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The Japanese have a wonderful expression for the art of deliberate ambiguity: tamamushi-iro.
It’s a reference to the iridescent wings of Chrysochroa fulgidissima, a wood-boring beetle native to Japan and Korea. The magic of the tamamushi—in English, the “jewel beetle”—lies in the fact that its wings reflect different colors depending on the angle of the light striking them. Two people observing the same tamamushi from different perspectives will each perceive the creature in their own way.
Japanese Prime Minister Yoshihide Suga may wish he possessed similar powers when he visits U.S. President Joe Biden in Washington on Friday.
Biden and his team have gone to great lengths to reaffirm Japan’s importance as America’s frontline security ally in the Indo-Pacific. Suga is delighted to be the first foreign leader Biden has invited to the U.S. for a face-to-face meeting since Biden took office—a distinction that could bolster Suga’s political fortunes ahead of a general election later this year.
But it has been widely reported in the Western press (see these accounts in the Financial Times, the Wall Street Journal, and Reuters), that Biden and his advisors are leaning hard on Japan to issue a joint statement of support for Taiwan after the Friday meeting to, per Reuters, “counter the challenge of an increasingly assertive China.”
That unnerves Suga and his political and business allies, who have been loathe to confront Beijing so publicly.
The U.S. may be Japan’s most important security ally. But China last year leap-frogged the U.S. to become Japan’s most important trading partner. In 2020, China took in $146 billion in Japanese goods, about 20% of Japan’s exports. Japan’s retail giant Uniqlo, for example, depends on China for a fifth of its business. And despite government efforts to prod Japanese manufacturers to move their supply chains out of China, few Japanese firms have done so.
Japan welcomes U.S. support for Japan’s claim to a cluster of small islands in the East China Sea that Japan controls but China also claims, and says it shares U.S. concerns about China’s expanding presence in the South China Sea. Suga was quick to join Biden’s efforts to convene leaders of the so-called Quad nations—the U.S., Japan, India, and Australia—for joint discussions of coping with the China challenge.
But so far Japan has balked at calls to join with the U.S. and European nations in sanctioning Chinese officials in response to charges of a crackdown against democracy activists in Hong Kong or Muslim Uyghurs in the western Chinese province of Xinjiang.
Taiwan is a particularly touchy topic when it comes to Tokyo’s relationship with Beijing. Japan has left the nature of its diplomatic and security ties to the island deliberately vague for decades, enabling Japanese firms to do business on both sides of the Taiwan Strait. Officially, Tokyo accepts the “one China” principle that mainland China and Taiwan are part of a single nation. Unofficially, Japan, which ruled Taiwan as a colony from 1895 to 1945, maintains strong cultural and economic ties to the island.
Beijing has put Japan on notice that it must not meddle in “internal matters” such as Taiwan, Hong Kong, or Xinjiang. In a phone call earlier this month, Chinese foreign minister Wang Yi warned his Japanese counterpart Toshimitsu Motegi not to be drawn into an anti-China alliance. “A certain superpower’s will does not represent the international community,” Wang fumed. “The U.S. and Japan are allies, but similarly, China and Japan have also signed a treaty of peace and friendship so Japan has a responsibility to uphold this treaty.”
But as U.S.-China tensions rise, it’s getting harder for Japan to maintain its strategic straddle. On Monday, Beijing sent 25 fighter jets and bombers into Taiwan’s air defense identification zone, the largest incursion to date. On Tuesday, former U.S. Senator Chris Dodd and former deputy secretaries of state Richard Armitage and James Sternberg arrived in Taipei for a three-day visit. The White House said Biden dispatched the trio as a “personal signal” of his commitment to Taiwan. On Wednesday, Beijing announced that the People’s Liberation Army would begin six days of live-fire drills off Taiwan’s southwest coast.
In a statement issued after a meeting of U.S. and Japanese foreign and defense ministers last month, the two countries “underscored the importance of peace and stability in the Taiwan Strait” and noted their “serious concerns” about human rights in Hong Kong and the western Chinese province of Xinjiang. If Biden and Suga use similar language in their meeting it would be a significant shift. The last time leaders from the U.S. and Japan mentioned Taiwan in a joint statement was 1969, before either country had normalized diplomatic relations with Beijing.
More Eastworld news below.
Clay Chandler
clay.chandler@fortune.com
This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com.
Eastworld news
To SPAC or not to SPAC?
Singapore ride-hailing giant Grab announced on Tuesday that it would go public in the U.S. via a merger with a special purpose acquisition company (SPAC) controlled by Silicon Valley firm Altimeter Capital Management. Grab’s planned New York IPO is valued at nearly $40 billion, making it the largest SPAC merger ever. Grab president Ming Ma explained to Fortune this week that Grab capitalized on the SPAC boom not to avoid the hassles of a traditional IPO process. Rather, he said, the decision to form a SPAC with Altimeter will give Grab a long-term and committed investment partner. Fortune
Waning light
Polysilicon is a raw material used in billions of solar panels around the world, and is set to fuel a solar boom that will play critical role in the global fight against climate change. But about half of all polysilicon is produced in China’s western Xinjiang province, and researchers have found that factories in the region may depend on forced labor among China’s Uyghur minority population. Amid a forced labor controversy in Xinjiang’s cotton and garment industry, businesses and governments are now growing uneasy about their reliance on Xinjiang’s polysilicon. Bloomberg
A new day for Hong Kong
On Thursday, Hong Kong held its first National Security Education Day, nearly ten months after Beijing introduced a sweeping national security law in the city that the government has used to prosecute and jail some of the city’s leading pro-democracy activists. The Thursday event included remarks from top city officials about the benefits of Beijing’s overhaul of Hong Kong’s legal and political systems following the city’s 2019 protest movement. Hong Kong’s students were also asked to sing China’s national anthem and participate in flag raising ceremonies to mark the event. South China Morning Post
India's Sputnik turn
On Tuesday, India approved Russia’s Sputnik V vaccine for emergency use, and the Russian backers of the vaccine, the Russian Direct Investment fund, announced plans to turn India into a major manufacturing hub for the vaccine. The announcement was a major win for RDIF, which has verified the efficacy of its vaccine in medical journals but has struggled to find places to make it. India hopes that Sputnik V’s approval–potentially along with other foreign vaccines—will help ease its short vaccine supply and current surge in COVID-19 cases. The country surpassed 200,000 daily cases on Thursday for the first time. Fortune
Coronavirus by country
The Philippines is battling its worst-ever wave of COVID-19, recording a daily average of over 10,000 cases for the first time this week. In an alarming report published on Wednesday, the OCTA research group also found that the city of Manila is suffering from one of the world’s worst case fatality rates at 5.4% as hospitals run out of beds for suffering patients. Meanwhile, President Rodrigo Duterte gave a public address on Monday after staying out of the public eye for over two weeks amid concerns he may have contracted the virus. Without explaining his absence, Duterte announced that for now he will not be getting a COVID-19 vaccine, contradicting his own government’s advice. Philippine Daily Inquirer
Markets and movers
Bytedance – The Chinese streaming giant and owner of TikTok announced that it is taking measures to stop young users from getting addicted to its TikTok equivalent in China, Douyin. Chinese regulators fined Douyin earlier this year for spreading “obscene videos,” but Bytedance says its new ‘youth mode’ will be heavily moderated and have time limits for much time users can spend on the platform. Caixin
Qantas – The Australian airliner said that its passenger traffic in Australia will return to 90% of pre-COVID-19 levels, above its previous forecast of 80%, in the first quarter of 2021. Qantas also said demand for leisure trips and business travel is “extremely strong,” and the company is optimistic about sustained recovery as vaccine rollouts allow border to open. Bloomberg
Kegome – The Japanese ketchup producer will stop importing tomatoes from China’s Xinjiang province amid concerns over forced labor and human rights abuses in the region. The ketchup-maker is the first known Japanese company to stop doing business in the region. Nikkei Asian Review
Tesla – The U.S. automaker said Tuesday that all data it collects from its vehicles in China are stored in the country. In March, the Chinese military banned Tesla vehicles from entering its complexes due to concerns about the cameras in Tesla vehicles. Reuters
Toshiba – CEO of the Japanese conglomerate, Nobuaki Kurumatani, stepped down from his role on Wednesday after an unprecedented shareholder rebellion. The shareholders have advocated against Kurumatani’s proposal to let the European private equity firm CVC take the company private in a $20 billion leveraged buyout. Financial Times
Vingroup – Vietnam’s largest conglomerate said Thursday that it is considering taking its auto unit Vinfast public in the U.S. through a SPAC, following in the footsteps of Singaporean ride-hailer Grab. Nikkei Asian Review
Final figure
$18.7 billion
China bought $18.7 billion worth of semiconductor equipment in 2020, a 39% jump from the previous year. The surge in purchases helped China surpass Taiwan as the largest market in the world for semiconductor equipment and signals China’s ambitions to not rely on places like Taiwan, which purchased $17 billion in the chipmaking equipment in 2020 for producing the critical technology supplies. Nikkei Asian Review
