CHAPTER 4

Globalization and Regionalization

Moon Chung-in and Park Han-kyu

Japan's foreign policy is facing m;Uor challenges as it adjusts to the emerging

international environment of the post-Cold War era. Japan has traditionally
adopted a reactive, incremental, and risk-minimizing foreign policy, the maneu-
vers of which have been limited by the historical burden of imperial expansion
and defeat in the Pacific War, postwar institutional constraints determined by the
peace constitution, and the shadow of the American security umbrella. These
historical and structural constraints have enabled Japan to avoid involvement in
international politico-military affairs and, instead, concentrate on maximizing its
economic interests. This policy orientation has allowed Japan to achieve, in a
relatively short time, an almost unprecedented degree of economic success.
Japan's postwar national strategy has, however, produced a paradox in terms of
foreign policy: the nation has often been described as an "economic giant," but
a "political pygmy." 1 The disjuncture of economic and politico-military power
has resulted in a foreign policy that is looked on with ambivalence by policy
makers and as an enigma by the rest of the world. Given its enormous economic
power and wealth, Japan could have played a more responsible role in interna-
tional society. Nevertheless, the existing political and institutional structure and
the postwar historical legacy of pacifism have made it extremely difficult for
Japanese leaders to shift national strategy from a passive and reactive to a positive
and proactive posture.
Since the early 1980s, however, Japan has been struggling to redefine its inter-
national identity and to assume a position of global and regional leadership
comparable to its economic power. Such efforts have led to new debates on
globalization and regionalization within Japanese society. Since the bold initiative
taken by former Prime Minister Nakasone Yasuhiro aimed at achieving interna-
tionalization, a growing number of scholars and policy makers have been involved
in the debate over greater assumption of global leadership and the path to glob-
alization. 2 As evidenced by the defiant tone of Ishihara Shin taro, however, an
equally large number ofJapanese politicians and intellectuals are seeking Japan's

I. Takashi et al. (eds.), Japanese Foreign Policy Today

© Inoguchi Takashi and Purnendra Jain 2000
66 MOON CHUNG-IN AND PARK HAN-KYU

new identity in Asia, arguing that Japan should strive to undertake a leadership
role in the region. While the goals of global and regional leadership are not nec-
essarily in conflict, as the two cam.ps would have one believe, the intellectual and
policy confrontation has stirred concern at home and abroad. That stems, clearly,
from the sheer size ofJapan's economic power, which can easily reshape the eco-
nomic, political, and strategic landscape in Asia and around the world.
This chapter will elucidate the patterns of globalization and regionalization in
Japan, explore foreign policy alternatives, and draw empirical and policy impli-
cations for the future. The first section presents a brief overview of recent ana-
lytical discourses on globalization and regionalization, while the second looks at
historical origins, empirical dimensions, and policy options for globalization in
Japan. The third part examines the dynamics of regionalization in Japan and
explores policy alternatives. The concluding section discusses some empirical
and policy implications for Japan's foreign policy.

Some Analytical Remarks

Before delving into a discussion of Japan's experiences, it is necessary to under-
stand the concepts of globalization and regionalization. While scholars' inter-
pretations of the term "globalization" differ according to their epistemological
and normative orientation, 3 the concept can be meaningfully divided into two
categories: spontaneous and governed globalization. 4
Spontaneous globalization refers to the process of economic interdependence
and integration through market forces that have resulted from the development
of technology and world capitalism. Global diffusion of production achieved by
multinational corporations, integration of movements of factors of production,
transnational networks of financial transactions and equity capital, as well as the
expansion of international trade serve to underscore the empirical dimensions of
spontaneous globalization.
Spontaneous globalization is not always mutually benef1cial and welfare max-
imizing. On the contrary, it can entail new constraints, challenges, and transi-
tional traumas. The process can increase systemic vulnerability: it makes national
economies more vulnerable to the transmission of external turbulence, such as
the cyclical instability of international financial and capital markets, the roller-
coaster effects of international commodity markets, and the transborder conta-
gion of inflation. It can also deepen relational sensitivity, in terms of the impact
and related costs of bilateral pressures. Unlike systemic vulnerability, relational
sensitivity can be managed within existing policy frameworks, although domes-
tic adjustment costs are high. A good example is the U.S. bilateral pressure that,
wrapped in the principle of strategic reciprocity, is placed on Japan and other
Asian trading partners. Finally, the globalization of production by multilateral
corporations can undermine the economic sovereignty of host nations by culti-
vating structural dependency.
Further, since spontaneous globalization can be seen to variously threaten
national economies, no country will be passive in the face of globalizing forces
but, rather, will attempt to minimize the costs while maximizing the benefits.