Japan in the Middle: The geo-economic conflict between China and the United States

The US can no longer provide its traditional leadership of the world economy. China is an essential participant in resolving most global economic problems. The two must therefore work together but their increasingly intense competition raises serious doubts about the future stability and sustainability of the international economic order.

Middle powers such as Japan (and the Europeans) are caught in the middle and thus face two major challenges. First, they must encourage (and indeed push) the two superpowers to cooperate sufficiently on global economic issues to avoid further deterioration. Second, they must step in themselves to provide the global economic leadership that is necessary to maintain an open and progressive system. For example, Japan needs to build on its exemplary leadership of the CPTPP to devise a strategy that will eventually bring both China and the US into the agreement to preserve prosperous and harmonious trade and investment in the Asia Pacific.