Economic and Political Outlook 2021

Check out CEDA's new report featuring insights from economists and political commentators on the year ahead.

International affairs

Australia and Japan: Competition, interdependence and cooperation

“The Australia-Japan relationship has defied prediction in positive ways,” Australian Ambassador to Japan, Bruce Miller, told a CEDA forum in Perth.

“The conclusion of the economic partnership agreement (EPA) – and hopefully the trans-pacific partnership in due course – will greatly expand the opportunities for mutual economic benefit in the years ahead.

“The next phase of our relationship will have much more of the character of the global partnership and be increasingly driven by the challenges and opportunities around us.”
 
Mr Miller cited four “mega trends” that will shape the future, and the relationship between Japan and Australia:

  1. The continued empowerment of individuals through the reduction of poverty and the rise of the global middle class, particularly, but not only, in Asia;
  2. The diffusion of power away from the North Atlantic to the rest of the world;
  3. Rapid demographic change, especially ageing, migration and urbanisation on an unprecedented scale; and
  4. Changing patterns of demand for energy, food and water, as well as the growing nexus between all three.

“The biggest challenge won’t be dealing with the rise of any one power but rather the way in which all the major powers in the region manage the complex blend of interdependence and competition which lie at the heart of their relationship,” Mr Miller said.

“And in doing this, the further challenge for us all is to maximise our economic opportunities while minimising strategic risk. It’s a much messier environment in which to operate than it has been in the past.”

He said the global shift that’s underway will result in “strategic influence and military power becoming more dispersed. That will make Japan all the more concerned about security, including energy and food security … This will drive our defence and security cooperation further.”

“By 2050, Japan will not be the centre of the region’s economy,” Mr Miller said.

China and India will become the economic focus of the region.  However, “Japan will remain a major economy in its own right.”

“Resources, especially minerals and energy, will continue to dominate our economic ties.”

“As good as the relationship between Australia and Japan currently is, it has the potential by 2050 to be … even more diverse and productive than it is now. For that to happen, the governments of both countries have to continue to make the right policy choices, not just in regards to our relationship, but on wider domestic and international issues.”

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