Why Japan will take a more China-friendly turn after its general election

Expect Fumio Kishida to take a more progressive approach to issues around Japan’s sluggish economy and foreign affairs
Enacting his policies will require greater trade and investment, and he is likely to look to China for both once his election victory is secured

Yoshihiro Sakai

Published: 9:15am, 6 Oct 2021

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Fumio Kishida has only been Japanese prime minister since October 4. Even so, he is already preparing to win a general election on October 31 as the House of Representatives’ term expires.

Internal politics in the Liberal Democratic Party (LDP) is brutal, with many politicians focusing only on holding onto their seats, with little regard for ideology and policy. As such, Kishida has appointed people to several senior posts within the LDP and assembled his cabinet to win the upcoming election.

For Japan to embark on Kishida’s policies, it will take greater investment and trade. He will quietly look to China for both, even if the language used might be challenging at times. Instead of acting like US President Joe Biden, Kishida will need to work with China.

First, Kishida needs to quickly compile a large supplementary budget to help Japan’s economy deal with the effects of the Covid-19 pandemic, which his predecessor Yoshihide Suga failed to do. He must also outline his economic policy and how he plans to address the negative effects of neoliberalism and support low-income people.

Former prime minister Shinzo Abe – a supporter of Kishida’s during the LDP election – tried to revamp the Japanese economy through his “Abenomics” approach. His plan had three “arrows” of bold monetary policy, flexible fiscal policy, and a growth strategy that encouraged private investment.

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The Nikkei stock index tripled and reached a 30-year high during Abe’s tenure, which ran from December 2012 to September 2020. Japan’s problems with chronic deflation eased during that time, while unemployment fell from 4.3 per cent in 2012 to 2.4 per cent in 2019, the lowest since 1992.

However, Abe’s plan neglected structural reform and widened existing inequities in the country. For example, Japan was ranked 120th out of 156 countries in the World Economic Forum’s Global Gender Gap Index 2021 rankings. The average Japanese woman’s income is 43.7 per cent lower than the average Japanese man’s.

Meanwhile, the annual value added per worker in the IT industry in 2019 was 9.76 million yen (US$88,000), but the figure for workers in the lodging, restaurant and service industry was 2.15 million yen, and 3.18 million yen for those in the medical and care industry.

The annual value added of all industries in the metropolitan areas of Tokyo, Osaka, Aichi and Fukuoka is 6.09 million yen, while in rural areas it is 4.7 million yen. The lowest figure is in the lodging, restaurant and service industry in rural areas, at 2.07 million yen.

And the gap has grown bigger during the Covid-19 pandemic, with the most vulnerable group – women working in the lodging, restaurant and service industry in rural areas – hardest hit. Last year, some 500,000 women lost their jobs while male employment increased by 330,000. Female deaths by suicide rose by 935, to 7,026, while those among men fell by 23 to 14,055, according to the National Police Agency.

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Women are struggling in the job market because the lodging, restaurant and service sector employs more part-time workers than other industries and 22 per cent of women work in part-time jobs, compared with only 9 per cent of men.

Kishida will attempt to improve the situation, but there will be big hurdles to clear. He hopes to emulate Abe’s victories in six national elections, so intends to continue with Abenomics reforms. He will also continue Japan’s current foreign policy to win the support of the people, who enjoyed a rare period of stability during Abe’s time as prime minister.

Kishida will put on a brave face when it comes to China, although he may become more pragmatic after the election, given China’s critical role if Japan hopes to revitalise its economy.

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Kochikai, one of four leading factions within the LDP, was founded by former prime minister Hayato Ikeda in 1957 with a focus on dovish foreign policy and addressing domestic economic inequality. Its name comes from a line written by Eastern Han dynasty poet Ma Ron.

Kishida, who has led Kochikai since 2012, now leads the LDP as well. He follows in the footsteps of LDP presidents Yohei Kono – the father of his rival Taro Kono – and former prime minister Yasuo Fukuda, who skilfully managed Japan’s relationship with China.

I believe Kishida will push Japan to seek greater cooperation with China for mutual benefit. Indeed, progressive policy should be the hallmark of Kishida’s approach to the economy and foreign affairs in his role as Japan’s 100th prime minister.

Yoshihiro Sakai is a professor at Chubu University, Japan. This article reflects the author’s own views