization of high-standard agreements and building stable foundations in the Asia-Pacific region as well as regional revitalization and establishment of safety and security” (ibid). Moreover, Keidanren suggested joining the TPP as soon as possible, by saying that: Top priority for Japan is the earliest participation in the advanced negotiations on the TransPacific Partnership [. . .] In order for Japan to be involved in substantive negotiations necessary for establishment of desirable rules, it is essential to take part in such negotiations no later than the end of this year, without falling behind Mexico and Canada (which already expressed intention to join the TPP talks as well). Japan needs to promptly declare its participation in the negotiations preferably without missing the opportunity of G20 summit and other appropriate setting. (ibid)

After Japanese Prime Minister Shinzo Abe announced to participate in the TPP negotiations in March 2013, Keidanren planned to lead the way for the government to conclude the TPP negotiations. Hiromasa Yonekura, the Keidanren chairman urged the Japanese government to sign the TPP arrangement and other FTA agreements as soon as possible to revitalize the economy (The Asahi Shimbun, 2013). In February 2014, together with the Keizai Doyukai and the JCCI, Keidanren considered the TPP as the most promising route to “putting the Japanese economy back on the path of sustainable growth” and called for the early conclusion of the TPP negotiations (Keidanren, 2014a). They emphasized in the joint statement that With a view to implementing the growth strategy that forms the “third arrow” of Abenomics, the Japanese business community places great importance on concluding the Trans-Pacific Partnership (TPP) as an urgent task for promoting economic partnerships, which are a crucial element of the strategy. [. . .] The business community, including small and medium enterprises, has high hopes that the TPP will not only expand access to markets for goods and services, but also enhance competitiveness by making trade and investment rules suited to the 21st century, which will lead to the formation of global rules. (ibid)

Moreover, in April 2014, Keidanren, together with the Japan-US Business Council (USJBS), the US Chamber of Commerce (USCC), and the Japan-US Business Council (JUSBC), issued a joint statement to urge both Japanese and American governments to “look to the future and take the steps necessary to lead the TPP to a successful conclusion” (Keidanren, 2014b). More specifically, they emphasized the core principle for full market access by saying that For Japan, it is essential to meet the commitment made to the United States and other TPP members upon admission into the TPP in April 2013 to subject all goods to negotiation, including agricultural products, with the goal of eliminating tariff and non-tariff barriers on all. For the United States, it is important to indicate a similar commitment to provide market access on industrial and agricultural goods. There are ways for both countries to manage commitments on sensitive issues flexibly, but fully in line with this principle [full market access]. (ibid)

The reasons lying behind Keidanren’s activities to urge the government to conclude the TPP agreement could be perceived in two policy proposals issued in 2013. The

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first one issued on April 16 articulated the necessity to redefine the national trade strategy so as to achieve the establishment of global rules (Keidanren, 2013a). According to this proposal, under the conditions of the rise of protectionism worldwide, the delays in concluding FTAs could “restrict the number of global business choosing Japan as a base” (ibid). Therefore, it is necessary for Japan to pursue regional FTAs including the TPP, which “enable Japan to actively create trade and investment rules that will regain and enhance Japanese competitiveness, maintain and expand domestic business bases, increase employment opportunities, and enhance economic growth” (ibid). In process of the expansion of FTAs, Japan should aim for the “liberalization of goods in which Japan has strengths, [. . .] simpler and smoother customs procedures, disciplines concerning export restrictions on natural resources and foods, information and communications technology (ICT) services, [. . .] expansion of international rules and cooperation on intellectual property rights, [. . .] investment protection and liberalization, Prohibition of Government Restrictions on Payment of Royalties and Overseas Remittance, ensuring a level playing field for State-owned Enterprises (SOEs) and private firms, trade measures and rules for preservation of environment/biodiversity” (ibid). This is echoed by the second proposal issued in May 2013, which underscored the necessity of expanding negotiations on the TPP to realize Japan’s national interest (Keidanren, 2013b). The Keidanren viewed the TPP as “last chance to rebuild Japan’s economy” in the intensifying battle for the establishment of new global rules, because on the one hand “delays in the conclusion of new FTAs have interfered with smooth formation of global supply chains and value chains,” on the other hand, the TPP is “essential to pave the way for achieving an international business environment where Japanese companies can compete on an equal footing” (ibid). Furthermore, Keidanren applauded the conclusion of a broad agreement of the TPP in October 2015 and the signing of the TPP agreement in February 2016, and claimed that “both [Japan and the US] stand to benefit immensely—in terms of economic welfare, with tremendous benefits to our businesses of all sectors, consumers, and workers, as well as in strategic terms” (Keidanren, 2016). It is estimated that the TPP will bring significant economic benefits, specifically “by implementing the TPP agreement, Japan will see economic growth rise by 2.7 percent by 2030, with exports growing by 23.2 billion dollars annually [. . .especially] Japan’s top exports to the US [including] automobiles, machinery, electronics devices and steel products” (ibid). Additionally, the TPP will benefit Japan in creating jobs, deepening cooperation with other participants, especially the USA, and establishing “rules of the road” for twenty-first century commerce (ibid).

6.3.1.2.2

JA Zenchu: Opponent

Besides Keidanren, the JA Zenchu is another umbrella organization (Japan Times, 2015), which tended to dominate the debate concerning the TPP (Mulgan, 2015, p. 129). Contrary to Keidanren, the JA Zenchu is a vehement opponent of the TPP.

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Japanese agriculture is famous for being a stumbling block to trade liberalization and is characterized by being “inward-oriented” (Dyck & Arita, 2014) and is thus protected by price supports, quantitative restrictions, and high tariffs from foreign competition (Solís, 2010, p. 225). Japanese agriculture kept high import tariffs on farm goods: the tariff on rice was 778%, while butter attracted a 360% levy and sugar 328% (The Economist, 2013). Moreover, the agricultural sector occupies a crucial role in the formation of Japanese trade policy, “the agricultural sector has been too electorally powerful, too highly organized, too visible publicly and too well represented in the Diet and in the ruling party for the government to ignore the political ramifications of any major decision on agricultural policy” (Mulgan, 2013, p. 645). As a well-organized and powerful umbrella organization, the JA Zenchu represents the interests of Japanese farmers and other agriculture groups with the purpose of protecting farming and living of its individual members. While most of the farmers in Japan are members of the JA Zenchu, non-farmers are also increasingly affiliated with the JA Zenchu, because it has a stake in everything from banking, life insurance, and accident insurance for farmers and non-farmers, as well as the supply of daily commodities and services including garage and petrol station businesses, wedding, and funeral services (Yamashita, 2015, p. 86). The JA Zenchu is famous for its position on trade protectionism through defending Japanese agriculture against cheaper foreign products by establishing and maintaining trade barriers as well as protecting and lobbying against trade pacts. Concerning the US leadership project of the TPP, which initially emphasized the no exception of the abolition of tariffs, the JA Zenchu showed the most vehement opposition. On November 9, 2010, the Japanese cabinet announced its FTA trade policy and formally commenced consultations with relevant countries concerning the TPP. On precisely the same day, the JA Zenchu responded with objections by issuing a position paper. It argued that participation in the TPP would undermine the foundation of Japan’s trade policy and food sovereignty. It emphasized that “[Japanese] agriculture will be dramatically reduced and destroyed completely. Regional economies and communities will also collapse including related industries [. . .] The TPP will completely destroy not only agriculture but also forestry and fisheries” (East Asia Forum, 2010). Moreover, the JA Zenchu emphasized the multi-functions played by Japanese agriculture in the protection of the national land and environment including preventing flood, fostering water resources, moderating summer heat, preventing soil erosion, recycling waste into fertilizers, preventing landslides, and providing recreational amenities for urban people.4 On the other hand, it underscored the negative impact of joining the TPP agreement in November 2011 by saying that “if Japan signs the TPP while ignoring the differences in land conditions and the volume of agricultural production among the negotiating countries, Japanese agriculture will no longer be able to fulfill all of its diverse roles, placing the livelihoods

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https://www.zenchu-ja.or.jp/eng/multi_functionality/

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of a wide range of people at risk” (Jamitzky, 2015, p. 81). In the same year, the JA Zenchu submitted Prime Minister’s office signatures of as many as 11.67 million for a petition requesting the government not to participate in the negotiations within a 10-month period, which constituted more than 10% of Japan’s total eligible voters (Epoch Times, 2014; Naoi & Urata, 2013). In Japan’s 2012 general election, JA Zenchu made opposition to the TPP a precondition to obtain its support. JA Zenchu said that it would support candidates and parties that had made their opposition to the TPP negotiations clear (East Asia Forum, 2012). Moreover, its President Akira Banzai and the President of the Japan Medical Association (JMA) Haranaka Katsuyuki underscored the devastating impact of the TPP on Japanese agriculture industries and pledged to block Japan’s participation in the TPP at a joint press conference (Japan Press Weekly, 2012). When the USA changed its leadership project from the prerequisite of tariff abolition with no exception to negotiating all goods to conclude agreement, and Japanese Prime Minister Shinzo Abe announced that Japan was to engage in the talks with a strong negotiating power in 2013, the JA Zenchu’s President Akira Banzai issued a statement to protest against the participation of TPP negotiations. Although the US stance had changed from “no exception,” and Shinzo Abe had made clear that entering the TPP negotiations was not based on the premise that total tariff elimination without sanctuary, Banzai still considered it as “extremely regrettable” (JA Zenchu, 2013). He articulated that the “Prime Minister’s preemptive decision to join the TPP talks in such a forceful way is not acceptable because there are widespread concerns among the Japanese public that TPP pact will completely change Japan’s economic structure. I, together with farmers around the nation, strongly protest and denounce the Prime Minister’s decision” (ibid). He pointed out that the TPP was not only dealing with the issues of the agriculture, demanded the government to keep its campaign promise, and formulate a firm negotiating position to protect sensitive products in agriculture and Japanese living conditions from the TPP (ibid). In March 2013, the JA Zenchu President Akira Banzai urged the government to promptly leave the negotiation table since Japanese national sovereignty had been damaged by the TPP (Nam, 2017, p. 52). Additionally, owing to the food security and cultural considerations, the anticipated damaging effects brought about by the TPP agreement were emphasized in a joint statement of the US national farmers union and the JA Zenchu in June 2013 (Johnson & Banzai, 2013). The statement stressed that “agriculture must be treated differently from other economic sectors in a trade agreement, due to the critical significance of food security, viable rural economies, and cultural considerations. Both countries have sensitive agriculture products that must be respected and protected” (ibid). From 2013 to 2015, the JA Zenchu led several protest rallies with thousands of participants to urge the government and the ruling party to protect sensitive agricultural products from tariff reduction or elimination during the TPP negotiations (Nam, 2017, p. 53). Furthermore, JA Zenchu President Akira Banzai urged the government to exempt sensitive farm items from the TPP negotiations in July 2015 (ibid). After the conclusion of a broad TPP agreement in October 2015, the JA Zenchu expressed concerns and pointed out that “the regional trade pact [TPP] might reduce incentives

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of agricultural production and affect young generation who are newly participating in the agricultural sector, so that the government should establish a long-term policy that encourages agricultural reproduction and dispel anxieties among farmers” (ibid, p. 56).

6.3.1.2.3

Other Umbrella Business Associations

The Japan Association of Corporate Executives (Keizai Doyukai) is one of the umbrella business associations which support trade liberalization and participation in the TPP. It compromises approximately 1400 top executives of some 1000 corporations, and dialogues with political parties, government officials, labor organizations, and individuals in many other organizations as well. With the aim of formulating solutions to a broad range of political, economic, and social issues, the Keizai Doyukai conducts in-depth studies, researches, and discusses, as well as maintains a leadership role in improving the Japanese economic community and in seeking solutions for numerous domestic issues and ensuring the overall well-being of Japanese society. In August 2011, the Keizai Doyukai urged the government to join the TPP negotiations as soon as possible due to the following reasons. Firstly, the decline of the Japanese population will lead to a shrinking of the domestic market, therefore, aggressively accessing global markets is an inevitable requirement to maintain and strengthen Japan’s competitiveness. Second, the TPP could make competitive conditions for Japanese companies equal to those of their foreign competitors. Third, Japan could benefit from the TPP through promoting fundamental solutions to the problems of agricultural industry and leveraging the TPP to accelerate other negotiations. Therefore, despite the anticipated lower revenues and higher unemployment in the fields of agriculture, healthcare, welfare, and labor, Japan must join the TPP negotiations, otherwise, it will be impossible to maintain the current standards of living and Japan’s international influence (Keizai Doyukai, 2011). In policy proposal issued in September 2013, Keizai Doyukai President Yoshiaki Fujimori suggested that in order to strengthen the access to goods markets, the TPP negotiations should aim for promoting general abolition of export tariffs and setting more than 98% tariff elimination, hence should minimize exceptional products to tariff abolition. Yoshiaki Fujimori also stressed the necessity to establish accumulation rules in response to globalization of value chains, strengthen effective protection of high-level intellectual property rights, open government procurement markets, as well as devise a system to protect investors and their investment assets (ibid, 2013b). Moreover, Keizai Doyukai (2013a) urged the government to make the utmost effort to reform existing domestic structure (agriculture reform) and promote trade liberalization, so as to ensure the return of Japanese economy to a solid growth path and maintain a high living standard for succeeding generations.

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Japanese Sectoral Interest Groups

While the TPP debate in Japan was highlighted by the antagonism between Keidanren and the JA Zenchu, it is necessary to point out “the TPP discourse absorbed a vast range of national organizations occupying almost the entire economic and social spectrum. Keidanren and the JA Zenchu stood at the head of a very long tail of organizations that represented diverse sectors and which had a myriad of different concerns, interests and preferences” (Mulgan, 2015, p. 129). The TPP issues not only limit to tariff reduction and abolition, but the establishment of common competitive conditions in economic activities as well as the setting up of common systems, rules, and regulations. Therefore, “what is being questioned in TPP participation is not just agriculture but Japan’s economy itself” (Honma, 2011). Headed by the umbrella business association Keidanren, Japanese sectoral interest groups in favor of the TPP are composed of various manufacturing industries, chemical industries, electronics, and information technology industries, etc., which relatively have strong international competitiveness and could promote their economic self-interest in expanding export market through further trade liberalization, such as Japan Automobile Manufacturers Association (JAMA), Japan Iron and Steel Federation (JISF), Japan Electrical Manufacturers’ Association (JEMA), Japan Machinery Center for Trade and Investment (JMCTI), Japan Federation of Medical Devices Associations (JFMDA), Japan Electronics and Information Technology Industries Association (JEITA), Japan Textile Federation (JTF), Japan Chemical Industry Association (JCIA), and Japan Association of New Economy (JANE) (see Table 6.4). These pro-TPP sectoral interest groups mainly requested further trade liberalization, tariff reduction and abolition, promotion of overseas trade and investment, establishment of rules of origin, investment, trade facilitation, environment, government procurement, intellectual property, and cross-border service. Headed by the umbrella business association JA Zenchu, Japanese sectoral interest groups against the TPP are composed of various agriculture, fishery, and forestry-related industries as well as healthcare, pharmaceutical, and insurancerelated industries, which relatively have weak international competitiveness and could maintain their economic self-interest in defending domestic market through trade protectionism. Sectoral interest groups regarding agriculture, fishery, and forestry-related industries include Japan Plywood Manufacturers’ Association (JPMA), Japan Pork Producers Association (JPPA), Japan Livestock Industry Association (JLIA), Japan Cattle Industry Cooperative (JCIC), Japan Leather and Leather Goods Industries Association (JLIA*), National Federation of Forest Owners’ Co-operative Association (JForest/Zenmoriren), Japan Poultry Association (JPA*), and Japan Chicken Association (JCA) (see Table 6.4). These anti-TPP sectoral interest groups mainly requested maintaining the current tariff rate, protecting five sacred items, information disclosure during TPP negotiations, securing employment in rural areas and food self-sufficiency, preventing the collapse of Japanese agriculture. Sectoral interest groups regarding healthcare, pharmaceutical, and insurancerelated industries include Japan Medical Association (JMA), All Japan Hospital

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Table 6.4 Japanese sectoral interest groups’ opinions during TPP negotiations (2013–2015) Support Japan Foreign Trade Council (JFTC) Invoke antidumping transparent; standardize technical barriers to trade; publish the data and simplify customs clearance to promote trade facilitation; establish a single window for each country that bundles the systems between ministries and agencies; simplify export/import restrictions in the region; relax US restrictions on internal and external investment loans based on the three principles of arms export; relax regulations regarding visa acquisition; simplify visa issuance procedures Japan Iron and Steel Federation (JISF) Reduce tariffs on steel products; promote stable procurement of raw materials; establish a common rule that restricts the export control of resources; set more flexible rules of origin to facilitate export of Japan’s high-quality, high-performance industrial products; introduce mandatory standards and conformity assessment system for steel products; unify international rules regarding trade relief measures; introduce a system to improper activation and abuse of trade relief measures; correct unfair trade practices such as dumping exports and to prevent triggering of trade remedy measures; establish rules regarding technical barriers to trade and export restrictions, customs procedures; establish flexible rules of origin; introduce new tax systems and regulations; harmonize system regarding competition law Japan Electrical Manufacturers’ Association (JEMA) Reduce or eliminate tariffs; adopt a tariff classification number change standard, value-added standard, and process selection standard; standardize rules of origin; simplify customs clearance procedures; promote mutual recognition of authorized economic operator (AEO) system; establish non-judgment information based on Wassenaar standards across countries; proceed with mutual certification of qualifications; request to publish construction permit approval procedure/ method and examination guidelines; establish rules on government procurement; introduce standards and criteria of environment which benefit Japan; ensure equal treatment of domestic and foreign investors; set rules on intellectual property Japan Automobile Manufacturers Association (JAMA) Immediately eliminate tariffs on automobiles and automobile parts in countries with globalized and mature automobile industry (the USA); gradually reduce tariffs in countries with developing stage automobile industry; promote efficient and convenient rules of origin and certification; simplify customs procedures; harmonize the system of authorized business operator system; prevent intellectual property infringement which hinders fair business and threatens economic damage, consumer health and safety; treat domestic and foreign investors fairly and equitably; ensure transparency of laws and administrative procedures related to the approval of vehicle production business; oppose foreign capital restrictions and technology transfer requests Japan Federation of Construction Contractors (Nikkenren) Eliminate tariffs on imported goods as much as possible; promote trade on the basis of fair free competition; require other countries to open a wider public works market for Japanese construction companies; demand local governments of other countries to open the procurement market; oppose to relax qualification requirements; abolish local content regulations in foreign countries; promote the equalization of legislation between developed and developing countries Support Japan Chemical Industry Association (JCIA) Set up abuse prevention measures against the abuse of anti-dumping; establish and unify fair rules of origin; promote development of chemical management regulations Japan Federation of Medical Devices Associations (JFMDA) Agree with TPP; consider participation in the TPP as a reform opportunity; cautious about universal health insurance system. Whether or not to adopt “mixed medical care” that combines “insurance medical care” and “free medical care” is still unknown. TPP will improve the export environment of our medical device industry; maintain a rulemaking position in the global market (continued)

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Table 6.4 (continued) for Japan’s growth; establish sufficient safety measures and quality assurance measures such as harmonization of regulations in each country, establishment of a system for sharing accident information, and equipment maintenance management system; strict regulations on cyber security National Federation of Small Business Associations (NFSBA) Provide information about the impact of TPP on SMEs, which support local regional economy and employment; secure exempt items from tariff elimination; negotiate to leave either the tariff rate of the current TQ system or the volume regulation; develop anti-dumping related laws to protect SMEs; ensure homogeneity and transparency of business practices associated with the import and export of products (also intellectual property rights); set international rules based on current domestic regulations; provide information about bidding standards of government procurement in TPP negotiations National General Contractors Association of Japan (NGCA) Liberalize government procurement and cross-border services; exercise caution in collecting opinions on the inflow of construction workers from other countries; prompt information regarding the status and content of the TPP negotiations Japan Association of New Economy (JANE) Establish a fair competitive environment for the increasing cross-border service resulting from further tariff elimination and expansion of electronic commerce; secure a fair competitive environment between domestic and foreign businesses; carefully consider the extension of copyright protection period since it likely leads to negative effects Japanese Electric Wire and Cable Makers’ Association (JCMA) Urge other TPP countries to abolish tariffs on related products; promptly rectify unfair trade conditions Japan Machinery Center for Trade and Investment (JMC) Advocating ambitious trade liberalization of the TPP; other participants should eliminate import tariffs early and coordinate the interpretation of the tariff classification; simplify and accelerate movement of persons; promote trade and investment and expand local employment; develop rules of origin, investment, trade facilitation, environment, government procurement, intellectual property, cross-border service, dispute resolution, competition policy for business combination examination procedures Japan Marine Industry Association (JMIA) Request the elimination of tariffs on outboard motors; request elimination of import duties on parts for water motorcycles and engines in the USA Support Life Insurance Association of Japan (LIAJ) Unify state insurance law or supervision at federal level in the USA; realize federal approval for acquiring a business license Japan Photographic Copyright Association (JPCA) Promote the usage and the balance of content creation; we are against the agreement on items, which currently tend to solve problems through systematic cooperation through centralized processing Overseas Construction Association of Japan (OCAJI) Demand the opening of the public works market for large-scale public works projects; demand the rulemaking on the bidding system or on-site management standards; include the government procurement chapter in TPP agreement. TPP will expand the business opportunities of Japanese construction companies Japan Textile Federation (JTF) Tariff liberalization will improve market access to the USA; insist on standards and speedily establish rules that will contribute to the expansion of Japan’s textile trade and investment Opposed (continued)

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Table 6.4 (continued) • Agriculture, forestry and fishery industries Japan Agricultural Corporation Association (Nokyo) TPP will lead to reduction of food self-sufficiency in Japan; maintain food safety standards; withdraw from the TPP negotiations if the sanctuary cannot be secured; request information disclosure and public debate Japan Cane Sugar Industry Association (JCSIA) Strongly request to continue measures to protect domestically produced sugarcane Japan Flower Growers Association (JFGA) Easy compromises can change the production structure of agricultural and rural areas and cause collapse of rural communities National Federation of Barley Industry Cooperatives (Zenbaren) Strongly oppose the Government of Japan to participate in the TPP negotiations; strongly request that important items such as rice, wheat, beef/pork, dairy products, and sugar be excluded or subject to renegotiation National Chamber of Agriculture (NCA) Exempt important items from tariff elimination such as rice, wheat, beef/pork, dairy products, and sweet resource crops; disclose information; immediately withdraw from the TPP negotiations if it damages the national interest; promote “local production for local consumption”; sufficiently protect intellectual property; establish effective protection measures for the genetic resources unique to Japan to prevent illegal outflow to other countries. Ensure the safety and security of the people’s food and stable food production, such as control of pesticide residues, food additives, genetically modified foods and seeds, labeling of the current location of imported raw materials, and measures to import beef related to BSE Japan Fisheries Association (JFA) Protect national important items and meet national interest; limit regulations on fishery subsidies to those that lead to overfishing Opposed • Agriculture, forestry, and fishery industries National Federation of Staple Food Collection Cooperative Associations (Zenshuren) Strongly oppose participation in TPP negotiations unless a perfect safety net is built at the responsibility of the state; withdraw from the TPP negotiations if the government could not secure a sanctuary such as “the five important items in the field of agriculture, forestry and fisheries” such as rice and wheat; disclose all information and take concrete countermeasures as much as possible National Federation of Fisheries Co-operative Associations (JF Zengyoren) Withdraw TPP negotiations once seafood has not been abolished of tariffs; the removal of fishery subsidies will lead to the collapse of Japan’s fisheries; protect sustainable use of fishery resources; protect fishery subsidies Japan Sugar Refiners’ Association (JSRA) Leave the TPP negotiations and do not sign the agreement if sugar and starch are not excluded from tariff elimination, otherwise, the TPP will lead to negative effects on public safety, the natural environment, national defense, as well as unemployment in refined sugar companies and local sugar companies Japan Federation of Wood Industry Association (JFWIA) Protect forestry industry; promote forest maintenance; countermeasures against global warming; maximum consideration to tariffs on forestry products Japan Plywood Manufacturers’ Association (JPMA) The TPP will lead to tariff reduction and abolition as well as increasing imports in plywood industry, which will result in negative impact on the prevention of global warming, the conservation of ecosystems, the promotion of forest maintenance. Therefore, the current tariff rate on plywood should be maintained National Milling Industry Federation (NMIF) (continued)

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Table 6.4 (continued) Basically opposed to participation in the TPP; exclude wheat, rice, flour-related products from tariff reduction Japan Pork Producers Association (JPPA) Elimination of tariffs will lead to decline in pig farming and related industries, which cannot recover once it declines. Therefore, strongly requests that five important items, especially pork related to this group, never be excluded Japan Livestock Industry Association (JLIA) Maintain existing border import measures and prevent further reduction of Japanese livestock production in terms of securing employment and crisis management. Protect five important items of agricultural products; accurate, prompt, and polite information to our stakeholders Japan Leather and Leather Goods Industries Association (JLIA*) Leather industry contributes to both employment and local economy. Exclude leather and related products from tariff elimination and reduction. Gradually reduce the tariff rate and allow sufficient time to abolish the tariffs if the tariff elimination is inevitable Japan Dairy Political Federation (Zenrakuren) Request government to protect sensitive five items including dairy products, so as to achieve food self-sufficiency Opposed • Agriculture, forestry, and fishery industries Japan Cattle Industry Cooperative (JCIC) Prioritize the securing of sanctuary areas such as five important items in the agriculture, forestry, and fisheries sector; maintain all existing tariff lines as well as maintaining existing border import measures; request information disclosure. Livestock farming has a large number of related industries such as feed, meat processing, and food processing, and is deeply connected to local agriculture through the supply of compost. Tariff abolition will lead to collapse of livestock farming business, and exert negative impact on national land conservation and national defense strategy National Federation of Starch Cooperatives (NFSC) Exclude five important items such as sweet resource (starch) crops from tariff elimination, otherwise, the small businesses that manufacture starch will be forced to close their business, and will lead to the reduction of the local economy and promotion of the collapse of the village Japan Poultry Association (JPA*) Maintain and secure the raw chicken egg culture unique to Japan and to clearly distinguish it from foreign eggs in order to ensure the food safety and security of consumers. Maintain labeling system which specifies origin/country of origin and the expiration date; enables the identification of distinguishing domestic and imported eggs; ensure that these are not subjected to the investor state dispute settlement (ISDS) clause; strongly request the maintenance of the current tariff on eggs National Federation of Forest Owners’ Co-operative Association (JForest/Zenmoriren) Strongly request that environmental standards will not be relaxed during the TPP negotiations. Strongly urge the government to protect forestry industry to the utmost including withdraw from TPP negotiations, because tariff elimination on plywood and lumber will lead to the expansion of imported timber, stagnant of forest development, and collapse of forestry and mountain village society, even Japan’s entire land and regional economy, hence lead to global warming and the reducing of self-sufficiency rate Japan Dairy Industry Association (JDIA) Protect the sanctuary such as dairy products; withdraw from the TPP negotiations if sustainability of dairy/dairy management may be hindered; oppose to include the phased elimination of tariffs; request to disclose details of TPP negotiations Japan Dairy Association (J-milk/JDA) It is regrettable to participate in TPP negotiations due to the multifaceted values of the dairy (continued)

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Table 6.4 (continued) industry. Dairy farming not only protects the food self-sufficiency rate, but also practices soil farming, grass farming, and cow farming, and has a multifaceted agricultural function such as national land conservation. Dairy education farm is the most advanced farm-based educational activity in the world. Collapse of dairy industry means the collapse and hollowing of the area. Exclude dairy from tariff elimination and reduction; maintain the current state of the system including safety standards, labeling systems, inspection methods, etc. Opposed • Agriculture, forestry, and fishery industries Japan Chicken Association (JCA) Maintain the current tariffs on five important agricultural products, especially adding chicken into sensitive items. Maintaining and developing poultry production in Japan contributes to securing employment in rural areas, securing food self-sufficiency and food security, improving feed selfsufficiency by promoting the use of rice for feed (effective use of cultivated land), and protecting national interests Japan Association for the Promotion of Pottery Industry (JAPPI) Japan’s ceramics industry shrank due to the change in lifestyle and the erosion of the domestic market, therefore, elimination of tariffs will further invade the domestic market Japan Beet Sugar Association (JBSA) Sugar beet accounts for more than 20% of Hokkaido’s main field crops. Participation of the TPP will lead to great loss to Hokkaido upland agriculture and the local economy, because firstly beet sugar provides employment in sugar and related industries, such as transporters, secondly collapse of domestic sugar undermine food self-sufficiency • Healthcare, pharmaceutical, and insurance industries Japan Medical Association (JMA) Oppose the extension of the patent period for rug prices and medical technology as well as the expansion of private health insurance; oppose the easy cross-certification of doctor licenses; oppose the entry of for-profit companies into the management of a medical institution since it leads to the selection of patients and unequal; oppose ISDS clause since it might damage universal health insurance system; protect universal health insurance system; maintain the scope of public medical benefits; withdraw the TPP negotiations if it damages national interests All Japan Hospital Association (AJHA) It consists of the Japan Psychiatric Hospitals Association (JPHA), Japan Hospital Association (JHA), Association of Japanese Healthcare Corporations (AJHC), and AJHA Maintain the public medical insurance system; avoid the entry of for-profit companies into hospital management; expand the clinical training system for foreign physicians; promote mutual exchange between medical personnel such as doctors and nurses Federation of Pharmaceutical Manufacturers’ Associations of Japan (FPMAJ) Do not accept matters that threaten the survival of the universal health insurance system in Japan; concern about the expanding scope of so-called “mixed medical care” beyond the scope of out-ofinsurance combination medical treatment system; request TPP participating countries to make the drug price calculation method and procedure transparent, to develop regulatory regulations; establish the ISD clause; secure a data protection period; promote the use of generic drugs along with the protection of intellectual property Japan Pharmaceutical Association (JPA) TPP will lead to rise in cost of drugs and collapse of the public health insurance system; TPP will damage drug price standard system Opposed • Healthcare, pharmaceutical, and insurance industries Japan Dental Association (JDA) Abolishing/releasing the price restrictions on these medicines and medical devices may cause the (continued)

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Table 6.4 (continued) hollowing out of the universal health insurance system. Patents for medical technology and diagnostics are out of the question. In-kind medical insurance benefits should be blocked General Insurance Association of Japan (GIAJ) Abolish domestic and foreign discriminatory tax systems which limit fair competition; abolish the nationality requirements and residence requirements of representatives/officers/employees/directors; abolish reinsurance requirements; request to reduce regulations such as relaxation of collateral conditions Japan Post Holding (JPH) Request not to restrict post groups by the application of the new regulations or the operation of additional regulations; request not to impose new restrictions on new insurance services business Cautious Recording Industry Association of Japan (RIAJ) Mutually promote music distribution, equalization of the protection period; establish statutory reparation system against copyright infringement Japan Wines and Spirits Importers’ Association (JWSIA) Develop new international standards for this industry; request the removal of Japan’s wine tariff as a reward measure for the other country Brewers Association of Japan (BAJ) Improve the degree of freedom at export destinations and price competitiveness; standardize rules on intellectual property concerning trademark protection Japan Broadcasting Corporation (NHK) Strengthen copyright protection; facilitate the use of copyrighted works; concern about the acceptance of US copyright rules as Japanese domestic rules. Japan Commercial Broadcasters Association (JCBA) Regulations on licensing rights will hinder the production and distribution of broadcast programs in Japan and affect the entire content industry in Japan; block above regulatory movement; maintain the treatment under the current copyright law of Japan Japan Federation of Certified Public Tax Accountants’ Associations (JFCPTAA) Oppose mutual recognition of Japan’s tax accountant qualification; exclude professional tax qualifications from the TPP negotiations Japan Sake and Shochu Makers Association (JSSMA) Call for the elimination of relevant tariffs; establish a system to ensure stable supply of rice used for sake; protect related intellectual property Japan Federation of Shiho-Shoshi (Judicial Scriveners) Lawyer’s Associations (JFSSLA) Oppose mutual recognition of the legal qualification system Japan Food Industry Association (JFIA) Tariff abolition may lead to the loss of marketing channels and damage the survival of domestic agriculture and fisheries. Ensure sufficient coordination of border measures between raw materials and products Cautious Flour Millers Association (FMA) Carefully judge the content of the TPP discussion; manage national trade to ensure the stability of wheat; maintain domestic wheat production; ensure healthy development of flour milling industry through maintaining wheat-related border measures; promoting local employment and revitalizing the local economy by utilizing locally produced wheat Japanese Institute of Certified Public Accountants (JICPA) Carefully consider the advantages and disadvantages of mutual recognition of certified public accountant’s qualifications Japan Federation of Certified Administrative Procedures Legal Specialists Associations (Nikko) (continued)

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Table 6.4 (continued) Carefully consider the impact of ease entry of foreign companies into Japanese public works; carefully discuss the copyright protection period and copyright infringement; carefully discuss mutual recognition of qualifications/licenses with other countries; enhance human infrastructure to strictly exclude immigrants who threaten public security; concern about the impact of ISDS clause Japan Fruit Juice Association (JFJA) Abolish the classification based on the sucrose content from the import tariff table for fruit juice in Japan Japan Crop Protection Association (JCPA) Maintain current tariffs, especially the rice; protect intellectual property rights regarding agrochemical and pesticides Japan Federation of Bar Associations (JFBA) Disclose information; oppose deregulation and future regulation of current Japanese food safety; maintain the current regulation regarding legal practices; maintain domestic standards for labor, consumer safety, and environmental protection; promote international standardization of privacy protection, dispute settlement rules, and transactions; maintain Japanese public drug price system Japan Ferroalloy Association (JFA*) Tariffs elimination and abolition will lead to the increase of ferroalloy from Australia, hence result in unfavorable conditions in competing with Australian manufacturers. Therefore, we strongly government to fully consider our difficult situation during TPP negotiations. Additionally, government shall provide an opportunity for individual hearings from each industry group and shall provide a sufficient explanation to each group about the reflection status in TPP negotiations Japan Association for Logistics and Transport (JALoT) Promotion of returnable containers for TPP participants; unification of tax simplification regulations Japan Advertising Agencies Association (JAAA) Advertising companies face intensifying competition due to deregulation in the telecommunication industry; be cautious about the extension of the copyright protection period National Federation of Building Lots and Buildings Business Associations (Zenyaren) The US system will become the standard in Japan, once achieve is mutual recognition of real estate qualifications in TPP. Concern about dispute settlement procedure Japan Association of Real Estate Appraisers (JAREA) Careful consideration on mutual recognition of real estate appraisal qualifications Cautious Japan Mining Industry Association (JMIA) Prioritize nonferrous metal tariffs; establish a common rule to restrict export restrictions on nonferrous mineral resources National Federation of Environmental Sanitation Industry Associations (NFESIA) Maintain technical and sanitary standards of the Japanese beauty industry Chocolate and Cocoa Association of Japan (CCAJ) Maintain balance of border measures between the raw materials and the chocolates, so as to prevent the hollowing out of the domestic industry Japan Wineries Association (JWA) Be careful about eliminating tariffs on wine. If the tariffs on imported wine would be immediately abolished in the TPP negotiations, it would be seriously hit, and if no support measures were taken, it could lead to a situation where the winery could end up in a crisis of survival Japan Biscuit Association (JBA) Ensure sufficient consistency of border measures between raw materials and products (wheat, sugar, dairy products, etc.) All Nippon Kashi Association (NAKA) Represent Japanese confectionery industry; maintain the balance of border measures; treat (continued)

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Table 6.4 (continued) confectionery in the same way as agricultural products such as sugar, wheat, dairy products, and rice Japan Salt Industry Association (JSIA) Japan has an extremely low salt self-sufficiency rate of about 12% due to lack of natural salt resources and the impact of rising coal prices, etc. Basic tax rate of 500 yen per ton is a non-negotiable line for the domestic salt industry Association of Japanese Animations (AJA) Establish countermeasures against copyright infringement; request for further information disclosure on the content of the negotiations and solicit opinions Japan Video Software Association (JVSA) Concern the issues related to intellectual property and copyright infringement Japanese Society for Rights of Authors, Composers, and Publishers (JASRAC) Extend copyright protection to at least 70 years after the author’s death; establish a legal damages compensation system regarding copyright infringement Japan Satellite Broadcasting Association (JSBA) Balance rules for both copyright holders and copyright users during the TPP negotiations Japan Patent Attorneys Association (JPAA) Harmonize trademark system in order to prevent free ride on the business credibility established by others; protect the geographical indication in the framework of the trademark system; protect the brand value of high-quality agricultural, forestry, and marine products and foods; relaxation of intellectual property regarding US patent and design system Association of Copyright for Computer Software (ACCS) Consider the balance of usage; information disclosure on copyright protection period, legal compensation system, defamation, and limitation of liability of Internet providers’ intellectual property Sources: Author’s compilation by Cabinet Secretariat (2015)

Association (AJHA), Japan Dental Association (JDA), Federation of Pharmaceutical Manufacturers’ Associations of Japan (FPMAJ), Japan Pharmaceutical Association (JPA), General Insurance Association of Japan (GIAJ), and Japan Post Holding (JPH). These anti-TPP sectoral interest groups mainly requested maintaining universal health insurance system of Japan and the drug price standard system, and requested not to impose new restrictions on insurance services business. Besides these sectoral interest groups either pursuing or rejecting the TPP, a large number of other sectoral interest groups “occupied the middle ground and [. . .] adopted a cautious stance. [. . .] their approval of Japan’s entry into the TPP was conditional on certain prerequisites being met” (Mulgan, 2015, p. 129). Compared to pro-TPP sectoral interest groups, cautious groups tended to be “defensive” rather than “offensive” (ibid, p. 140). Cautious groups consisted of Japan’s law system, professionals, and those categorized as food processors with less competitiveness and thus fewer potential export opportunities for their products (ibid), including Japan Federation of Certified Administrative Procedures Legal Specialists Associations (Nikko), Japan Federation of Shiho-Shoshi (Judicial Scriveners) Lawyer’s Associations (JFSSLA), Japan Patent Attorneys Association (JPAA), Japan Wineries Association (JWA), Japan Fruit Juice Association, Recording Industry Association of Japan (RIAJ), Japan Association of Real Estate Appraisers (JAREA), and

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National Federation of Environmental Sanitation Industry Associations (NFESIA) (see Table 6.4). Among the above-mentioned sectoral interest groups, some of them need to be presented particularly since they are one of the most vocal and active in supporting or opposing the participation of the TPP. Attracted by the huge potential market resulting from the TPP, the Japan Automobile Manufacturers Association (JAMA) as the active and powerful stakeholder in automobile industry, strongly supported the TPP. It represents 14 manufacturers of passenger cars, trucks, buses, and motorcycles in Japan, and views the TPP as a measure to revitalize the economy. In a summary in March 2012, the JAMA explained from an auto industry perspective, why the TPP would be beneficial for all its member countries. JAMA and its member companies endorsed and promoted Japan’s participation in the TPP, saying that “JAMA believes that Japan’s participation in the TPP will contribute constructively to the development of rules that promote free trade, open investment and the protection of intellectual property rights, among other benefits” (JAMA, 2012). In response to Japan’s participation in the TPP talks, JAMA posted a commend and “welcome Prime Minister Shinzo Abe’s announcement [. . .] of Japan’s intent to enter into negotiations on a Trans-Pacific Partnership. Japan’s participation in the TPP will not only be instrumental in the recovery of its economy, but will enable it to make significant contributions to regulatory and other progress throughout the Asia Pacific region and to the development of bilateral and multilateral economic partnership agreements in other regions as well. We believe it is critical to start taking part in these talks at the earliest possible time” (ibid, 2013). Moreover, the Japan Electronics and Information Technology Industries Association (JEITA), welcomed the government’s decision of joining the TPP talks, and viewed the TPP as a leverage to strengthen the international competitiveness of Japanese industry. Ryoji Chubachi, the Chairman of the JEITA, stressed in an announcement that “we hope to further accelerate the rulemaking towards the development of global supply chains under a free trade and investment environment [. . . because] in order to overcome the fierce international competition, it is essential for Japanese companies to maintain internationally fair competition conditions as the competition with overseas companies intensifies” (JEITA, 2013). Additionally, Ryoji Chubachi emphasized the importance of promoting trade in services through the TPP, especially regarding information and communication technology services. He said: In making [TPP] negotiations, while making necessary claims in areas important to Japan, such as those related to safety and security, by participating in high-level rules such as market access, intellectual property protection, investment as well as tariffs, it is important to incorporate the high growth of the Asia-Pacific region into Japan. The IT/electronics industry believes that by promoting the utilization of IT, it will be possible to support the strengthening of the competitiveness of important industries including agriculture and the transformation into a growth industry. (ibid)

In the contrast, the Japanese medical, pharmaceutical, and insurance sectors were highly alert to the government’s decision toward the TPP. As aforementioned, even though the proportion of trade in services of Japan was increasing, the share of the

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services in international trade was relatively small than in domestic trade (Corning, 2016, p. 783). Thus, defending the domestic market or maintaining Japan’s national healthcare system were the core demands of the Japanese medical, pharmaceutical, and insurance sectors. The concern about the possibility that the US would put the deregulation of Japan’s national healthcare system on the TPP agenda arose panic in these sectors. The Japan Medical Association (JMA) represents the voice of Japanese physicians and insisted that the TPP would trigger negative effects on the nation’s medical and nursing care systems. It considered Japan’s participation in the TPP could generate the liberalization of Japanese medical services, hence leading to the collapse of the Universal Health Insurance System, which is considered to have helped to bring about Japanese high level of life expectancy and healthcare standards. At a press conference in December 2011, the JMA vice president Toshio Nakagawa stated that “joining the TPP will force adherence to market principles in the Japanese medical system and could end up destroying the universal health insurance system” (Japan Press Weekly, 2011). In April 2012, Mitsuo Okubo, Chairman of the Japan Dental Association, and Takashi Kodama, Chairman of the Japan Pharmaceutical Association, also expressed their opposition to the TPP by saying that “American pharmaceutical companies are taking issue with Japan’s public medicine-pricing system. They will demand through the TPP that American products being sold in Japan at high prices. This is an alarming situation” (Mulgan, 2015, p. 150). Similarly, JMA chairman Yoshitake Ukokura stated in his speech that If Japan takes part in the TPP, there will be a risk of its becoming a society in which the type of medical services available to patients will vary according to their income because of the total lifting of a ban on mixed medical care, and medical services becoming a profit-making industry. It is necessary to have the Diet listen to the voices of many people who are hoping for the continuation of the universal health insurance system, which has contributed to making Japan’s healthy life expectancy the highest in the world. (ibid)

6.3.2

Societal Ideas

Societal ideas are defined here as path-dependent and value-based collective expectations of voters in Japan, regarding appropriate and acceptable governmental positions, such as how to steer the economy. With regard to Japanese societal ideas, attention will be paid to both process and content ideas. The focus will be on the attitudes of Japanese voters, which are evidenced by public opinion polls. Since domestic ideas are considered as more stable than domestic interests, it is necessary to focus on values that are persistent over time (Schirm, 2013, p. 691). This is why ideas will be evidenced using long-term surveys, such as the Pew and the WVS.

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Process Ideas

The process ideas here refer to dominant expectations of Japanese voters about the way political decision-making should be conducted. Several process ideas are under scrutiny, including democracy and its characteristics (Van Loon, 2017, p. 159), the responsibilities of the government and the individual (Schirm, 2009, p. 509), as well as trust in market forces. The first category of process ideas refers to the significance of democracy, which is relevant to Japanese societal actors’ role in influencing the government’s reelection. Because the importance and characteristics of democracy imply the possibilities and opportunities of societal actors to express their opinions and to influence governmental decision-making (Van Loon, 2017, p. 159). According to the WVS polls in 2005 and 2010, survey questions on Japanese views regarding democracy (see Table 6.5) showed that more than 72% of respondents in Japan were in favor of a democratic political system. 95.8% of Japanese respondents in 2005 and 88.9% of respondents in 2010 considered “living in a country that is governed democratically” as absolutely important. On the contrary, among the respondents, only 21.1% in 2005 and 29% in 2010 believed that it is good (very good/fairly good) to “have a strong leader who does not have to bother with parliament and elections.” In 2005, more than three times of Japanese voters were in favor of being governed by a democratic political system rather than those preferring a strong leader. In 2010, the cleavage slightly decreased, yet still remained more than two times. Regarding the question of how democratically the country is being governed, a substantial majority of Japanese expressed their satisfaction about democraticness (86.4% in 2005 and 77.4% in 2010). Therefore, surveys reinforce Japanese process ideas of strong support for democracy and less favor for strong leadership. Specifically, a majority of Japanese respondents considered the following as the essential characteristics of democracy: people choose their leaders in free elections (71.4%); people receive state aid for unemployment (59.7%); civil rights protect people from state oppression (57.6%); governments tax the rich and subsidize the poor (57%) (WVS, 2010). The second category of Japanese process ideas refers to the strong or weak governmental responsibilities, in other words, the role of government in taking care of social welfare. Table 6.6 shows that in 2010, 71.4% of Japanese respondents agreed with the statement “government should take more responsibility to ensure that everyone is provided for,” whereas only 25.7% of respondents accepted the statement “people should take more responsibility to provide for themselves.” In 2005, Japanese respondents in favor of more government responsibility were slightly Table 6.5 Japanese process ideas concerning democracy (percentage)

Survey questions The importance of democracy Having a democratic political system Having a strong leader Democraticness in own country

2005 95.8 77.8 21.1 86.4

2010 88.9 72.0 29.0 77.4

Sources: Author’s compilation based on WVS (2005, 2010)

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Table 6.6 Japanese process ideas concerning government and people responsibility (percentage) Survey questions The government should take more responsibility People should take more responsibility

2005 71.4 25.7

2010 76.4 18.6

Sources: Author’s compilation based on WVS (2005, 2010) Table 6.7 Japanese process ideas concerning market economy (percentage)

Survey questions Competition is good High confidence in major companies Low confidence in major companies

2005 78.3 36.2 51.7

2010 77.2 43.4 36.6

Source: Author’s compilation based on WVS (2005, 2010)

lower than in 2010, but still occupied the mainstream ideas (71.4%). These results are backed by surveys conducted by Pew Global Attitudes Project (2007), in which a few Japanese respondents had concerns about government’s excessive control. In 2002, only 42% of Japanese were concerned about government’s interference, while the proportion dropped to 34% in 2007 (ibid). Thus, surveys reinforce Japanese process ideas concerning strong government responsibility. The third category of Japanese process ideas refers to government’s role in steering the economy, in specific, whether the market in Japan is considered as a process driven by private actors (trust in market forces) or by government (trust in governmental regulation) (Schirm, 2009, p. 509). The survey data (see Table 6.7) clearly shows high support for trust in market forces, as free competition was desired by a large majority of respondents in Japan. Seven out of ten respondents shared the view that “competition is good, it stimulates people to work hard and develop new ideas” (78.3% and 77.2%, respectively, in 2005 and 2010). Moreover, confidence in market forces was evident in that more and more Japanese showed confidence in major companies. Compared to the survey in 2005, which had 36.2% of proponents and 51.7% of opponents to major companies, a plurality of Japanese respondents (43.4%) expressed their confidence in major companies while only 36.6% showed their distrust in 2010. Thus, surveys reinforce Japanese process ideas trust in market force.

6.3.2.2

Content Ideas

Regarding the dominant expectations about the primary tasks of Japanese government, the content ideas prevailing in Japan will be investigated through surveys on Japanese economic priorities, its attitudes toward free trade, its opinion on the TPP issues, as well as its views concerning environment protection and economic growth. Overall, Japanese voters had concerned about their economic situation and shared pessimistic attitudes toward economic prosperity (see Table 6.8). Around 20–30% of respondents showed satisfaction with the way things are going in Japan from 2002 to 2015. During the same period, the proportion of respondents with confidence toward

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Table 6.8 Japanese content ideas concerning economic priorities (percentage) Survey questions 2002 2007 2008 2009 2010 2011 2012 2013 2014 2015

Satisfied with the way things are going in Japan 12 22 23 25 20 25 20 33 34 –

Current economic situation in Japan is good 6 28 13 10 12 10 7 27 35 37

Economic situation in Japan will improve in the next year 11 – 5 18 14 17 16 40 15 24

Sources: Pew (2015)

the current economic situation and future economic prosperity was even lower. Most of the time, only around one out of ten thought that the Japanese economic situation was good, while no more than 20% of respondents had confidence in Japanese economic growth (before 2013). According to the WVS surveys, 46.5% and 56.2% (respectively in 2005 and 2010) of Japanese respondents suggested that the aims of country in the next 10 years should be a high level of economic growth (WVS, 2005, 2010). Against the backdrop of Abenomics and Japan’s participation in the TPP, a slight increase of Japanese respondents showed positive attitudes toward national economic situation. In 2013, 40% of respondents displayed confidence in Japanese economic growth in the near future, while in 2015 survey showed the peak satisfaction of Japanese current economic situation in a decade. According to Pew surveys,5 a majority of Japanese respondents showed a favorable (very/somewhat) opinion of the USA. In 2011, the USA enjoyed the most favorable views from Japanese respondents (85%). From 2012 to 2016, a strong majority of around 70% of Japanese voters expressed positive attitudes toward the USA as well. Japanese attitudes toward free trade were also evident in polls conducted by Pew surveys (see Table 6.9). In general, Japanese voters showed positive attitudes toward free trade and economic globalization. According to the Pew surveys from 2002 to 2014, robust majorities in Japan consistently endorsed international trade, saying the growing trade and business ties between Japan and other countries had a positive impact on both the Japanese economy and their own families. These results are backed by BBC surveys in 2009, Japan was the second among 27 countries’ respondents to express faith in free market capitalism, as only 9% of respondents agreed that “free market capitalism is fatally flawed and a different economic system is needed,” whereas 66% of respondents believed that “its problems can be

5

https://www.pewresearch.org/global/database/indicator/1/country/JP

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Table 6.9 Japanese content ideas concerning free trade (percentage) Survey questions 2002 2007 2008 2009 2010 2012 2014

The growing trade and business ties between Japan and other countries: good for our country 72 72 71 73 72 – 69

The growing trade and business ties between Japan and other countries: good for you and your family 83 – 71 73 – – –

Sources: Author’s compilation based on Pew (2009, 2014a, 2014b)

addressed through regulation and reform.” In the meanwhile, “the Japanese express the most satisfaction with their government’s current role in the even distribution of wealth, regulation of business, and control over major industries” (BBC, 2009, p. 14). Despite the positive attitudes toward international trade, Japanese respondents expressed mixed feelings toward the free market economy due to their concerns about the cost of free trade, such as job losses and income decrease (see Fig. 6.2). In 2014, 51% of Japanese respondents believed free market economy results in worse life, while 49% thought “people are better off in a free market economy” (Pew, 2014a). Meanwhile, much more Japanese respondents believed the negative impacts of international trade and investment such as job losses and income decrease, rather than those in favor of positive impacts such as job creation and wage increase (ibid). However, a strong majority of 69% of respondents believed that the growing trade and business ties between Japan and other countries are good for the Japanese economy. This could be explained by Naoi and Urata stating (2013, p. 337), “attitudes towards trade policy are more likely to be formed through their perception of how trade affects the national economy rather than how trade effects their individual well-being.” Therefore, even though 80% of respondents were tenuous about the distributional effect of the TPP on their own life (do not know/ neutral toward the TPP’s effect) (ibid), more respondents showed positive attitudes toward the TPP (see below). Concerning the TPP issues, public opinion polls show that the ratio of TPP proponents and opponents in Japan changed over time. A survey conducted by Yomiuri Shimbun (a considerable influential Japanese national newspaper) showed the swaying proportions of TPP supporters and opponents since 2010 (see Table 6.10). Owing to Japanese Prime Minister’s intention of entering into TPP consultations in October 2010 and the anti-TPP political campaign mobilized by agricultural cooperatives and legislators in December 2010, the Japanese public opinions on TPP had changed over time. A slim majority of 58% of respondents supported Japan engaging in the TPP talks in 2010, while around 27% opposed it. The proportion of opponents had risen to 34% in 2012, when the protectionist campaign soared during the 2012 Lower House election (Naoi & Urata, 2013, p. 335). In 2015, the proponents of the TPP returned back to 57%. These numbers

6.3

Domestic Responses in Japan

119

Our country

Wages

2 6

7 12

10 Increase

Very good

23

Somewhat good Somewhat bad 57

37

46

Does not make a difference DK/Refused

Very bad DK/Refused

Jobs 6

Decrease

Prices

9

15

23 Increase

Job creaon 41 38

Job losses

Decrease

42

27

Does not make a difference

Does not make a difference DK/Refused

Fig. 6.2 Japanese opinions: the impact of international trade and investment (percentage). Sources: Author’s compilation based on Pew (2014b) Table 6.10 Japanese content ideas concerning swaying public opinions about the TPP (percentage)

Survey questions 2010 2011 2012 2013 2015

Support the TPP 58 50 44 55 57

Oppose the TPP 27 30 34 28 27

Sources: Naoi and Urata (2013, p. 335) and Zakowski et al. (2018, p. 224)

reveal that attitudes toward participation in the TPP had changed over time, however, the supporters were still the mainstream. These results are backed by a series of surveys conducted from 2012 to 2014 by Asahi Shimbun, which reveal that a majority of Japanese voters shared a positive attitude toward the TPP (MMMF, 2012). In April 2014, 52% of Japanese respondents expressed support for the TPP while only 25% were against it (Zakowski et al., 2018, p. 224). With regard to the question “Japan is considering participation in the TPP, which is a free trade agreement between Pacific states on economic liberalization. How much interest do you have in Japan’s participation in

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Table 6.11 Japanese content ideas concerning environment protection (percentage) Survey questions Looking after the environment is important Most serious problem in the world Protecting the environment should be given priority, even if it causes slower economic growth and some loss of jobs Economic growth and creating jobs should be the top priority, even if the environment suffers to some extent

2005 52.5 – 36.4

2010 46.7 41.3 22.7

23.4

30.0

Sources: WVS (2005, 2010)

the TPP?” Thirty-one percent of respondents showed great interest, 46% a degree of interest, while only 4% had no interest at all (MMMF, 2012). In April 2013, over half (55%) of Japanese supported Japan’s participation in the TPP negotiations. Among those 55% proponents, 63% believed that TPP would have positive effects on the Japanese economy. For those 22% of respondents who were against Japan joining the TPP, their main concerns (64%) were the future of agriculture and the safety of food (ibid, 2013). Moreover, when asking the question “on which areas do you think Japan should focus when it promotes its economic relations with foreign countries,” 46.6% of respondents believed that government should focus on securing food, while 35.4% of respondents suggested “strengthening its economic relations with foreign countries through promoting of liberalization of trade and investment, such as the use of such mechanisms as free trade agreements (FTAs), economic partnership agreements (EPAs), investment agreements (BIT), and World Trade Organization (WTO) initiatives with specific countries and regions” (ibid, 2009). Japanese societal attitudes showed the general favor of international trade and investment as well as trade liberalization, and mixed feelings about the negative impact of free trade. When it comes to the values of protecting environment (one of the aims of the TPP is the development of rules concerning environment), fewer people were concerned about the environment from 2005 to 2010 in Japan, however, the environment was still the most serious problem of the world in their perspective (see Table 6.11). Along with the dissatisfaction with economic situation, Japanese respondents who considered environmental protection as important decreased from 52.5% in 2005 to 46.7% in 2010. A plurality (36.4%) of Japanese respondents viewed environmental protection as priority “even if it causes slower economic growth and some loss of jobs” in 2005. However, things changed after 5 years. In 2010, economic growth and creating jobs were considered as the top priority in the perspective of Japanese respondents, “even if the environment suffers to some extent.” Nevertheless, environmental pollution (41.3%) was perceived as the most serious problem in the world, followed by poverty (36.6%), inadequate education (8.1%), and poor sanitation and infectious diseases (7.2%) (WVS, 2010).

6.4

Japanese Governmental Preferences Toward the TPP

6.4

121

Japanese Governmental Preferences Toward the TPP

The Japanese government started to express a positive stance on the TPP issue since Prime Minister Naoto Kan of the DPJ indicated the government’s intention to participate in the TPP as the pathway to building a Free Trade Area of the AsiaPacific (FTAAP), which was a goal of the APEC, in October 2010 (Kantei, 2010). Naoto Kan showed the willingness to examine TPP participation during his policy speech at the 176th extraordinary session of the Diet: We will look into participating in such negotiations as those for the Trans-Pacific Partnership Agreement and will aim to build a Free Trade Area of the Asia Pacific. With a view toward making the East Asian Community a reality, I want to open our country to the outside world and move forward with concrete steps of negotiations as much as possible. (ibid)

Succeeding Kan as Prime Minister, Yoshihiko Noda announced that Japan would enter into consultations with the countries concerned toward participating in the TPP negotiations, saying that “with regard to the process from now, consultations among the countries concerned will be launched and we will make efforts to gather further information as to what each country would expect from Japan. The process will then continue through sufficient national debate, and we will reach a conclusion on the TPP faithfully from the viewpoint of our national interests” (Kantei, 2011). Two years later, Prime Minister Shinzo Abe expressed his intention to participate in the TPP negotiations in March 2013, and Japan formally participated in the 18th round of the negotiations in Malaysia in July 2013. In the press conference, Shinzo Abe specified that, “I have decided to take part in the negotiations for the TransPacific Partnership (TPP) Agreement. I will notify this intention to the TPP countries [. . .] Now is our last chance. Losing this opportunity would simply leave Japan out from the rule-making in the world. Future historians will no doubt see that the TPP was the opening of the Asia-Pacific Century [. . .] Japan has to be at the heart of the Asia Pacific Century” (Kantei, 2013b). Shinzo Abe believed that Japanese participation in the TPP negotiations is a “provident masterstroke” (Kantei, 2013c). He first conceived the TPP negotiations as “an entirely new kind of negotiations that aim to create rules in a broad array of fields that are suited to the 21st century” (ibid). According to him, “economic independence cannot even be an aspiration without promotion of international trade” (ibid, 2013b), hence, the TPP will be built on the free trade system, which “promises prosperity in the future in the Asia-Pacific” (ibid, 2013b). Regarding the benefits of the TPP, he underscored the expected positive impact of the TPP on Japanese economy, saying that “even if we estimate all tariffs, our economy is expected to gain from the TPP’s positive influence as a whole” (ibid). Regarding the costs of the TPP, he acknowledged the expected decrease in production of agriculture, forestry, and fisheries, however, suggested that for making agriculture a growing industry, “the TPP is not a crisis; it is a big chance” (ibid). He pledged to “make every effort to minimize its negative impact, such as special considerations for our sensitive items in the negotiations to come” (ibid). In addition, he pointed out his endeavor in dealing with various concerns, such as “opposing

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participation in the TPP negotiations as long as the requirement for participation is that the Japanese Government makes a prior commitment to eliminate tariffs with no sanctuary” and securing national character based on its social security system, i.e., “the world-class universal health care insurance system” (ibid). In the meanwhile, he underscored that “the significance of the TPP is not limited to the economic impact on our country. [. . .] I have no doubt that deepening economic interdependence with these countries [the US and other countries who share the universal values of freedom, democracy, basic human rights, and the rule of law] in a common economic order will significantly contribute to the security of our country and also to the stability of the Asia-Pacific region” (ibid). After two and a half-year of negotiations, Japan and other TPP participants reached an agreement in principle at the Ministerial Meeting held in the USA in October 2015. Japanese Foreign Minister Fumio Kishida welcomed the outcome and praised the benefits of the TPP, including “further promoting trade, and investment in the Asia-Pacific region,” stimulating remarkable economic growth, “building a new economic order,” and nurturing “substantial strategic significance for sharing prosperity” (MOFA, 2015). He said: I am convinced that [the TPP] would also contribute to the peace and stability of Japan and the overall Asia-Pacific region. This agreement in principle is expected to serve as a foundation for the building of a broader free trade area in the Asia-Pacific region, and to provide the momentum to push forward other economic partnership negotiations that Japan is pursuing. (ibid)

Likewise, Prime Minister Shinzo Abe considered the TPP as “the trump card of our growth strategy, one that will create an open and dynamic economy” (Kantai, 2015b). Talking about the TPP agreement made in principle in October 2015, Shinzo Abe expressed that he would like to “truly and directly link the TPP to the economic revitalization of Japan and regional vitalization” (ibid). It is because Japan will play a central role in the process of “creating an ocean of liberty and prosperity” (ibid, 2015a). Displaying the significance of the TPP, which involves 800 million people and accounts for almost 40% of world’s economy, Shinzo Abe concentrated on Japan’s gains from the TPP. Firstly, Shinzo Abe claimed that the TPP will provide consumers lower prices due to the removal of tariffs, and benefit consumers through rejecting cheap and shoddy goods and services due to high levels of standards from services to intellectual property (ibid, 2015a). Secondly, Shinzo Abe articulated that the main beneficiaries of the TPP would be “small- and medium-sized business and small-scale firms,” because the removal of tariffs provides opportunities for Japanese corporations to expand overseas markets. More specifically, “there are great merits provided by the TPP. 99.9 percent of the tariffs on the 19 trillion yen of manufactured products we export to the 11 participating TPP countries will be lifted. This will offer tremendous support for the export of specialty products made by regional small- and medium-sized enterprises” (ibid, 2015b). On the other hand, “the TPP includes several other rules on such matters as investments, services, intellectual property, and e-commerce, all of which help make it smoother for companies to do business overseas” (ibid). For example, through creating rules on investment, the

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TPP will not allow the member states to “request transfers of technologies” in exchange for investment authorization (ibid, 2015a). Additionally, Shinzo Abe underscored the endeavor made by his administration on protecting universal healthcare system, food safety, and security standards, as well as “the important products that have long underpinned Japan’s agricultural sector—particularly, rice, wheat and barley, sugar cane, sugar beet, beef and pork, and dairy products” (ibid). Moreover, Shinzo Abe reiterated his pledge to “transition the agriculture, forestry and fishery industries from defensive industries to industries on the offensive” (ibid, 2015b). He expressed the ambition to promote agriculture reform so as to make agriculture producers continuously “work with peace of mind” as well as making those industries where “young people aspire to work” (ibid, 2015a). Eventually, Japan and other participants signed the agreement in February 2016. According to the Ministry of Foreign Affairs of Japan, “the TPP Agreement promotes the liberalization and facilitation of trade in goods and services and investment in the Asia-Pacific region and establishes new 21st century rules in a wide range of areas, such as intellectual property, electronic commerce, state-owned enterprises, and the environment. The TPP Agreement would not only promote economic growth in the Asia-Pacific region, including Japan, but also further strengthen relations and help share prosperity with the countries in this region through building a new economic order, and thus has substantial strategic significance for contributing to the peace and stability of the region” (MOFA, 2016).

6.5

Multi-step Analysis

The causal mechanism in this case study is scrutinized as follows, which consists of four parts, including the impact of the US leadership project on Japan concerning the TPP, the domestic actors’ responses in Japan, Japanese governmental preferences and testing the hypotheses on conditions of prevalence, inclusiveness of American leadership project and testing the hypothesis of followership.

6.5.1

American Leadership Project and Its Impacts on Japan

The first step of causal mechanism assumes that the US leadership project of the TPP had an impact on the Japanese economy and hence generates anticipated winners and losers among relevant economic sectors, on the one hand. On the other hand, the US leadership project impacted the fundamental expectations of Japanese voters on the appropriateness of governance, hence arose questions on the role of politics within Japan. As illustrated before, the USA engaged itself in TPP negotiations in November 2009. The US leadership project initially emphasized that “Japan must be prepared to meet the TPP’s high standards for liberalizing trade and to address specific issues

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of concern to the United States regarding barriers to agriculture, services, and manufacturing trade, including non-tariff measures” (USTR, 2011a). Specifically, the USA insisted on no exceptions to remove tariffs under the TPP in terms of agriculture, urged Japanese automobile industries to open market access, and promised not to raise the issue of Japan’s insurance coverage rules for advanced medical treatment during trade negotiations, while tried to enter Japan’s private insurance market to cover uninsured treatments instead of revising its universal health insurance coverage. However, the initial leadership project of the USA confronted Tokyo’s backlash, with Japanese ruling party LDP’s pledge of not joining the TPP under the prerequisite of abolition of tariffs without any sanctuaries. Correspondingly, the USA retreated from the stance that Japan had to vow to remove all trade tariffs as a prerequisite of joining the TPP negotiations. Instead, in February 2013, the USA confirmed that all items would be on the table of TPP negotiations, but the tariffs elimination of these items would depend on the actual negotiations. During 11 rounds of US-Japan negotiations from 2013 to 2015, the main controversial issues between the two countries were still focused on “bilateral trade sensitivities, such as certain agriculture products for Japan and certain manufactured products for the US” (Kantei, 2013a). Additionally, the TPP not only promoted further trade and investment liberalization and expanded market access through “eliminating or reducing tariff and nontariff barriers across substantially all trade in goods and services and cover[ing] the full spectrum of trade” (ibid, 2015a), but also tried to set a new standard in the field of government procurement, competition policy, intellectual property, as well as labor and the environment. Concerning the anticipated distributional consequences of the US leadership project on Japanese economy, the TPP would no doubt impact Japanese agriculture and manufacturing industries. Aiming at promoting trade liberalization through tariff elimination, the TPP would lead to the gains of export-oriented manufacturing sector and losses of less-competitive industries such as agriculture and medical services. The average tariff rate of Japanese manufacturing goods (2.5%) was already lower than other developed economies such as the USA and EU, while Japanese agricultural goods had higher average tariff rate (19.0%) even compared to some developing countries (see Table 6.3). Therefore, one could anticipate the huge benefits for Japanese manufacturers as well as the tremendous suffering of agriculture sectors being confronted with the TPP. Moreover, Japanese services firms faced both opportunities and challenges in dealing with the TPP. On the one hand, there is considerable opportunity for them to improve their market position in East Asia. On the other hand, Japanese services sectors are still considered as “lagging in efficiency and penetration of foreign markets” (Corning, 2016, p. 779).

6.5

Multi-step Analysis

6.5.2

125

Domestic Actors’ Responses in Japan

The second step of causal mechanism occurs at the domestic level of analysis, and it assumes that Japanese domestic actors are expected to respond to the impact arising from the US leadership project.

6.5.2.1

Responses from Japanese Interest Groups

As aforementioned, concerning the impact of the US leadership project on specific sectors of Japan, the TPP is anticipated to create winners and losers, thus generating the supporters and opponents. Accordingly, rational domestic actors such as business interest groups struggle for political power in the process of decision-making to maximize their advantages and improve their own competitiveness. A large amount of Japanese economic data as well as related reports and research have revealed the relevant Japanese sectors directly impacted by the TPP. The documents (speeches, statements, and position papers) of umbrella business associations and relevant sectoral interest groups also displayed the domestic interests of these sectors. The economic data showed the decline of the primary industry and the rise of tertiary industry, as well as the expansion of trade in services in Japan. In 2015, the primary industry only accounted for 1.1% of GDP and 4.0% of employed persons, while tertiary industry accounted for 72.7% of GDP and 71.0% of employed persons (Statistics Bureau, 2017, p. 29). Concerning trade in goods, Japanese agriculture products, and manufacturing products accounted for, respectively, 1.5% and 87.4% of share in Japan’s total trade in goods exports (WTO, 2015, pp. 78–79). Concerning trade in services, Japanese services firms in the field of wholesale/retail, hospitality, and transport, as well as information and communication technology services confronted with both opportunities of opening huge foreign markets and challenges of foreign competition. Based on the Japanese economic situation and the anticipated distributional impact of the TPP, the winners of trade liberalization manufacturers would strongly support joining the TPP, whereas the losers such as Japanese agriculture and medical sectors would fiercely oppose the TPP. Other sectors directly affected by the TPP would choose their stance based on their competitiveness and cost/benefit calculations as well. Two main umbrella business associations, Keidanren and the JA Zenchu represent the interest of big companies and agriculture industries, respectively, tended to dominate the debate concerning the TPP. The expansion of market access impelled the exported-oriented sectors to support and urge the government to participate in the TPP. Keidanren, the biggest business interest group representing large industries, proposed to actively liberalize trade and investment and viewed the TPP as a measure to revitalize the economy. With growing influence, Keidanren used trade liberalization as a catalyst to liberalize uncompetitive (agriculture) sectors, and gave government impetus to join the TPP, so as to avoid the immense suffering of

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manufacturing interests excluded from the TPP and thus profit from potential extensible export and production activities. Keidanren (2014b) emphasized the necessity to “subject all goods to [TPP] negotiation including agricultural products” so as to achieve full market access. It is estimated that all Japanese sectors would benefit immensely from the TPP, especially automobiles, machinery, electronics devices, and steel products (Keidanren, 2016). Moreover, Keidanren (2013a) underscored that the TPP could “enable Japan to actively create ‘rules of the road for 21st century commerce’ that will regain and enhance Japanese competitiveness, maintain and expand domestic business bases, increase employment opportunities, and enhance economic growth.” On the contrary, Japanese agriculture is inward-oriented and highly protected. The JA Zenchu is famous for its position on trade protectionism through defending Japanese agriculture against cheaper foreign products by establishing and maintaining trade barriers as well as protecting and lobbying against trade pacts. With a strong voice in parliamentary elections, it reiterated its objection to the TPP and protested against it because this liberal trade regime would challenge Japan’s existing agricultural welfare state, food security, viable rural economies, and even Japanese culture and identities. The JA Zenchu emphasized that the TPP would completely destroy Japanese agriculture, forestry and fisheries, and urged the government to protect sensitive farm items. It collected around 11 million petitions to protest TPP (which constituted more than 10% of Japan’s total eligible voters) and mobilized a huge anti-TPP campaign by gathering other interest groups, such as the medical interest group. Keidanren and JA the Zenchu “stood at the head of a very long tail of organizations that represented diverse sectors and which had a myriad of different concerns, interests and preferences” (Mulgan, 2015, p. 129). The proponents of the TPP are composed of various manufacturing industries, chemical industries, electronics and information technology (IT) industries, etc., which have a relatively strong international competitiveness and could promote their economic self-interest in expanding export market through further trade liberalization. Among them, the JAMA represented the automobile industry and the JEITA represented the electronics and IT industries, were the most vocal groups in dynamically actuating the government in engaging in the TPP negotiations. They had anxiety about being left out of the TPP, which meant they would be disadvantaged in their export and production activities. For them, the TPP would further liberalize trade and investment, promote trade in goods and services, accelerate the rulemaking, maintain fair competition, protect intellectual property rights, and contribute to the recovery of Japanese economy. The opponents of the TPP are composed of various agriculture, fishery, and forestry-related industries as well as healthcare, insurance, and pharmaceutical sectors, which have a relatively weak international competitiveness and could maintain their economic self-interest in defending domestic market through trade protectionism. Their main demands were maintaining tariff rates, protecting sensitive agriculture products, and Japanese universal health insurance system. Among those, the JMA represented the voice of Japanese physicians as the most vocal

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group, which underscored negative effects of the TPP on the Japanese medical and nursing care systems. It needs to be pointed out here that the Japanese agricultural sector was electorally powerful and highly organized, and the JA Zenchu had a stake in everything from banking, life insurance, and accident insurance for farmers and non-farmers, as well as the supply of daily commodities and services including garage and petrol station businesses, wedding and funeral services (Yamashita, 2015, p. 86). However, “[Japanese] agricultural sector has declined in importance and JA Zenchu is consequently losing influence and political clout. This ongoing transition has also caused a shift of interest, with farmers now increasingly lobbying for policies that allow them to maintain their current welfare levels, instead of seeking traditional prize subsidies or higher tariffs to protect their businesses” (Jamitzky, 2015, p. 86). The decline of the Japanese agriculture industry could be reflected by the changing demographics of Japanese agricultural workers. In 2015, the number of farm households engaged in commercial farming6 was 1.33 million, only half of the number in 1995. Of the 2.1 million Japanese commercial farmers, 63.5% were aged 65 years and over (Statistics Bureau, 2016: 55). Moreover, the Japanese agricultural sector has suffered from huge shortage of farm successors, with more than 60% of farmers (aged 65 years and over) doing farm work by themselves and only 26.4% assisted by their children during farming (Nam, 2017, p. 25). Furthermore, the Japanese agriculture sector faced obstacles in attracting the younger generation into this sector due to the insufficient profit made by commercial farmers (ibid, p. 26). The situations are similar in the forestry and fishery industries. In 2010, there were 69,000 workers engaged in forestry, with one out of six workers aged 65 years and over (Statistics Bureau, 2016, p. 57). The marine fishery industry also confronted with the constant decrease of workers and the aging of labor force (ibid, p. 59). Moreover, a large number of other sectoral interest groups adopted a cautious stance toward the TPP. They were mainly alert to the impact of TPP on the Japanese economy regarding intellectual property protection and copyright infringement prevention, asked for further information disclosure, requested maintaining domestic standards for labor, consumer safety, and environmental protection, and were concerned about dispute settlement procedure.

6.5.2.2

Responses from Japanese Voters

Concerning the impact the US leadership project has on issues at stake for Japan, whether to join the TPP could “affect principle-based collective expectations about appropriate governmental behavior” (Schirm, 2013, p. 692). On the one hand, Japanese voters can be affected economically by the TPP in their daily life. On the

Commercial farming refers to “households with cultivated land under management of 0.3 hectares and over, or with annual sales of agricultural products amounting to 500,000 yen or more” (Statistics Bureau, 2016, p. 55).

6

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other hand, voters express their fundamental expectations on how politics should govern economy. Accordingly, public opinion polls represent Japanese societal ideas including both process and content ideas and will be analyzed from the perspective of the commonality and specificity of its societal ideas (ibid, 2009, p. 504). The possibilities and opportunities of Japanese voters to express their opinions and influence governmental decision-making are represented by their overwhelming support for democracy (WVS, 2005, 2010). Moreover, Japanese voters are in favor of more government responsibility than individual responsibilities (ibid). Furthermore, survey data show a high commonality that strong majorities trust in market forces (ibid). With regard to the fundamental expectations of Japanese voters concerning the TPP, several categories of content ideas show their opinions about how politics should govern. Overall, surveys show a high commonality that Japanese voters had a strong concern about their economic situation and shared pessimistic attitudes toward economic prosperity. Against the backdrop of Abenomics and Japan’s participation in the TPP, a slight increase of Japanese respondents showed positive attitudes toward national economic situation (Pew, 2015). In the meanwhile, Japanese voters showed generally favorable views toward the USA. Moreover, surveys displayed high commonality and specificity that Japanese voters hold positive attitudes toward international trade, trade liberalization, and economic globalization. In 2009, Japanese was the second among 27 countries’ respondents to express their faith in free market capitalism (BBC, 2009). Moreover, Japanese respondents expressed mixed feelings toward the free market economy due to their concerns about the cost of free trade, such as job losses and income decreases (Pew, 2014a). On the other hand, a strong majority of 69% of respondents believed that the growing trade and business ties between Japan and other countries are good for Japanese economy (ibid). Since “attitudes towards trade policy are more likely to be formed through their perception of how trade affects the national economy rather than how trade effects their individual wellbeing” (Naoi & Urata, 2013, p. 337), Japanese respondents generally showed positive attitudes toward the TPP from 2010 to 2015 (see Table 6.10). As for 22% of Japanese respondents who opposed the TPP in 2013, the top reason behind their opposition was the concern about national food security (MMMF, 2013). Furthermore, even though environmental pollution was considered as a serious problem, fewer and fewer Japanese respondents supported that environmental protection should be prior to economic growth. (see Table 6.11).

6.5

Multi-step Analysis

6.5.3

129

Governmental Preference Formation and Testing Hypotheses

The third step of the causal mechanism equally occurs at the domestic level of analysis, it is based on the standard assumption of elected politicians in democratic political systems respond to domestic demands ranging from lobby groups to the voters. The impact of the US leadership project and Japanese domestic responses have been analyzed in the first two steps, in the third step hypotheses on conditions of prevalence will be tested through reviewing governmental preferences of Japan regarding the TPP, and recalling hypotheses as well as examining interactions between discourses. The Japanese government started to express a positive stance on the TPP issue since Prime Minister Naoto Kan of the DPJ indicated government’s intention to participate in the TPP in 2010. Succeeding Kan as Prime Minister, Yoshihiko Noda announced that Japan would enter into consultations with the countries concerned toward participating in the TPP negotiations. In March 2013, Prime Minister Shinzo Abe declared Japan’s participation in the TPP negotiations and highlighted it as “provident masterstroke” (Kantei, 2013c). After two and a half-year of negotiations, Japan and other TPP participants reached an agreement in principle in October 2015 and signed the agreement in February 2016. Shinzo Abe underscored the positive impact of the TPP on Japanese economy, such as setting rules, benefiting domestic industries, and promoting trade liberalization and economic revitalization (Kantai, 2013b, 2013c, 2015b). Besides that, he also highlighted the endeavor made by his administration on protecting universal healthcare system as well as food safety and security standards (ibid, 2015b). Before examining the correlation between domestic interests and/or societal ideas of Japan and its governmental preferences toward the TPP, it is necessary here to recall the hypotheses. Concerning this case study, H2 states that if American leadership project of the TPP directly affects specific economic sectors in Japan, and raises cost/benefit questions of international competition, then domestic interests will be the most influential in shaping governmental preferences of Japan, because lobbying will be strong. While H3 claims that if American leadership project of the TPP raises concerns on the fundamental questions and collective expectations about how politics should govern the economy, then societal ideas will prevail in shaping governmental positions of Japan, this link will be strengthened if the project has only a diffuse impact on related sectors of Japan, because then lobbying will be weak. Firstly, Table 6.12 shows that there is a strong degree of governmental responsiveness to Japanese domestic demands of interest groups in the participation of the TPP. The Japanese government was responsive to domestic interests, such as promoting trade and investment liberalization, expanding overseas markets, leading to economic revitalization, and setting rules on investments, services, intellectual property, and e-commerce; securing national character based on Japanese universal healthcare insurance system; opposing participation in the TPP negotiations as long

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Table 6.12 Correlation between Japanese domestic interests and governmental preference on the TPP Domestic interests • Proponents Keidanren: Liberalize trade and investment as well as create new rules for the future; expand access to markets for goods and services, enhance competitiveness by making trade and investment rules and protecting intellectual property rights; join the TPP to increase employment opportunities and enhance economic growth; subject all goods to TPP negotiation, including agricultural products JAMA: Promote free trade and open investment; protect intellectual property rights; develop rules of trade and investment; support the TPP JEITA: Accelerate rulemaking; create free trade and investment environment as well as fair competition conditions; promote trade in services; support the TPP • Opponents JA Zenchu: Oppose trade liberalization; defend Japanese agriculture; protect sensitive five agriculture items; oppose the TPP JMA: TPP will lead to the collapse of Japanese universal health insurance system and exacerbate social unequal JForest, JCA, JPPA, JCIC, JLIA, etc.: Maintain the current tariffs on five important agricultural products, maintain current tariffs on respective industries • Cautious JFBA, Nikko, JFJA, AJA, etc.: Protect intellectual property; prevent copyright infringement; disclose information; standardize rules of labor, consumer safety, and environmental protection; concern about dispute settlement procedure

Governmental preference Prime Minister Shinzo Abe: “Even if we estimate all tariffs, our economy is expected to gain from the TPP’s positive influence as a whole” “The TPP is not a crisis; it is a big chance” “The significance of the TPP is not limited to the economic impact on our country” “Truly and directly link the TPP to the economic revitalization of Japan and regional vitalization” TPP will “create an ocean of liberty and prosperity,” provide consumers lower prices, expand overseas markets “TPP includes several other rules on such matters as investments, services, intellectual property, and e-commerce, all of which help make it smoother for companies to do business overseas” “Opposing participation in the TPP negotiations as long as the requirement for participation is that the Japanese government makes a prior commitment to eliminate tariffs with no sanctuary” Secure national character based on “the worldclass universal healthcare insurance system” “Make every effort to minimize its negative impact, such as special considerations for our sensitive items in the negotiations to come” Promote agriculture reform while joining the TPP so as to make those industries where “young people aspire to work” MOFA: The TPP will promote trade and investment in the Asia-Pacific region, stimulate remarkable economic growth, and build a new economic order

Sources: Author’s compilation

as the Japanese government is required by the USA to make a prior commitment to eliminate tariffs with no sanctuary; and promoting agriculture reform while joining the TPP so as to make those industries where young people aspire to work. The evidence shows strong support for H2, under the conditions of (1) Japanese domestic interests of specific economic sectors directly affected the cost/benefit questions of international competition arising from the US leadership project on

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Table 6.13 Correlation between Japanese societal ideas and governmental preference on the TPP Societal ideas • The top priority of the country: Economic growth • Concern about their economic situation and shared pessimistic attitudes toward economic prosperity • Favorable views of the USA • Overwhelming support for international trade and investment • Strong faith in free market capitalism • Majorities support the TPP • Concerns about Japanese agriculture and food security

Governmental preference • The TPP will promote trade and investment in the Asia-Pacific region, stimulate remarkable economic growth, and build a new economic order • The TPP will lead to price decrease • Make every effort to minimize negative impact of the TPP, such as special considerations for our sensitive items in the negotiations to come • Promote agriculture reform while joining the TPP so as to make those industries where “young people aspire to work”

Sources: Author’s compilation

the TPP, and (2) a high degree of Japanese governmental responsiveness to its domestic interests. Eventually, Japanese domestic interests dominate its governmental preference formation. More specifically, against the background of the shrinking primary industry (agriculture) and the rise of tertiary industry, as well as the dominating share of manufacturing products in Japan’s total trade in export, Tokyo’s participation in the TPP would not only expand markets, promote trade and investment, but also set new rules for the future, hence contribute to the recovery of the Japanese economy. Correspondently, the Japanese government joined the TPP negotiations in 2013 and signed the agreement in 2016. Moreover, the Japanese government also partially responded to agriculture and medical sectors’ demands, such as opposing the American prerequisite of removing all tariffs, protecting five sensitive items during negotiations, and protecting universal healthcare insurance system. Secondly, Table 6.13 shows that there is a high degree of governmental responsiveness to Japanese domestic demands of voters concerning the participation in the TPP. With regard to the process ideas, dominant expectations of Japanese voters about the conduction of political decision-making, Japanese respondents displayed high acceptance of democracy, government responsibility, and market forces. The high commonality and specificity show a large opportunity for Japanese voters to participate in the political process. With regard to the content ideas, the Japanese government was responsive with high commonality and specificity, such as achieving top priority of economic growth, enhancing international trade and investment, as well as strongly favorable opinions of the USA. Therefore, the above-mentioned evidence shows strong support for H3, because (1) affected by the US leadership project, Japanese voters share collective fundamental expectations on appropriate governmental behavior concerning the TPP, (2) a high degree of the Japanese governmental responsiveness to its societal ideas. Based on the above analysis, Japanese domestic interests and societal ideas reinforce each other in shaping Japanese governmental position on joining the TPP.

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Leaders Need Followers: An Analysis of American Leadership and. . .

Inclusiveness of Leadership Project and Followership

The fourth step of the causal mechanism occurs at international level of analysis. As Schirm (2010, p. 216) states, “leadership [. . .] gains followership only if it is credibly framed as a project also representing the goals of others.” Therefore, the main hypothesis (H1) is necessary to be recalled here, which claims that the inclusion of the domestic ideas and/or interests dominant in the potential follower country, Japan, into American leadership project of the TPP is a necessary condition to secure followership of Japan. Table 6.14 illustrates the correlation between inclusiveness of the US leadership project and Japanese followership. On the one hand, the TPP leadership project was to increase Japanese economic growth, integrate the two economies (Japan and the USA) further and solidify the strategic alliance at a critical time, extend market access, promote liberalization of trade and investment, and set rules for future trade agreements. On the other hand, the TPP leadership project was to harm the interests of Japanese farmers, undermine the foundation of Japanese food sovereignty. However, the shift of the TPP leadership project (from abolishing all tariffs without exception to abandoning this prerequisite) is especially correspondent to domestic interests of the Japanese agriculture sector, which is famous for trade protectionism. Additionally, the US leadership project was keen on entering Japan’s private insurance market to cover uninsured treatments instead of revising its universal health insurance coverage, which is correspondent with domestic interests of the Japanese medical sectors. Therefore, the US leadership project includes Japanese domestic interests and societal ideas, including providing huge markets for interest groups, more job opportunities and lower prices for constituencies, rulemaking regarding trade, investment, and intellectual property rights, as well as protecting sensitive agriculture products and universal health insurance system. The evidence analyzed above shows a strong support for the main Hypothesis (H1) concerning the US leadership in this case study, because (1) the USA credibly included Japanese domestic interests and societal ideas into its leadership project and (2) hence it obtained Japan to follow its leading by joining the TPP.

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Table 6.14 Correlation between inclusiveness of the US leadership project and Japanese followership

US leadership project • Shift from abolishing all tariffs without exception to canceling this kind of prerequisite to attract Japan to join the TPP negotiations • Focus on the mutual expansion of market access in terms of automobile; enter Japan’s private insurance market to cover uninsured treatments instead of revising its universal health insurance • Set new standard for global trade; create jobs, raise living standards, open domestic markets; promote trade liberalization, economic growth, innovation, productivity, competitiveness

Japanese domestic interests • Actively liberalize trade and investment as well as create new rules for the future; expand access to markets for goods and services; promote trade in services; enhance competitiveness by making trade and investment rules and protecting intellectual property rights; join the TPP to increase employment opportunities and enhance economic growth; subject all goods to TPP negotiation, including agricultural products • Oppose trade liberalization; defend Japanese agriculture; protect sensitive five agriculture items; maintain current tariffs; protect universal health insurance system

Japanese societal ideas • Economic growth is the top priority of the country • Pessimistic attitudes toward economic prosperity • Favorable views of the USA • Overwhelming support for international trade and investment • Strong faith in free market capitalism • Majorities support for the TPP • Concerns about Japanese agriculture and food security

Japanese governmental preferences • TPP will “create an ocean of liberty and prosperity,” provide consumers lower prices, expand overseas markets, promote trade and investment liberalization, and lead to economic revitalization • Protect sensitive agriculture products • Secure national character based on Japanese universal healthcare insurance system • Oppose participation in the TPP negotiations as long as the requirement for participation is that the Japanese government makes a prior commitment to eliminate tariffs with no sanctuary • Promote agriculture reform while joining the TPP so as to make those industries where young people aspire to work

Sources: Author’s compilation

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Chapter 7

Leaders Need Followers: Non-followership of South Korea and the Failure of Japanese Leadership in Pursuing the Permanent Seat on the UNSC

7.1

Introduction

The membership and structure of the UNSC are considered as “the most controversial and intractable issues” since its establishment in the mid-1940s (Guzzardi & Mullenbach, 2007, p. 35). The importance of the permanent seats on the UNSC “stems from the status and prestige associated with its decision-making authority on questions of global peace and security” (ibid), because the permanent membership within the UNSC represents the great power status (Tillema, 1989, p. 182). Since the early 1990s, Japan and Germany campaigned for the permanent seat on the UNSC. In 2000, Brazil and India joined in discussions with Germany and Japan. This so-called Great Four (G4) then coordinated to collectively push for the United Nations (UN) reforms. Their central claim is that the composition of the UNSC, especially the exclusive veto privilege of Permanent Five (P5), could not represent the distribution of power reflected in the international order. Currently, the UNSC is composed of 15 Member States, with five permanent seats and ten nonpermanent seats. Five permanent seats are occupied by five nuclear powers with veto power— Britain, China, France, Russia, and the USA. Ten nonpermanent seats shall be elected by a two-thirds majority vote in the UN General Assembly (UNGA) for a 2-year term. Due to the consideration of their “contribution to global peace and security and also equitable geographical distribution” (Ogunnoiki, 2018, p. 51), ten nonpermanent seats shall be three for Africa, two for Asia, two for Latin America, two for Western Europe and others, and one for Eastern Europe. In the perspective of G4, to increase the representativeness, legitimacy, and effectiveness of the Security Council, the basic structure of the UNSC should change significantly, which includes an increase in permanent and nonpermanent seats. To alter UNSC’s size, composition, majority threshold, or the P5 veto, a two-thirds majority of the UNGA and the support of all P5 would be required according to Article 108 of the UN Charter (Hosli & Dörfler, 2019, p. 39). So far, G4’s bids for permanent seats on the UNSC were not acted upon. In the 2005 UNGA session, the © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 F. Su, The Determinants of Leadership, Contributions to International Relations, https://doi.org/10.1007/978-3-031-12555-3_7

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Table 7.1 Key dates on the Japanese bid for a permanent seat on the UNSC Dates 1970 1994 1990s 2005 2008 2014–2015 Present

Events Started to lay the groundwork for permanent membership on the UNSC Clearly proposed to obtain permanent membership on the UNSC for the first time Continuously pushed on the UN reform G4 (Brazil, Germany, India, and Japan) proposal of the UNSC reform (adding six permanent and four nonpermanent members) failed UNSC reform entered into intergovernmental negotiations progress Text-based negotiations started “Nothing significant has been achieved and there are no prospects for reform in sight” (Christensen, 2016) “No concrete outcome yet” (Hosli & Dörfler, 2019, p. 44)

Sources: Author’s compilation

G4 looked forward to putting their proposal to a vote, however, did not gain enough seats1 to pass their resolution, and subsequently withdrew before coming to a vote. Each of the G4 evoked the regional objectors with fears of their neighbors obtaining elevated status. For example, in South Korea, people protested vigorously against Japan’s bid for a permanent seat; Pakistan feared that the inclusion of India as a permanent UNSC member would undermine its regional security due to the longstanding militarily threat posed by India; Mexico did not assent that Brazil ideologically represents the entire continent; Italy opposed Germany’s aspiration in order to prevent it from completely dominating European politics (Er, 2020, p. 46; Schirm, 2010, p. 202). Small and medium states are also worried about the proposed enlargement seats since it might reduce their opportunities to be represented on the UNSC. Due to the principle of “one country-one vote” of the UNGA, none of the G4 countries obtained the majority necessary to achieve their goals in 2005 UNGA session, which is considered a chance “close to a settlement” (Hosli & Dörfler, 2019, p. 44). Since then, various initiatives were proposed by divergent groups with opposing interests, but none of them was voted on. Moreover, “in the format of intergovernmental negotiations on UNSC reform, several text-based negotiations have taken place, with no concrete outcome yet” (ibid) (Table 7.1). Against this backdrop, this case study will employ the inclusive leadership and the societal approach to investigate the questions of under which conditions did Japan fail to obtain the acceptance from South Korea concerning its bid for the permanent seat on the UNSC? And under which conditions did domestic interests and societal ideas prevail in shaping governmental preferences of South Korea? In this case study, South Korea is chosen as the potential follower, because (1) it meets four criteria for classifying a democratic regime set by Cheibub et al. (2010, p. 69);

1

In order to pass their solution, G4 need the support of Africa, which is one of the key players in reform progress with 53 votes in the UNGA. However, the G4’s reform proposal called for two permanent Africa seats without veto powers, which was opposed by Africa. In addition, the G4 proposed four nonpermanent seats, but Africa will settle for no less than five.

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(2) it is the third-largest economy in East Asia and one of the most important neighbors of Japan; (3) South Korea is one of the main objectors of Japan’s bid of the permanent seat on the UNSC. Accordingly, in line with inclusive leadership, this case study will test the main hypothesis (H1) on the correlations between followership and the inclusiveness of the leadership project, the inclusion of the domestic ideas and/or interests dominant in potential follower country South Korea into the Japanese leadership project of the permanent seat on the UNSC is a necessary condition to secure followership of South Korea. Additionally, hypotheses on the conditions of prevalence of domestic interests and societal ideas will be tested in this case study as well, with H2 stating that if the Japanese leadership project of the permanent seat on the UNSC directly affects specific economic sectors in South Korea, and raises cost/benefit questions of international competition, then domestic interests will be most influential in shaping South Korean governmental preferences because lobbying will be strong; and with H3 claiming that if the Japanese leadership project of permanent seat on the UNSC raises concerns on the fundamental questions and collective expectations about how politics should govern the security, then societal ideas will prevail in shaping South Korean governmental positions, this link will be strengthened if the project has only a diffuse impact on South Korean related sectors, because then lobbying will be weak. It has to be mentioned that the issues of the UNSC reforms have to fit into the big picture of Japanese and South Korean foreign policies. The context issues such as general South Korean–Japanese relations, and their strategies to exert influence in the UN, are important. Yet, the research has to be parsimonious and focused. It cannot consider all possible aspects of policy-making processes; thus, these context issues are beyond the scope of this book. The key interest here is the interactions between dependent and independent variables in the case study of the UNSC, and the specification of the causal mechanism within the inclusive leadership.

7.2

Japanese Leadership Project

Japan began to lay the groundwork for becoming a permanent member of the UNSC around 1970s. Its economic strength gave it a boost in self-confidence during the bubble economy of the 1980s. In the 1990s, Japan continuously pushed for the UNSC reform by advocating its inclusion and right to the veto privilege. In a speech before the UNGA in September 1994, Japanese Foreign Minister Yohei Kono stated clearly for the first time that Japan was prepared “to assume its responsibilities as a permanent member of the Security Council” (Guzzardi & Mullenbach, 2007, p. 47). When Japanese Prime Minister Junichiro Koizumi took into office in April 2001, Japan stepped up its efforts in seeking acceptance of UN Member States regarding the UN reforms (Coulmas, 2006, p. 18). In September 2004, Junichiro Koizumi discussed the UN reforms with leaders of Brazil, Germany, and India, which

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upgraded the UN ambassadorial level G4 framework to state leader level (Nobumasa, 2015, p. 284). Moreover, in the press conference by Junichiro Koizumi and German Chancellor Gerhard Schroeder on December 9, 2004, Junichiro Koizumi articulated that As a part of the UN reform, Japan maintains a stance of expanding the number of both permanent and non-permanent members. Upon this expansion, it is better that there will be no difference between the new permanent members and the existing five permanent members (P5) [. . .] if Japan is to become a permanent member, then it wishes to hold equal rights as the P5. (MOFA, 2004c)

Japanese Prime Minister and Foreign Minister had articulated Japanese bid for the permanent UNSC membership on different occasions. For example, during the 59th session of the UNGA, Japanese Prime Minister Junichiro Koizumi addressed a speech called “A New United Nations for the New Era,” in which he expressed Japan’s eagerness to become a permanent member of the UNSC. He emphasized that the UN member states’ role should be “commensurate with its own capabilities,” and Japan has provided “a solid basis for its assumption of permanent membership on the Security Council” due to its contributions to the UN peacekeeping operation (MOFA, 2004a). In his address at the High-Level Plenary Meeting of the 60th Session of the UNGA, Junichiro Koizumi articulated: “in a reformed Council, Japan is ready to play a larger role as a permanent member” (MOFA, 2005a). In the perspective of Japan, its bid was mainly based on Japan’s large financial contribution to the UN budget, which was then second only after the USA, its increased participation in the UN peacekeeping operations, its leading role in the disarmament of conventional arms and non-proliferation, it is then national strength, i.e., the world’s second-largest economy (MOFA, 2006), and the international community’s high expectations of the country (Katsuno, 2012), as well as Japan’s large contribution to international cooperation through its “one-fifth of world Official Development Assistance (ODA) for the past 10 years” (MOFA, 2005b). Hereby, Japan viewed itself as “a natural candidate by dint of population, standing and economic power” (The Economist, 2005b). As one of the G4 countries, Japan along with Brazil, India, and Germany, submitted a proposal to the UNGA concerning the UNSC reform in July 2005 (A/59/L64). They proposed to increase the UNSC from 15 to 25 members by adding six permanent and four nonpermanent members. According to G4’s proposal, the new permanent and non-permanent members of the UNSC shall be elected as the following pattern: Asia and Africa would receive two new permanent member seats apiece, and Latin/South America and Western Europe one seat each. New non-permanent seats would be given to Africa, Asia, eastern Europe, and Latin America. The proposal calls for veto rights for new permanent members, although the G4 offered to defer use of the veto for fifteen years, and pending a review conference to discuss the issue. (Vicente, 2013, p. 30)

However, Japan eventually failed to secure the approval of two-thirds of the UN Member States, which is required for revision of the UN Charter to reform the UNSC

7.2

Japanese Leadership Project

143

regarding the fundamental properties such as size, composition, the majority threshold, and the P5 veto. Since then, some progress concerning the UNSC reform has taken place. For example, the UNSC reform entered into intergovernmental negotiations progress in September 2008; text-based negotiations started in 2014–2015; a text has been adopted at the 69th UNGA session (without vote) to advance the UNSC reform (Er, 2020, p. 45). However, “nothing significant has been achieved and there are no prospects for reform in sight” (Christensen, 2016). It is echoed by Hosli and Dörfler (2019, p. 44), who conceived the UNSC reform as “no concrete outcome yet.” During this progress, Japan along with other G4 members continued to promote the enlargement of the UNSC. In 2009, Japanese Prime Minister Yukio Hatoyama stated that “Japan has the capacity to play an even greater role in the United Nations, [. . .] Japan will continue to engage activity in the intergovernmental negotiations on Security Council reform, pursuing the expansion of both permanent and non-permanent membership and Japan’s permanent membership in the Council” (Kantei, 2009). Likewise, in a press conference in 2010, Japanese Prime Minister Naoto Kan emphasized that “together with the countries of the so-called G4, we shall be cooperating and tenaciously stressing the need to reform the UN Security Council and would like to continue to engage in those efforts” (Kantei, 2010). Moreover, in September 2015, Japanese Prime Minister Shinzo Abe attended the 70th UNGA and reiterated Japan’s desire to reform the UNSC (MOFA, 2016b). Shinzo Abe underscored that “Japan would further contribute to the world as a Proactive Contributor to Peace,” then he also expressed his willingness “to realize Security Council reform in order to make the UN better reflect the realities of the 21st century and to make further efforts for world peace and prosperity as a permanent member of the Security Council” (ibid). Furthermore, he attended the G4 Summit meeting during which the top leaders of G4 reaffirmed “their cooperation for an early realization of the Security Council reform” (ibid). To “take a leading role in the promotion of the [UNSC] reform,” Japanese Foreign Minister Fumio Kishida established the Headquarters on Strategy for the United Nations Security Council in the Ministry of Foreign Affairs in January 2016 (MOFA, 2016a). Moreover, Japan engaged in “a variety of diplomatic efforts, such as dispatching State Ministers and Parliamentary Vice-Ministers for Foreign Affairs to various regions” (ibid) so as to “campaign for a permanent seat” (Er, 2020, p. 39). Fumio Kishida reiterated that “it is essential to reform the UNSC and reflect the realities of the international community in the 21st century” (MOFA, 2016a). He proposed that The number of permanent members, not only non-permanent members, should be increased, and countries suited to handle the responsibilities should become members. I believe Japan is a country that should be a permanent member, and Japan is presenting the G4 reform proposal with India, Germany, and Brazil. Specifically, this proposal calls for increasing permanent member seats by six and non-permanent member seats by 4–5 and thereby raising the total of UNSC member countries to 25–26. I am convinced that this change will realize the improvement of the UNSC’s representativeness, legitimacy, and effectiveness. (MOFA, 2016a)

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Furthermore, from 2015 to 2019 Japanese Diplomatic Bluebook reiterated Japan’s ambition to realize the UNSC reform through expanding the permanent and nonpermanent members of the UNSC and its admission as a permanent member (MOFA, 2015, 2016a, 2016b, 2017, 2018a, 2019a). In addition, it underlined that “Japan also places great importance on strengthening its initiatives as a member of the G4 (Japan, India, Germany, and Brazil), a group that cooperates on promoting the reform of the UN Security Council” (MOFA, 2017, 2018a, 2019a).

7.3

Domestic Responses in South Korea

7.3.1

Domestic Interests

Domestic interests here are defined as material considerations of economic sectors of South Korea, whose cost-benefit calculations can change rapidly according to changing economic circumstances arising from the Japanese bid for the permanent seat on the UNSC. Since South Korean interest groups did not directly affect by Japanese leadership project concerning the issue of the UNSC reform, the role of Japanese material interests will be considered as null in this case study.

7.3.2

Societal Ideas

Societal ideas are defined here as path-dependent and value-based collective expectations of voters in South Korea, regarding appropriate and acceptable governmental positions, such as how to govern the security. With regard to societal ideas of South Korea, the concentration will be focused on both process ideas and content ideas. Moreover, the commonality and specificity of societal ideas indicate the relevancy for government reelection (Schirm, 2009, p. 504). The former refers to whether societal ideas are shared by a large number of citizens, while the latter refers to whether they have a precise meaning. Since societal ideas express themselves in societal attitudes (ibid), a combination of public opinion polls is used to represent both process and content ideas of South Korea, including the WVS (2001, 2005, 2010, 2017), as well as surveys conducted by Lorea Research Center (KRC), Chicago Council, Genron NPO, and East Asian Institute.

7.3.2.1

Societal Ideas: Process Ideas

The process ideas here refer to dominant expectations of South Korean voters about the way political decision-making should be conducted. Several process ideas are under scrutiny, including democracy and its characteristics (Van Loon, 2017,

7.3

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Table 7.2 South Korean process ideas concerning democracy (percentage) Survey questions The importance of democracy Having a democratic political system Having a strong leader Democraticness in own country

2001 – 79.9 24.3 37.0

2005 93.6 77.1 47.6 68.9

2010 90.9 74.4 48.7 59.6

2017 92.4 70.1 66.8 89.0

Sources: Author’s compilation based on WVS (2001, 2005, 2010, 2017) Table 7.3 South Korean process ideas concerning essential characteristics of democracy (percentage) Survey questions People choose their leaders in free election Government tax the rich and subsidize the poor People receive state aid for unemployment Civil rights protect people’s liberty from state oppression The state makes people’s incomes equal The economy is prospering

2005 87.7 – 71.3 75.9 – 85.2

2010 82.5 78.4 72.7 70.1 38.7 –

2017 88.9 81.5 78.1 84.8 63.4 –

Sources: Author’s compilation based on WVS (2005, 2010, 2017)

p. 159), as well as the responsibilities of the government and individuals (Schirm, 2009, p. 509). The first category of process ideas, democracy, and its characteristics, is relevant for societal actors’ role in influencing government reelection. The significance of democracy implicates the possibilities and opportunities of societal actors to express their opinions and influence governmental decision-making. South Korean public showed very strong support (nine out of ten) for democracy in the last two decades (see Table 7.2). According to surveys of the WVS from 2001 to 2017, more than 70% of South Korean respondents were in favor of “having a democratic political system.” Meanwhile, beliefs of respondents on the democraticness in South Korea dramatically increased from 37.0% in 2001 to 89.0% in 2017. In 2001, only 32.1% of South Korean respondents viewed democracies as “being indecisive and having too much quibbling,” while 54.8% disagreed the statement of “democracies are not good at maintaining order” (WVS, 2001). In the same year, a majority of 65.6% of South Korean respondents believed that even though democracy may have problems, it is still better than any other form of government (ibid). Moreover, more and more South Koreans thought it is “very good”/“fairly good” to have a strong leader who does not have to bother with parliament and elections. Concerning the essential characteristics of democracy, South Korean respondents shared a consensus that the most important is the free election. Besides that, more and more South Koreans considered the following as important, including “government tax the rich and subsidize the poor,” “people receive state aid for unemployment,” “Civil rights protect people’s liberty from state oppression,” and “make people’s incomes equal” (Table 7.3). Among those, the highlight is the soaring up of demands for equal incomes from 2010 to 2017.

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Table 7.4 South Korean process ideas concerning government and people responsibility (percentage) Survey questions The government should take more responsibility People should take more responsibility Do not know

2000 65.7 30.8 3.5

2005 71.4 25.7 3.0

2010 76.4 18.4 5.2

2017 51.8 48.2 –

Sources: Author’s compilation based on WVS (2001, 2005, 2010, 2017) Table 7.5 South Korean content ideas concerning government’s priority (percentage) Survey questions: aims of country A high level of economic growth Seeing that people have more say about how are done at their jobs and in their communities Trying to make our cities more beautiful A strong defense force No answer

2001 38.8 33.6

2005 46.5 28.6

2010 47.2 28.7

2017 42.2 16.2

17.1 2.7 7.8

12.4 8.4 4.0

14.4 8.7 0.9

3.1 38.4 –

Sources: Author’s compilation based on WVS (2001, 2005, 2010, 2017)

The second category of South Korean process ideas refers to the responsibilities of government and individuals. Concerning “who should take more responsibility,” from 2001 to 2010, a strong majority of respondents advocated that “government should take more responsibility to ensure that everyone is provided for,” while a minority of respondents believed that people should take more responsibility to provide for themselves (see Table 7.4). From 2010 to 2017, the proportion of South Koreans with views on governmental responsibility decreased but still maintain a slight majority (ibid).

7.3.2.2

Societal Ideas: Content Ideas

Content ideas here refer to dominant expectations about core tasks of the South Korean government concerning Japanese leadership project of the permanent seat on the UNSC. Content ideas will be traced through public opinion polls on the priorities of South Korea, views of Japan, responsibility of the UN, and South Koreans’ positions on Japan’s bid. Table 7.5 illustrates South Korean public opinions on the top priorities of their own country. From surveys conducted by the WVS from 2001 to 2017, “a high level of economic growth” is continuously considered as the most important aim of the government, followed by the willingness of having more say on issues, having a more beautiful environment, and having strong defense force. Concerning South Koreans’ views of Japan, the Korea Research Center (KRC) conducted face-to-face interviews with 1500 Korean adults nationwide at the request of the Dong-A Ilbo, which examined South Korean attitudes toward Japan and other countries (MMMF, 2005). According to this survey, 63.4% expressed an overall

7.3

Domestic Responses in South Korea

147

Table 7.6 South Korean content ideas concerning views of Japan (percentage) Survey questions Views of Japan: Unfavorable/relatively unfavorable impression Japanese sociopolitical regime: Militarism Current South Korea–Japan relations: Extremely bad/relatively bad

2013 76.6

2014 70.9

2015 72.5

2016 61.0

2017 56.1

2018 50.6

2019 49.9

50.3 67.4

53.1 77.8

56.9 78.3

49.6 62.3

49.3 65.6

45.1 54.8

49.1 66.1

Source: Author’s compilation based on The Genron NPO and East Asian Institute (2013, 2015, 2016, 2017, 2018, 2019)

unfavorable opinion of Japan, while only 7.8% were favorable (ibid). Moreover, 28.1% of Korean respondents felt that the most threat to the security of South Korea should be Japan, which was only second to North Korea (46.1%) (ibid). Furthermore, 93.5% thought that South Korea–Japan relations were not going well (ibid). To explain these unfavorable opinions of Japan, 93% of respondents thought that the unresolved historical issues hinder deeper South Korea–Japan relations (ibid). When the question referred to Japanese Prime Minister Junichiro Koizumi’s visits to the Yasukuni Shrine2 every year since taking office, 92.3% of South Korean respondents expressed their opposition, while 60.9% of respondents viewed the Yasukuni Shrine as a symbol of Japanese militarism (ibid). Only 18.2% viewed the shrine as a memorial place for the war dead (ibid). Moreover, 95.2% of South Koreans thought that Japan did not compensate for victims of colonial era. Refer to the most important element to solving the historical issues between South Korea and Japan, 42.6% of South Korean respondents thought that Japanese government should apologize in a way that is acceptable to Koreans, 23.9% thought Japan should reconsider compensation, and 23.3% suggested a joint history study (ibid). This is partially echoed by a survey conducted by the Chicago Council in 2006 (ICPSR, 2006), in which 61.8% of South Koreans believed that the relations between South Korea and Japan is worsening, and 81% expressed their distrust of Japan to act responsibly in the world (ICPSR, 2006). Moreover, a series of public opinion polls conducted by the Genron NPO (Japan) and East Asian Institute (South Korea) from 2013 to 2019 showed South Koreans’ unfavorable views of Japan as well (The Genron NPO and East Asian Institute, 2013, 2015, 2016, 2017, 2018, 2019). Table 7.6 shows that in general the proportion of South Koreans with unfavorable impressions of Japan is decreasing from 2013 to 2019, however, majority of South Koreans still hold this bad impression. Around half of South Koreans considered Japan’s sociopolitical regime as militarism rather than capitalism, democracy, international co-operationalism, etc. Moreover, the proportion of South Koreans, who view the relationship between Japan and South 2

There are major controversies surrounding Yasukuni Shrine. It is because among those 2,466,532 listed war dead commemorated and venerated in the shrine, 1068 were convicted war crimes by a post-World War II court and 14 of whom are Class A war criminals. Therefore, Yasukuni Shrine is viewed by neighboring countries of Japan, especially China, South Korea and North Korea, as a microcosm of a revisionist and unapologetic approach to Japanese crimes of World War II.

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Table 7.7 South Korean content ideas concerning barriers to South Korea–Japan relations (percentage) Survey questions Dokdo issues Historical awareness and education in Japan The comfort women issue

2013 94.6 61.1

2014 92.2 –

2015 88.3 42.1

2016 81.1 74.9

2017 82.1 75.8

2018 82.1 78.1

2019 75.6 60.4

–

–

63.5

75.7

75.8

73.5

84.5

Source: Author’s compilation based on The Genron NPO and East Asian Institute (2013, 2015, 2016, 2017, 2018, 2019) Table 7.8 South Korean content ideas concerning historical issues and bilateral relations (percentage) Survey questions South Korea–Japan relations will not develop further if issues of historical understanding are not resolved

2013 41.5

2014 41.1

2015 52.5

2016 42.8

2017 39.5

2018 33.5

2019 39.1

Source: Author’s compilation based on The Genron NPO and East Asian Institute (2013, 2015, 2016, 2017, 2018, 2019)

Korea as “good,” was found to be exceedingly low, in contrast, a strong majority of South Koreans regarded the present bilateral relations between South Korea and Japan as extremely bad/relatively bad. To explain the reasons hindering the improvement of bilateral relations, an overwhelming majority of South Korean respondents polled “the Dokdo3 issue,” followed by “comfort women issue” and “historical awareness and education in Japan” (Table 7.7). In addition, a plurality of South Korean respondents said that “bilateral relations will not improve unless historical issues are resolved” (Table 7.8). It infers a general perception of South Koreans: the resolution of historical issues is a necessary premise for improving bilateral relations. Moreover, survey in 2013 displayed that a strong majority of South Koreans think there is a territorial dispute between Japan and South Korea concerning Dokdo island (The Genron NPO and East Asian Institute, 2013, p. 25). In 2015, 76% of South Korean respondents felt it is necessary to resolve “the depiction of history in textbooks in Japanese schools,” 69.8% suggested dealing with “comfort women issues,” 60.9 and 59.6% were dissatisfied with “Japan’s perception of its invasions of South Korea” and “Japanese lack of apology or remorse for historical events,” respectively (ibid, 2015, p. 20). It has to be noted that, despite the final and irreversible agreement signed by both South Korea and Japan on comfort women issue in December 2015, a strong majority of South Korean respondents felt that “comfort women issue has not been resolved by the agreement reached between the two countries,” with 75% in 2017 and 70.5% in 2018 (ibid, 2017, 2018). Furthermore, according to the surveys, a strong majority shared a consensus that South Koreans’ impression of Japanese 3

Both South Korea and Japan claim their sovereignty over the Liancourt Rocks, a group of small islets, which are referred to as Dokdo in Korean and Takeshima in Japanese.

7.3

Domestic Responses in South Korea

149

Table 7.9 South Korean content ideas concerning Japanese Prime Minister Shinzo Abe and his visits to Yasukuni Shrine (percentage) Survey questions Impression of Shinzo Abe: Extremely unfavorable/relatively unfavorable Shinzo Abe’s visits to Yasukuni shrine: Not acceptable, whether it is made in an official capacity or as a private citizen

2013 –

2014 75.9

2015 80.5

2016 79.4

2017 80.3

2018 74.6

2019 79.3

60

66.5

64.6

–

–

–

–

Source: Author’s compilation based on The Genron NPO and East Asian Institute (2013, 2015, 2016, 2017, 2018, 2019) Table 7.10 South Korean content ideas concerning confidence in the UN (percentage) Survey questions A great deal/quite a lot of confidence in the UN

2001 –

2005 55.2

2010 68.3

2017 69.9

Sources: Author’s compilation based on WVS (2001, 2005, 2010, 2017)

Prime Minister Shinzo Abe is extremely bad or relatively bad, which is partial because of his numerous visits to Yasukuni Shrine (Table 7.9). In 2015, 64.6% of South Koreans said that the visit to Yasukuni Shrine is “not acceptable, whether it is made in an official capacity or as a private citizen,” while those who considered the visit as “not a problem” constituted a mere 3.3%. Concerning the UN, South Korean respondents showed increasing confidence (saying that they have “a great deal”/ “quite a lot” of confidence in the UN) from 55.2% in 2005 to 69.9% in 2017 (Table 7.10). Moreover, in 2005, a plurality of South Koreans was keen on empowering the UN rather than national governments and regional organizations to make decisions regarding the following issues, including international peacekeeping (46.5%), aid to developing countries (56.3%) and refugees (59.9%). Concerning South Koreans’ views of the UNSC reform and the expansion of the permanent seats, survey conducted by the Korea Research Center (KRC) showed that 86.9% of the South Korean respondents “opposed Japan’s being a new member of the UN Security Council” (MMMF, 2005). In another large-scale public opinion study conducted by the Chicago Council in 2006 (ICPSR, 2006), 73.5% of South Koreans opposed Japan becoming a permanent member of the UNSC (ibid). Moreover, along with the debate over the permanent seat on the UNSC, an online petition campaign also helped galvanize global opinions on this issue. This petition movement was resolved around a refusal for granting Japan the status as a permanent member on the UNSC. This global signature drive was initially launched in Los Angeles in the USA by a Northern California-based grassroots organization on February 28, 2005, and rapidly swept the global. The drive has united public opinion in areas including China, South Korea, North Korea, the Philippines, the USA, the Netherlands, and so on (People’s Daily Online, 2005). The ranks of anti-G4 groups surged rapidly. South Korea had the second-largest number of participants, only next to China. As the major Internet base for Korean activists, the website of Historical Justice Now (www.historicaljustice.org/HjN/) published petition letters in both

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Korean and English. By March 24, 2005, over 60,000 South Koreans had signed the online petition; and by the time the petition was submitted to the UN headquarters on June 30, 2005, 164,255 signatories were gathered from South Korea (Tai, 2007).

7.4

South Korean Governmental Preferences Toward the UNSC

South Korea is an integrant member of the Uniting for Consensus (UfC) group which originated from “coffee club” founded in 1995 by Italy, Pakistan, Mexico, and Egypt. The member states of the UfC consisted of Argentina, Canada, Colombia, Costa Rica, Italy, Malta, Mexico, Pakistan, San Marino, Spain, South Korea, and Turkey, and later continuously grew to 50 members (Preschern, 2009, p. 5). These countries commonly oppose the increase of permanent members on the UNSC, and support instead the expansion of the nonpermanent seats within the body. Similarly, South Korea rejects Japan’s leadership project, which proposes six permanent members (G4 and two African countries) and four nonpermanent members. Rather, South Korea, along with other UfC countries, promotes alternative proposals with more representativeness, legitimacy, and effectiveness, centered on an enlargement of the number of nonpermanent members from 10 to 20. Moreover, Japanese “somewhat narcissistic arguments” (Katsuno, 2012) are not shared by its neighbors, especially China and South Korea. Since the 1990s, senior South Korean officials constantly expressed their opposition to the enlargement of the permanent members of the UNSC. South Korean Ambassador Park Soo Gil, the Permanent Representative at the High-Level Open-ended Working Group, stated that Some would argue that the proposed increase in permanent seats is the best answer to this problem. We do not share this view [. . .] It could deal a blow to the health and vitality of the Organization [UNSC] by making a few countries permanently better off, while making dozens of other countries with similar, or in some cases, even greater capabilities to contribute to peace, worse off forever. (Global Policy, 1997)

During the 54th Session of the UN General Assembly, Lee See-young, the South Korean Permanent Representative, expressed government’s consistent position (Global Policy, 2000). He elaborated that South Korea was “prepared to go ahead with the expansion of the non-permanent membership,” which “better guarantees democratic representation on the Security Council [. . .] should be distributed on a more equitable geographical basis” (ibid). When he turned to the sensitive issue of the decision-making process of the UNSC, he articulated that “the number of veto holders must not be enlarged” (ibid). In the 59th General Assembly Plenary 115th Meeting, the UfC presented a text against the G4 proposal (additional six permanent seats and four nonpermanent seats) by promoting their alternative reform (Minor, 2010). The text articulated that the UNSC shall consist of 25 members of the UN, 20 elected members serving for a

7.4

South Korean Governmental Preferences Toward the UNSC

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2-year term, in addition to the five permanent members, i.e., additional ten nonpermanent members and no additional permanent members (UN, 2005a). The 20 nonpermanent members of the UNSC would be allocated as the following pattern: six from African states; five from Asian states; four from Latin American and Caribbean states; three from Western European and other states; and two from Eastern European states. South Korean Foreign Minister Ban Ki-moon addressed separately in the 59th and 60th Sessions of the UN General Assembly, and emphasized that “the best way to foster broad-based consensus” is to increase the nonpermanent seats without any additional permanent seats on the UNSC (MOFA, 2004b, 2005c). During an official visit to Germany in 2005, South Korean President Roh Moo-hyun expressed reservations about a permanent Japanese seat on the UNSC (Frankfurter Allgemeine Zeitung, 2005). A few months later, at the High-level Plenary Meeting of the 60th Session of the UN General Assembly, Roh Moo-hyun called upon the UN member states to “completely divest itself of mindsets and vestiges reminiscent of imperialistic tendencies that appear to linger in various forms,” and to keep “vigilance against a resurgence of major-power centrism in certain circles” (UN, 2005b). Although Roh Moo-hyun used elaborate language, the Korea Herald interpreted it as a pointed and apparent shot at South Korea’s “close but often inimical neighbor Japan” (The Korea Herald, 2010). Roh Moo-hyun also said: “the leading nations of contemporary international politics should be more forthcoming in their introspection of the past and future and also exercise greater self-restraint” (UN, 2005b). Referring to the UN reform, Roh Moo-hyun suggested it should “proceed in a manner that enhances its moral authority through democracy, accountability and efficiency” (The Korea Herald, 2010). He added that any reform plan should serve to facilitate the collective will of nations, rather than presage another variant of powerplay politics (ibid). According to the Korea Herald, “Roh once again expressed, albeit circuitously, Korea’s opposition to expanding the number of permanent seats in the powerful international security authority” (ibid). Since no UNSC reform proposal (including G4 and UfC) was put to the vote in 2005, South Korea, together with other UfC countries reaffirmed their shared position of reforming the UNSC through adding nonpermanent members and considered it as “the only realistic way to promote the democracy, accountability, transparency and representativeness of the body” (MOFA, 2014). Concerning the details of the UNSC reform proposal, UfC stuck with the position of only expanding the number of non-permanent members and proposed to add nonpermanent seats allocated to the regional groups on a rotational basis instead of to single national countries. Moreover, the new category of nonpermanent seats would be elected for (1) 3–5 years duration of terms without the possibility of immediate reelection, or (2) an extended duration of 2 years with the possibility of immediate reelection (Global Policy, 2009). Additionally, it is reported by the Korea Times in 2014, South Korean President Park Geun-hye “is showing no signs of abating her wrath against Japan” (Chung, 2014). On the one hand, Park Geun-hye questioned “Japan’s qualifications to

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become the sixth permanent member of the UNSC, under its ultranationalist Prime Minister Shinzo Abe,” and insisted that “it is better to increase the non-permanent membership of the UNSC when reforming the Security Council” (ibid). She said, “the Korean government thinks this way of reform to be more desirable because it can better help the UNSC actively cope with changing international circumstances,” (ibid). The Korea Times (ibid), on the other hand, pointed out the grievances of President Park Geun-hye concerning Japan’s reflection on historical issues. It is reported that “[Park Geun-hye] called Shinzo Abe, in a roundabout way, a hypocrite for denying historical facts about Japan’s imperial past” and said that “selecting a couple of nations for the privileged permanent status through just a single election could be counterproductive” (ibid). The background of Park Geun-hye’s expression was Shinzo Abe’s reasserting Japan’s claim on Dokdo island and having Dokdo claim included in Japanese history textbooks (ibid). In 2018, South Korea H.E. Ambassador Cho Tae-yul further stated South Korea’s position on the UNSC reform. He said: “we firmly believe that creating a new category of long-term re-electable seats is the best way of addressing the current structural problems as it not only fits for purpose, but is in line with democratic principles. It also better reflects the ever-evolving geopolitical realities of the world, while providing the aspiring countries, especially those in Africa, with additional and more equitable opportunities to be democratically elected to the Council for longer-term seats and to play greater roles in discharging the Council’s primary responsibilities” (MOFA, 2018b). Moreover, he called for the resistance of “any temptation to resort to simpler solutions such as evoking ‘the number’ in the negotiations” (ibid). He said: “no one would deny that we need to have a text for negotiations eventually. However, under the current circumstances where Member States hold polar opposite views on the most substantive issues, it seems unlikely that a text would be anything but divisive” (ibid). At the 73rd UNGA’s 4th meeting of the intergovernmental negotiations on the UNSC reform in May 2019, South Korea H.E. Ambassador Cho Tae-yul pointed out that “we in the UfC Group have not seen any comprehensive reform proposal that considers the inherent interlinkages among the clusters, other than our own proposal, [. . .] the UfC’s proposal to add eleven non-permanent members with long-term, re-electable seats is a proposal that will minimize the negative impact of veto power, while maximizing regional representation simultaneously” (MOFA, 2019b). Additionally, he emphasized five key principles of comprehensive UNSC reform, which include: “More representative” means more inclusive, offering increased opportunities for all Member States, especially those from currently un-represented or under-represented regions, to serve in the Council. “More democratic” means that the Council members should be elected by the wider membership. “More accountable” means that the Council membership should be considered as a responsibility, not as a granted privilege, and that the members should be held to account for their performance. “More transparent” means improving the Council’s working methods in a way that doesn’t leave out any member. And lastly, “more effective” means expanding the Council to an adequate size, while minimizing the problems of stalemate and inaction that hinder the Council’s ability to fulfill its mandate. (ibid)

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Furthermore, Cho Tae-yul claimed that all five cluster areas4 are “strongly interconnected and therefore negotiations should be based on the principle that ‘nothing is agreed until everything is agreed’. Some countries seem to be interested in a fast-track approach focused on a few selected issues only. It is simply unacceptable. We cannot afford to miss this once-in-a-generation opportunity to achieve a comprehensive reform of the Council through the [intergovernmental negotiations] process” (MOFA, 2019b).

7.5

Multi-step Analysis

The causal mechanism in this case study is scrutinized as follows, which consists of four parts, including the impact of the Japanese leadership project on South Korea concerning the permanent seat on the UNSC, the domestic actors’ response in South Korea, South Korean governmental preferences and testing hypotheses on conditions of prevalence, inclusiveness of the Japanese leadership project and testing hypothesis of followership.

7.5.1

Japanese Leadership Project and Its Impacts on South Korea

The first step of causal mechanism assumes that the Japanese leadership project of the permanent seat on the UNSC impacted the fundamental expectations of South Korean voters on the appropriateness of governance, hence arose questions on the role of politics within the country. As illustrated before, Japan with other three countries in G4 initially called for expanding the UNSC by adding six permanent seats (G4 and two African states) and four nonpermanent seats. In order to secure the support of the P5, the G4 accepted to forego the veto privilege for at least 15 years. In the perspective of Japan, its bid for the permanent seat on the UNSC was based on its continued efforts in developing the UN cooperation in terms of personnel, its financial contributions to economic cooperation, and its stance on arms control, disarmament, and nonproliferation (MOFA, 2006). G4’s proposal failed to obtain two-thirds of votes at UNGA in 2005. Afterward, Japan kept pushing forward the UNSC reform through the expansion of both permanent and nonpermanent members. Some progress has taken place, such as the intergovernmental negotiations progress started in 2008, and the text-based

4

Five key cluster areas consist of (1) size of an enlarged Security Council, (2) categories of membership and regional representation, (3) veto, (4) the amelioration of the UNSC’ working methods, and (5) relations between the UNSC and the UNGA (Ronzitti, 2010, p. 10).

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negotiations started in 2014–2015. During this progress, Japan emphasized strengthening its initiatives as a member of the G4, and claimed to “take a leading role in the promotion the [UNSC] reform” (MOFA, 2016a). Specifically, Japanese Foreign Minister Fumio Kishida proposed to increase six permanent member seats (including Japan) and 4–5 nonpermanent member seats on the UNSC, to raise the total number of the UNSC Members to 25–26 (ibid). However, so far, “nothing significant has been achieved and there are no prospects for reform in sight” (Christensen, 2016). It is echoed by Hosli and Dörfler (2019, p. 44), who conceived the UNSC reform as “no concrete outcome yet.” This is partially because there is significant disagreement among UN Member States about the details of reforming the UNSC, such as “what should be the basis for determining the legitimacy and representativeness of the UNSC”; “Which regions should be granted more seats and how many” (Christensen, 2016).

7.5.2

Domestic Actors’ Responses in South Korea

The second step of the causal mechanism occurs at the domestic level of analysis, and it assumes that South Korean domestic actors are expected to respond to the impact arising from the Japanese leadership project of the UNSC. On the one hand, South Korean interest groups did not directly affect by Japanese leadership project regarding the UNSC, the role of South Korean material interests will be considered as null in this case study. On the other hand, with regard to the fundamental expectations of South Korean voters concerning Japanese leadership project regarding the UNSC, several categories of societal ideas show the public opinions of South Koreans about how politics should govern the security. The possibilities and opportunities of South Korean voters to express their opinions and influence governmental decision-making are represented by their overwhelming support for democracy and governmental responsibilities (WVS, 2001, 2005, 2010, 2017). Moreover, the survey data (ibid) show a high commonality and specificity that South Koreans have a deep negative impression of Japan. The majority articulated their opposition to Japan’s admission to permanent seats on the UNSC and expressed their unfavorable opinions of Japan. More specifically, 86.9% of South Korean respondents opposed Japan’s bid for the permanent seat on the UNSC (MMMF, 2005). Regarding the views of other countries, South Koreans held a strongly unfavorable impression of Japan in the last two decades (MMMF, 2005; ICPSR, 2006; The Genron NPO and East Asian Institute, 2013, 2015, 2016, 2017, 2018, 2019). Japan was viewed as the second most threatening to the security of South Korea (MMMF, 2005). In addition, in the perspective of South Koreans, militarism is the symbol of Japanese sociopolitical regime; and bilateral relations between South Korea and Japan are extremely bad/relatively bad (The Genron NPO and East Asian Institute, 2013, 2015, 2016, 2017, 2018, 2019).

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South Koreans’ unfavorable views of Japan were reflected by their dissatisfaction with Japanese introspection on historical issues. The momentum of South Koreans’ opposing attitudes toward Japan stemmed from their rocky relations, the perceived lack of historical awareness on the part of average Japanese of the Koreans’ suffering under the former empire’s colonial rule. According to the surveys (The Genron NPO and East Asian Institute, 2013, 2015, 2016, 2017, 2018, 2019), the top three issues that hinder deeper South Korea-Japan relations consisted of Dokdo issue, comfort women issue as well as historical awareness, and education in Japan (ibid). The plurality of South Koreans even insisted that bilateral relations will not develop further unless the historical issues have been resolved (ibid). In South Korea, the hostility was also aroused by several developments. First is the issue of disputed volcanic islets between Korea (where they are known as Dokdo) and Japan (where they are called Takeshima). At a meeting of foreign journalists in late February 2006, the Japanese Ambassador to South Korea claimed the disputed islets of Dokdo are historically and legally Japan’s territory (Tai, 2007), which evoked the nationalistic fervor among South Koreans. Demonstrations were held. An old woman cut off her little finger, and a young man even set fire to himself (The Economist, 2005a). In response to the territorial dispute, South Korean President Roh Moo-Hyun issued a letter to the people on March 23, 2005, declaring the prospects of a “diplomatic war” with Japan (MMMF, 2005). Moreover, Dokdo issue got the spotlight again in 2008 that “a row over content [appeared] in a Japanese teaching guide” (BBC, 2012). Furthermore, Japan filed a diplomatic protest with South Korea concerning Dokdo issue (ibid). According to Coulmas (2006, p. 21), “Japan is at the center of unresolved territorial conflicts that are a leftover of Japan’s colonialism, expansionism, and war of aggression.” Second, a series of new Japanese secondary school history textbooks written by extreme nationalists, who downplayed Japan’s military aggression toward its neighbors during World War II (WWII) and “whitewashed Japan’s militaristic past” (Khoso, 2005, p. 107) were submitted for approval by Japan’s Ministry of Education in March 2005 (Tai, 2007). Moreover, the comfort women issue is considered “merely the most politically explosive of the textbook controversies that have long articulated with, and inflamed, historical memory issues in ways that exacerbate contemporary international conflicts involving Japan and South Korea” (Nozaki & Selden, 2009, p. 15). The third issue that hinders the improvement of South Koreans’ attitudes toward Japan is the Yasukuni Shrine. Japanese Prime Minister Junichiro Koizumi has insisted on visiting the Yasukuni Shrine once a year since taking office against the backdrop of loud protests in China and South Korea. This has thrown Japanese relations with its two biggest neighbors, China and South Korea, into the political chiller. Moreover, Yasukuni is such a vital issue for South Korea–Japan relations, that South Korea hardened its attitudes toward Japan as Japanese Prime Minister Shinzo Abe made a sudden visit to Yasukuni Shrine on December 26, 2013 (Koga, 2016, p. 332). The Economist (2005c) suggested that the deterioration in relations between Japan and its neighbors at the highest level is unavoidable as long as Japan’s Prime Ministers continue to visit the Yasukuni Shrine. All these

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above-mentioned reasons not only evoked mistrust, but also upheld South Korea’s argument that Japan did not deserve a permanent seat on the UNSC. Against the backdrop of unfavorable views of Japan, South Koreans shared great confidence in the UN, and were keen on empowering the UN to make decisions regarding peacekeeping, aid, and refugees (WVS, 2005, 2010, 2017). Particularly, they shared a strong consensus opposing Japan’s being a new permanent member on the UNSC. All Japanese efforts to campaign for acceptance of its admission to permanent seat on the UNSC “will mean little if it fails to confront its past and heal its historic wound with its neighbors” (Khoso, 2005, p. 108).

7.5.3

Governmental Preference Formation and Testing Hypotheses

The third step of the causal mechanism equally occurs at the domestic level of analysis, it is based on the standard assumption of elected politicians in democratic political systems respond to domestic demands, ranging from lobby groups to the voters. The impact of the Japanese leadership project and South Korean domestic responses have been analyzed in the first two steps, in the third step hypothesis on conditions of prevalence will be tested through reviewing the governmental preferences of South Korea regarding the UNSC reform, and recalling the hypothesis as well as examining interactions between discourses. South Korean government held a consistent position regarding the UNSC reform: expanding the nonpermanent membership is a better guarantee of democratic representation of the UNSC on the one hand, and it could provide a more equitable geographical basis on the other hand. Along with other UfC countries, South Korea proposed to expand the UNSC with additional ten nonpermanent members and no additional permanent members in 2005. Moreover, South Korean President Roh Moo-hyun called for keeping vigilance against imperialistic tendencies and a resurgence of major power centrism, which is explained as aiming at its close but often inimical neighbor Japan. More specifically, he insisted that “the leading nations” should exercise greater self-restraint and conduct introspection of the past and future. After the failure of G4’s proposal at UNGA in 2005, South Korea continued to work with other UfC countries to promote UNSC reform through adding nonpermanent members and refusing the expansion of permanent members. Moreover, South Korea insisted that “the UfC’s proposal to add eleven non-permanent members with long-term, re-electable seats is a proposal that will minimize the negative impact of veto power, while maximizing regional representation simultaneously” (MOFA, 2019b). On the other hand, in the perspective of South Korea, adding long-term re-electable seats is the best way to promote comprehensive UNSC reform since it fits five principles including more representative, more democratic, more accountable, more transparent, and more effective (MOFA, 2019b). Furthermore, South Korea opposed fast-track approach focusing on a few selected issues

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only, and insisted the negotiation should be based on the principle of “nothing is agreed until everything is agreed” (MOFA, 2018b, 2019b). Among South Korean politicians and leaders, President Park Geun-hye particularly questioned “Japan’s qualification to become the sixth permanent member of the UNSC” and claimed its governmental positions on the UNSC reform: adding nonpermanent membership (Chung, 2014). She expressed concerns about Japanese Prime Minister Shinzo Abe’s behavior of “denying historical facts about Japan’s imperial past,” and she said that “selecting a couple of nations for the privileged permanent status through just a single election could be counterproductive” (ibid). Before examining the correlation between domestic interests and/or societal ideas and the South Korean governmental preferences toward Japan’s bid for the permanent seat on the UNSC, it is necessary here to recall the hypotheses. Concerning this case study, H2 states that if the Japanese leadership project of the permanent seat on the UNSC directly affects specific economic sectors in South Korea, and raises cost/ benefit questions of international competition, then domestic interests will be most influential in shaping the South Korean governmental preferences because lobbying will be strong. While H3 claims that if the Japanese leadership project of the permanent seat on the UNSC raises concerns on the fundamental questions and collective expectations about how politics should govern the security, then societal ideas will prevail in shaping the South Korean governmental positions, this link will be strengthened if the project has only a diffuse impact on South Korean related sectors, because then lobbying will be weak. Firstly, the lack of direct impact of Japanese leadership project regarding the UNSC reform on the specific economic sectors in the South Korea, leads to low support for H2, because (1) there is no evidence showing domestic sectors’ lobbying concerning the UNSC reform in South Korea, (2) there is a low degree of South Korean governmental responsiveness to its domestic interests. Secondly, Table 7.11 shows a high degree of South Korean governmental responsiveness to its societal ideas. With regard to the process ideas, dominant expectations of South Korean voters about conducting political decision-making, South Korean respondents displayed a high acceptance of democracy and government responsibility. The high commonality and specificity show a large opportunity for South Korean voters to participate in the political process. With regard to the content ideas, the South Korean government was responsive with high commonality and specificity, such as trust in the UN, strongly unfavorable opinions of Japan, dissatisfaction with Japanese introspection of historical issues, as well as opposition of Japan’s admission to permanent seats on the UNSC. The viewpoints in abovementioned public opinion polls spanned for decades, and showed continuity, which indicated the expectations of the South Korean voters on how to organize the international society. For example, the South Korean sentiment toward Japan remained largely negative. For South Koreans, Japan has been a historical threat to the peace and prosperity in Asia. Japan’s postwar crimes and lack of self-reflection have long plagued political ties between the two countries. The arguments of the South Korean ambassadors, Foreign Ministers, and Presidents highlighted the dissatisfaction with Japanese reflection on historical issues and the opposition to

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Table 7.11 Correlation between the South Korean societal ideas and its governmental preferences on the UNSC Societal ideas • The top priority: A high level of economic growth • Majority of South Koreans generally trust in the UN, and were keen on empowering the UN to make decisions regarding international peacekeeping • 86.9% South Koreans opposed Japan’s bid for the permanent seat on the UNSC • Overall unfavorable opinions of Japan, 81% distrust Japan • Japan is viewed as the second most threatening to the security of South Korea • A plurality viewed Japanese sociopolitical regime as militarism • Strong majority conceived ROK–Japan relations as bad • A consensus of South Koreans regarding the top three barriers to South Korea–Japan bilateral relations: Dokdo issues, historical awareness and education in Japan, and the comfort women issue • A plurality thought that South Korea–Japan relations will not develop further if issues of historical understanding are not resolved • A strong majority had a bad impression of Japanese Prime Minister • Overwhelming gap between South Koreans who thought “not acceptable to visit Yasukuni Shrine, whether it is made in an official capacity or as a private citizen” (64.6%) and those considered the visit as “not a problem” (3.3%) • 92.3% of Koreans opposed Japanese Prime Minister Junichiro Koizumi’s numerous visits to the Yasukuni Shrine

South Korean governmental preference • Permanent Representative at the UNGA Lee See-young: Prepared to go ahead with the expansion of the nonpermanent membership based on a more equitable geographical basis; better guarantees democratic representation on the UNSC; the number of veto holders must not be enlarged • UfC: Expand the UNSC with ten nonpermanent members and no additional permanent members (2005); add nonpermanent seats allocated to the regional groups on a rotational basis instead of to single national countries; new category of nonpermanent seat would be elected for (1) 3–5 years terms without immediate reelection, or (2) 2 years terms with immediate reelection • President Roh Moo-hyun: Completely divest itself of mindsets and vestiges reminiscent of imperialistic tendencies that appear to linger in various forms; keep vigilance against a resurgence of major-power centrism in certain circles; the leading nations of contemporary international politics should be more forthcoming in their introspection of the past and future and also exercise greater self-restraint; proceed in a manner that enhances its moral authority through democracy, accountability, and efficiency • President Park Geun-hye: Questioned Japan’s qualifications to become the sixth permanent member of the UNSC; insist to increase the nonpermanent membership of the UNSC; select a couple of nations for the privileged permanent status through just a single election could be counterproductive; denying historical facts about Japan’s imperial past is hypocrite • MOFA: Add 11 nonpermanent members with long-term, reelectable seats; five key principles of comprehensive UNSC reform (more representative, more democratic, more accountable, more transparent, and more effective); nothing is agreed upon until everything is agreed

Sources: Author’s compilation

Japan’s bid for the permanent seat on the UNSC, therefore reflecting South Korean societal ideas. Therefore, the above-mentioned evidence shows strong support for H3, because (1) affected by the Japanese leadership project of the UNSC, the South

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Korean voters share collective fundamental expectations on appropriate governmental behavior concerning the UNSC reform, (2) a high degree of the South Korean governmental responsiveness to its societal ideas.

7.5.4

Inclusiveness of Leadership Project and Followership

The fourth step of the causal mechanism occurs at the international level of analysis. As Schirm (2010, p. 216) states, “leadership [. . .] gains followership only if it is credibly framed as a project also representing the goals of others.” Therefore, the main hypothesis (H1) is necessary to be recalled here, which claims that the inclusion of the domestic ideas and/or interests dominant in the potential follower country, South Korea, into the Japanese leadership project of the UNSC is a necessary condition to secure the followership of South Korea. Table 7.12 illustrates the correlation between inclusiveness of the Japanese leadership project and South Korea’s non-followership. The Japanese leadership project articulated its ambition to change the structure of global governance and to reflect its position in the international system through pushing for the UNSC reforms and making itself a permanent member. The lack of inclusiveness resulted in the failure of Japan’s leadership attempt. Tokyo tried to equalize its automatic right of being a permanent member to the representativeness and legitimacy of the UNSC, which was not shared with its potential follower South Korea. South Korea joined the Coffee Group, which was later renamed the UfC and brought together the G4’s regional rivals. South Korea criticized and opposed the creation of any new permanent seat on the UNSC, called upon more equitable geographical distribution of nonpermanent seats, and proposed the introduction of more numerous non-permanent members. Japan not only failed to meet South Korea’s requirement of more numerous nonpermanent members, but also ignored or underestimated the prevalent anti-Japan sentiment in South Korea, such as South Koreans’ demand for Japanese self-reflection of its aggressions in the past, sincere apologies, and reasonable compensation. Japan included neither South Korea’s domestic interests nor societal ideas in its leadership project of the UNSC. Eventually, the Japanese leadership project failed and none of the G4 captured the permanent seats on the UNSC in 2005, no concrete outcomes of the UNSC reform have been reached so far. Therefore, the evidence analyzed above shows a strong support for the main hypothesis (H1) concerning Japanese leadership of the UNSC, because (1) Japan did not credibly include South Korean societal ideas/domestic interests in its leadership project and (2) Japan did not obtain the followership from South Korea.

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Table 7.12 Correlation between inclusiveness of the Japanese leadership project and non-followership of South Korea Japanese leadership project • If Japan is to become a permanent member, then it wishes to hold equal rights as the P5 • Expanding the UNSC by adding six permanent seats (G4 and two African states) and four nonpermanent seats; forego the veto privilege for at least 15 years • Strengthen its initiatives as a member of the G4 • Japanese Foreign Minister Fumio Kishida proposed to increase six permanent member seats (including Japan) and 4–5 nonpermanent member seats on the UNSC, to raise the total number of the UNSC members to 25–26

Societal ideas of South Korea • The top priority: A high level of economic growth • Trust in the UN; empower the UN to make decisions regarding international issues • 86.9% South Koreans opposed to Japanese leadership project of the UNSC • Overall unfavorable opinions of Japan • Japan is viewed as the second most threatening to the security of South Korea • A plurality viewed the Japanese sociopolitical regime was viewed as militarism • ROK–Japan relations were conceived as bad • The top three barriers to ROK–Japan bilateral relations: Dokdo issues, historical awareness and education in Japan, and the comfort women issue • A plurality thought that ROK–Japan relations will not develop further if issues of historical understanding are not resolved • Bad impression of Japanese Prime Minister • 92.3% opposed Japanese Prime Minister’s visits to the Yasukuni Shrine

South Korean governmental preferences • UfC: Expand the UNSC with ten nonpermanent members and no additional permanent members (2005); new category of nonpermanent seats would be elected for (1) 3–5 years terms without immediate reelection, or (2) 2 years terms with immediate reelection • President Roh Moo-hyun: Completely divest itself of mindsets and vestiges reminiscent of imperialistic tendencies; the leading nations of contemporary international politics should be more forthcoming in their introspection of the past and future and also exercise greater self-restraint • President Park Geun-hye: Questioned Japan’s qualifications to become the sixth permanent member of the UNSC; insist to increase the nonpermanent membership of the UNSC; select a couple of nations for the privileged permanent status through just a single election could be counterproductive; denying historical facts about Japan’s imperial past is hypocrite MOFA: Add 11 nonpermanent members with long-term, re-electable seats; nothing is agreed upon until everything is agreed

Sources: Author’s compilation

References BBC. (2012, August 10). Profile: Dokdo/Takeshima islands. BBC News. https://www.bbc.com/ news/world-asia-19207086 Cheibub, J. A., Gandhi, J., & Vreeland, J. R. (2010). Democracy and dictatorship revisited. Public Choice, 143(1), 67–101. https://doi.org/10.1007/s11127-009-9491-2

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MOFA. (2004b, September 25). Statement by H.E. Ban Ki-moon at the 59th session of the UN General Assembly. Ministry of Foreign Affairs of Japan. https://www.un.org/webcast/ga/59/ statements/koreng040924.pdf MOFA. (2004c, December 9). Press conference by Prime Minister Junichiro Koizumi and Chancellor Gerhard Schroeder of the Federal Republic of Germany. Ministry of Foreign Affairs of Japan. https://www.mofa.go.jp/region/europe/germany/summit0412/press.html MOFA. (2005a, September 15). Address by Prime Minister Junichiro Koizumi at the high-level plenary meeting of the sixtieth session of the general assembly of the United Nations. Ministry of Foreign Affairs of Japan. https://www.mofa.go.jp/policy/un/assembly2005/state_pm.html MOFA. (2005b, September 17). Address by H.E. Mr. Nobutaka Machimura Minister for Foreign Affairs of Japan at the sixtieth session of the general assembly of the United Nations “A new United Nations and Japan.” Ministry of Foreign Affairs of Japan. https://www.mofa.go.jp/ policy/un/assembly2005/state_fm3.html MOFA. (2005c, September 18). Statement by H.E. Ban Ki-moon (foreign minister) at the general debate of the 60th session of the General Assembly of the United Nations. Ministry of Foreign Affairs of Japan. http://www.mofa.go.kr/webmodule/htsboard/template/read/engreadboard.jsp? t y p e I D ¼1 2 & b o a r d i d ¼3 0 4 & s e q n o ¼2 9 8 3 6 3 & c ¼T I T L E & t ¼& p a g e n u m ¼1 3 & tableName¼TYPE_ENGLISH&pc¼&dc¼&wc¼&lu¼&vu¼&iu¼&du¼ MOFA. (2006). An argument for Japan’s becoming permanent member. Ministry of Foreign Affairs of Japan. https://www.mofa.go.jp/policy/q_a/faq5.html MOFA. (2014). 2nd vice foreign minister attends a vice-ministerial-level meeting of the uniting for consensus group. Ministry of Foreign Affairs of Japan. https://www.mofa.go.kr/eng/brd/m_54 61/view.do?seq¼313446&srchFr¼&;srchTo¼&;srchWord¼&;srchTp¼&;multi_itm_seq¼0& ;itm_seq_1¼0&;itm_seq_2¼0&;company_cd¼&;company_nm¼ MOFA. (2015). Diplomatic bluebook 2015, chapter 3 Japan’s foreign policy to promote national and worldwide interests. Ministry of Foreign Affairs of Japan. https://www.mofa.go.jp/fp/pp/ page24e_000100.html MOFA. (2016a, February 23). Japan’s United Nations diplomacy “together with developing countries”—Speech by Foreign Minister Kishida. Ministry of Foreign Affairs of Japan. https://www.mofa.go.jp/fp/unp_a/page3_001576.html MOFA. (2016b, July 29). Diplomatic bluebook 2016, chapter 3 Japan’s foreign policy to promote national and worldwide interests. Ministry of Foreign Affairs of Japan. https://www.mofa.go. jp/fp/pp/page24e_000157.html MOFA. (2017). Diplomatic bluebook 2017, chapter 3 Japan’s foreign policy to promote national and worldwide interests. Ministry of Foreign Affairs of Japan. https://www.mofa.go.jp/ files/000106463.pdf MOFA. (2018a). Diplomatic bluebook 2018, chapter 3 Japan’s foreign policy to promote national and worldwide interests. Ministry of Foreign Affairs of Japan. https://www.mofa.go.jp/policy/ other/bluebook/index.html MOFA. (2018b, February 1). Statement at the 1st meeting of the intergovernmental negotiations (IGN) of the 72nd General Assembly on the Security Council reform. Ministry of Foreign Affairs of Japan. http://www.mofa.go.kr/eng/brd/m_5461/view.do?seq¼319319 MOFA. (2019a). Diplomatic bluebook 2019, chapter 3 Japan’s foreign policy to promote national and worldwide interests. Ministry of Foreign Affairs of Japan. https://www.mofa.go.jp/policy/ other/bluebook/index.html MOFA. (2019b, May 1). Statement at the 73rd General Assembly’s 4th meeting of the Intergovernmental Negotiations (IGN) on the Security Council reform (5.1). Ministry of Foreign Affairs of Japan. http://www.mofa.go.kr/eng/brd/m_5461/view.do?seq¼319359&srchFr¼&; srchTo¼&;srchWord¼&;srchTp¼&;multi_itm_seq¼0&;itm_seq_1¼0&;itm_seq_2¼0&;com pany_cd¼&;company_nm¼&page¼2&titleNm¼ Nobumasa, A. (2015). Japan’s failed bid for a permanent seat on the UN Security Council. In Examining Japan’s lost decades. Routledge.

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Nozaki, Y., & Selden, M. (2009). Japanese textbook controversies, nationalism, and historical memory: Intra-and inter-national conflicts. The Asia-Pacific Journal, 24(5). Ogunnoiki, A. O. (2018). Reforming the United Nations in the 21st century: A discourse on the enlargement, democratisation and the working methods of the Security Council. International Journal of Advanced Academic Research, 4(6), 40–70. People’s Daily Online. (2005). Signatures being globally collected against Japan’s seek for UN Security Council seat. http://en.people.cn/200503/10/print20050310_176330.html. Preschern, P. (2009, June 11). La riforma del Consiglio di Sicurezza dagli anni ‘90 ad oggi: Problemi e prospettive [The Reform of the Security Council from the 1990s to Today: Problems and Perspectives] [Text]. IAI Istituto Affari Internazionali. https://www.iai.it/it/pubblicazioni/ la-riforma-del-consiglio-di-sicurezza-dagli-anni-90-ad-oggi Ronzitti, N. (2010). The reform of the UN security council. In The EU, the UN and collective security: Making multilateralism effective (p. 73). Schirm, S. A. (2009). Ideas and interests in global financial governance: Comparing German and US preference formation. Cambridge Review of International Affairs, 22(3), 501–521. https:// doi.org/10.1080/09557570903103992 Schirm, S. A. (2010). Leaders in need of followers: Emerging powers in global governance. European Journal of International Relations, 16(2), 197–221. https://doi.org/10.1177/ 1354066109342922 Tai, Z. (2007). The internet in China: Cyberspace and civil society. Routledge. https://doi.org/10. 4324/9780203944073 The Economist. (2005a, March 23). South Korea and Japan Rocky Relations. The Economist. http:// www.economist.com/node/3795319 The Economist. (2005b, April 14). China, Japan and the UN: A collision in East Asia. http://www. economist.com/node/3861266 The Economist. (2005c, October 13). The Yasukuni shrine, stone of contention, A small Improvement in Japan-Korea Relations. The Economist. https://www.economist.com/asia/2005/10/13/ stone-of-contention The Genron NPO and East Asian Institute. (2013, May 14). The 1st Japan-South Korea joint opinion poll. https://www.genron-npo.net/en/opinion_polls/archives/5263.html The Genron NPO and East Asian Institute. (2015, October 22). 11th Japan-China joint opinion poll analysis report on the comparative data (2015). https://www.genron-npo.net/en/opinion_polls/ archives/5315.html The Genron NPO and East Asian Institute. (2016, August 15). The 4th Japan-South Korea joint public opinion poll (2016) analysis report on comparative data. The Genron NPO. https://www. genron-npo.net/en/opinion_polls/archives/5305.html The Genron NPO and East Asian Institute. (2017, July 20). The 5th Japan-South Korea joint public opinion poll (2017) analysis report on comparative data. https://www.genron-npo.net/en/ opinion_polls/archives/5363.html The Genron NPO and East Asian Institute. (2018, June 18). The 6th Japan-South Korea joint public opinion poll (2018): The Japan-South Korea joint opinion poll on North Korean’s denuclearization and the future of the Korean peninsula. https://www.genron-npo.net/en/opinion_polls/ archives/5436.html The Genron NPO and East Asian Institute. (2019, June 12). The Japan-South Korea joint public opinion poll 2019. https://www.genron-npo.net/en/opinion_polls/archives/5489.html The Korea Herald. (2010, April 6). President warns against “great power politics” Roh to return home tomorrow after 10-day tour. http://www.koreaherald.com/common_prog/newsprint.php? ud¼20050916000033&dt¼2 Tillema, H. K. (1989). Foreign overt military intervention in the nuclear age. Journal of Peace Research, 26(2), 179–196. https://doi.org/10.1177/0022343389026002006 UN. (2005a, July 26). Uniting for consensus’ Group of States Introduces Text on Security Council reform to General Assembly. 59th General Assembly Plenary 115th Meeting. https://www.un. org/press/en/2005/ga10371.doc.htm

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UN. (2005b, September 14). Address by President Roh Moo-hyun of the Republic of Korea at the high-level plenary meeting of the 60th session of the United Nations General Assembly. https:// www.un.org/webcast/summit2005/statements/rok050914eng.pdf van Loon, A. (2017). Variation in preferences: Domestic interests and ideas in British and German governmental trade positions in EU FTA negotiations [Doctoral dissertation]. Ruhr-Universität Bochum). Vicente, A. R. (2013). United Nations Security Council reform: The question of the veto power. Multilateral Diplomacy Summer School–Student Papers, 19. WVS. (2001). World values survey wave 4, South Korea. World Values Survey. https://www. worldvaluessurvey.org/WVSDocumentationWV4.jsp WVS. (2005). World values survey wave 5, South Korea. World Values Survey. https://www. worldvaluessurvey.org/WVSDocumentationWV5.jsp WVS. (2010). World values survey wave 6, South Korea. World Values Survey. https://www. worldvaluessurvey.org/WVSDocumentationWV6.jsp WVS. (2017). World values survey wave 7, South Korea. World Values Survey. https://www. worldvaluessurvey.org/WVSDocumentationWV7.jsp

Chapter 8

Leaders Need Followers: China and the Philippines in the Joint Development in the SCS

8.1

Introduction

Since 2010, there have been growing concerns about the South China Sea (SCS) maritime territorial disputes. Surrounded by rapidly developing countries, the SCS has become a focal point due to significant economic, strategic, and political importance. On the one hand, the SCS has several major strategic transportation routes and sea lines of communication (SLOC). On the other hand, the SCS holds redundant natural resources and offers tremendous economic opportunities for surrounding countries. The SCS consists of over 250 islands, shoals, and reefs; essentially none of them have self-sustainable resources for the indigenous population. These islands, shoals, and reefs are primarily grouped into three archipelagos, the Spratly Islands, the Paracel Islands, and the Pratas Islands, as well as other features within Zhongsha Islands (the Macclesfield Bank and the Scarborough Shoal). The SCS disputes between China and the Philippines involve three issues, which are closely linked and reinforced to each other. The first is sovereignty claims over the Spratlys and Scarborough Shoal. The Spratly Islands (Nansha qun dao 南沙群 岛; Nansha Islands) are wholly or partly claimed by Brunei, China, Malaysia, Vietnam, and the Philippines. Of more than 200 maritime features in the Spratly Islands, Vietnam, China, and the Philippines respectively occupy 21, 7, and 9 maritime features. In addition, claimed by both China and the Philippines, Scarborough Shoal (Huangyan dao 黄岩岛; Panatag Shoal in Filipino) is occupied by China after standoff in 2012.1 The second issue regarding the SCS disputes is the delimitation of

1

Scarborough Shoal standoff refers to tensions between China and the Philippines. It started from 8 April 2012, with Philippine navy detaining Chinese fishermen at Scarborough Shoal, which is claimed by both China and the Philippines. With two countries refusing to withdraw firstly, the Philippines escalated the issue through maximizing US involvement. Eventually, the de facto control of the Shoal transferred from the Philippines to China. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 F. Su, The Determinants of Leadership, Contributions to International Relations, https://doi.org/10.1007/978-3-031-12555-3_8

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the maritime border, the use of Exclusive Economic Zone (EEZ) and control of the islands, including the right to explore and exploit the suspected potential oil and natural gas resources, as well as the right to fish in this area. The third issue refers to the impact of the SCS disputes on strategic security of China and the Philippines as well as the stability and growth in this region. Regarding its strategic significance of geographic location, the SCS is one of the most important waterways in the region and even in the world. “5.3 trillion US dollars worth of goods transit through the SCS annually” (CSIS, 2017), making it an essential maritime crossroads for trade. The resolution of the SCS disputes is expected to impact security strategy and even growth and development of both China and the Philippines. Maritime security of the SCS has gathered significant attention because the competing islands and waters claims as well as the associated fisheries and hydrocarbon resources claims in the SCS have escalated in the last decade. Therefore, the peaceful management of the SCS conflicts could hugely contribute to the stability and growth in this region. When the SCS disputes became a more prominent issue in Sino-Philippines relations, many scholars tentatively concluded that peaceful resolution and cooperation opportunities were narrowing due to domestic political considerations (Baviera, 2012, 2014; Murphy, 2017; Santamaria, 2018), nationalism arose in both countries (Ortuoste, 2013; Johnson, 2012), and personality of the decision makers (Zha, 2015). Under the circumstances, “shared development of oil, gas and possibly other natural resources is the most promising option for reducing tensions in the South China Sea and should be the focus of efforts to improve diplomatic relations between China and its coastal neighbors” (Reuters, 2014). Joint development is considered as the only route for achieving a better management of the SCS disputes while securing the exploration and exploitation of maritime and seabed resources (Encomienda, 2014; Emmers, 2010). According to Emmers (2013, p. 158), “the joint exploration of resources combined with the temporary shelving of the sovereignty question is generally discussed as the only feasible option to enhance cooperation and stability in the SCS.” Joint development is “the cooperation between States with regard to the exploration for and exploitation of certain deposits, fields or accumulations of non-living resources which either extend across boundary or line in an area of overlapping claims” (Lagoni, 1988, p. 509). Joint cooperation differentiates from joint development, while the former focuses on survey and research activity, the latter concentrates on exploitation and development of resources. After the 2012 Scarborough Shoal standoff between China and the Philippines, Aquino’s government (2010–2016) decided to deal its relationship with China through the internationalization of the SCS disputes, i.e., on the one hand, strengthening close ties with external powers, such as the USA and Japan; and on the other hand, filing an arbitration case against China over the SCS disputes. However, even though the result of arbitration was perceived as a victory for Aquino government, it was considered as “an outright failure to the newly elected Duterte administration due to the tremendous attendant costs” (Kreuzer, 2018, p. 2). Firstly, the strategy of Philippine President Benigno Aquino III did not prevent China from asserting its claims in the SCS. Secondly, besides arbitration, it did not provide other feasible

8.1

Introduction

167

Table 8.1 Key dates on the joint development in the SCS Dates 2012 2013 2017 2018

Events Scarborough Shoal standoff between China and the Philippines The Philippines unilaterally initiated the SCS arbitration The Philippine President Rodrigo Duterte approved pursuing a joint development agreement China and the Philippines signed the MoU on joint oil and gas development in the SCS

Sources: Author’s compilation

options to “enforce the ruling without running the risk of militarizing the dispute” either (ibid). Thirdly, due to the hardline stance of Aquino’s government, the Philippines lost relevant possible economic development opportunities during the confrontation between two countries. Therefore, the Duterte government (2016– present) focused on downplaying the conflict and enhancing bilateral economic relations with China. Both countries endeavored on strengthening cooperation and signed oil and gas exploration deal in 2018 (Table 8.1). The following case studies focus on Chinese leadership project of promoting the joint development in the SCS in two periods: Aquino government (2010–2016) and Duterte government (2016–2018).2 Given the outcomes of joint development between the two countries in these two periods, the arisen question is that why did the Philippines support China’s proposal in one case, but not in the other. By employing the inclusive leadership and the societal approach, this case study will test the main hypothesis (H1) on the correlations between inclusiveness of the leadership project and followership, which claims that the inclusion of the domestic interests and/or societal ideas dominant in potential follower country the Philippines into Chinese leadership project of the joint development of the SCS is a necessary condition to secure followership of the Philippines. Additionally, hypotheses on the conditions of prevalence of domestic interests and societal ideas will be tested in this case study as well, with H2 stating that if the Chinese leadership project directly affects specific economic sectors in the Philippines, and raises cost/benefit questions of international competition, then domestic interests will be most influential in shaping governmental preferences of the Philippines, because lobbying will be strong; and with H3 claiming that if the Chinese leadership project raises concerns on the fundamental questions and collective expectations about how politics should govern the security, then societal ideas will prevail in shaping governmental positions of the Philippines, this link will be strengthened if the project has only a diffuse impact on related sectors of the Philippines, because then lobbying will be weak. The divergent results of Chinese leadership project enabled the expectation that the inclusiveness of leadership project could determine the followership.

The selection of the period of 2016–2018 is because, firstly, Philippine President Rodrigo Duterte took in office in June 2016, secondly, the bilateral consultation mechanism was setting up in 2017 in accordance with the consensus of Xi Jinping and Rodrigo Duterte in 2016, and thirdly, oil and gas exploration deal was signed by China and the Philippines in November 2018. 2

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It has to be mentioned that the SCS issue has to fit into the big picture of Chinese and Philippine foreign policies. The context issues such as general Sino-Philippine relations, the Sino-US competition, the characteristics of Philippine political elites, and so on, are important, but the research has to be parsimonious and focused and cannot consider all possible aspects of policy-making process, thus these context issues are beyond the scope of this book. The key interest here is the interactions between dependent and independent variables in the case study of the SCS, and the specification of the causal mechanism within the inclusive leadership.

8.2 8.2.1

Joint Development in the SCS (2010–2016) Chinese Leadership Project

In general, Chinese leadership project toward the SCS disputes could be summarized as “setting aside disputes and pursuing joint development” (Gezhi Zhengyi Gongtong Kaifa 搁置争议共同开发). This concept, as maritime territorial dispute resolution, can be traced back to the Deng Xiaoping3 period. On May 11, 1979, Chinese leader Deng Xiaoping suggested this concept in dealing with Sino-Japan territorial dispute over Diaoyu Islands (Senkaku Islands in Japanese) (FMPRC, 2000). Regarding the Spratly Islands (Nansha Islands in Chinese), Deng made a reasonable proposal for shelving the disputes: The Nansha Islands have been an integral part of China’s territory since the ancient times. But disputes have occurred over the islands since the 1970s. Considering the fact that China has good relations with the countries concerned, we would like to set aside this issue now and explore later a solution acceptable to both sides. We should avoid military conflict over this and should pursue an approach of joint development. (ibid)

This concept was further strengthened in June 1986, during Deng Xiaoping’s visit to the Philippines in an attempt to deal with the issue of the Spratly Islands. Deng Xiaoping strategically put forward ideas such as avoiding military conflicts and joint development in order to solve disputes peacefully. In a meeting with Filipino Vice President Laurel, Deng Xiaoping stated that: “we should leave aside the issue of the Nansha Islands for a while. We should not let this issue stand in the way of China’s friendship with the Philippines and with other countries” (ibid). Since then, joint development is part of China’s strategy in tackling maritime territorial disputes, which is clarified in the position paper “China’s Peaceful Development” by Information Office of the State Council (IOSC) as follows: It [China] calls for settling disputes over territory and maritime rights and interests with neighboring countries through dialogue and negotiation. For instance, China has made a constructive proposal to “shelve disputes and seek joint development” and done its utmost to uphold

3

Deng Xiaoping (1904–1997) was a Chinese politician, who was the paramount leader of China from 1978 to 1989, and led China to economic reform.

8.2

Joint Development in the SCS (2010–2016)

169

peace and stability in the South China Sea, East China Sea and the surrounding areas. China seeks to promote common development and prosperity in the Asia-Pacific region by pursuing bilateral cooperation and participating in regional and sub-regional cooperation. (Gov.cn, 2011)

According to the interpretation of the Foreign Minister of China, the concept of “setting aside dispute and pursuing joint development” has four elements, including the following: 1. The sovereignty of the territories concerned belongs to China. 2. When conditions are not ripe to bring about a thorough solution to territorial dispute, discussion on the issue of sovereignty may be postponed so that the dispute is set aside. To set aside dispute does not mean giving up sovereignty. It is just to leave the dispute aside for the time being. 3. The territories under dispute may be developed in a joint way. 4. The purpose of joint development is to enhance mutual understanding through cooperation and create conditions for the eventual resolution of territorial ownership. (FMPRC, 2014)

Concerning the SCS disputes between China and the Philippines, Chinese President Hu Jintao emphasized the breakthrough progress on the joint exploitation in the SCS through the conduct of the Joint Marine Seismic Undertaking (JMSU).4 Hu raised concrete suggestions on advancing the development of China–Philippine relations, including “to continue the close cooperation, try to implement the agreement on joint work on the ocean and earthquake in the partial region of South China Sea by the petroleum corporations of China, the Philippines and Vietnam and try to achieve substantial progress in the common exploitation” (FMPRC, 2005). Chinese leadership project in dealing with the SCS disputes mainly focused on joint development and bilateral negotiation between the countries directly concerned. “Setting aside disputes and pursuing joint development” was reiterated by Chinese officials on different occasions. At the press conference of celebrating the anniversary of Vietnam–China relationship in 2010, Sun Guoxiang, the Chinese Ambassador to Vietnam, articulated that “China’s senior leaders have taken the initiatives to solve the SCS issue, especially in setting aside disputes and pursuing joint development” (Truong & Huynh, 2014, p. 118). Moreover, in an interview with the Philippine Daily Inquirer editorial team in December 2012, Ma Keqing, the Chinese Ambassador to the Philippines, emphasized the joint cooperation as the best way to solve sovereignty disputes, and adding “I think it is still a very valid formula pending the solution of the disputes. We can have cooperation with each other to [explore] the resources because we cannot see in the near future [. . .] that we can solve all the disputes” (Inquirer.net, 2013). In addition, during the state visit of the Philippine President Benigno Aquino III to China in August 2011, the Chinese President Hu Jintao underscored the importance of peaceful consultation and negotiation between China and Philippine, as well as the significance of joint exploration and development. He said: 4

JMSU is a tripartite agreement signed by Philippine National Oil Company (PNOC), China National Offshore Oil Company (CNOOC), and Vietnam Oil and Gas Corporation (VOGC) on March 14, 2005. JMSU was limited to the scientific research of jointly surveying the tremendous potential oil and gas reserves under the SCS, however, it was expired after 4 years term and was never extended by the parties due to political reasons.

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China’s position and proposition on the South China Sea issue has been consistent and explicit. [. . .] China has always advocated that the South China Sea disputes should be resolved peacefully through consultation and negotiation between the two countries concerned. [. . .] Before the disputes are resolved, the countries concerned may put aside the disputes and actively explore forms of common development in the relevant sea areas, which is in the common interest of relevant countries. [. . .] China is ready to work with the countries of the Association of Southeast Asian Nations (ASEAN), including the Philippines, to actively implement the Declaration on the Conduct of Parties in the South China Sea and jointly develop the waters into a sea of peace, friendship and cooperation. (FMPRC, 2011)

The Chinese Foreign Minister Yang Jiechi reiterated Chinese leadership project in dealing with SCS issues, when he met with American Secretary of State Hilary Clinton at the Great Hall of the People, Beijing, in 2012, On the South China Sea, the position of the Chinese Government has been consistent and clear-cut. China has sovereignty over the islands in the South China Sea and their adjacent waters. There is plentiful historical and jurisprudential evidence for that. As for the dispute over the sovereignty of some islands and reefs of the Nansha Islands and the overlapping rights, interests, and claims over some waters of the South China Sea, these should be discussed by the directly concerned countries on the basis of the fact—of historical fact and international law, and handled and settled through direct negotiations and friendly consultation. People talk about the importance of respecting the DOC (Declaration of Conduct of Parties in the South China Sea).5 What I have outlined is not just China’s position, but an important principle and spirit of the DOC. It is the consensus of all the signatories to the DOC and important commitment the parties have made. (USDOS, 2012)

Moreover, during the ASEAN Regional Forum (ARF) Foreign Ministers’ Meeting in 2013, Wang Yi, the Chinese Foreign Minister stressed that the SCS issue should be resolved by parties directly concerned through negotiation. He emphasized that “bilateral disputes should be resolved through bilateral consultation. Should one choose to play up the issue on multilateral occasions, it will not help resolve the issue. Rather, it will harm the bilateral relations and this is not in the interests of that country and its people” (nl.china-embassy, 2013). Moreover, he pointed out that “outside forces and countries outside the region should not intervene in the disputes in the SCS and that the SCS issue should not be internationalized, otherwise it is not conducive to resolving the issue” (ibid). By the end of 2013, Chinese President Xi Jinping made important remarks at the conference on Chinese diplomatic work with neighboring countries. Xi Jinping highlighted the concepts of “friendship, sincerity, benefit and inclusiveness,” and stressed to treat neighboring countries “as friends and partners, and to make them feel safe and to help them develop” (FMPRC, 2013). Regarding the strategy in shelving the SCS disputes, Chinese leadership project has been consistent and explicit: “setting aside dispute and pursuing joint development.” However, concerning the specific activities of exerting this approach, an

5

China together with other ASEAN countries is a party to the Declaration of Conduct of Parties in the South China Sea (DOC). Signed in 2002, all sides declared commitment to ten principles which include, among other, exercising self-restraint, environmental protection, marine scientific research, reaffirming commitment to principles of international law, and building trust and confidence.

8.2

Joint Development in the SCS (2010–2016)

171

examination of Chinese measures and approaches in dealing with the SCS territorial and maritime disputes has to consider both Chinese strategic goals and the most effective ways of pursuing these goals (Zhou, 2016, p. 870). Many scholars suggested that Chinese diplomacy has become more assertive since 2010 due to its rapid economic growth (Thayer, 2011a, 2011b; Yahuda, 2013; Johnston, 2013). However, “being assertive never means being aggressive. [. . .] Assertiveness has a more profound meaning than aggressiveness. China is not what some American academics, politicians and journalists believe as an assertive rising power” (Lee, 2013, pp. 503–504). In addition, China’s assertiveness should be viewed in a broader sense (Chen et al., 2013, p. 177). Chinese assertiveness should not be considered as given, and the Chinese strategic goals regarding the SCS disputes are constantly evolving (Kreuzer, 2018, p. 1). Chinese changing approaches to the territorial and maritime disputes in the Asia-Pacific area “are conditioned by and contingent on its national grand strategic goal of rejuvenating the Chinese nation; the US pivot to Asia; rising nationalism in China; and the interactions between China and other claimants in the South China Sea disputes, particularly the Philippines” (Zhou, 2016, p. 870). The Chinese leadership project of dealing with the SCS territorial and maritime disputes is partially shaped by its overall diplomatic aims, and is also determined by how China perceives the changing international environment and how China balances sovereign and maritime rights as well as regional stability (Kreuzer, 2018, p. 1). According to Zhou (2016), China’s diplomatic work has been processed under the guiding ideology “diplomacy serving the economy” from the opening reform in 1978 to the first decade of twenty-first century. Therefore, its characteristic is “keeping a low profile” (Tao Guang Yang Hui 韬光养晦), in other words, to maintain peace and stability international environment. Along with China’s rapid economic growth and American pivot to Asia, the characteristics of Chinese diplomacy turned to “striving for achievement” (You Suo Zuo Wei 有所 作为). In terms of approaches and activities, China tested the approach of striving for achievement in dealing with the SCS disputes, and its SCS policy began to become more proactive and assertive from 2010 to the first half of 2014. This approach was reflected by the Scarborough Shoal standoff, which refers to tensions between China and the Philippines in 2012. It started on April 8, 2012, when Philippine navy detained Chinese fishermen at Scarborough Shoal. With two countries refusing to withdraw firstly, the issue has escalated after the Philippines maximizing the USA involvement. Eventually, the de facto control of the Shoal transferred from the Philippines to China. From the second half of 2014, China’s focus turned to the development of the BRI and the establishment of the AIIB, therefore, its policy sought to balance regional development and security issues. On the one hand, this trend was reflected by China’s land reclamation and physical presence in the SCS, which were also commonly used by other claimants such as Vietnam and the Philippines. On the other hand, China showed self-restraint in dealing with the SCS disputes, for example, “China called a halt to the operations of the Haiyang Shiyou 981 drilling platform in the SCS in July 2014, even though the platform situated at waters which is not under dispute in China’s perspective” (Zhou, 2016, p. 871).

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8.2.2

Domestic Responses in the Philippines

8.2.2.1

Domestic Interests

Domestic interests here refer to material considerations of economic sectors of the Philippines, whose cost-benefit calculations can change rapidly according to changing economic circumstances arising from the impact of the Chinese leadership project of jointly developing the SCS. The business community of the Philippines is considered to be strongly affected under the conditions of armed conflict between China and the Philippines over the SCS disputes. However, the Philippine business community “has yet to make its views publicly known on recent developments in the South China Sea” (Storey & Lin, 2016, p. 179). According to Medeiros et al. (2008, p. 109), “as in other ASEAN countries, the ethnic Chinese community in the Philippines plays a much larger role in the economy than its share of the population might suggest. Although ethnic Chinese constitute between 1 to 2 percent of the population, they control an estimated 60 percent of corporate wealth (and these percentage are even higher in Indonesia, Malaysia, and Thailand).” As the most affluent members of the Philippine business community, the ethnic Chinese enjoy commercial success while suffering jealousy and animosity from other Filipinos. Therefore, voicing on the SCS disputes is a very sensitive issue for business community of the Philippines. Moreover, the Philippine National Oil Company (PNOC),6 as the primary operator in the oil and gas industry, is a government-owned and controlled corporation, which is mandated by the Philippines’ government through the Department of Energy (DOE) to take the lead in exploration, development, and production of oil, gas, and coal resources. The President and CEO of the PNOC is nominated directly by the Philippines President, while its chairman is also appointed by the President and is simultaneously the Secretary of the Energy Department (ICG, 2016). Under this situation, the sectoral lobbying evidence in the Philippines is not detected, therefore, the role of the material interests of the Philippines will be considered as null in this case study.

8.2.2.2

Societal Ideas

Societal ideas here are defined as path-dependent and value-based collective expectations of voters in the Philippines, regarding appropriate and acceptable governmental positions, such as how to govern the security. With regard to societal ideas of the Philippines, attention will be paid to both process and content ideas. The value-based societal ideas will be represented by a

6

PNOC has two subsidiaries: PNOC Exploration Corporation (in charge of natural gas production, petroleum exploration and development, as well as coal exploration, production and trading) and PNOC Renewable Corporation (in charge of geothermal, hydro, and solar energy projects).

8.2

Joint Development in the SCS (2010–2016)

Table 8.2 Philippine process ideas concerning democracy (percentage)

Survey questions The importance of democracy Having a democratic political system Having a strong leader Democracy is better despite problems Democraticness in own country

173 2001 – 81.7 61.8 78.5 44.9

2012 81.6 78.4 59.1 – 74.2

Sources: Author’s compilation based on WVS (2001, 2012)

combination of public opinion polls mainly from the WVS (2001, 2012), Laylo (2015), Social Weather Station (2013–2016) before and during the period. The WVS data applied in this case study refer to the existing polls during the fourth and fifth waves of surveys, more specifically the 2001 and 2012 survey results. Laylo is a polling and strategic research firm, which uses its expertise in conducting surveys and delivering advisory services in terms of political, governance, social, and market investigations. The related public opinion polls conducted by Laylo in this case study are ranging from 2012 to 2015, which could be found through the website Rappler. Additionally, Social Weather Station (SWS) is a private, nonprofit and nonstock institute of the Philippines, which is founded as early as 1985 and remains one of the Philippines’ foremost public opinion polling body. Its aim is to conduct social surveys and survey-based social science research regularly, especially on topics of public interest for governmental, public, and private organizations, and Philippine economic, social, and political conditions. Concerning the case study of joint development of the SCS 2010–2016, the data of SWS will concentrate on the same period.

8.2.2.2.1

Societal Ideas: Process Ideas

The process ideas here refer to dominant expectations of the Philippines voters about the way political decision-making should be conducted. Several process ideas are under scrutiny, including the significance of democracy and its characteristics (Van Loon, 2017, p. 159) as well as the strong and weak governmental and individual responsibilities (Schirm, 2009, p. 509). These process ideas represent the opportunities and possibilities of Philippine voters to express their fundamental expectations in the political process. The first category of Philippine process ideas refers to the significance of democracy, which is relevant to societal actors’ roles in influencing reelection. Because the importance and characteristics of democracy imply the possibilities and opportunities of societal actors to express their opinions and to influence governmental decision-making. According to the WVS polls in 2001 and 2012 survey questions regarding Philippine views regarding democracy (see Table 8.2), around 80% of respondents in Philippine are in favor of a democratic political system. 81.6% of respondents in 2012 considered “living in a country that is governed democratically” as important. In 2001, 78.5% of Philippine respondents agreed with the statement

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Table 8.3 Philippine process ideas concerning government and individual responsibilities (percentage) Survey questions The government should take more responsibility People should take more responsibility

2001 52.4 47.6

2012 44.7 55.3

Sources: Author’s compilation based on WVS (2001, 2012) Table 8.4 Philippine content ideas concerning government’s priority (percentage) Survey questions: aims of country A high level of economic growth Seeing that people have more say about how are done at their jobs and in their communities Making sure this country has strong defense forces

2001 56.8 22.1

2012 48.6 28.0

16.3

14.2

Sources: Author’s compilation based on WVS (2001, 2012)

“democracy may have problems but it is better than any other form of government.” In the meanwhile, among the respondents, 61.8% in 2001 and 59.1% in 2012 believed that it is good (very good/fairly good) to “have a strong leader who does not have to bother with parliament and elections.” Regarding the question of how democratically the country is being governed, a large majority of Filipinos expressed their satisfaction with their democraticness. The number of respondents who believe their country is governed democratically today, surged up from 44.9% in 2001 to 74.2% in 2012. Therefore, surveys reinforce Philippine process ideas concerning strong support for democracy. The second category of Philippine process ideas refers to the role of government. Table 8.3 shows that in 2001, 52.4% of Filipinos agreed with the statement “government should take more responsibility to ensure that everyone is provided for,” whereas 47.6% of respondents accepted the statement “people should take more responsibility to provide for themselves.” In 2012, there was only slight cleavage of Philippine respondents’ support of government responsibility (44.7%) and people responsibility (55.3%) as well. Therefore, surveys showed that there is a tendency in the Philippines: more and more respondents are in favor of individual responsibility.

8.2.2.2.2

Societal Ideas: Content Ideas

Content ideas here refer to dominant expectations about primary tasks of Philippine government during Aquino period (2010–2016). The prevailing content ideas will be investigated through surveys on priorities of the Philippines, the willingness to fight for the country, the views of China, and the concerns about territorial conflicts. Overall, according to the polls conducted by the WVS in 2001 and 2012, respondents believed that the priority of the Philippines should be promoting the economic growth of the country, with 56.8% in 2001 and 48.6% in 2012 (see Table 8.4). Strengthening country’s defense forces ranked third (16.3% in 2001

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Table 8.5 Philippine content ideas concerning war and armed forces (percentage) Survey questions Willingness to fight other countries in war Non-willingness to fight other countries in war Confidence in the armed forces

2001 83.5 12.4 73.5

2012 82.5 17.2 71.2

Sources: Author’s compilation based on WVS (2001, 2012)

and 14.2% in 2012), after “people have more say about how are done at their jobs and in their communities.” Therefore, in the perception of Filipinos, economic growth of the country was still the top priority of the government, which overwhelmed the strengthening of defense forces. Even though strengthening of defense forces was not the priority of Filipinos, public opinion data showed high willingness of Filipinos to sacrifice their lives in war. According to WVS polls in 2001 and 2012 (see Table 8.5), more than 80% of respondents in the Philippines showed positive attitudes toward survey question “of course, we all hope that there will not be another war, but if it were to come to that, would you be willing to fight for your country.” In the sixth wave of WVS surveys, the Philippines was one of the top (ranking the third7) countries, whose people expressed a strong willingness to protect it. Moreover, among Philippine respondents, 73.5% in 2001 and 71.2% in 2012 showed confidence in their armed forces. With regard to the SCS issues, a survey commissioned by the Department of Foreign Affairs (DFA) of the Philippines and conducted by the SWS in December 2013 revealed that a big majority of 73% of respondents were aware of the territorial dispute between China and the Philippines over a group of Spratly Islands (Rappler, 2014). The remaining (27%) said that they heard about this for the first time during the survey. In addition, 68% were aware of the possible oil and gas deposits in the SCS as well, while 61% were aware of the Aquino administration’s move of filing the case against China at the International Tribunal for the Law of the Sea (ITLOS). According to Pew Research Center survey (2015) regarding the Asia-Pacific perception of various global threats, the concerns of Filipinos about territorial disputes between China and neighboring countries ranked the second.8 A strong majority of 91% of respondents expressed their concerns over territorial disputes between China and the Philippines, with 56% very concerned and 35% somewhat concerned. Likely, 90% of Filipinos thought that territorial disputes with China are a big problem in 2013 (see Table 8.6). These are backed by a survey of 1500 Filipinos across 77 provinces by Laylo Research Strategies (Rappler, 2012), which reveals

The top five country with “willingness to fight for your country”: Qatar (97.8%), Pakistan (88.2%), the Philippines (82.5%), Thailand (82.2%), and Malaysia (80.2%). 8 The relevant international issues in the public opinion survey of Pew Research Center in 2015 include seven issues. Philippine respondents were very concerned about following issues: global climate change (72%), territorial disputes between China and its neighbors (56%), global economic instability (52%), ISIS (49%), cyberattack on governments, banks, or corporations (49%), Iran’s nuclear program (47%), tensions between Russia and its neighbors (38%). 7

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Table 8.6 Philippine content ideas concerning territorial disputes (percentage) Survey questions Concerned about territorial disputes between China and neighboring countries

2013 90

2015 91

Sources: Author’s compilation based on Pew (2013b, 2015) Table 8.7 Philippine content ideas concerning worry of armed conflict (percentage) Survey questions Worry of armed conflict with China

2012 88

2013 89

2014 87

2015 84

Sources: Author’s compilation based on SWS (2015b) Table 8.8 Philippine content ideas concerning approaches of resolving the SCS disputes (percentage) Survey questions Diplomacy should be used and not a show of force from both parties There should be negotiations between the Philippines and China for a joint venture on any environment protection or resource use in Scarborough Shoal An international court should decide on this issue to resolve whose territory the Scarborough Shoal is part of The Philippines should stand its ground in claiming the Scarborough shoal as part of its territory They should make this an international marine reserve and disputing nations should help preserve it The Philippines should ask for help from the USA to defend Scarborough Shoal and send forces to guard the Scarborough Shoal Do not know

2012 33 20 11 11 9 8 9

Sources: Author’s compilation based on Rappler (2012)

that 69% of respondents were concerned about the territorial disputes between China and the Philippines in 2012. Moreover, the SWS survey (2015b) showed that 84% of Philippine respondents worried about armed conflict between the Philippines and China over the disputed islands in Scarborough Shoal in the future, with 49% worried a great deal, 35% somewhat worried, and 16% not too worried or not worried at all. These concerns were also high in the three other surveys in Philippine since 2012 (see Table 8.7). The data showed that a strong majority of Filipinos expressed such concerns, with 88% in 2012, 89% in 2013, and 87% in 2014. Concerning the ways to resolve the SCS issues, the survey conducted by Laylo Research Strategies in August 2012 offered a list of possible and suggested means to resolve the disputes (see Table 8.8). Among them, about a third (33%) of respondents preferred diplomacy over a show of force from both parties. Meanwhile, 20% of Filipinos supported that there should be negotiations between the Philippines and China for joint venture on any environmental protection or resource use in Scarborough. Others said that an international court must decide on the dispute (11%); the Philippines must stand its ground in claiming Scarborough (11%); Scarborough

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must be declared an international marine reserve and disputing nations should preserve it (9%); and the Philippines should ask help from the USA to defend its claim (8%). Moreover, the opinion concerning the way of resolving the territorial friction with China was still divided until 2015. A survey published by Philippine broadsheet “The Standard” revealed that 47% of Filipinos go for the arbitration case before the UN by saying that “it is better that the Aquino administration complained to the United Nations.” In the meanwhile, 53% of respondents preferred to resolve the disputes diplomatically (Rappler, 2015b). Meanwhile, Laylo survey (2015) showed that a plurality of 45% of respondents is satisfied with the performance of the Aquino administration in protecting the country from any possible threats from China (22% dissatisfied). In contrast, “51 percent of the respondents rejected the possibility of entering into a joint exploration agreement in the Spratlys with other claimantcountries” (ibid). When asked specifically “if the Philippines should partner with China in exploring the Spratlys,” 53% of the respondents said that should not be pursued. Moreover, a slight majority of 64% of respondents also “expressed confidence that the US would help the Philippines in an armed confrontation with China” (ibid). While the survey results from The Standard showed that a majority of 53% of Filipinos support the diplomatic resolution of the SCS disputes, the SWS survey displayed that a large majority of 82% of Filipinos agreed with Aquino administration’s move to file the case against China, while 8% disagreed and 8% were undecided (Rappler, 2014). The difference between the above surveys is based on the questions asked in the polls. The SWS survey only asked Philippine respondents whether they agree or disagree with Aquino government’s move to bring the case for resolution before the ITLOS, therefore, obtained the result that a strong majority of Filipinos support filing the case. On the contrary, The Standard survey provided two choices and asked which is better: filing a case or pursuing a diplomacy approach to shelve the SCS disputes. Therefore, it got the conclusion of supporting diplomatic resolution. Moreover, the SWS surveys (2015a) showed that there is +40 net satisfaction (% satisfied minus % dissatisfied) with Aquino government in defending Philippine’s territorial rights in 2014. In the meanwhile, the Philippine public supported Aquino government’s moves regarding the tension in the Scarborough Shoal, despite 87% worried about armed conflict with China in disputed islands (ibid, 2015b). However, the support for Aquino government’s actions regarding the tension in the Scarborough Shoal showed a significant decline (see Table 8.9). To the question, “in general, do you approve or disapprove of our government’s actions regarding the tension between China and the Philippines in the Scarborough Shoal,” the proportion of Philippine proponents dropped from 65% in 2013 to 62% in 2014, and continuously decreased to 49% in 2015. On the contrary, the opponent of Aquino government’s moves regarding the SCS issues constantly increased from 28% in 2013 to 46% in 2015. During the same time, respondents of the Philippines were satisfied with Aquino administration’s action in fighting corruption, with a net satisfaction of +6% from

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Table 8.9 Philippine content ideas concerning the satisfaction with the actions of Aquino administration (percentage) Survey questions: Aquino government’s action regarding the tension in the Scarborough Shoal Strongly approve Somewhat approve Strongly disapprove Somewhat disapprove

Sep 2013 27 38 10 18

Jun 2014 22 40 12 21

March 2015 16 33 19 27

Sources: Author’s compilation based on SWS (2015b)

2010 to 2014 (SWS, 2015a). Additionally, Filipinos’ grade for Aquino administration in fighting oil prices and fighting inflation was weakening, with
8% net satisfaction of Filipinos toward Aquino administration’s action on ensuring that oil firms do not take advantage of oil prices (ibid). It has to be mentioned that Benigno Aquino III was elected to be the President of the Philippines under the conditions of Arroyo administration’s corruption scandal, which was related to the previous tripartite cooperation on the SCS issues, i.e., Joint Maritime Seismic Undertaking (JMSU). These SWS surveys data suggested that even though Philippine people support for Aquino administration’s strong position on territorial issues due to high concerns about territorial and armed conflicts between China and the Philippines, more and more people had doubts about Aquino government’s confrontational position due to subsidy effect of high oil prices. These public opinions were echoed by the generally negative views of Filipinos toward China, and positive views toward the USA. The Filipinos’ favorable views of China were down from strong majority (63%) in 2002 to nearly half (48%) in 2013, hence continuously dropping to 38% in 2014, and showed an upswing in 2015 (with 54% very favorable and somewhat favorable). In the meanwhile, the Filipinos shared much more positive views toward the USA, with 90% of respondents in 2002 and 85% in 2013 showing favorable views of the USA (Pew, 2013b). While 69% of Filipinos believed that China has “great deal/fair amount” of influence on the Philippines in general, 74% of respondents agreed with the statement that “China will never replace the US as the world leading superpower” (ibid, 2013a). Regarding the survey question “in making international policy decisions, to what extent do you think China takes into account the interests of Philippine,” 58% of respondents confirmed the positive role of China. In the meanwhile, much higher proportion of Philippine respondents, 74% in 2002 and 85% in 2013, believed that the USA considers the interests of Philippines. Moreover, only 25% of Philippine respondents thought that China’s growing military power is a good thing, in the contrast, a large majority of 68% shared negative attitudes toward China’s growing military power. In addition, only 22% of Filipinos considered China as more of a partner while 39% viewed China as more of an enemy (ibid). These opinions were backed by the survey data, a strong majority of 77% of Philippine respondents thought it is more important to have strong ties with the USA, while 13% were prone to maintain strong ties with both China and the USA, and only 6% said ties with China are the most important

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(Rappler, 2013). In 2013, only 35% of Filipinos agreed that China had good influence on Philippines in general, while a slight majority of 53% viewed China’s economic impact more positively (Pew, 2013b). Moreover, according to SWS surveys, the net trust ratings of China in the Philippines were negative most of the time from 1994 to 2016. China’s net trust ratings briefly recovered from February 2009 to June 2010, ranging from
2 to +17 (SWS, 2016b). The net trust ratings showed a sharp down from +10 in March 2012 to
44 in December 2015 due to the Scarborough Shoal standoff in 2012 (ibid). Afterward, the net trust ratings gradually climbed back to
24 in Jun 2016. According to SWS surveys (2012), this sharp down was mostly due to enormous publicity. Scarborough Shoal standoff was the fourth most followed news event during that period. In addition, “the Filipino public’s distrust in China [was] stronger among those who closely followed the news on the Scarborough Shoal standoff” (ibid). Therefore, Philippines held relative negative views of China, especially after the 2012 Scarborough Shoal standoff.

8.2.3

Aquino Governmental Preferences Toward the SCS Issues

Under President Benigno Aquino III (2010–2016), Philippine’s approach toward China and the SCS disputes included internationalization of the conflicts and strengthening external ties with the USA, as well as invoking the SCS arbitration. The position of Aquino government on the SCS issues could be summed up as “what is ours is ours, we are ready to defend what is ours” in his 2011 State of the Nation Address. He claimed that, Speaking of security, does enhanced security not also enhance our national pride? [. . .] Now, our message to the world is clear: What is ours is ours; setting foot on Recto Bank [Reed Bank] is no different from setting foot on Recto Avenue [in the national capital of Manila]. (Kreuzer, 2018, p. 8)

Moreover, in a statement released on June 13, 2011, Philippine presidential spokesperson Edwin Lacierda articulated the way of “peaceful settlement of disputes in the West Philippine Sea,9” and said: The Philippine Government has been clear and consistent with respect to its position on our national territory. The administration has always asserted that it will dismiss out of hand any claim to what are considered integral parts of Philippine territory, such as the Recto (Reed) bank in western Palawan. The administration has also always called for a peaceful, multilateral settlement with regard to contested claims in the West Philippine Sea, along the lines of the Declaration on the Conduct of Parties in the South China Sea and applicable international laws, notably the UNCLOS. (Gov.ph, 2011)

9

The West Philippine Sea is Philippine phrasing of the South China Sea.

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After 2012 Scarborough Shoal standoff, Aquino government filed a case against China in January 2013. In the 2014 joint press conference of US President Barack Obama and Philippine President Benigno Aquino III, Aquino underscored the significance of the SCS arbitration, he said: Both President Obama and I shared the conviction that territorial and maritime disputes in the Asia Pacific region should be settled peacefully based on international law. We affirm that arbitration is an open, friendly and peaceful approach to seeking a just and durable solution. We also underscored the importance of the full and effective implementation of the Declaration of Conduct and the expeditious conclusion of a substantive and legally binding Code of Conduct in the South China Sea—all towards fostering peace and stability in our part of the world. (The White House, 2014)

In his speech delivered in Berlin in September 2014, Benigno Aquino III emphasized that SCS is “a region vital to the livelihood, security, and cultural identity of those who live around it,” hence he expressed opposition toward “any country to claim these waters solely as their own.” Moreover, he articulated the way to shelve the SCS disputes: “to this end, we are taking two tracks: first, we continue to promote the formulation of a binding code of conduct for the South China Sea; and second, we are pursuing arbitration to clarify the maritime entitlements for all countries concerned; this a mechanism embedded in the United Nations Convention on the Law of the Sea” (Gov.ph, 2014).

8.2.4

Multi-step Analysis

The causal mechanism in this case study is scrutinized as follow, which consists of four parts, including the impact of Chinese leadership project on the Philippines concerning the SCS disputes, the domestic actor’s response in the Philippines, Aquino governmental preferences, and testing hypotheses on conditions of prevalence, inclusiveness of Chinese leadership project and testing hypothesis of followership.

8.2.4.1

Chinese Leadership Project and Its Impacts on the Philippines

The first step of causal mechanism assumes on the one hand that Chinese leadership initiative impacts Philippine economy and generates anticipated winners and losers among relevant economic sectors. On the other hand, Chinese leadership initiative impacts fundamental expectations of Filipinos about the appropriateness of governance, hence arises questions on the role of politics within the country. As examined before, Chinese leadership project in dealing with the sovereignty and maritime disputes in the SCS could be summarized as “setting aside dispute and pursuing joint development.” Moreover, China reiterated that the SCS disputes should be shelved through bilateral negotiation between the countries directly concerned, and emphasized the significant role of joint development in dealing

8.2

Joint Development in the SCS (2010–2016)

181

with the SCS issues. In terms of approaches and activities, China tested the approach of striving for achievement in dealing with the SCS disputes, and its SCS policy began to become more proactive and assertive from 2010 to the first half of 2014. This approach was reflected by the Scarborough Shoal standoff in 2012. From the second half of 2014, china’s focus turned to the development of BRI and the establishment of the AIIB, therefore, its policy seeks to balance regional development and security issues. This trend was reflected by land reclamation and physical presence. Chinese proposal for joint development could have impact on the Philippine economy and generate anticipated winners and losers among relevant economic sectors. Especially, the ethnic Chinese community in the Philippines plays a large role in the economy, and even controls an estimated 60% of corporate wealth. However, the wealth of the ethnic Chinese community brings jealousy and animosity among other Filipinos, hence making the business community’s cautious about articulating views concerning the developments in the SCS. Moreover, the President of Philippine Oil and Gas Association is directly nominated by the Philippine President. In addition, no statement regarding the SCS issues from oil and gas industries could be found in the last decade. Therefore, domestic material sectoral interests of Philippine will not be considered as determining factors in Aquino governmental preference formation regarding the SCS disputes due to the lack of lobbying. Moreover, Chinese leadership project of bilateral negotiation and joint development on the SCS issues also had an impact on the fundamental expectations of Filipinos about the appropriateness of governance, due to the high public awareness of Filipinos regarding the SCS disputes and high public concerns on sovereignty and territory integrity within the Philippines.

8.2.4.2

Domestic Actors’ Responses in the Philippines

The second step of causal mechanism occurs at the domestic level of analysis, and it assumes that Philippine domestic actors are expected to respond to the impact arising from Chinese leadership projects in dealing with the SCS issues. Concerning domestic interests of the Philippines, there is no evidence showing sectors’ lobbying concerning the SCS issues within the Philippines, and Philippine domestic business communities are very cautious about commenting on the SCS disputes. Concerning societal ideas of the Philippines, both process ideas and content ideas are scrutinized in the previous sections. As aforementioned, the impact of Chinese leadership project on the SCS issues could affect principle-based collective expectations of Philippine voters about appropriate governmental behavior. The Philippine voters express their fundamental expectations on how politics should govern security. Accordingly, public opinion polls are used to represent societal ideas, which will be examined by the commonality and specificity (Schirm, 2009, p. 504).

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Regarding the process ideas, Philippine voters’ possibilities and opportunities to express their opinions on the SCS issues and to shape government decision-making, are represented by Filipinos’ high support for democratic political system and the soaring up of their evaluation of Philippine’s democraticness from 2001 to 2012. Moreover, a slim majority of respondents thought that the people instead of the government should take more responsibility to provide for themselves (WVS, 2001, 2012). Regarding the content ideas, the SCS disputes between China and Philippines attracted high public concerns (73%), which was evidenced by high awareness among Philippine public regarding the Scarborough Shoal standoff in 2012 as well as the SCS disputes and governmental responding actions in general (Rappler, 2014). Even though strengthening defense forces was only the third priority in the perspective of Filipinos, they showed a very strong willingness to fight for their country during war and expressed huge confidence in their armed forces as well. Concerning the approaches to deal with the SCS disputes, a survey (Rappler, 2012) showed mixed public opinions on this topic in 2012, with different proportions of respondents suggesting different ways to resolve the SCS issues, including diplomatic resolution, joint venture, international court, strong claim, internationalization, and USA involvement. After Aquino government filed the case in January 2013, surveys revealed that a large majority of 82% of Filipinos agreed with government’s move in 2014 (Rappler, 2014). In the meanwhile, a net satisfaction of +40% of Filipinos showed their support for Aquino governmental positions on defending territorial rights (SWS, 2015a). However, the high support is partially due to the questions surveyed in the questionnaires. When asking Philippine respondents whether they agree or disagree with Aquino government’s move to bring the case for resolution before the ITLOS, polls showed high support. But if asking the respondents to choose between filing a case and pursuing a diplomacy approach to shelve the SCS disputes, polls showed a slim majority of diplomatic approach proponents (Rappler, 2015b). Besides the cleavage between different surveys, there were still half majorities of Philippine voters opposing the joint exploration with other claimant countries, especially China. According to SWS (2015b) surveys, Filipino adults who approve Aquino government’s action regarding the tension in the Scarborough Shoal continuously decreased from 65% in 2013 to 49% in 2015. This significant decline should be understood under the backdrop of the corruption-tainted JMSU in the Philippines. The public opinion of Filipinos displayed +6 satisfaction with Aquino government on fighting corruption, whereas showed a negative impression of Aquino administration’s effort of fighting oil prices, with net satisfaction of
8 (ibid). This suggests that despite the majority support of maintaining the sovereignty and territory integrity among Filipinos, Aquino government’s reluctance for joint cooperation and development did not provide a better and more pragmatic way to resolve the sore needs for oil and gas resources in Philippines. These public opinions were echoed by Filipinos’ negative views of China. This negative impression during 2010–2016 partially stemmed from its domestic blame

8.2

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183

of the Joint Maritime Seismic Understanding (JMSU), which expired in 2008 under the corruption allegations related to Chinese investment and loans. These unfavorable views were aggravated after the Scarborough Shoal standoff in 2012, which continuously decreased and eventually reached the bottom of 38% in 2014 (Pew, 2013b, 2015). However, this bad impression was getting improved in 2015 (ibid). Meanwhile, the SWS surveys (2016b) showed that Philippines’ net trust in China gradually decreased from +10 in September 2011 to
44 in December 2015, and in turn increased to
24 in 2016.

8.2.4.3

Governmental Preference Formation and Testing Hypotheses

The third step of causal mechanism also occurs at domestic level of analysis, and it is based on the standard assumption that the elected politicians in democratic political systems are responsive to domestic demands, ranging from specific lobby groups to the voter’s attitudes, so as to remain in the office and secure reelection. After reviewing the impact of Chinese leadership project and Philippine domestic actors’ responses, hypotheses on conditions of prevalence will be tested through reviewing Philippine governmental preferences under Aquino period (2010–2016), recalling hypotheses, and examining interactions between discourses. As aforementioned, Aquino government internationalized the SCS issues through maximizing the involvement of the USA in 2012 Scarborough Shoal standoff, and then strengthened external ties with the USA as well as filed the arbitration case against China. These were emphasized by Benigno Aquino III’s statement “what is ours is ours, we are ready to defend what is ours.” Before examining the correlation between domestic ideas and/or interests of the Philippines and governmental preferences toward the SCS disputes during Aquino government (2010–2016), it is necessary here to recall the hypotheses. Concerning this case study, H2 states that if Chinese leadership project directly affects specific economic sectors in the Philippines, and raises cost/benefit questions of international competition, then domestic interests will be most influential in shaping governmental preferences of the Philippines, because lobbying will be strong. While H3 claims that if Chinese leadership project raises concerns on the fundamental questions and collective expectations about how politics should govern the security, then societal ideas will prevail in shaping governmental positions of the Philippines, this link will be strengthened if the project has only a diffuse impact on related sectors of the Philippines, because then lobbying will be weak. Firstly, the lack of lobbying evidence of Philippine domestic sectors regarding the SCS disputes results in low support for H2, because (1) there is no evidence showing domestic sectors’ lobbying concerning the SCS issues within the Philippines, (2) there is a low degree of Aquino governmental responsiveness to domestic material sectoral interests. Secondly, Table 8.13 shows a high degree of Aquino governmental responsiveness to Philippine societal ideas. For example, Benigno Aquino III’s speech of “what is ours is ours, we are ready to defend what is ours,” was in line with the strong

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willingness among Filipinos of fighting for their country. Faced with unfavorable views of and low trust in China, Aquino administration sought to strengthen external ties with the USA and to promote the internationalization of the SCS disputes, which responded to fundamental expectations of Philippine voters regarding defending territorial rights. SWS surveys (2015a) displayed +40 net satisfaction with Aquino government’s move in defending territorial rights. In the meanwhile, Filipinos were cautious about the possibility of entering into a joint exploration agreement in the Spratlys with other claimant countries (51%), especially China (53%). Additionally, when asking about whether or not you support Aquino government’s move regarding the SCS arbitration, a survey (Rappler, 2014) showed very high support (82%). However, Aquino government did not respond to the fundamental expectations of Philippine voters concerning governing the security issues through diplomatic approach. For example, when asked to choose the better one between filing a case and pursuing a diplomacy approach to shelve the SCS disputes, a majority of 53% of Philippine respondents supported “going back to talks” and resolving disputes diplomatically in 2015 (Rappler, 2015a). SWS surveys (2015b) showed a significant decline in the proponents of Aquino government’s moves regarding the tensions in the SCS. Additionally, more and more voters had doubts about Aquino government’s moves due to the subsidy effect of high oil prices (
8 net satisfaction regarding oil prices) (SWS, 2015a). In 2016, Benigno Aquino III lost his reelection bid in a contest with Rodrigo Duterte. Therefore, the evidence in Table 8.10 shows strong support for H3, because (1) affected by Chinese leadership project, Philippine voters share collective fundamental expectations on appropriate governmental behavior concerning the SCS disputes, (2) Chinese leadership project has only a diffuse impact on related sectors Table 8.10 Correlation between societal ideas of the Philippines and Aquino governmental preference on the SCS disputes Societal ideas • Top priority of the country: Economic growth • Third priority of the country: Strengthening defense forces • High public awareness of the SCS disputes and governmental responding actions in general • Very strong willingness to fight for the country • High support for Aquino government’s positions on defending territorial rights from 2012 to 2014 (whether or not approved government’s move) • Support diplomatic approach (choose between filing a case and diplomatic resolution) • Reluctant toward joint venture with China in the SCS. • Decreasing approval toward Aquino government’s action regarding the tension in the Scarborough Shoal from 2013 to 2015 Sources: Author’s compilation

Aquino governmental preference • What is ours is ours . . . we are ready to defend what is ours • The administration . . . dismiss out of hand any claim to what are considered integral parts of Philippine territory • Both President Obama and I shared the conviction that territorial and maritime disputes . . . should be settled peacefully based on international law • We are pursuing arbitration to clarify the maritime entitlements for all countries concerned

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of the Philippines, therefore lobbying is weak, (3) there is a strong degree of government responsiveness to Philippine societal ideas.

8.2.4.4

Inclusiveness of Leadership Project and Followership

The fourth step of causal mechanism occurs at international level of analysis. As Schirm (2010, p. 216) states, “leadership [. . .] gains followership only if it is credibly framed as a project also representing the goals of others.” In this section, the main hypothesis (H1) is necessary to be recalled here, which claims that the inclusion of the interests and/or ideas dominant in the Philippines into Chinese leadership project of the joint development of the SCS is a necessary condition to secure followership of the Philippines. Table 8.11 illustrates the correlation between inclusiveness of Chinese leadership project and non-followership of the Philippines during Aquino period (2010–2016). The Chinese leadership project in dealing with the SCS issues during 2010–2016 underscored the significance of joint development and bilateral negotiations between

Table 8.11 Correlation between inclusiveness of Chinese leadership project and Aquino government’s non-followership Chinese leadership project • Setting aside disputes and pursuing joint development • The sovereignty of the territories concerned belongs to China • Outside forces and countries outside the region should not intervene in the disputes • Peacefully resolve disputes through consultation and negotiation between the two countries concerned [. . .] the SCS issue should not be internationalized

Sources: Author’s compilation

Societal ideas of the Philippines • The top priority of the country: Economic growth • The third priority of the country: Strengthening defense forces • High public awareness of the SCS disputes and governmental responding actions in general • Very strong willingness to fight for the country • High support for Aquino government’s positions on defending territorial rights from 2012 to 2014 • Support diplomatic approach (choose between filing a case and diplomatic resolution) • Reluctant toward a joint venture with China in the SCS • Decreasing approval toward Aquino government’s action regarding the tension in the Scarborough Shoal from 2013 to 2015

Aquino governmental preference • What is ours is ours [. . .] we are ready to defend what is ours • The administration . . . dismiss out of hand any claim to what are considered integral parts of Philippine territory • Both President Obama and I shared the conviction that territorial and maritime disputes [. . .] should be settled peacefully based on international law • We are pursuing arbitration to clarify the maritime entitlements for all countries concerned

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China and Philippines, as well as the opposition to internationalization of the SCS disputes. In exercising, China tested the approach of striving for achievement in dealing with the SCS disputes and showed certain proactiveness and assertiveness from 2010 to the first half of 2014. This approach was reflected by the Scarborough Shoal standoff of 2012. From the second half of 2014, china’s focus turned to the development of BRI and the establishment of the AIIIB, therefore, its policy sought to balance regional development and security issues. This trend was reflected by land reclamation and physical presence. Therefore, during this period, the Chinese leadership project did not credibly include societal ideas of the Philippines, such as strong willingness to fight for the country, satisfaction with the moves of defending Philippine’s territorial rights and Aquino government’s arbitration. Even though the support for arbitration was getting lower and lower, Filipinos were still cautious about joint exploration agreements with China. Therefore, the evidence analyzed above shows strong support for the main hypothesis (H1) concerning Chinese leadership in this case study, because (1) China did not credibly include societal ideas into its leadership project, (2) China did not obtain followership from the Philippines from 2010 to 2016.

8.3 8.3.1

Joint Development in the SCS (2016–2018) Chinese Leadership Project

As stated earlier, Chinese leadership project of resolving the SCS disputes could be summarized as “setting aside disputes and pursuing joint development.” Chinese leadership project in dealing with the China-Philippine maritime disputes mainly focuses on bilateral negotiation between the countries directly concerned, bilateral consultation mechanism, and joint exploration and exploitation of oil and gas in the SCS. The time period of this case study would be 2016–2018 due to the fact that firstly, Philippine President Duterte took office in June 2016, secondly, the bilateral consultation mechanism was set up in 2017 in accordance with the consensus of Xi Jinping and Duterte in 2016, and thirdly, oil and gas exploration deal was signed by China and Philippine in Nov 2018. The proposed “setting aside disputes and pursuing joint development” was reiterated by Chinese leaders and officials on various occasions. The position paper issued in December 2014 by Chinese government stated that: “with regard to disputes concerning territorial sovereignty and maritime rights, China has always maintained that they should be peacefully resolved through negotiations between the countries directly concerned” (FMPRC, 2014). The position paper issued in 2016 displayed the Chinese envision of managing differences and engaging in practical maritime cooperation in the SCS. It emphasized the joint development and bilateral talks as the management and solution of the SCS disputes. It said, In keeping with international law and practice, pending final settlement of maritime disputes, the states concerned should exercise restraint and make every effort to enter into provisional arrangements of a practical nature, including establishing and improving dispute

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management rules and mechanisms, engaging in cooperation in various sectors, and promoting joint development while shelving differences, so as to uphold peace and stability in the South China Sea region and create conditions for the final settlement of disputes. [. . .] Only when an agreement is reached by parties concerned through negotiation on an equal footing can a dispute be settled once and for all, and this will ensure the full and effective implementation of the agreement. (FMPRC, 2016)

On a 2-day visit to Manila, Chinese Foreign Minister Wang Yi reiterated the importance of joint energy ventures in the disputed South China Sea in a news conference on July 25, 2017 (Reuters, 2017). He warned that unilateral action could cause problems and damage both sides, then called on both sides to exercise restraint, and saying “in waters where there are overlapping maritime rights and interests, if one party goes for unilateral development, and the other party takes the same action, that might complicate the situation at sea [. . .] that might lead to tension, and as the end result, nobody would be able to develop resources” (ibid). Meanwhile, he implicitly mentioned the USA, while underscored the importance of resisting outside interference, by saying that “if there are still some non-regional forces in the region, they do not want to see stability and want to stir up trouble, we need to stand together and say ‘No’ to them together” (ibid). Moreover, remarked China and Philippine endeavor on dealing with the SCS disputes, Wang Yi emphasized in 2018 that two countries will “in a prudent and steady way advance cooperation on offshore oil and gas exploration [. . .] the South China Sea disputes will no longer be a source of negative energy blocking the development of bilateral ties” (The ASEAN Post, 2018). Furthermore, in terms of approaches and activities, China’s focus turned to the development of BRI and the establishment of the AIIB in the second half of 2014. Since then, China’s policy pursued to balance regional development and security issues. It is reported that less than a week after Philippine President Rodrigo Duterte’s visit to Beijing, Chinese vessels have left the Scarborough Shoal (Rappler, 2016).

8.3.2

Domestic Responses in the Philippines

8.3.2.1

Domestic Interests

Domestic interests here are defined as material considerations of economic sectors of the Philippines, whose cost-benefit calculations can change rapidly according to changing economic circumstances arising from the Chinese leadership project of the joint development of the SCS. To fuel its rapidly growing economy, the Philippines is in sore needs to develop indigenous energy resources, because it overwhelmingly relies on importing oil and gas. According to International Crisis Group (ICG), “the Philippines import more than 90 percent of their crude oil and petroleum products, as they produce only a minuscule amount domestically” (ICG, 2016, p. 14). Meanwhile, Reuters (2017)

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reported that “its [the Philippines] main source of natural gas, the Malampaya field near the disputed waters, will be depleted within a decade.” Not only that energy resources in Malampaya field will run out in a short time, the Philippines is faced with a huge gap between oil and gas availability and energy consumption. According to World Energy Council (2016), the oil production of the Philippines in 2014 was one million tonnes, while its annual consumption reached 18.4 million tonnes, in the meanwhile, the proved recoverable reserves were 15 million tonnes. Likely, the proved reserves of natural gas in the Philippines in 2014 were 98.5 billion m3, however, its production was only 3.7 billion m3. Corresponding to this situation, there are abundant energy resource reserves. A report conducted by the US Geological Survey (USGS) in 1994 estimated that “the sum total of discovered reserves and undiscovered resources in the offshore basins of the South China Sea at 28 billion barrels” (Forbes, 2016), i.e., 266 trillion ft3 of hydrocarbon resources. According to the USGS report (2010), which updated the survey results on energy resources of the SCS, there is a 95% chance to explore more than 760 million barrels of oil and 4600 billion ft3 of gas in the SCS platform, especially in the contested Reed Bank, while a medium chance of more than 2500 million barrels of oil and 32,000 billion ft3 of gas, as well as a low chance of around 5400 million barrels of oil and 15,000 billion ft3 of gas. The estimation of the WB is more conservative, but still reckons that oil reserves of the SCS are at least 7 billion barrels, while the estimated natural gas reserves are more than 900 trillion ft3 (Kipgen, 2017). Correspondingly, the estimation of state-owned oil company China National Offshore Oil Company (CNOOC) is relatively bold, with around 125 billion barrels of oil and 500 trillion ft3 of gas in undiscovered areas in the South China Sea (Forbes, 2016). The above energy resources surveys share the same view that the sources of natural gas in the SCS are more abundant than oil. The exploitation of natural gas in this area needs construction of an expensive subsea pipeline with the purpose of carrying the gas to processing facilities. Moreover, there are huge obstacles to constructing effective deep-water gas infrastructures, such as formidable geologic problems (including submarine valleys and strong currents) and spectacular location with typhoons and tropical storms (USEIA, 2013). All of these complex situations in turn preclude cheaper rigid drilling and production platforms, and increase the difficulties for the Philippines to explore and exploit oil in disputed waters. Faced with the sore needs for energy resources, the Philippines ethnic business communities, which control an estimated 60% of corporate wealth, are very cautious about expressing opinions regarding the SCS issues, because their success and wealth engendered jealousy and animosity among other Filipinos (Medeiros et al., 2008, p. 109). Moreover, the Philippine National Oil Company (PNOC),10 as the primary operator in the oil and gas industry, is a government-owned and controlled

10

PNOC has two subsidiaries: PNOC Exploration Corporation (in charge of natural gas production, petroleum exploration, and development, as well as coal exploration, production and trading) and PNOC Renewable Corporation (in charge of geothermal, hydro and solar energy project).

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corporation, which is mandated by the Philippines’ government through the Department of Energy (DOE) to take the lead in exploration, development, and production of oil, gas, and coal resources. The President and Chief Executive Officer (CEO) of the PNOC are nominated directly by the Philippines President, while its chairman is also appointed by the President and is simultaneously the Secretary of the Energy Department (ICG, 2016). Under this situation, the lobbying evidence of the energyrelated sectors in the Philippines is not detected. Therefore, the role of the material interests of the Philippines will be considered as null in this case study.

8.3.2.2

Societal Ideas

Societal ideas here are defined as path-dependent and value-based collective expectations of voters in the Philippines, regarding appropriate and acceptable governmental positions, such as how to govern the security. With regard to societal ideas of the Philippines, attention will be paid to both process and content ideas. The value-based societal ideas will be represented by a combination of public opinion polls mainly from the Laylo (2015), the Pew (2017, 2018), the Pulse Asia (2018), the SWS (2016a, 2016b, 2017a, 2017b, 2018a, 2018b, 2018c), and WVS (2001, 2012). The public opinion poll, which has not been mentioned before, is the Pulse Asia. It is a for-profit survey firm founded in 1999 and loaded in the Philippines, which is reformed as a nonprofit organization in 2013, and is considered to have close ties with the Philippines President Benigno Aquino III. Its expertise is the conduction of national surveys, election polls, and others regarding significant political, economic, and social issues. The related polls of the Pulse Asia in this case study include those conducted in 2017 and 2018.

8.3.2.2.1

Societal Ideas: Process Ideas

The process ideas here refer to dominant expectations of the Philippines voters about the conduct of political decision-making. The process ideas within the Philippine society concentrated on democracy are examined, since these are relevant to societal actor’s role in influencing re-election. The importance and characteristics of democracy imply the possibilities and opportunities of societal actors to express their opinions and influence governmental decision-making. As stated in the last case study, the Philippines public showed high support for democratic political system since 2001 (WVS, 2001, 2012). On the one hand, a very high majority of the Philippines respondents deeply realized the significance of democratic political system, on the other hand, a large majority showed confidence in the democraticness of their country. The Philippines voters’ support for democracy was anchored by the survey conducted by the SWS from 2013 to 2018 (see Table 8.12). A majority of 59% of respondents believed that “democracy is always preferable to any other kind of government,” while only 20% sometimes preferred authoritarianism. Concerning

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Table 8.12 Philippine process ideas concerning democracy (percentage) Survey questions Democracy is always preferable to any other kind of governments Satisfaction with the way democracy works

2013 59

2015 58

2016 62

2017 61

2018 59

68

76

86

80

84

Sources: Author’s compilation based on SWS (2017b, 2018b)

the democraticness of their country, a very high majority of 88% of the Philippines respondents in September 2018 and 83% in March 2018 were satisfied with the way democracy works in the Philippines, with respectively +77 and +65 net satisfaction. Concerning the characteristics of democracy, a slight majority of 64% in 2010 and 66% in 2014 disagreed with the statement “we should get rid of parliament and election, and have a strong leader decide things.” Moreover, an even higher proportion of Filipinos opposed military-governed country (75% in 2010 and 71% in 2014), one-part autocracy (67% in 2010 and 70% in 2014), and having experts decide everything (82% in both 2010 and 2014). In other words, “those favoring strong-leader governance, military governance, single-party governance and technocratic governance have always been minorities in Philippine” (SWS, 2018b, p. 5).

8.3.2.2.2

Societal Ideas: Content Ideas

Content ideas here are defined as the dominant expectations about the primary tasks of the Philippines government during Duterte period (2016–2018 in this case study). The prevailing content ideas will be investigated through surveys on concerns about territorial conflicts, as well as the way to shelve the SCS issues.11 The concerns about territorial disputes between China and the Philippines were slightly decreased. According to surveys conducted by Pew Research Center (2017), nine out of ten Filipinos viewed territorial disputes as a big problem in 2015, this number dropped to 82% in 2017. Concerning the approach to resolving the SCS disputes, two-thirds of Filipinos (67%) reckoned that it is more important to have a strong economic relationship with China at expense of being tough on territorial disputes. This 2017 data showed a big difference from those in the previous. In 2015, Filipinos were divided into two when choosing between economic growth and a strong stance in the SCS disputes, with 43% favoring a stronger economic relationship with China, and 41% preferring a tough stance on territorial disputes (see Table 8.13). These views are mirrored by the SWS surveys conducted in March 2016 (see Table 8.14). To the question, “how much do you agree or disagree with this statement: the Philippines should find ways to do business with China, regardless of what happens in the South China Sea,” 39% of respondents agreed with strengthening Sino-Philippine trade ties (strongly/

11 Here, the priority of Philippine will not be examined further, since the newest data before 2018 is released by WVS in 2012.

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Table 8.13 Philippine content ideas concerning economic growth and strong stance on territorial disputes (percentage) Survey questions It is important to have a strong economic relationship with China It is important to be tough with China on territorial disputes

2015 41 43

2017 67 28

Sources: Author’s compilation based on Pew (2017)

Table 8.14 Philippine content ideas concerning business with China (percentage) Survey questions: Promotion of the business ties with China despite the SCS disputes Strongly approve Somewhat approve Strongly disapprove Somewhat disapprove Undecided and do not know

March 2016 13 26 16 12 33

Sources: Author’s compilation based on SWS (2016a)

somewhat), 28% disagreed (strongly/somewhat), and 33% were undecided or do not know. Moreover, the survey data showed that the Philippines respondents had more willingness to promote trade ties with China, with +11 net agree (39% agree and 28% disagree). Eighty-six percent of Filipinos thought the growing trade and business ties are good (very/somewhat) for their country (Pew, 2014), which is one of the reasons to explain their expectation of promoting trade with China. The expectations of the Philippines to strengthen trade with China despite the SCS disputes depended on the fact that they can benefit from it. Fifty-six percent of respondents believed growing trade leads to job creation, while +27 proportion of the Filipinos thought it results in an incomes increase12 (ibid). During the period of Duterte, domestic attitudes of the Philippine respondents regarding the way to deal with the SCS disputes were distinct in contrast with previous (see Table 8.15). According to Laylo (2015) survey, “51 percent of the respondents rejected the possibility of entering into a joint exploration agreement in the Spratlys with other claimant-countries. When asked specifically if the Philippines should partner with China in exploring the Spratlys, 53 percent of the respondents said that should not be pursued.” However, a Pulse Asia survey conducted in 2017 showed a net agreeable of +29 to the statement “the Philippine should explore security and defense cooperation with China”, with 47% agreed and 18% disagreed (Inquirer.net, 2017). Moreover, according to the SWS survey, which was conducted in June 2018 among 1200 Philippine respondents, a large majority of 73% were in

12

According to Pew (2014), 41% Philippine respondents believed that trade leads to an increase in the wages of workers, 14% thought trade leads to income decrease, 41% thought trade does not make difference, and 4% did not know or refused to answer.

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Table 8.15 Philippine content ideas concerning approaches to shelve the SCS issues (percentage) Survey questions Disagree with entering into a joint exploration agreement in the SCS with China The Philippines should explore security and defense cooperation with China Have direct and bilateral negotiations between the Philippines and China

2015 53

2017 –

2018 –

–

+29

–

–

–

73

Sources: Author’s compilation based on Laylo (2015), Inquirer.net (2017), and SWS (2018a)

favor of having direct and bilateral negotiations between the Philippines and China, while only 27% reckoned it is wrong to do that (SWS, 2018a). These public opinions were echoed by Filipinos’ improving impression toward China since 2015 (Pew, 2013b, 2015). During the Duterte period, a slim majority of Filipinos held favorable views of China and showed confidence in Chinese President Xi Jinping (Pew, 2018). The Philippines respondents’ views of China were gradually increasing from 38% in 2014 to 53% in 2018, while their confidence in Chinese President enhanced from 32% in 2014 to 58% in 2018. A survey conducted in 2015 suggested that young people (aged 18–29 years) in the Philippines are “among the strongest supporters of the Chinese leader in the region [Asia]” (Rappler, 2015c). Moreover, the public trust of Filipinos in China was improved since 2015 (SWS, 2016b, 2017a). The data showed that 60% of Philippine respondents expressed little trust in China in December 2015, while only 16% showed much trust in China. However, in 2016 this situation changed, Filipinos with much trust in China were higher than those with little trust in China. The net trust soared up from
44 in 2015 to +9 in 2016. Moreover, President Rodrigo Duterte was the most trusted top government official in the Philippines according to a series of nationwide surveys conducted in 2017 and 2018, in which Rodrigo Duterte enjoyed both a top performance rating and a trust rating (Pulse Asia, 2018; Rappler, 2019). In 2018, a strong majority of Filipinos (81%) expressed appreciation for the work done by President Rodrigo Duterte, with a net approval of +74. Meanwhile, Rodrigo Duterte was also overwhelmingly trusted by Filipinos (76%), with a net trust of +70 (ibid).

8.3.3

Duterte Governmental Preferences Toward the SCS Issues

Philippine President Rodrigo Duterte, who succeeded Benigno Aquino III, has taken office on June 30, 2016. Duterte’s approach to the SCS disputes is different from Aquino’s. He changed Manila’s confrontational approach toward China. On the one hand, he prioritized strengthening close economic and diplomatic relations with China (Baviera, 2016) while putting the SCS arbitration aside. On the other hand, he promoted the joint exploration of natural resources in the SCS, while seeking to

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shelve the maritime disputes through conducting bilateral negotiations and setting up bilateral consultation mechanism with China. Defending his stance on the SCS issues, he doubted the willingness of the USA to support the Philippines in military confrontation between China and the Philippines over competing for territorial claims (Kipgen, 2017). Additionally, he publicly announced his military and economic separation from the USA (CNN, 2016). Hence, concerning their own armed forces, Rodrigo Duterte believed that “Philippine military forces were no match for China’s powerful forces,” therefore, it was impossible to “resume control of the resource-rich Scarborough Shoal from Beijing” (Kipgen, 2017). Moreover, he said, “I will not go into a battle and a battle which I cannot win and the consequence will be the massacre of my soldiers” (GMA, 2018). In an effort to mend fences and boost trade, Philippine President Rodrigo Duterte visited Beijing in October 2016. During that state visit, two sides agreed to achieve full improvement in the Philippine-China bilateral relations, to seek a settlement through bilateral dialogue on the SCS issues, to exercise self-restraint in conducting activities in the SCS areas, and to strengthen economic ties with China.13 It is emphasized in the joint statement of the two countries that, Both sides affirm that contentious issues [regarding the SCS] are not the sum total of the Philippines-China bilateral relationship [. . .] Both sides also reaffirm the importance of maintaining and promoting peace and stability, freedom of navigation in and over-flight above the South China Sea, addressing their territorial and jurisdictional disputes by peaceful means, without resorting to the threat or use of force, through friendly consultations and negotiations by sovereign states directly concerned [. . .] A bilateral consultation mechanism can be useful, which will meet regularly on current and other issues of concern to either side on the South China Sea. (Gov.ph, 2016)

Additionally, five meetings of bilateral consultation mechanism on maritime issues have been convened by the Philippines and China.14 In his state-of-the-nation address in 2017, Rodrigo Duterte underscored the achievement of improving relationship with China. He said, “we have cultivated warmer relations with China through bilateral dialogues and other mechanisms, leading to easing of tensions between the two countries and improved negotiating environment on the West Philippine Sea” (Rapple, 2017b). This is mirrored by joint statement between two countries in 2017, which said, Both sides welcome the implementation of the consensus between President Xi Jinping and President Rodrigo Duterte to establish a Bilateral Consultation Mechanism on the South China Sea as a way to manage and prevent incidents at sea, enhance maritime dialogue and cooperation, and pursue a stable growth of bilateral relations [. . .] Both sides may explore means to cooperate with each other in other possible maritime activities including maritime oil and gas exploration and exploitation. (FMPRC, 2017)

13

During his state visit to Beijing in October 2016, President Rodrigo Duterte conducted plenty of cooperation deals with the Chinese government, including around 33 billion dollars’ worth of business and financial deals, and billions worth of developmental assistance (Rappler, 2016). 14 The first meeting is held in Guiyang, China on May 19, 2017.

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In his 2018 state-of-the-nation address, Rodrigo Duterte firstly confirmed that “our improved relationship with China, however, does not mean that we will waver in our commitment to defend our interests in the West Philippine Sea.” He underscored further, This is why we engage China through bilateral and multilateral platforms such as the ASEAN-China and the Philippines-China Bilateral Consultation Mechanism. Opening lines of communication and amicably managing differences have led to positive developments [. . .] Participation in the ASEAN-China dialogue has also resulted to the draft framework for the Code of Conduct in the South China Sea which intends to resolve disputes by peaceful means. (Rappler, 2018)

In July 2017, Rodrigo Duterte indicated the expected joint exploration for oil in the SCS between the Philippines and China by saying “when they start wot excavate the gas and oil, I tell you it’s going to be just like a joint venture” (Rappler, 2017a). A month later, Philippine Foreign Affairs Secretary Peter Cayetano confirmed that he had received approval from President Rodrigo Duterte to pursue a joint development agreement on the SCS issues (OGJ, 2017), under the situation of anticipated depletion of Malampaya resources. It is reported that production from Malampaya natural gas field “fuels generation of 25 percent of the electricity used on the main island of Luzon,” and its natural gas will run out in a short time (ibid). In February 2018, Cayetano confirmed that a legal framework allowed for joint exploration would be finalized within the year, he said, “I can tell you we are pursuing it aggressively because we need it” (Bloomberg, 2018). On November 20, 2018, the Philippines and China agreed to a joint oil and gas exploration deal during Chinese President Xi Jinping’s state visit to the Philippines. A memorandum of understanding has been signed to promote bilateral cooperation in a wide range of areas (SCMP, 2018).

8.3.4

Multi-step Analysis

The causal mechanism in this case study is scrutinized as follows, which consists of four steps, including the impact of Chinese leadership project on the SCS issues in the Philippines, the domestic actors’ responses in the Philippines, governmental preferences of the Philippines in Duterte period and testing hypothesis on conditions of prevalence, inclusiveness of Chinese leadership project, and testing hypothesis of followership.

8.3.4.1

Chinese Leadership Project and Its Impacts on the Philippines

The first step of causal mechanism assumes that Chinese leadership project regarding the SCS issues has impacts on the Philippines, including generating anticipated winners and losers among relevant economic sectors, and affecting fundamental

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expectations of the Philippines about the appropriateness of governance and the role of politics on security issues. As examined before, Chinese leadership project in dealing with the sovereignty and maritime disputes in the SCS could be summarized as “setting aside dispute and pursuing joint development.” The Chinese SCS policy toward the Philippines during 2016–2018 highlighted three points, including bilateral talks between countries directly concerned, bilateral negotiation mechanism, and joint exploration of oil and gas in the SCS. These points are viewed as the management and solution of the SCS in the perception of the Chinese government, which could contribute to easing the tension, promoting China–Philippine bilateral relations, as well as strengthening economic development. Furthermore, in terms of approaches and activities, Chinese vessels have left the Scarborough Shoal less than a week after Philippine President Rodrigo Duterte visited Beijing (Rappler, 2016), which is a signal of easing the tension in the contested area. Chinese leadership project on the SCS issues, especially the joint exploration of natural resources in the contested waters could have an impact on the Philippines economy and generates anticipated winners and losers among relevant economic sectors, such as Philippine oil and gas industry. On the other hand, Chinese leadership project could impact fundamental expectations of Filipinos about the appropriateness of maritime issues governance, hence arises questions on the role of politics within the country.

8.3.4.2

The Domestic Actors’ Responses in the Philippines

The second step of causal mechanism occurs at domestic level of analysis as well, and it assumes that the Philippines domestic actors are expected to respond to the impact arising from Chinese leadership projects in dealing with the SCS issues. On the one hand, despite the sore needs for oil and gas resources within the Philippines, there is no evidence showing sectors’ lobbying concerning the SCS issues within the Philippines. Because the primary operator of the Philippines in the oil and gas industry is a government-owned and controlled corporation, whose chairman is appointed by the Philippine President and simultaneously the Secretary of the Energy Department. Under these up-down circumstances, lobbying of the energy sectors regarding the SCS issues cannot be detected. Therefore, material interests are considered as null in this case study. On the other hand, the SCS disputes between China and the Philippines attracted high public concerns, which is evidenced by high awareness (89%) among the Philippines public regarding the “West Philippine Sea conflict” in September 2018 (SWS, 2018c). Regardless of the willingness among 73% of Philippine respondents in asserting rights in the disputed waters (Philstar, 2018), more and more Filipinos chose to strengthen their economic relationship with China at expense of being tough on territorial disputes (Pew, 2017). Furthermore, the public opinions regarding specific approaches to shelving the SCS disputes showed a positive shift. In 2015, 53% of respondents rejected the possibility of entering into a joint exploration with

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China (Laylo, 2015). However, in 2017, only 18% refused to explore security and defense cooperation with China (Inquirer.net, 2017). Moreover, in 2018, a large majority of 73% of respondents supported dealing with the SCS disputes through “direct and bilateral negotiations between the Philippines and China” (SWS, 2018a). Meanwhile, the Philippines under President Rodrigo Duterte during 2016–2018 also displayed a strong preference for democratic political system and high satisfaction with the way democracy works (SWS, 2017b, 2018b). The Filipinos’ views of China have improved since 2014, while more and more Filipinos expressed their trust in China (Pew, 2018; SWS, 2016b, 2017a). Rodrigo Duterte enjoyed a high popularity within the Philippines, with eight out of ten Filipinos expressing satisfaction and trust in him (Pulse Asia, 2018; Rappler, 2019).

8.3.4.3

Governmental Preferences Formation and Testing Hypotheses

The third step of causal mechanism occurs at domestic level of analysis as well, and it is based on the standard assumption that the elected politicians in democratic political systems have self-interest to remain in office, therefore they are responsive to domestic demands, ranging from specific lobby groups to the voter’s attitudes. Thus, in order to test hypotheses on conditions of prevalence, it is necessary to examine the governmental preferences during Duterte period (2016–2018 in this case study). As aforementioned, unlike Benigno Aquino III, Duterte administration accepted Chinese leadership project by putting aside the SCS arbitration, seeking to strengthen economic and diplomatic relations with China, and shelving the SCS disputes through bilateral negotiation as well as joint oil and gas exploration with China. Before examining the correlation between domestic ideas and/or interests of the Philippines and governmental preferences toward the SCS disputes during Duterte period (2016–2018) in this case study, it is necessary here to recall the hypotheses. Concerning this case study, H2 states that if Chinese leadership project directly affects specific economic sectors in the Philippines, and raises cost/benefit questions of international competition, then domestic interests will be most influential in shaping governmental preferences of the Philippines, because lobbying will be strong. While H3 claims that if Chinese leadership project raises concerns on the fundamental questions and collective expectations about how politics should govern the security, then societal ideas will prevail in shaping governmental positions of the Philippines, this link will be strengthened if the project has only a diffuse impact on related sectors of the Philippines, because then lobbying will be weak. Firstly, as aforementioned, material interests are considered as null in this case study, which accordingly shows low support for H2, because (1) there is no evidence showing domestic sectors’ lobbying concerning the SCS issues within the Philippines, (2) there is low degree of Duterte governmental responsiveness to domestic material sectoral interests. Secondly, Table 8.16 shows a strong degree of governmental responsiveness to societal ideas under Philippine President Rodrigo Duterte during 2016–2018.

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Table 8.16 Correlation between societal ideas of the Philippines and Duterte governmental preference on the SCS Societal ideas • The top priority of the country: Economic growth; third priority: Strengthening defense forces • Very strong willingness to fight for the country • High public awareness of the SCS disputes (89%) • Concerns about territorial disputes were slightly decreased • Substantial majority of Filipinos (67%) choose to strengthen economic relationship with China at expense of being tough on territorial disputes • +11 net agree with promoting trade ties with China • A large majority of 73% of Filipinos support resolving the SCS disputes through direct and bilateral negotiations between the Philippines and China • Eighteen percent of Filipinos refuse to explore security and defense cooperation with China

Governmental preference • Joint statement: Both sides also reaffirm the importance of [. . .] addressing their territorial and jurisdictional disputes by peaceful means, without resorting to the threat or use of force, through friendly consultations and negotiations by sovereign states directly concerned • Rodrigo Duterte: We have cultivated warmer relations with China through bilateral dialogues and other mechanisms, leading to easing of tensions between the two countries and improving negotiating environment on the west Philippine Sea • Joint statement: Both sides may explore means to cooperate with each other in other possible maritime activities including maritime oil and gas exploration and exploitation • The MoU of joint oil and gas exploration has been signed in 2018

Sources: Author’s compilation

Duterte government was responsive to societal ideas of the Philippines, including enhancing economic ties with China at expense of being tough on the SCS disputes, supporting bilateral negotiations between two countries as the solution to the SCS disputes, as well as finding ways to do business with China regardless of the SCS disputes. Even though Aquino administration perceived its strategy as a complete success, a growing number of Filipinos viewed this success as limited (Kreuzer, 2018), which reinforced the shifting attitudes of the Philippines voters regarding the way to shelve the SCS disputes. In contrast, Duterte government was responsive to this shifting public opinions. The reasons behind this are that “while clearly winning the diplomatic contest and successfully resorting to external balancing, the [Benigno Aquino III] strategy had not prevented China from vastly extending its presence and clout in the areas claimed by the Philippines. In addition, continuing the course at that juncture threatened the Philippines with huge economic costs. The previous years showed how the country had seemingly been left out of the Chinese Belt and Road vision and plans” (ibid: 15). Therefore, the above-mentioned evidence shows strong support for H3, because (1) affected by Chinese leadership project, the Philippine voters share collective fundamental expectations on appropriate governmental behavior concerning the SCS disputes, (2) the Chinese leadership project has only a diffuse impact on related sectors of the Philippines, therefore lobbying is weak, (3) there is a strong degree of government responsiveness to societal ideas of the Philippines.

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Leaders Need Followers: China and the Philippines in the Joint. . .

Inclusiveness of Leadership Project and Followership

The fourth step of causal mechanism occurs at international level of analysis. As Schirm (2010, p. 216) states, “leadership [. . .] gains followership only if it is credibly framed as a project also representing the goals of others”. In this section, the main hypothesis (H1) is necessary to be recalled here, which claims that the inclusion of the interests and/or ideas dominant in the Philippines into Chinese leadership project of the joint development of the SCS is a necessary condition to secure followership of the Philippines. Table 8.17 illustrates the correlation between inclusiveness of the Chinese leadership project and followership of the Philippines in Duterte period (2016–2018). The Chinese leadership project regarding the SCS issues is “setting aside disputes and pursuing joint development.” Various governmental position papers and statements and speeches of Chinese politicians reiterated that disputes concerning Table 8.17 Correlation between inclusiveness of Chinese leadership project and Duterte government’s followership Chinese leadership project • Setting aside disputes and pursuing joint development • The sovereignty of the territories concerned belongs to China • Disputes concerning territorial sovereignty and maritime rights [. . .] should be peacefully resolved through negotiations between the countries directly concerned • The states concerned [. . .] establishing and improving dispute management rules and mechanisms, engaging in cooperation in various sectors, and promoting joint development while shelving differences • If there are still some non-regional forces in the region, they do not want to see stability and want to stir up trouble, we need to stand together and say “no” to them together

Sources: Author’s compilation

Societal ideas of the Philippines • The top priority of the country: Economic growth; the third priority: Strengthening defense forces • Very strong willingness to fight for the country • High public awareness of the SCS disputes (89%) • Concerns about territorial disputes were slightly decreased • Substantial majority of Filipinos (67%) choose to strengthen economic relationship with China at expense of being tough on territorial disputes • +11 net agree with promoting trade ties with China • A large majority of 73% of Filipinos support resolving the SCS disputes through direct and bilateral negotiations between the Philippines and China 18% of Filipinos refuse to explore security and defense cooperation with China

Duterte governmental preference • Joint statement: Both sides also reaffirm the importance of [. . .] addressing their territorial and jurisdictional disputes by peaceful means, without resorting to the threat or use of force, through friendly consultations and negotiations by sovereign states directly concerned • Rodrigo Duterte: We have cultivated warmer relations with China through bilateral dialogues and other mechanisms, leading to easing of tensions between the two countries and improving negotiating environment on the west Philippine Sea • Joint statement: Both sides may explore means to cooperate with each other in other possible maritime activities including maritime oil and gas exploration and exploitation • The MoU of joint oil and gas exploration has been signed in 2018

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territorial sovereignty and maritime rights should be peacefully resolved through negotiations between the countries directly concerned; non-internationalization of the SCS issues, i.e., stand together and say no to non-regional forces; promoting joint development while shelving differences. Therefore, during the period of Duterte (2016–2018), the Chinese leadership project credibly included societal ideas of the Philippines, such as the improving favorability and trust of Filipinos toward China, the expectation of strengthening economic relationship with China at expense of being tough on territorial disputes, as well as the expectation of resolving the SCS disputes through direct and bilateral negotiations with China. Moreover, as examined in the last section, Duterte government has accepted Chinese leadership project concerning the SCS issues. Duterte administration not only put aside the SCS arbitration, but also constructed bilateral consultation mechanism with China, as well as jointly explored the oil and gas of the SCS with China. Therefore, the evidence analyzed above shows a strong support for the main hypothesis (H1) concerning Chinese leadership in this case study, because (1) China credibly included societal ideas of the Philippines into its leadership project, (2) China obtained followership from the Philippines under President Rodrigo Duterte from 2016 to 2018.

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Chapter 9

Conclusion

9.1

Introduction

Along with China’s high-speed economic growth, Japan’s ambition to revitalize the economy through Abenomics, and USA’s pivot or balancing toward Asia-Pacific, the regional environment has changed dramatically in East Asia. The puzzles arising from East Asian economic and security dynamics are how China, Japan, and the USA strive for leadership and what factors determine their success and failure. Nowadays, the comprehensive strategic competition between two major powers—China and the USA has not only extended to nearly all fields, including geostrategic, geopolitical, geoeconomics, technology, and military, but also stretched from Asia to the Middle East and Latin American region. And it will likely intensify and diversify over time. While some scholars (White, 2012; Kang, 2007) consider the East Asian region as inevitably falling within China’s orbit, thus the USA should share power with China on an equal basis; others (Shambaugh, 2020) suggest that the USA has extensive clout within the region vis-à-vis China. Meanwhile, Sino-Japanese rivalry mainly focuses on geopolitical domain and maritime security affairs. While some scholars (Wallace, 2019; Sinkkonen, 2019) emphasize the increasing asymmetry between Chinese and Japanese material capacities and the less and less important for China to control Japanese international ambitions, others (Black, 2017; Solís, 2020) refute the insight of a declining Japan, claim that Japan still has significant leadership ambitions and economic statecraft to bring them to fruition. Against this backdrop, it is suggested that East Asia is in the process of leadership transition in divergent issue areas regarding global governance (He & Feng, 2019). To fully understand the East Asian leadership transition, it is necessary to investigate the determinants of leadership in East Asia. Accounting for nearly half the world’s real economic power collectively, China, Japan, and the USA are taken for granted that they ought to be the potential leaders in East Asia (Beeson, 2017, p. 567). The possible influence of Chinese, Japanese, and American leadership depends on their © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 F. Su, The Determinants of Leadership, Contributions to International Relations, https://doi.org/10.1007/978-3-031-12555-3_9

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material capabilities. However, apart from these, the issues that drew the attention of the scholars and political observers are not only the power over resources but also the three countries’ abilities to transform their power into political influence as well as the interactions between these leaders and potential follower countries in East Asia. Thus, it is necessary to investigate what are the determinants of reaching leadership in economic and security dynamics in East Asia. The result of this investigation is to contribute to the nascent literature motivated by the acceptance of leadership activities, beyond the leader-centered literature or supply-side literature of leadership, to gain new insights into the determinants of leadership in East Asia, which could provide an impetus for further research. Due to its strategic importance, the focus is on the significance of followership in the successful performance of leadership. Nowadays, China, Japan, and the USA have presented aspirations and various initiatives to extend their clout in East Asia. However, facing a gap between aspirations and abilities, all three countries partially failed to reach their goals. A varying behavior of East Asian potential followers in divergent issue areas between acceptance and refusal in the face of Chinese, Japanese, and American leadership projects can be empirically ascertained. These variants display that being an economic weight does not always support acquiring control over other states. Therefore, one inadequately researched mystery is why do China, Japan, and the US sometimes reach and sometimes fail their goals? The underlying question behind the success and failure of a leadership project is the question of the basic conditions for leadership. More specifically, under which conditions do potential followers in East Asia accept China’s, Japan’s, and USA’s bids for leadership? Furthermore, under which conditions do domestic interests and societal ideas prevail in shaping governmental preferences of potential followers?

9.2

The Main Arguments

The aim of this book is to contribute to a better understanding of determinants of leadership in East Asia, especially the cultivation of followership. To achieve it, it focuses on the leadership projects of China, Japan, and the USA, as well as domestic demands of potential followers. Domestic politics is usually not the focus of scholars in the field of leadership, since the mainstream studies either concentrate on material resources of leadership or concentrate on ideational factors as a way to socialize or internalize values, norms, and identities. However, the under-researched is a particular focus on followership as the determinant of leadership in East Asia, as well as the conditions of motivating the acceptance of potential followers in the region, in other words, motivating followership through framing Chinese, Japanese, and American leadership projects. Some scholars explore the ways to motivate secondary powers to accept or oppose leadership claims, such as focusing on the allocation of material resources, construction of democratic institutions, projection norms, and values, and provision

9.2

The Main Arguments

207

of common interests between leaders and followers (Flemes & Wojczewski, 2011), modifying the fundamental belief of elites in follower country through intersubjective internalization of ideas, norms, and identities (Nabers, 2008), socializing the mass public of follower country with leadership ideas (Wang, 2003), providing ideational commitment to foster liberalism and democracy (Beeson, 2009), promoting collective goals instead of imposing intentions on followers by force (Terada, 2001), and sharing power, incentive, and vision with followers (Truong, 2015). However, this literature overemphasizes constraints on state behavior emanating from the distribution of power, the configuration of information and institutions, as well as social mechanisms. Moreover, research on applying empirical analysis to comparatively explore the leadership of China, Japan, and the USA in the context of East Asia economic and security dynamics is relatively thin and could thus be enhanced by an in-depth analysis. To complement the existing literature, this book underscores the significance of followership in securing a leadership position, hence it investigates the role of domestic politics in shaping a follower country’s preferences and motivating its followership, in order to provide more in-depth theoretical and empirical accounts for the research questions mentioned above. Thus, the highlight of this book is the analysis employing a concept of inclusive leadership, in which it examines the leadership determinants for China, Japan, and the USA in projecting their leadership projects. The second distinguished point contrary to other studies is that, instead of focusing on studying one particular country or one specific field, this book not only examines the influence of China, Japan, and the USA over different countries in East Asia, but also conducts a comparison among them regarding their leadership position in the region. Moreover, instead of focusing on one specific issue, this book also covers the economic and security dynamics of the leadership bids. Furthermore, the significance of domestic politics in leadership conditions will be presented by examining the concept of inclusive leadership as well as the domestic politics of potential followers in East Asia. The inclusive leadership developed by Schirm (2010) emphasizes the significance of followership as a core condition to determine leadership performance. It holds that in order to perform successfully, any leadership must be accepted by followers in the context of noncoercive and benign leadership. Thus, “including the interests and ideas of other countries in the leadership project triggered followership, whereas neglecting them resulted in criticism or opposition” (Schirm, 2010, p. 214). The societal approach (Schirm, 2011, 2013, 2016, 2020) is the base of inclusive leadership. It assumes that elected governments in the democratic political system want to remain in office and therefore are prone to be responsive to societal demands, ranging from lobby group pressure to public opinion attitudes (Schirm, 2013, p. 690). It does not only emphasize the role of societal demands in shaping governmental preference formation, but also innovatively conceptualizes and examines the conditions for the prevalence of either domestic interests or societal ideas in informing governmental positions. The inclusive leadership and the societal approach seem promising for the explanation of Chinese, Japanese, and American leadership in securing the acceptance of potential follower countries in East Asia,

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because they could theoretically conceptualize and empirically scrutinize the endogenous societal demands of follower countries in explaining their governmental preference formation, which were included in the leadership projects proposed by China, Japan, and the USA. Through the employment of inclusive leadership and the societal approach, this book investigates the inclusiveness of leadership projects, and views it as a necessary condition for cultivating followership. On the other hand, this book focuses on the domestic politics of potential followers to investigate which societal actors and which domestic demands are involved in influencing governmental preference formation. Therefore, the independent variable, the inclusiveness of leadership project has been applied to explain followership as the dependent variable. More specifically, several interrelated arguments are developed. Regarding the acceptance of regional leadership, this book argues that the inclusion of the domestic interests and/or societal ideas dominant in potential follower country in leadership projects of China, Japan, and the USA is a necessary condition to secure followership. To examine the inclusiveness of a leadership project, it is a necessity to investigate the leadership project on the one hand, and endogenous societal demands (interests and ideas) of potential follower countries on the other hand. Moreover, regarding the condition of the prevalence of domestic interests and societal ideas, this book argues that if leadership project directly affects specific economic sectors in East Asian potential follower country, and raises cost/benefit questions of international competition, then domestic interests will be most influential in shaping potential follower’s governmental preferences because lobbying will be strong. Additionally, if the leadership project raises concerns on the fundamental questions and collective expectations about how politics should govern the economy and security, then societal ideas will prevail in shaping potential follower’s governmental positions, this link will be strengthened if the project has only a diffuse impact on specific sectors in potential follower, because then lobbying will be weak. Varying leadership projects in East Asian economic and security dynamics and their respective potential followers have been scrutinized to prove those arguments and specify the following causal mechanism through investigating interactions between leaders and followers. The leadership project exerts an impact on potential followers in two ways. First, through the anticipated distributional consequences, and second, via influencing voters’ fundamental expectations within follower countries. Then, domestic actors of potential followers (ranging from interest groups to voters) are assumed to respond to the impact arising from leadership projects, as so to improve their own competitiveness and express fundamental expectations regarding the way to govern the economy and security. In this case, elected politicians of potential follower countries are assumed to respond to societal demands so as to remain in office or secure reelection. Correspondingly, the governmental preference of potential followers concerning a specific leadership project displays its acceptance or refusal toward that leadership project, in other words, the followership or non-followership. Therefore, the inclusion of domestic demands of potential follower countries into leadership projects serves as a necessary condition to secure followership.

9.3

The Most Important Findings

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It has to be mentioned that in each case study (the AIIB, TPP, UNSC, and SCS), whether potential followers decide to follow or against the leadership projects of China, Japan, and the USA, is strongly embedded in the overall foreign policies of potential followers. Besides domestic interests and societal ideas, potential followers’ behavior might be influenced by other different calculations, such as systematic factors, political willingness of elites, and the capacity to mobilize internal resources. Therefore, all the above-examined cases have to be fit into the big picture of both leaders and potential followers’ foreign policies. However, the research has to be parsimonious and focused and cannot consider all possible aspects in policymaking process. Therefore, this book exclusively aims at evidencing and analyzing the potential societal causes of the potential followers’ decision to follow or not to follow a leadership project.

9.3 9.3.1

The Most Important Findings Four Interrelated Findings

This book shows four interrelated findings regarding the determinants of leadership in East Asia. First, material power resources alone are not the decisive factor for the successful performance of leadership. Accounting for nearly half the world’s real economic power collectively, China, Japan, and the USA, as the would-be leaders in East Asia, have achieved the leading role and improved their positions in the region in some particular cases, but failed to obtain their goals in other cases, in which their material power dominated the others, but still cannot be transferred into political influence. Thus, their failure in leadership projects displays that material power resources alone could not qualify China, Japan, and the USA to maintain and increase leadership in East Asia. Instead, more important question is the use of power by these would-be leaders. In other words, faced with aspiration-achievement gaps in dealing with respective issues, China, Japan, and the USA are supposed to focus on the effectiveness of translating power over resources into power over outcomes, in order to obtain voluntary cooperation and willing supporters within the region. The results of four detailed case studies (in which two cases are divided into sub-case studies) in the context of East Asian leadership transition support this finding. In individual cases, the willingness of East Asian countries to accept leadership projects proposed by China, Japan, and the USA varied even in the same time period and under the conditions of the same power capacity. For example, the Chinese leadership project AIIB secured support from 56 countries around the world in 2015, whereas its project regarding the joint development in SCS did not obtain support from its neighbor the Philippines (with its initiative of the SCS arbitration) in the same time period. The USA successfully won the support of all TPP members after 5 years of negotiation and concluded the agreement in 2016, however, it did not manage to hinder its closest allies to join the China-led AIIB.

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Equally, Japan failed to obtain the permanent member seat on the UNSC due to the resolute opposition in East Asia, especially from South Korea, although its power dominated South Korea by that time. Second, followership is a necessary but not sufficient condition of successful performance of leadership. In the process of East Asian leadership transition, China, Japan, and the USA endeavored to enhance their influence within the region and initiated various leadership projects. And their success and failure distinguish power over resources and power over outcomes in detail in the context of a dramatically changing regional environment. Despite the different understanding among scholars regarding the regional positions of three would-be leaders, as well as divergent predictions on the regional hierarchy in the future, it is obvious that the regional order in East Asia is formulated along with an ongoing engagement of China, Japan, and the USA, as well as their interaction with other states within and outside the region. More specifically, followership plays a significant role in securing leadership. In order to perform successfully, any leadership must be accepted by followers in the context of non-coercive and benign leadership. The success and failure of would-be leaders’ initiatives in divergent issue-specific areas, as well as varying governmental positions and reactions of East Asian countries between accepting to objecting show that any leadership must be accepted by followers. Third, since leaders are in need of followers, followership depends on the inclusiveness of leadership project, i.e., leaders can secure followership through credibly incorporating potential followers’ domestic interests and/or societal ideas into their leadership project so as to neutralize potential resistance and stimulate support for this project. The exogenously given changes on the international and regional levels—such as leadership projects—anticipatedly affect voters and interest groups in potential follower countries. In turn, these voters and interest groups, who are interested in improving their positions, shape the governmental preference formation of potential follower countries. In this perspective, the inclusion of the domestic interests and/or societal ideas of potential follower into leadership project is a necessary condition for cultivating followership. The result of case studies in the context of East Asian economic and security dynamics supports this finding. High inclusiveness of leadership project triggered followership. The three successful leadership projects all indicate high inclusiveness. Vice versa, neglecting domestic societal demands of potential follower countries resulted in criticism or opposition. The three failed leadership projects all display low inclusiveness. The comparison of various case studies shows that the high degree of inclusiveness of leadership project correlated clearly with followership regardless of cases, issues, and countries. Fourth, the variation of governmental positions of potential follower countries toward leadership projects proposed by China, Japan, and the USA—followership or non-followership—arises from diverging domestic interests and societal ideas, which exist prior to international strategies and interstate negotiation. In other words, domestic influences of potential followers crucially shape their governmental preference formation. Thus, due to domestic sources of governmental positions, it is a necessity for leaders to include domestic interests and societal ideas dominant in follower countries into their leadership projects, so as to secure followership.

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Moreover, in different case studies, domestic interests and societal ideas have divergent importance in shaping governmental preference formation. Under the condition of impact on specific sectors, the finding shows that if leadership project directly affects specific economic sectors in East Asian potential follower country, and raises cost/benefit questions of international competition, then domestic interests will be most influential in shaping potential follower’s governmental preferences because lobbying will be strong. Under the condition of issues at stake, the finding displays that if the leadership project raises concerns on the fundamental questions and collective expectations about how politics should govern the economy and security, then societal ideas will prevail in shaping potential follower’s governmental positions, this link will be strengthened if the project has only a diffuse impact on specific sectors in potential follower, because then lobbying will be weak.

9.3.2

Detailed Findings of Case Studies

The detailed findings of the empirical research on the determinants of China, Japan, and the USA in East Asia will be specified in the following. Firstly, the rise of China is one of the most notable events in the twenty-first century and a focal point for IR scholars. Some argued that China is “an increasingly credible alternative to the US leadership in Asia Pacific and beyond” (Fels, 2017, p. 9). Others suggested that “China is rising as a leader, but is still a leader in the making” (Truong, 2015, p. 229). Anyway, China’s rise is considered as the principal cause of the undergoing profound change in international relations in East Asia (Shambaugh, 2004, p. 64). Along with the development of the vision of the Chinese leadership, China “has evolved from a passive participation into a potential creator of structures of global (economic) governance” (Caspari & Gottwald, 2018, p. 265). China will continue to spread its leadership projects within and outside East Asia and exert its leadership by gaining followership of other countries, since leader is not self-appointed but requires the acceptance of followers regarding its leadership project. However, China sometimes reached its goals, and sometimes failed its goals despite its dominating power over other countries. The findings show that the correlation between inclusiveness of leadership projects and followership does hold throughout the variation in the cases, issues, and countries examined in this book. Concerning the case study of the AIIB, China proposed to establish the AIIB, and South Korea as a potential follower eventually accepted Chinese leadership project to take part in this new Beijing-led bank. At the domestic level, South Korean government showed a strong degree of responsiveness to domestic interests, such as bridging the gap between infrastructure needs and investment, facilitating further development of Asia economies, benefiting South Korean industries, creating jobs, revitalizing economy, having more say and influence in the AIIB; and showed a moderate degree of responsiveness to societal ideas, such as achieving top priority of economic revitalization, strengthening cooperation, enhancing international trade

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and investment. South Korea’s domestic interests prevail over ideas in shaping governmental preference formation regarding the AIIB. Moreover, domestic interests and societal ideas reinforce each other in shaping governmental decisions on joining the AIIB. At the international level, concerning the correlation between inclusiveness of Chinese leadership project and South Korean followership, Chinese leadership project obviously included South Korea’s domestic interests and societal ideas, hence secured its followership. Concerning the case study of the SCS, China proposed to “setting aside dispute and pursuing joint development.” To achieve this goal, the Chinese SCS strategy between 2010 and 2016 changed from being initially more proactive and assertive to attempting to make a balance between regional development and security concerns. The Philippine government under Benigno Aquino III internationalized the SCS issues through maximizing the involvement of the USA in 2012 Scarborough Shoal standoff, and then strengthened external ties with the USA as well as filed the arbitration case against China. At the domestic level, Aquino government was responsive with high commonality and specificity to societal ideas (material interests of the Philippines were considered as null due to the lack of lobbying evidence of Philippine domestic sectors), such as strong willingness to fight for the country, unfavorable views of and low trust in China, satisfaction with the moves of defending Philippine’s territorial rights and Aquino government’s arbitration, as well as cautious about the possibility of entering into a joint exploration agreement. At the international level, concerning the correlation between inclusiveness of Chinese leadership project and non-followership of the Philippines, the Chinese leadership project did not credibly include societal ideas of the Philippines, hence cannot secure the Philippine’s followership. During the period of Duterte, Chinese leadership project emphasized bilateral talks between countries directly concerned, bilateral negotiation mechanisms, and joint exploration of oil and gas in the SCS. Duterte administration accepted Chinese leadership project by putting aside the SCS arbitration, seeking to strengthen economic and diplomatic relations with China, and shelving the SCS disputes through bilateral negotiation and joint oil and gas exploration with China. At the domestic level, Duterte government was responsive with high commonality and specificity to societal ideas, including enhancing economic ties with China at expense of being tough on the SCS disputes, supporting bilateral negotiations between two countries as the solution to the SCS disputes, as well as finding ways to do business with China regardless of the SCS disputes. At the international level, concerning the correlation between inclusiveness of Chinese leadership project and followership of the Philippines under Duterte administration, the Chinese leadership project did credibly include societal ideas of the Philippines, hence securing the Philippines followership. Secondly, Japan as the third-largest economy in the world, experienced two lost decades, which undermined its claim to leadership. Rather than perceiving Japan as declining in material power relative to the rise of China, some scholars argue that Japan still has significant “leadership ambitions and, potentially, the means to bring them to fruition” (Black, 2017, p. 151). However, Japan sometimes reached its goals,

9.3

The Most Important Findings

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and sometimes failed its goals. For example, Japan successfully played a leadership role in the construction of TPP-11 after the withdrawal of the USA from the TPP. Moreover, Japan successfully exerted its influence to make the East Asian Summit based on the framework of ASEAN+6,1 instead of the Chinese version of ASEAN +3.2 On the other hand, Japan failed to establish Asian Monetary Fund in 1997, and failed to obtain the permanent seat on the UNSC under the strong opposition of China and South Korea as well. Due to the lack of resources, this book only analyzes the case study of the UNSC, however, the findings still show that the leadership gains followership only if it is credibly framed as a project to include the domestic interest and/or societal ideas of potential follower. Concerning the case study of the UNSC, Japan as one of the G4 countries, proposed to reform the UNSC by adding six permanent seats with veto power (including Japan) and four nonpermanent seats, however, Japanese bid for the permanent seat on the UNSC has been fiercely opposed by South Korea (as one of the UfC countries), and did not obtain any concrete outcome. At the domestic level, South Korean government was responsive with high commonality and specificity to its societal ideas (material interests were considered as null), such as trust in the UN, strong unfavorable opinions of Japan, and dissatisfaction with Japanese introspection of historical issues. At the international level, Japan not only failed to meet South Korea’s requirement of more numerous nonpermanent members, but also ignored or underestimated the anti-Japan sentiment within South Korea, including the demand for self-reflection of Japanese aggression in the past, the sincere apologies and reasonable compensation. Eventually, concerning the correlation between inclusiveness of Japanese leadership project and non-followership of South Korea, the Japanese leadership project did not credibly include domestic interests and societal ideas of South Korea, hence cannot secure South Korean followership. Thirdly, the USA presented itself as a global power, which participated in nearly all areas of the globe, including East Asia (Stokes & Waterman, 2017, p. 1039). Its leadership derives from “its prominent position in global governance institutions and from its strong economic involvement throughout the world” (Van der Putten, 2013, p. 226). However, the USA sometimes reached its goals, and sometimes failed its goals even though it is the only superpower in the world. The findings show that the correlation between inclusiveness of leadership projects and followership does hold throughout the variation in the cases, issues, and countries examined in this book. Concerning the case study of the AIIB, the USA urged its close allies to stay away from the China-led AIIB, and South Korea as potential follower eventually participated in this new bank. Comparing the merits resulting from Chinese leadership project, the USA only focused on the skepticism of the necessity to establish the AIIB, as well as the concerns over the governance standards of the AIIB. Even though the USA shared high favorability and enjoyed high support for its current economic and political influence in South Korea, these cannot overweigh the actual

1 2

ASEAN+6: ASEAN, China, Japan, and South Korea), but also Australia, New Zealand, and India. ASEAN+3: ASEAN, China, Japan, and South Korea.

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benefit of joining the AIIB. American leadership project obviously did not credibly include South Korea’s domestic interests and societal ideas, hence cannot secure South Korean followership. Concerning the case study of the TPP, the US leadership project shifted from abolishing all tariffs without exception to canceling this kind of prerequisite. Japan joined the TPP negotiations in 2013 and signed the agreement in 2016. At domestic level, Japanese government showed a strong degree of responsiveness to both domestic interests (including promoting trade and investment liberalization, expanding overseas markets, leading to economic revitalization, and setting new rules for the trade of twenty-first century, securing universal health care insurance system, opposing participation in the TPP negotiations with prerequisite of abolishing all tariffs without exception) and societal ideas (including achieving top priority of economic growth, enhancing international trade and investment, as well as strong favorable opinion of the USA). At international level, concerning the correlation between inclusiveness of American leadership project and Japanese followership, American leadership project obviously included Japanese domestic interests and societal ideas, hence securing its followership. In sum, along with the dramatically changed international and regional environment, China, Japan, and the USA “will find themselves increasingly competing for influence and the loyalties of [other] states” (Ikenberry, 2016, p. 12), owning to the fact that the leadership should be understood by the acceptance of others, rather than “muscle flexing or clinging onto self-delusion” (Truong, 2015, p. 235). The findings of this book suggest that policymakers of China, Japan, and the USA should reassess their successful leadership projects and learn from their failed cases so as to formulate a smarter strategy for obtaining leadership and securing followership in the East Asian region.

9.4

Future Research

As Schirm (2020, pp. 409–410) suggests, societal approach “conceptually deepens a crucial but limited part of the political process,” thus other potentially important factors are not considered explicitly, including “international influences on governmental decisions,” “the increasing transnationalisation of societies,” “the role of transnational elites,” and “party programmes.” These factors are not examined explicitly in the employment of the societal approach and the inclusive leadership, however, their impact “is not negated, but enters the analysis of governmental preferences formation indirectly” (ibid). Based on the constructive criticism of the societal approach and the inclusive leadership, it has to be noticed that the context issues and the big picture of both leaders and potential followers’ foreign policies could be investigated further, so as to figure out not only the necessary but also the sufficient conditions of leadership in East Asia. Future work could also be conducted concerning the perception of leadership from follower countries within and outside East Asia. Moreover, further research could be focused on (1) other issues within

References

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East Asia, such as monetary leadership (internationalization of Renminbi/Yen), non-traditional security issues, etc., and (2) other subregions such as Northeast Asia and Mekong subregion. Last but not least, the attention of further research could also be focused on what the future hold for East Asian leadership dynamics; the competition of China, Japan, and the USA on the new world trade regulatory order; types of leadership displayed by those three countries, etc.

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