By Eric Vandenbroeck and co-workers

Tokyo Should Step Up

As the United States rethinks its role in the international order it has championed since the end of World War II, Japan is on the frontlines of the challenge to rules-based commerce and diplomacy. For the past decade, Tokyo has promoted the idea of a free and open Indo-Pacific, which seeks to ensure that countries from the western shores of the Indian Ocean to the northern reaches of the East China Sea can pursue economic growth without compromising their autonomy by relying too heavily on China. The policies associated with this idea, which include ensuring freedom of navigation in the Indian and Pacific Oceans, peacefully resolving geopolitical conflicts, and establishing common rules to govern trade, have made Japan a stabilizing force in the region. The framework of a free and open Indo-Pacific has also encouraged advanced economies, including the United States, to maintain their military and economic engagement with the region.

But Japan’s ability to promote a viable alternative to a regional order centered on Beijing has been faltering. Japan is on its fifth prime minister in as many years and, in the most recent elections, the ruling Liberal Democratic Party lost its majority in both houses of parliament. Pursuing a foreign policy vision has taken a back seat to navigating domestic politics. Meanwhile, the allure of the development programs that China can offer is growing as countries throughout the region struggle to find new sources of economic growth.

Japan is now in a unique position to reenergize its vision of a free and open Indo-Pacific. Its newly elected prime minister, Sanae Takaichi, is the self-proclaimed successor to Shinzo Abe, the former prime minister who proposed the free and open Indo-Pacific idea in 2016. In her first weeks in office, Takaichi has made clear that embracing this vision will be part of her commitment to carrying on Abe’s legacy. Takaichi, like Abe, has sought to position Japan as the United States’ trusted guide to the region and convince U.S. leaders that it is in their interest to have the United States remain an Indo-Pacific power and support Japan’s strategic vision.

Takaichi’s government does not need to craft a fundamentally new vision of regional order. Instead, Tokyo can update and reinvigorate the basic tenets of Abe’s free and open Indo-Pacific strategy through tangible, results-oriented policies, including more trade agreements, developmental partnerships in Southeast Asia, contingency planning for a potential crisis in the Taiwan Strait, and investment in human capital and technical knowledge among Pacific islands. Buoyed by high public support in the early days of her administration, Takaichi can use her political leverage to promote this slate of policies as the core of her foreign policy agenda. By building on the goodwill and trust it has established over decades, Japan can ensure that the idea of a free and open Indo-Pacific further takes root despite Chinese expansion and U.S. retreat.

Promoting a free and open Indo-Pacific over the past decade has made Japan a diplomatic powerhouse in Asia. As early as 2007, when Abe floated the idea during his first stint as prime minister, Japan was already concerned that China’s rise challenged Japan’s economic and security interests. When Abe launched the free and open Indo-Pacific strategy in 2016, during his second administration, Beijing had inaugurated a series of comprehensive programs to extend its regional influence. It created the Belt and Road Initiative, which outlined a global framework to support much-needed development projects, and the Asian Infrastructure Investment Bank, which supplemented and competed with the U.S.-dominated World Bank and the multilateral Asian Development Bank. Domestically, the Made in China 2025 plan provided a blueprint for Beijing to invest in key technology sectors and boost its competitive edge. The United States has failed to provide similar far-sighted plans to spur growth in the region; only Japan’s free and open Indo-Pacific framework has provided an even partial alternative.

Tokyo’s vision has never been about decoupling from China, nor has it been about restoring Japan’s former status as the region’s largest economy. Instead, Tokyo is concerned about China’s destabilizing influence on the norms and rules that support a fragile peace in the Indo-Pacific. Beijing’s aggressive territorial claims in the East China and South China Seas, for instance, challenge established international law. And China’s weaponization of its economic leverage for political gain and its strategy of exporting excess industrial capacity have weakened the ability of other economies to compete with Beijing. Countries across the Indo-Pacific may not agree on everything, but they share a wariness of China’s methods of wielding power. Japan, meanwhile, has built significant goodwill through its partnerships. According to a 2025 ISEAS-Yusof Ishak Institute survey, for instance, nearly 67 percent of respondents from ten Southeast Asian countries express trust in Japan, many more than express trust in China, the European Union, or the United States.

But in the decade since Abe proposed the idea of a free and open Indo-Pacific, sources of instability in the region have grown. China has strengthened its command over numerous advanced technologies and its monopoly in key sectors, including critical minerals. When Beijing restricted the export of rare-earth minerals in the run-up to the Asia-Pacific Economic Cooperation forum in South Korea last week, a move ostensibly targeting the United States, it drove home to all Indo-Pacific countries the susceptibility of their own supply chains to China. Beijing and Moscow have become closer, converging on an alternative vision of regional order in which strength takes precedence over the rule of law. Russia’s invasion of Ukraine and the Israel-Hamas war in Gaza, meanwhile, have shaken confidence in the United States’ commitment to the Indo-Pacific. Washington seems more focused on resolving immediate conflicts than on promoting a long-term strategic vision for managing relations with China.

 

Results First

Japan’s foreign policy elites have tried to expand on the success of the free and open Indo-Pacific strategy to keep pace with geopolitical changes. At the 2025 Shangri-La Dialogue in Singapore, for instance, Japan’s defense minister proposed the One Cooperative Effort Among Nations security concept, also known as OCEAN, which sought to boost defense cooperation and capacity building among regional allies. But such a grand strategic vision failed to gain traction: Japan could not convince the loose coalition of Southeast Asian countries that they would reap clear benefits from another comprehensive program aiming to unite them around shared interests.

A better way to adapt to the new geopolitical landscape would be to solidify the individual parts of the free and open Indo-Pacific framework that have brought tangible successes. To win support, Japan needs to prioritize a results-oriented approach that promises tangible improvements to living standards. Such efforts can build on the areas in which Japan has effectively established itself as a credible source of pragmatic, growth-oriented policies that benefit the region.

Trade is where Japan has emerged as an economic leader in the Indo-Pacific. Without Tokyo’s commitment, the Trans-Pacific Partnership, the 2016 trade agreement to harmonize regulations, lower tariffs, and establish regional trading rules among a group of countries with interests in the Pacific, would not have survived when the United States pulled its support in 2017, during the first Trump administration. But far from collapsing, the agreement that replaced it—the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—has been effective in establishing a rules-based trade framework.

Development assistance has been another bedrock of Japan’s success in building regional trust. Japan started providing aid to countries in South and Southeast Asia in 1954 to atone for its actions in World War II. But by the late 1950s, it adopted a more pragmatic approach to reparations by providing favorable loans rather than aid packages. Japan’s overall global development assistance continued to grow throughout the twentieth century, peaking at nearly $10 billion in 1997 at the height of Japan’s economic might. Although Japan’s development assistance budget has effectively been halved in the intervening years, the cutbacks have forced Tokyo to be far more strategic in providing aid, including by focusing on infrastructure projects that align with its broader Indo-Pacific goals.

Japanese investments in infrastructure, workforce development, and technical knowledge have helped countries such as Thailand climb the economic ladder so that they are too wealthy to qualify for development assistance. The Philippines is likely to reach a similar threshold soon. Japan’s new challenge will be to leverage the goodwill it has generated through its contributions to Southeast Asian economies to move beyond a transactional relationship between donor and recipient. Even if Japan is no longer assisting countries such as Thailand or the Philippines, Japan can engage with former aid recipients as partners to secure supply chains and invest in strategic industries with an eye toward longer-term growth. For instance, Japan can support countries by investing in their capacity to process critical minerals rather than only exporting them, thereby creating new economic opportunities and reducing regional dependence on China.

Japan can also pursue a practical approach to aiding Taiwan. Leaders in Tokyo have made clear that a crisis over Taiwan would be a crisis for Japan and for regional order at large. Since 2021, when Japanese Prime Minister Yoshihide Suga and U.S. President Joe Biden issued a joint statement highlighting the need for stability in the Taiwan Strait, Japan’s willingness to risk backlash from China because of its support for Taiwan has set the standard for other advanced economies. Tokyo has continued to support Taipei with concrete action, including an August 2025 agreement to share information about non-Japanese nationals evacuating from Taiwan in the event of a military conflict. A revamped free and open Indo-Pacific strategy with Japan at the helm could further support Taiwan by helping the island’s leaders prepare for other potential coercive actions, such as a blockade, and encouraging the island to diversify its energy supply.

Japan’s ability to promote a rules-based order faces its most acute challenge among small island nations in the Pacific. Since 2019, Kiribati, Nauru, and the Solomon Islands, under pressure from China, have withdrawn their diplomatic recognition of Taipei and formally recognized Beijing. In return, China has offered them security pacts, strategic partnerships, and financial assistance. Japan, for its part, has stepped up its diplomatic engagement with and economic support for island nations. Tokyo opened new embassies in Kiribati and New Caledonia in 2023 and offered nearly $56 million in aid to enhance resilience in island nations including Fiji and Papua New Guinea. Japanese-sponsored development projects have included building wind turbines, providing equipment for disaster preparedness and road construction, and training local authorities in emergency preparedness and international law. By instructing local leaders on how to assess the consequences of contracts they sign with China, for instance, Japan can help island governments retain their sovereignty and empower them to decide what investments would benefit them the most in the longer term.

 

Building a Coalition

Japan’s biggest obstacle to revitalizing a free and open Indo-Pacific strategy is its own political reality. Although public support for the newly formed Takaichi government is high, because the Liberal Democratic Party is not in the majority, it will have to deal with a fragile coalition in which it cannot call all the shots. Takaichi will also have to address numerous domestic challenges, including how to manage a continually aging population, a shrinking workforce, and one of the highest debt-to-GDP ratios in the world, as well as how to implement social and financial changes—including updating tax structures to reward innovation and attract talent—that Japan needs to remain competitive in a borderless digital economy.

Yet a free and open Indo-Pacific strategy is an area in which Takaichi can build support across the political spectrum. Conservatives embrace the strategy because it shows Japan’s leadership in the region and projects an image of a strong Japan. Moderates see it as a way to promote a Japanese style of diplomacy that emphasizes a collective approach. There is wide support in Tokyo for the government’s commitment to double national defense spending, which Takaichi has declared she will achieve by March 2026, rather than the initial plan to do so by 2027. Takaichi has also repeatedly called for strengthening ties with allies to ensure freedom of navigation and for improving coordination with major regional partners, including Australia, the Philippines, and South Korea.

Where Takaichi will face pushback is on the scope of Japanese commitment, how to pay for it, and where the line between deterring China and provoking further conflict lies. Increasing defense spending will require cutbacks in other areas, such as pensions and health care, or increases in taxes. Either of these will be unpopular with voters, and cutbacks could decrease support for development assistance and other international spending programs. There are also lingering historical tensions that Tokyo will have to navigate. Although Takaichi has a reputation as a conservative, on the campaign trail she carefully skirted sensitive issues such as political memory and Japan’s actions in World War II. Takaichi must continue to ensure that she has support not only from within Japan but also from allies and partners as far away as Europe and the United States.

By tapping seasoned trade negotiators for two key positions—foreign minister and minister of economy, trade, and industry—Takaichi has signaled that she values experience in foreign and economic policy. But in a rapidly shifting geopolitical environment, the new prime minister cannot merely offer a redux of what Abe created. She will need to effectively reestablish Japan as a central pillar of stability in the volatile Indo-Pacific. A realistic vision of support and cooperation will show the region that a deeper commitment to a free and open Indo-Pacific is the best strategy to address the economic and security challenges of the current moment.

 

 

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