Will the US’s economic containment draw Japan and China closer?

Abstract

ABSTRACT Through the prism of Japan's trade and investment linkages with China and the US, this article evaluates the potential of Japan in providing a balance to China under the US's economic containment. The empirical results turn the conventional views on their head, showing that the US and Japan are more influential with each other. China's rising economic capacity and fierce competition with Japan also make it less likely for Japan to accept greater trade partnership with China, not to mention the long-term bilateral diplomatic instability and uncertainties that do not allow Japan to risk becoming overly dependent on China economically. By analysing trade and investment structures of the three, this article examines the possibility that the Japan-China cooperation could draw Japan away from its existing economic alliance with the US.