The analysis on the trend of Japan's economic diplomatic policy after Yoshihide Suga came to power

Du Ying1
1 Heilongjiang Academy of Social Sciences

Статья в журнале

Экономические отношения
Том 11, Номер 3 (Июль-сентябрь 2021)

Du Ying The analysis on the trend of Japan's economic diplomatic policy after Yoshihide Suga came to power // Экономические отношения. – 2021. – Том 11. – № 3. – doi: 10.18334/eo.11.3.112400.

Research purpose. This article mainly analyzes Japan\'s foreign economic policy since Yoshihide Suga took office in the purpose of revealing its impact on China-Japan economic cooperation, and proposing countermeasures and suggestions to deepen China-Japan economic and trade cooperation. This article adopts many methods including literature survey, comparative analysis, and the method of connecting theory with practice. The research content of this article is as follows. First, the establishment of Yoshihide Suga\'s economic diplomatic policy is discussed. Second, the analysis on the trend of Yoshihide Suga\'s economic diplomatic policy is conducted. Third, the influence of Yoshihide Suga\'s economic diplomatic policy on Sino-Japanese relations is evaluated. Fourth, thoughts and suggestions on countermeasures are given. The research concludes that Yoshihide Suga has basically continued the economic and diplomatic practices of the Abe period after he took office, but he has also adopted some autonomous routes, which have become increasingly obvious. Diplomatically, the Yoshihide Suga government has strengthened its bondage with the United States and adopted a tough stance toward China, highlighting the limitations of its foreign policy and inevitably bringing new uncertainties to the future development of Sino-Japanese relations.

Ключевые слова: China, Japan, Suga Yoshihide Economics, economic and trade cooperation

JEL-классификация: F51, F52, F53, N45


In September 2020, Shinzo Abe, Japanese former Prime Minister, resigned abruptly, and Yoshihide Suga, then the official chief, was elected as the 99th Prime Minister of Japan and officially became the successor. At the backdrop of “great changes unseen in a century”, when the historical process of the world has been accelerated by the COVID-19 epidemic, and when Sino-Japanese relations, the international system and the international order have undergone profound changes and adjustments [1] (Yang Bojiang, 2020), the Yoshihide Suga government is determined to promote reforms and lead Japanese economy to recovery. Suga Yoshihide said at the press conference on his inauguration as prime minister, "We must continue to implement Abenomics and further advance reforms" [2] (Hideki Murai). It attracts attention from all quarters as to in what degree Suga Yoshihide will inherit Abe's policies and in which fields he will use his autonomy to lead Japan to move forward.

This paper systematically combs and analyzes Japan's foreign economic policy since Yoshihide Suga took office, summarizes Japan's economic policy towards China, and looks in to the future development trend of Sino Japanese economic and trade cooperation. The innovation points of this paper lie in a discussion of the economic and trade cooperation between China and Japan under background of international economic cooperation and regional economic cooperation and a comprehensive study of Japan's foreign economic policy by adopting research methods of international economics, regional economy and international relations. The author believes that the “Yoshihide Suga Economics” is not only an inheritance of the “Abenomics”, but also reflects autonomy of Yoshihide Suga himself. For the policy towards China, Japan keep encircling and suppress China following steps of the United States, which has caused negative impact on the economic and trade cooperation between the two countries. In response to this situation, an actively response is necessary. In aspect of public opinion, China should publicize its foreign policy, increase its credibility and dispel foreign doubts; meanwhile, in aspect of industrial chain, economic recovery and digital applications, China should seek cooperation with Japan.

Establishment of Yoshihide Suga's economic and foreign policy

Suga Yoshihide's economic policy.

Japanese academic circles therefore believe that, "Suga Yoshihide Economics" and "Abenomics" are produced by the media, critics, and reporters. Through Internet searches, it is also found that the concept of "Suga Yoshihide Economics" has increased with the increase in media reports. Some people have questioned the rationality of this name. For example, some people say whether it is not in accordance with the convention. In addition, whether it is disrespectful to Yoshihide Suga and Shinzo Abe? Western media said that, “the pronunciation of ‘Suga’ in "Suga Yoshihide Economics" is similar to the pronunciation of “sugar” in English, which makes people mistakenly think it is (Suganomic) [2] (Hideki Murai). The rationality of this name will not be evaluated, and the name of Suga Yoshihide "Suga Yoshihide Economics" is used for the time being.

Suga Yoshihide's economic policy, namely "Suga Yoshihide Economics", mainly includes the following contents. The first,administrative reform. After Yoshihide Suga took office, he appointed Kono Taro as the Minister of Administrative Reform to promote reforms. Starting from the central government, the system of stamping was abolished, the approval process was simplified and the administration quickened, in expectation of changing the bureaucracy of state agencies to the utmost extent and improving the work efficiency and policy determination of the agencies. The second is social intelligence. That is, IT, AI and other digital industry policies, budgets, and entities that are scattered in various central agencies will be integrated into the "Digital Agency". And this new organization will coordinate the policy formulation, financial encouragement and administrative guidance of many Japan's industries such as IT, artificial intelligence (AI), and Internet of Things. The third is to significantly reduce mobile Internet fees. Japan’s mobile Internet charges are so high that it ranks second only to New York among cities in Western countries. Drastically reducing mobile Internet fees will stimulate consumption and boost the domestic demand market. Fourth, reorganize local banks. Soon after taking office, Yoshihide Suga held talks with the governor of the Bank of Japan Haruhiko Kuroda, asking the Bank of Japan to support the mutual merger of local banks and make efforts to implement restructuring, so as to strengthen the local finance and escort the revitalization of the local economy [3] (Xu Jingbo). Yoshihide Suga’s economic policy is implemented under the banner of reform. Its practice of ensuring the continuity of the policy is conducive to ensuring the stability of the domestic economy and political power, it also meets the needs of the people to a certain extent, and has won a high rate of support from the domestic people.

Since Yoshihide Suga was elected as prime minister under the special circumstances of Abe's sudden resignation, his New Deal has problems with reservations and inheritance of the unfinished Abe policy. This has also become the main reason for the disagreement of Yoshihide Suga's economic policies. The first is the inheritance theory, divided into "inheritance theory" and "inheritance development theory" respectively. The former believes that the "Suga Yoshihide" economic policy is the "Abe 2.0" version. For example, Nomura Securities believes that "Suga Yoshihide Economics" is a continuation of Abenomics in essence. In the future, The key to judging its success will lie in whether Suga Yoshihide can steadily promote the regulatory reforms that the Abe government has gradually implemented [4] (Liu Rui, 2020). The latter believes that "Suga Yoshihide Economics" is the "fourth arrow" put forward on the basis of "Abenomics", that is, continuing the "Abenomics" economic policy to a certain extent. The second is "to Abe". According to this view, "Abenomics" is composed of three arrows. During the 7 years and 8 months of the Abe administration, Yoshihide Suga knew very well that the first and second arrows had reached the end of the crossbow. Therefore, he naturally chose the third arrow [5] (Zhang Rui, 2020). Japanese media believe that the engine of Yoshihide Suga's economic policy is the "Growth Strategy Conference" initiated by Yoshihide Suga himself. One month after Suga Yoshihide's New Deal, the first gathering was to cancel the "Future Investment Conference" that promoted "Abenomics" and set up a "Growth Strategy Conference". The third is the difference theory. The proposition of his view dates back to the election of Prime Minister Yoshihide Suga, saying that "Suga Yoshihide Economics" is an industrial policy different from Abenomics and accompanied by the induction of corporate interests. It is also a realist strategy different from Abe's strategy. In addition, the policy objectives are different. The core of the policy is different. Abe made it his goal to get rid of deflation, while Yoshihide Suga made stocks his first goal. "Abenomics" takes macroeconomic policies as its core, while "Suga Economics" is dominated by microeconomic policies, focusing on corporate interests .

Yoshihide Suga's foreign policy

Suga Yoshihide once said at a press conference at the Liberal Democratic Party headquarters on September 8, “Abe diplomacy is very good diplomacy. I can't do it. I can only do "Suga diplomacy", that is, cooperating with the Ministry of Foreign Affairs as well as consulting Prime Minister Abe, and then groping to do it” [6] (Kotaro Furukawa). From the perspective of actual development, after Suga Yoshihide came to power, he has achieved certain diplomatic results, one of which is the successful signing of the RCEP. Due to the influence of the United States, Japan's attitude towards RCEP has been relatively vague. However, as the United States has implemented unilateralism and trade protectionism, Japan has gradually changed its position, changing its policy goal from cooperating with India to refrain China to expanding trade with China and South Korea. In a sense, the successful signing of the RCEP agreement has become the first Economic Partnership Agreement (EPA) signed by Japan, China and South Korea, which has created convenience for Japan to deepen economic cooperation with ASEAN countries. Two-thirds of Japan’s exports to China have tariffs, while South Korea accounts for about 80%. Under the framework of the RCEP agreement, the reduction of tariffs on certain products, or the phased elimination of tariffs, and the exclusion of important items such as vulnerable agriculture from the removal of tariffs will undoubtedly help reduce the pressure on enterprises, protect agriculture [7] (Lin Qingquan, 2021), and expand the development space of the enterprise. At the same time, Japan achieved its goal of exerting pressure on the United States and gained bargaining chips for free trade negotiations by participating in the RCEP negotiations. Second, it has strengthened control over the oceans by continuously promoting balanced diplomacy between China and the United States. When the United States is busy with the presidential election and rarely speaks out, Japan's diplomacy is showing more proactiveness. As early as November 8th 2020 the Japanese government had congratulated Biden on his victory on Twitter, then, it shifted its focus to establishing close contact with the US "post-president" Biden as soon as possible, and urgently arranging the first telephone meeting between the two. Yoshihide Suga just rightly presupposed the scene for Biden to express his views on the Diaoyu Islands issue, and guided Biden to make a statement that "Diaoyu Islands (called ‘Senkaku Islands’ in Japan) are subject to Article 5 of the Japan–US Security Treaty". In the joint statement of the 2+2 talks with the United States, the two sides reached a consensus on reiterating that the Diaoyu Islands issue is applicable to Article 5 of the "US–Japan Security Treaty" [8] (Liu Shuliang, 2021). Fundamentally speaking, Suga's approach is a continuation of Japan's overall foreign policy toward China. Japan has further strengthened its bondage with the United States under pressure from its allies and with a purpose of winning the attention of the United States, but it also intends to strengthen its control over the East China Sea and the South China Sea to which the Diaoyu Islands belong, and to enhance a new maritime strategy to contain China.

Analysis on the trend of Yoshihide Suga's economic and foreign policy

The characteristics of the internal and external embryonic policies of the Yoshihide Suga government can be classified into four key words: supply chain, economic recovery, engagement, and digital society [9] (Chen Youjun, 2020). But what is the development trend of economic policies centered on these elements?

Analysis on economic policy trends

As mentioned above, the economic policy goal of Yoshihide Suga's New Deal is to lead economic recovery through reforms, which has something in common with the reform route of "from government-to-people" implemented in the Koizumi era [10] (Huang Yanan, 2020), whose economic strategic goal is shifted from "Manufacturing Nation" to "Digital Nation". From the release of the "Osaka Digital Economy Declaration", it’s obvious that Japan takes a positive stance in promoting related digital policies. There are various signs that the route of Yoshihide Suga's course centered on economic recovery and epidemic prevention and control will be a unique route with Yoshihide Suga's color [11] (Lu Zhongwei, 2021). However, it must be noted that there are many restrictive factors in the implementation of Yoshihide Suga's economic policies. One is whether the epidemic will be effectively prevented and controlled. The epidemic in Japan has rebounded several times in many places, and there is still uncertainty about whether the epidemic can be completely controlled. The second is whether the policies proposed by Yoshihide Suga in the early days of his administration can be implemented smoothly. Fairly speaking, the economic policies implemented by Yoshihide Suga in the early stage have achieved certain results, but the key lies in whether it is sustainable. The third is whether the Suga cabinet can become a long-lived cabinet. The new government was once positioned as a "transitional government", and what Yoshihide Suga has to do is to fulfill the unfinished mission of the Abe administration. Due to the uncertainty of Yoshihide Suga's re-election, a medium- and long-term national development strategy based on reality cannot be proposed. The fourth is the demand for "change". Japanese people generally have the ambivalent feeling of "desiring change" while "fearing change". How to change this situation? The fifth is a pragmatic attitude. In the second half of the Abe regime, improving low productivity has become an important issue for the Japanese government. Therefore, Yoshihide Suga's road to reform faces many challenges. Specific policies such as the cancellation of the seal system introduced by the Suga government, the advocacy of Goto travel, and the reorganization of local banks will challenge Japan’s traditional culture and touch the interests of vested interests [12] (Zhang Yulai, 2020). In addition, due to the continuous spread of the domestic epidemic in Japan and other superimposed factors, the holding of Tokyo Olympics will meet new uncertainties, and economic policies that promote development through reforms will face numerous difficulties.

Analysis on foreign policy trends

Yoshihide Suga chose Southeast Asia for his first visit instead of the United States, not only because he was unwilling to get involved in trouble, but he also took the opportunity to declare the "economy-centered" characteristic of Japan's foreign policy. Patrick Cronin, director of the Asia-Pacific Security Research Project at the Hudson Institute in the United States, analyzed that Japan’s new Prime Minister Yoshihide Suga will insist on establishing a strong bilateral alliance with the United States while avoiding “decoupling” with China. The stable domestic economic environment in China is an indispensable external environment for the development of Japanese companies. According to analysis, Yoshihide Suga will beef up to pursue a more independent foreign policy in order to build a "strong and prosperous" Japan [13] (Liu Shaodong, 2020).

In addition, the successful signing of RCEP is a major achievement of Japan by seizing the historical opportunity period in adopting economic diplomacy, which has greatly enhanced Japan's trade status in the region. In the future, with the concrete implementation of the RCEP agreement, the countries joining the RCEP agreement will carry out in-depth exchanges and consultations. After taking office, Yoshihide Suga continued to promote Abe's "Indo-Pacific Strategy" concept, and worked with the United States to build an encirclement of China. Meanwhile, he sought to economically improve the dilemma of Sino-Japanese relations. Japanese scholar Kotaro Furukawa criticized Yoshihide Suga's practice of balancing diplomacy between China and the United States as taking chestnuts out of fire and dangerous diplomacy [14] (Zhu Qingxiu, 2020). Based on the danger of this balanced diplomacy, Japan's foreign policy toward China is also unsustainable. Therefore, from the perspective of medium- and long-term development, Japan's attitude toward China will undergo an adjustment, and it will become more of Suga Yoshihide's color.

The impact of Yoshihide Suga's economic and foreign policy on China-Japan economic relations

Today, Asian countries including Japan are embedded in the political and economic framework of globalization. In the first policy speech, Japanese Prime Minister, Yoshihide Suga, put the epidemic prevention and control and restarting the economy in a prominent position, and expounded it by the great length. It is obvious that the Yoshihide Suga government will continue to promote relations with China under the framework of the Japan–US alliance. As long as the Japanese government adopts a prudent development strategy to promote economic restart and recovery in the post-epidemic era, it needs to deepen the development of China–Japan relations. One the one hand, it needs to further expand economic and trade cooperation with China. The successful signing of RCEP will bring cooperation opportunities for China and Japan to share the “Belt and Road” initiative.

In the future, it will continue to be based on the concept of realism, advance the national diplomatic strategy of pragmatic negotiations, so as to seize the strategic heights of "establishing rules and regulations" in emerging industries, avoiding the risk of trade frictions in traditional industries, and seeking its leading position in the global industrial chain through collaboration and optimizing the industrial layout based on the three major markets through the cooperation. The second is to conduct digital economy docking cooperation. For example, in order to deepen official and unofficial cooperation and docking, a version 1.5 joint online and offline meeting between China and South Korea should be held. The third is to promote the signing of the China–South Korea Free Trade Agreement. Although the RCEP was successfully signed and opened up a new path for China–Japan–Korea cooperation, it cannot completely replace the China–Japan–Korea FTA. It should be a higher-level trade mechanism which can better release the potential of trilateral cooperation of China–Japan–Korea FTA negotiation process.

However, in terms of its foreign economic strategy, especially Japan its economic strategy towards China, it has gradually changed its previous cooperation policy, and actively adjusted the layout and scope of overseas supply chains. In the context of the overall contraction or internalization of foreign industrial development, Japan has tried its best to reduce excessive dependence on the Chinese economy. In recent years, under the guidance of the "Indo-Pacific Concept", Japan's actions in the South China Sea have been gradually escalated. Japan's strategic intervention in the South China Sea dispute has actually become a concrete manifestation of Japan's containment of China and its pursuit of "Indo-Pacific maritime order" [15] (Lu Yaodong, 2021). The United States and Japan confirmed that the Diaoyu Islands are applicable to Article 5 of the "U.S.–Japan Security Treaty", which further complicates Sino–U.S.–Japan relations and affects the peace, stability and development of the Asia-Pacific region and even the whole world.

In addition to the changes in China's economic development perception, Japan intentionally or unintentionally carried out stigmatizing propaganda against China, creating obstacles and trouble for China's economic and trade cooperation with countries within the region [16] (Zhang Jifeng, 2021). For example, there may be intra-regional competition surrounding the RCEP agreement, it will increase restrictions on Japan’s exports to China, which will have an impact on economic cooperation with China.


After Yoshihide Suga took office, he continued his concept of starting from realism, and promoted a sound economic strategy and a pragmatically negotiated national diplomatic strategy. However, the smooth implementation of its goals faces severe tests such as changes in the international and domestic situations. On the other hand, based on the history and the actual situation of current regional international relations, only by deepening the economic development cooperation with China is it expected to bring about the recovery of the Japanese economy, which has been in a downturn affected by the epidemic, and promote the economy to return to the normal development track [17] (Wang Zhenyu, 2021). However, the factors restricting Yoshihide Suga's foreign policy still exist, especially the evaluation and disagreement of the Japanese government on international strategy, the intervention of the United States, and the disturbance of Korean Peninsula affairs, leading to certain variables in Japan's economic and foreign policy toward Northeast Asia [18] (Lv Yaodong, 2020). For this reason, the following should be considered.

First, make utmost of the characteristics of "emphasis on economy" after Yoshihide Suga's New Deal, and seek the possibility of cooperation. In recent years, especially in the epidemic situation, the Japanese government has implemented a series of strategies to guide enterprises to transfer domestically in order to ensure the safety of enterprises. But for the demand of the Chinese market, many companies still choose to stay in China. Considering the Japanese government is making the choice between China and the United States, especially Yoshihide Suga’s tough approach to China, the Japanese business community has expressed concern. The Japanese government and economic community have already expressed their willingness to participate in China’s “One Belt, One Road” initiative. The consensus and practice of the tripartite cooperation are constantly advancing. In the future, China and Japan can explore the possibility of cooperation in multiple fields under the framework of the RCEP agreement. For example, it can focus on key areas such as digitalization, medical care, food, elderly care industry, and energy.

In addition, face up to the fact that Japan has chosen to stand with America and form an effective response. After Yoshihide Suga’s new policy, it was not only difficult for him to set a new route for Japanese diplomacy during his short one-year term [19] (Bai Ruchun, 2020), but he also faced the pressure from China’s growing regional and global influence. Under this background, inevitably some faults may emerge in its economic and foreign policy. Considering Japan's increased control over maritime rights, Japan's intention to use the "South China Sea issue" to contain disputes in the East China Sea will be even more obvious [20] (Wang Jingchao, 2021). In addition, Japan's construction of the RCEP mechanism is bound to be more mixed with elements that dilute China's influence in ASEAN. The inherent structural contradictions in Sino-Japanese relations combined with the tensions in Sino-US relations have made the US–Japan alliance's specificity towards China increasingly prominent [21] (Gao Lan, 2021). Therefore, it is necessary to consider how to effectively connect the "21st Century Maritime Silk Road" with Japan's Indo-Pacific strategy and Indonesia's "Global Maritime Fulcrum" strategic concept to deepen understanding and to promote mutually beneficial cooperation, Meanwhile, China should be psychologically prepared to prevent various risks and to form a mid- and long-term response strategy as soon as possible.

Third, carry out active and effective promotion to correct the cognitive biases from Japan. "Peace will benefit both, and fight will hurt both." At present, doing active and positive publicity is another effective way to resolve Japan's bias in recognizing China. Through publicity, they will realize the characteristics of China's maritime power model as an emerging power, namely gradual and steady progress, safe development, openness and tolerance. At the same time, establish the image of China abiding by international regulations, speed up the negotiation process of formulating the "Code of Conduct in the South China Sea" with ASEAN countries, and provide more maritime public products to neighboring countries, and strengthen neighboring countries' recognition of China's "community of maritime destiny" concept. The doubts and emotions generated by the growth of China's maritime power can reduce Japan's confrontation with China on maritime issues or cooperate with the strategic needs of the United States.


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