Monday 18 Jan 2021 | 06:13 | SYDNEY
Monday 18 Jan 2021 | 06:13 | SYDNEY

Australia-Japan: The upside of down


Malcolm Cook

23 June 2009 10:47

Last week, Andrew Shearer and I spoke to our recent report on Australia-Japan multilateral cooperation here at the Lowy Institute and at my alma mater, the Australian National University. Yesterday, the Lowy Institute also hosted a seminar on the new wave of Japanese direct investment in Australia, headlined by Kirin’s planned take-over of Lion Nathan. 

In all three cases, one counterintuitive message was reinforced: many of the factors leading people within Japan and outside to worry about (or celebrate) Japan’s declining power and relevance are also working to broaden and strengthen Australia-Japan relations.

On the commercial side, Japan’s greying population, ugly fiscal picture and mature domestic markets are leading traditionally domestically-focused Japanese firms in a wide range of sectors — from finance to food and beverages to housing — to go regional or international. Some, like Kirin, Asahi and Dai-ichi Mutual Life are expanding into Australia (a secure, predictable and profitable market) through mergers and acquisitions. Roughly 20% of Kirin's total revenues now come from their Australian holdings.

On the political side, Japan’s growing geo-political anxiety is forcing the Japanese post-war political system to overcome some of its self-imposed limitations on Japan's use of its latent power and diplomacy. Over the last three years, Australia-Japan relations have benefitted from this new latitude, with the signing of the Australia-Japan Joint Declaration on Security Cooperation. Since then, Japan has a signed a similar agreement with India and Canberra with Seoul. Japan and Australia are now hosting more bilateral naval visits, sharing more intelligence and working more closely in new minilateral groupings like the PSI.

Out of the apparent darkness of Japan’s relative decline (from a very high base) some new light is shining into previously dark and empty areas of Australia-Japan cooperation and interaction.

Photo by Flickr user Sushicam, used under a Creative Commons license.