A dialogue between Yoshiko Sakurai and Yoshiyuki Kasai examining whether the coronavirus crisis could destabilize the Chinese Communist Party regime, why the U.S.–China confrontation extends beyond trade, and why Japan must reduce strategic dependence on China and reaffirm the U.S.–Japan alliance.

July 9, 2020
【Background】
The following is a continuation of the preceding chapter.
It is taken from a special dialogue between Yoshiko Sakurai and Yoshiyuki Kasai published in the monthly magazine WiLL under the title “Japan’s Choice: Turn Decisively toward the United States.”
The preceding chapter discussed the expansionism of the Chinese Communist Party regime, Sinocentrism, pressure on Hong Kong, Taiwan and the Senkaku Islands, and the danger of a Japanese foreign policy that attempts to please both the United States and China.
This chapter considers the internal instability of China’s one-party dictatorship, the possibility that the coronavirus crisis could become a catalyst for political change, the essential nature of the U.S.–China confrontation, the risks created by supply chains dependent on China, strategically important technologies such as semiconductors, and the path that Japan’s government and business community should choose.
The suggestion that either Xi Jinping could be replaced or the Communist Party regime itself could collapse was a forecast expressed by Sakurai in 2020.
It was not a declaration that regime change would necessarily occur.
The important historical question is whether even a one-party dictatorship possessing an enormous population, economic power, military strength and surveillance capacity can suddenly face major change as a result of economic stagnation, disease, military adventurism, internal power struggles or public discontent.
Japan, however, cannot build a national strategy merely by waiting for political change in China.
It must prepare both for the continued survival of the Chinese Communist Party regime and for the possibility of serious instability, while protecting its strategic supplies, technology, national security and supply chains.
【The Coronavirus Could Trigger Political Change】
Sakurai:
The abnormal nature of the Chinese Communist Party became widely known throughout the world after the Tiananmen Square incident of 1989.
After witnessing the deployment of the military against students seeking democratization and the resulting loss of many lives, the international community believed that the Communist government would be unable to maintain its authority for very long.
Yet more than thirty years have passed, and the Communist Party dictatorship continues.
Although that endurance is remarkable, I still cannot believe that a Chinese Communist Party that refuses to learn from history can govern a population of approximately 1.4 billion indefinitely.
President Xi clearly has not learned from history.
Mao Zedong devoted himself to power struggles and threw the country into chaos through the Cultural Revolution.
Leonid Brezhnev and other Soviet leaders became prisoners of ideology and lost the flexibility required for sound policy.
Both Mao-era China and the Soviet Union were ultimately driven into severe difficulty by centrally controlled economic systems.
Nevertheless, the Xi administration is attempting to return to earlier forms of control in almost every field.
Kasai:
Viewed from the opposite direction, this means that the leadership believes it cannot suppress domestic dissatisfaction without becoming increasingly authoritarian.
China’s population of approximately 1.4 billion is a source of overwhelming economic power, but it is also an Achilles’ heel.
During the Cold War, the Cuban Missile Crisis of 1962 became one important turning point in the Soviet Union’s long decline.
Then, in 1979, the invasion of Afghanistan, undertaken despite domestic economic stagnation, became one of the decisive factors leading toward collapse.
No one can know what event may cause China to stumble.
Sakurai:
Looking at Chinese history, epidemics contributed to the decline or fall of a number of dynasties, including the Ming and Qing.
The coronavirus may weaken the foundations of Xi Jinping’s dictatorship and bring about political change.
Xi himself may be replaced, or the Communist Party regime may collapse.
In either case, major change is possible.
【Indecision Can Destroy a Nation】
Kasai:
China has made clear its intention to challenge the United States not only in the traditional military and economic fields but also in outer space and cyberspace.
The United States has begun to recognize that the challenge has reached a level that can no longer be overlooked.
This view is not limited to the Trump administration.
Across the Republican and Democratic parties in both the Senate and the House of Representatives, a common understanding has developed that the United States must take a firm position toward a China capable of undermining American superiority.
Some observers argue that President Trump’s severe demands in trade negotiations are merely an attempt to raise the initial price of a deal, and that the deeply interdependent American and Chinese economies will eventually find a compromise.
However, the assumption that everything can be reduced to monetary transactions reveals an inadequate understanding of humanity, history and culture.
The United States has consistently sought to contain powers that threaten the free and open maritime order on which it depends as a maritime nation.
That principle is unlikely to change in this case.
Sakurai:
The U.S.–China confrontation has developed beyond a trade war and is increasingly becoming a struggle over fundamental values.
Neither the United States nor China can easily yield.
The conflict may continue until one political system or national strategy is forced into a major retreat.
Kasai:
Japan’s position is being tested under these circumstances.
An indecisive policy of cooperating with the United States while simultaneously attempting to please China—trying to secure the advantages of both by balancing geopolitical risks against short-term economic benefits—could ultimately destroy the nation.
Sakurai:
Until now, the Japanese government and business community have viewed relations with China primarily from an economic perspective.
Although the idea of a “China plus one” strategy has been discussed as a means of diversifying supply chains, the discussion was largely based on economic considerations such as labor costs.
The coronavirus crisis, however, exposed the risks of dependence on China.
Medical supplies such as masks and protective clothing were typical examples.
Concentrating production facilities in China itself came to be recognized as a national security risk.
Kasai:
Dependence on another country for strategic goods is a matter of national survival.
Diversifying supply chains and restoring domestic production are urgent tasks.
Sakurai:
Beginning in late January, the Japanese government arranged charter flights to return several hundred Japanese citizens from Wuhan.
Approximately half of the returnees worked for automobile manufacturers, but many engineers employed by semiconductor companies were also among them.
With Huawei excluded from access to important American markets and technologies, China requires the most advanced semiconductor technology if it is to dominate fifth-generation communications.
Yet major Japanese companies were sending engineers to China.
Such conduct could directly conflict with the United States’ strategy toward China.
When Winston Churchill maintained a firm position against Nazi Germany, British bankers urged him to adopt a policy of appeasement.
Japan’s business community, which did not want to lose access to Chinese money and markets and therefore obstructed Prime Minister Abe’s China policy, should also learn from history.
Economic activity cannot flourish without peace and security.
Japan must shift its thinking away from placing the economy above everything else and give greater weight to national security strategy.
Kasai:
Given the fundamental premise of the U.S.–Japan alliance, the measures that Japanese companies should adopt ought to be clear.
Yet a business community lacking a long-term perspective tends to place immediate profits first.
It is understandable that companies hesitate to abandon established supply chains and factories and remain attracted to a market of approximately 1.4 billion people.
However, if they neglect relations with the United States and continue activities that assist China’s military and technological rise, Japan may suffer fatal losses in the long term.
Even if some economic pain is unavoidable, Japan must confront the challenge with the determination to demonstrate the enduring nature of the U.S.–Japan alliance from the perspectives of security and shared values.
To be continued.
【Editorial Note on Republication】
The central purpose of this chapter is not to predict the date on which the Chinese Communist Party regime will collapse.
It is to warn against confusing the appearance of stability in a dictatorship with permanent stability.
A regime possessing an immense surveillance system and powerful security institutions is not necessarily supported voluntarily by its people.
The fact that increasingly severe control is required to maintain order may itself reveal anxiety within the system.
Japan must not, however, base its policy on the expectation that the Chinese Communist Party regime will weaken or collapse.
It must prepare both for the regime’s long-term continuation and for the possibility of sudden political and social instability.
That preparation requires the diversification of supply chains concentrated in China.
Medicines, semiconductors, communications equipment, batteries, critical minerals, energy equipment and other goods essential to national survival must not be dependent on a single country whose political system and security interests differ fundamentally from Japan’s.
The Chinese market offers substantial profits to Japanese companies.
Yet if technology, production capacity and skilled personnel continue to be transferred in pursuit of immediate returns, Japan’s domestic industrial foundation will disappear.
Factories, engineers, component suppliers and research capabilities that have once been lost require enormous amounts of time and money to restore.
Economics and national security are not separate subjects.
Advanced technology, logistics, ports, communications, medicine, food and energy may be commercial matters during ordinary times, but they become national security itself during a crisis.
Japanese companies must consider not only profits but also the effect of their business decisions on Japan’s national security and alliances.
Japan does not need to terminate all trade or dialogue with China.
Exchanges with the Chinese people should also continue.
Maintaining economic relations, however, is entirely different from depending on China for strategic goods and essential technology.
The foundation Japan must protect is its alliance with the United States, with which it shares freedom, democracy, human rights and the rule of law.
This does not mean obeying every American policy without question.
It means that Japan must possess its own national strategy while ensuring that the reliability of the U.S.–Japan alliance is never placed in doubt.
At a major turning point in history, indecision is not neutrality.
To continue pursuing immediate profit without making necessary decisions is to surrender Japan’s future choices one by one.