EU & Japan sign deal to link Asia

Counterweight to China

BRUSSELS, Sept 28, (RTRS): The European Union and Japan signed an infrastructure deal on Friday to coordinate transport, energy and digital projects linking Europe and Asia, seeking an alternative to Chinese largesse that has raised suspicion in Brussels and Tokyo.

The accord, signed by Japanese Prime Minister Shinzo Abe and European Commission President Jean-Claude Juncker, formalises Japan’s involvement in a new EU-Asia “connectivity” plan that is set to be backed by a 60 billion euro ($65.48 billion) EU guarantee fund, development banks and private investors.

“Whether it be a single road or a single port, when the EU and Japan undertake something, we are able to build sustainable, rules-based connectivity from the Indo-Pacific to the Western Balkans and Africa,” Abe told an EU-Asia forum in Brussels.

Since 2013, China has launched construction projects across more than 60 countries, known as the Belt and Road Initiative, seeking a network of land and sea links with Southeast Asia, Central Asia, the Middle East, Europe and Africa.

“The sea route that leads to the Mediterranean and the Atlantic must be open,” he added, referring to the need to prevent projects funded by Beijing and its vast foreign exchange reserves dominating transport routes.

Juncker also vowed to help build infrastructure “without mountains of debt” or a reliance “on a single country”.

That was a veiled reference to Chinese-financed projects that have sent debts in some central Asian and Balkan countries soaring after they embarked on building bridges, roads and tunnels they could ill-afford.

The EU and Japan also want stricter environmental standards.

Abe

Investment

EU officials said they are concerned about what they see as a Chinese investment model which lends to countries for projects they may not need, making them reliant on China once under way. Poor countries across Asia and Africa have seized on the attractive Chinese loans.

A Chinese-funded highway to link Montenegro’s Adriatic coast to landlocked neighbour Serbia has so indebted Montenegro that the International Monetary Fund has told the country it cannot afford to finish the project.

Although not all European and Japanese money will be spent in Asia, the Commission’s strategy makes spending on infrastructure links with Asia official EU policy involving the EU’s common budget.

In their 10-point accord, the EU and Japan promised to pay “utmost attention” to countries’ “fiscal capacity and debt-sustainability”.

Meanwhile, China’s growing military might has replaced North Korean belligerence as the main security threat to Japan, Tokyo’s annual defence review indicated on Thursday, despite signs that Pyongyang could have nuclear-tipped ballistic missiles.

The document’s security assessment on China comes after a section on Japan’s ally, the United States, the first time Beijing has achieved second place in the Defence White Paper and pushing North Korea into third position.

Russia, deemed by Japan as its primary threat during the Cold War, was in fourth place.

“The reality is that China is rapidly increasing military spending, and so people can grasp that we need more pages,” Defence Minister Taro Kono said at a media briefing.

“China is deploying air and sea assets in the Western Pacific and through the Tsushima Strait into the Sea of Japan with greater frequency.”

China’s Foreign Ministry expressed displeasure with the report.

China will not accept Japan’s “groundless criticism” of its normal national defence and military activities, spokesman Geng Shuang said at a press briefing in Beijing.

Japan has raised defence spending by a tenth over the past seven years to counter military advances by Beijing and Pyongyang, including defences against North Korean missiles which may carry nuclear warheads, the paper said.

Launches

North Korea has conducted short-range missile launches this year that Tokyo believes show Pyongyang is developing projectiles to evade its Aegis ballistic missile defences.

To stay ahead of China’s modernising military, Japan is buying US-made stealth fighters and other advanced weapons.

In its latest budget request, Japan’s military asked for 115.6 billion yen ($1.1 billion) to buy nine Lockheed Martin F-35 stealth fighters, including six short take-off and vertical landing (STOVL) variants to operate from converted helicopter carriers.

The stealth jets, US-made interceptor missiles and other equipment are part of a proposed 1.2% increase in defence spending to a record 5.32 trillion yen in the year starting April 1.

By comparison, Chinese military spending is set to rise this year by 7.5% to about $177 billion from 2018, more than three times that of Japan. Beijing is developing weapons such as stealth fighters and aircraft carriers that are helping it expand the range and scope of military operations.

Once largely confined to operating close to the Chinese coast, Beijing now routinely sends its air and sea patrols near Japan’s western Okinawa islands and into the Western Pacific.

China has frequently rebuffed concerns about its military spending and intentions, including an increased presence in the disputed South China Sea, and says it only desires peaceful development.

The Defence White Paper said Chinese patrols in waters and skies near Japanese territory are “a national security concern”.

The paper downgraded fellow US ally, South Korea, which recently pulled out of an intelligence sharing pact with Japan amid a dispute over their shared wartime history. That could weaken efforts to contain North Korean threats, analysts said.

Other allies, including Australia, the Association of Southeast Asian Nations (ASEAN) and India, feature more prominently in the defence paper.

South Korean government officials took issue with the White Paper’s reference to ownership of an island in the Sea of Japan that is also claimed and controlled by South Korea. The outcrop is known as Dokdo in Seoul and Takeshima in Tokyo.