Opinion | Stuck between China and the US, flailing Japan needs a grand new plan

“Japan is the world’s third-largest economy and has consistently sought to bring about peace and prosperity in the region since the end of the second world war,” said Prime Minister Fumio Kishida at the 2022 Shangri-La Dialogue, Asia’s premier defence summit. “Accordingly, the responsibility Japan must fulfil is heavy.”

Soon, Japan vowed to increase defence spending, enhance its military capabilities and expand defence aid to like-minded nations. Despite the projection of assertiveness, however, Japan’s leadership is grappling with profound strategic anxieties.

At home, the Kishida administration is deeply unpopular, with public disapproval ratings reaching 65 per cent last November. Following yet another recession, Japan has been overtaken by Germany as the world’s third-largest economy, and could soon by superseded by India.

To make matters worse, such moments of domestic vulnerability have coincided with extreme geopolitical uncertainty. Japan is confronting the resurgence of China as a fully fledged technological and military power as well as the potential return of Donald Trump to the White House next year, which may well prove to be more disruptive than his previous term.

On the surface, Japan is a dynamic nation. On a recent visit to Tokyo, I noticed the changes brought about by the Olympics, which ushered in major public infrastructure projects. Investors seem bullish and the stock market is at its highest in decades.