 My name's Kieran Gilbert. I'm from Sky News. I'm the Chief Political Reporter there and I'm hosting the Politics and Foreign Policy discussion this afternoon. As our Japanese visitors and friends would know, we are now on to our seventh Prime Minister in the last decade. And it's like the roles of reversed with Japan from 2006 to 2012, December 2012 and Shinzo Abe took over. You had a Prime Minister every year and it looks like things have reversed and one thing I want to ask our panel this morning is how has Abe achieved that stability? Is it likely to continue for the foreseeable future? One thing or a few things that we have in common as nations, our reliance in terms of a very strong economic relationship with China, but parallel to that our, in a security sense, our alliances with the United States. So there are similarities. We also as nations are grappling with the Trump presidency and Sheila touched on this as well. Shinzo Abe, one of the world leaders who's been able to manage that relationship, although not without its side effects, not the least of which the tariffs on steel and aluminium and as Professor Drysdale pointed out as well, the prospect of tariffs on automobiles. This morning I have Dr Lully Miura from the University of Tokyo with me, Dr Sheila Smith as you know from the Council of Foreign Relations and Mr Hiroyuki Akita from Nikkei. Please put your hands together. We'll start with some opening remarks from Lully and Hiro. We've heard from Sheila, so we'll get into some questions with her in a moment as well. But Lully, if I could start with some opening remarks from you. Okay, thank you. I'm Lully Miura from the University of Tokyo. Nice to meet you all and thank you for the kind invitation. And I was overwhelmed by Sheila's comprehensive, passionate, thoughtful remarks, but I will stick to my other remarks. When thinking about regional order and regional security and Japan's role, I think sleep perspectives or elements that are critical. First and most important is the U.S. retreat from East Asia. I think the change had happened after the 2006 mid-term elections from then. A lot of things happened in Asia. The U.S. is a democracy, thus making it a democratic empire. In this context, not only is the U.S. capability important, but equally important as well to continue to be an empire. The emergence of Trump in the Republican Party and the enthusiasm mirrored around Bernie Sanders on the democratic side is a clear sign of shifting priority in the U.S. to maintain such an empire. I do not believe that U.S. will simply let go of its grips as the dominant power in the world to China. Its recent focus on economic pressure towards China or its rebuilding of prominence in the technology sphere is a clear sign that it doesn't intend to do so. From the security perspective, the U.S. modernization of nuclear arsenals, investment in technology, AI cyberspace warfare is a sign of its imperial resolve, but that doesn't necessarily translate into regional hegemony in East Asia. That's an important point, I think. Besides, the U.S. military deterrence cannot deter the type of salami slicing tactics deployed by China. The second factor that will shape Asia is China's continued economic blows and continued power projection on the security arena. As many experts have pointed out, the quiet diplomatic philosophy of not too exciting excessive influence is over. Xi Jinping's China is quite different from Deng Xiaoping's China. I don't necessarily blame China for its ambition because China is a big country. However, I do fear that that will mean for the world order, especially in Asia. The post-World War II world led by the U.S. for all its shortcomings tried to recreate the world in its own image. Democratic principles being an open trade and the rule of law were pillars that made up the world. U.S. allies such as the G7 countries and countries like Australia were given preferential status in this world. Unlike the pre-war bloc economies, Japan was given access to U.S. markets that enabled its post-world recovery. What would the world look like in which China creates in its own image? Cut-slot economic competition, state-dominated decision-making, the permanence of order over human rights, a hierarchical approach to international society coming immediately to mind. These realities are already taking root in areas that China has established economic dominance, for example, in the continental states within ASEAN. Will the current international order be able to sustain the principles it has established over the last seven years? There are definitely signs of encouragement such as the TPP-11 process where Japan and Australia jointly showed leadership. Having said that, I must confess I am less optimistic of the long-term trend. The third element is Japan's ambivalence. Japan's approach towards this rapidly changing Asia is ambivalent at best, or more simply domestically divided. On the one hand, there is Abe administration and Japan's ruling elites that base incrementalism as a basis for creating policy. The objective for regional policies to maintain the status quo as long as possible. The U.S. retreat is either neglected or minimized in importance. There is no real drive towards wider independence either. This view is more or less represented in the main factions in the ruling LDP and bureaucracy. On the other side, you have a reluctant isolationism, I named it, embodied by the liberal leaning media and the opposition parties. The pacifist sentiment characterized post-war Japanese public opinion as deteriorating. Today, an overwhelming majority of the Japanese public is about 80 percent hate China. It's a surprising number. All the while, the anti-U.S. sentiment evident among the left is still prominent. Thus, the Japanese left neither like the Americans or the Chinese doesn't want to build up an independent defense capability of its own, nor do they want to pursue market-oriented reforms to re-establish Japanese economic productivity. In the short term, the incrementalist power will pursue a reactive yet stable policy, I think. Even as we speak of U.S. retreat, of course, no one in the U.S. Navy is in the Pacific Fleet is going to admit U.S. lack of dissolving Asia. So the desire to maintain or claim to the old world order is understandable, but the world is changing. So other administration will gradually increase defense spending and allocate much of that towards the purchasing expensive U.S. weapons system. Although I assume that U.S.-Japan relationship will become much more stressful and sour after the midterms in the U.S., there will be increased pressure on trade. In any case, unrealistic pressure in the economic arena will reopen Japanese assertiveness, not seen since the 1990s. What will be difficult for the administration and the incrementalist is that Japan has to confront a Trump-led, often unreasonable U.S. in the age of increasing dependence on the security side. This is likely to be quite difficult politically. So I gave you a dim view about Japan, but I am eager to discuss. And I also conduct the large-scale opinion poll every three years to Japanese public, Korean public, and Chinese public. So I have some numbers. So if you have some questions about the opinions, please ask me. Thank you very much for inviting me today. Many of my friends in Tokyo envy me not only because Australia is beautiful and country and the Australian wine is delicious, but this is winter here in Australia. You know about the Japanese crazy summer, it is still like 38 or 37 degrees. So, you know, that's why they envy. But anyway, I have to go back. So I have to go to Hanoi after this. So maybe, yeah, I'm really happy to be here. Anyway, two cheers. I'd like to keep my comment quite short so that we can have more time for discussion. But I'd like to make two points. One is how Japanese government perceive Trump administration. And secondly, how Japanese government tried to deal with or adapt or react or adapt to this reality. So since I'm a journalist, so I'd rather speak based on my observation or conversation with policy makers or politicians. So basically, this is a Trump shock, maybe bigger than Nixon's shock, I think. And we have to go into the detail of the shock. But basically, Japanese policy makers now increasingly started to realize that Trump phenomenon is not Trump himself, is not the cause of problem, but the symptom, sorry to say symptom, reflection. Reflection of U.S. changing U.S. foreign policy. So that will continue. And maybe it is due to the series of war in Afghanistan or Iraq, Middle East, after 9-11. So U.S. have a kind of war particle. And while there is income gap widening in the U.S., so it will continue. Maybe American first policy will continue beyond Mr. Trump. And secondly, but initially, when I talk with government officials, they always talk about how to endure Trump administration period and how to deal with it. And Mr. Abe met Mr. Trump like eight times and also talked on the phone like 26 times. It is extraordinarily frequent. And assumption was that Abe, as he communicated more and more, he can change Mr. Trump's mindset or policy. But now, as I said, he's a reflection of a deeper change. So I think Abe have realized that he cannot change Mr. Trump, not only his mindset, but his policy. So that is why he will try to meet one more, at least try to minimize the risk. Yeah, so also a Trump shock is that we cannot take, Japan cannot free ride, of course not, but also may not be able to cheap ride on the U.S. security umbrella. Maybe Japan have to do more and also have to reconsider or adjust the burden. So second point is how to deal with the reality. Basically, to put it more journalistically, Japan is about to adopt so-called dual hedge approach, dual hedge. One hedge is to do more to sustain or maintain U.S.-Japan alliance, invest more. So on this front, Japan, as Shira said or Miura-san said, Japan will invest more. Next fiscal year's defense budget will be like a five point maybe five or six trillion Japanese yen, which is the biggest in person. And also Japan will increase amphibious capability and also missile defense in order to sustain U.S. footprint in Japan so that they don't have to worry about the vulnerability coming from North Korea or China. So Japan is investing more for the missile defense. It is not only to defend Japan, but also sustain U.S. military presence. And also amphibious side is that now Japan have realized that maybe when there is a contingency in Senkaku or Sea Island chain, Trump administration may not intervene to help Japan unless Japan invests more to defend by its own. Then maybe even then we will have to defend by ourselves first, then U.S. may help. So that is one hedge to Trump reality. Second hedge is more interesting. As Shira mentioned, Japan is trying to minimize the risk of the war or risk of high tension with China and also Russia. When U.S. can assure strong military or political commitment to this region, maybe Japan didn't have to worry about so much to deal with this reality. But now we cannot count on that. So Abe tries to minimize tension with China as much as possible. That's why he is visiting maybe Beijing October 23rd. And also maybe not maybe it is very likely that Xi Jinping will visit Japan for the first time in past 10 years. Also Abe is visiting Russia again. I think that he met with Putin more than 20 times bilaterally, including his first term as Prime Minister. And I don't think that he has hoped that Putin will return for Ireland's back. I don't think so. He is not that stupid. But the reason why he keeps meeting, he keeps meeting Putin is to minimize the risk. Japan doesn't want to have a two-front confrontation with China and Russia. And another hedge is to push forward TPP-11. And maybe Japan will reach out to Asian country including Indonesia. Indonesia and Thailand have already hinted that they are willing to negotiate. And also even UK. And also Japan was very sceptical to a BRRI, Belt and Road Project, a Belt and Road Initiative. But now, later this month, I think they will meet in China and Japanese officials will meet in Thailand to discuss about the joint project within the context of BRRI. Maybe Japan wouldn't say it's context of BRRI, but it's context of BRRI to push forward the railway project in Thailand. So that is also another change. So to do more to sustain US-Japan alliance, but also to try to ease tension with China, Russia. In case this hedge cannot be effective enough. Thank you. And Sheila, just to pick up on a few of the themes that Hiro touched on there, we know that Abe has said on a number of occasions on the public record, he's keenest to see constitutional revision of Article IX, the peace clause. How likely is it that he's able to revise the constitution? This could take us the rest of the day. Briefly, public opinion on this moves depending on the moment, right? It is not true that the Japanese public overwhelmingly want to change the constitution. However, there's I think a greater appetite in Japan for a conversation on revision. I don't think we'll know until Abe's, you know, suggestion that Article IX add a paragraph or add a sentence, right? Until that gets into the diet, I don't think we'll know whether or not the Japanese, how the Japanese people really feel about it. There's a fairly strong, but small group of people who actually want to see the second paragraph of Article IX seriously revised. So you'll have a debate among the war focused critics of Article IX and this new kind of soft approach by Abe. But I don't know that the Japanese people are going to buy into it. There's other political issues coming up at the same time. Not sure yet that he's got a full consensus on moving forward. Lily, what are your thoughts on that? Well, PM Abe is quite eager to change the constitution and current draft made by LDP reflects the idea by Nukomeito, which is a pacifist party in Japan. So LDP discussing the draft, I try to include the certain words that civilian control by the diet. So it might be helpful to get the support from some of the opposition party members, but it is quite political right now. So I think during the fight over the changing NICE article, it's actually 9-2 article. So it's to be precise. The Japanese left-leaning opposition party might lose public support because they have already very limited number of seats and their real intention is quite different from the supporters. They are supporters. The core supporters are pacifists, but the party members of a constitutional democratic party doesn't mind to change constitution. So it might be a gap between the diet member and the supporters. So I think it's a close call if the public support the... I think that the mindset of Japanese is like this. When I was a kid, maybe my parents chose clothes for me and forced me to wear. And then I grew up and I still like this clothes, but I want to choose it by myself. So I go to the department store and buy it, buy myself with my money. So that is I think average mindset of the Japanese people. So we don't want to change the design so drastically. But maybe there is a several article which must be adjusted to the reality like environmental protection or contingency provision and so on. But article 9 is the one I think highly divided. But the essence of article 9, the renounce of the war, renounce of the war, this part, this design is I think largely supported by Japanese people. No Japanese people wants to preemptively attack China or North Korea. So that is my understanding. So that is the reason why when you look at the poll, it is support to a change of constitution in general is quite high. But the article 9 is quite highly divided. So not even divided, I don't think that people want to change the essence of article 9. Okay. If we look at the domestic politics as well, Abe faces a ballot later this month to continue as president of the LDP and prime minister of the country. Is it a done deal, Sheila, that he remains leader? I think that Ishiba Shigeru is running and that's the contender that he ran against in 2012. But I think it's pretty much predictable that you Mr. Abe will continue to be prime minister. I think the party is largely in support of his leadership. And in terms of that, do you see another three years of Abe that the Japanese thinking is that you can get beyond the Trump blip or is the view like Hiro said that the shift in the U.S. is much greater than that? So I don't know. I mean, I don't know what the average Japanese think about Trump other than Abe seems to be able to manage him. So maybe Abe's a good idea, right? Until we can figure this out. But remember, there's other issues on the table as well. So next year, 2019, there's the abdication of the emperor. It's already decided. It's going to happen. But it's an important moment for Japan. There's the raising of the consumption tax is coming next year. And then there's a very important upper house election. And so whatever happens on the constitutional debate in the diet, you will be gearing up then for an electoral response to that conversation next summer at the upper house election. So I think we want to I think Abe is the best. I mean, the parties basically thought he can get us through this the best and he can manage whatever may come in foreign policy where he has a pretty strong record. You spoke about the fact that you don't think this is just that the Trump changes, I guess, an economic approach, an America first approach in pulling out of the TPP and the tariffs and so on. But you feel it's a more fundamental shift in the United States that's something you're going to have to grapple with for years to come. Maybe his tactics impose tariff is very Trump. But for American taxpayer to demand Japan to buy more U.S. American product, thereby U.S. can fix its trade imbalance, is, I think, deep rooted trend. Of course, and also, as Mirazan said, I perceive U.S. has been opening market and keep buying other products even though U.S. have trade deficit. It is partly because in the context of the Cold War, the U.S. was very generous to allies so that allies can develop economically and politically and because helping allies that way was to help the U.S. itself to deter the Soviet Union. But China is not the Soviet Union. China is a competitor, maybe strategic adversary at the same time economic partner. So naturally, U.S. have less incentive to be more generous, as generous as U.S. was during the Cold War, economically, militarily, everything. That is my perception, but I think it is widely shared among the Japanese government officials. Can I add one point? This is a dangerous tendency in Japanese public to welcome U.S.-China trade war, because TV programs are excited about that theme, but they don't understand the reality. Because during the Cold War, U.S.-Soviet export is less than 1% of the whole. So U.S.-China's relationship cannot be a Cold War type of relation, but Japanese public, some of the Japanese public don't understand such side of the relationship. Lili, how would you rate Abe's handling of Trump? I remember he went into Trump Tower, I think, presented the president with a gold club, and he's made him, as you pointed out, many, many times. First meeting was President Trump at Malago. Shortly after Shinzo came home, he was quite excited. He was happy about the new relationship, because President Trump seemed to understand everything about the trade issue, especially the automobile industry. During the lunch session, he loaded up by himself, and he explained everything, because U.S. car doesn't sell well in the Japanese market for a reason. President Trump seemed to understand it, but that's the first mistake Prime Minister Abe made, because Mr. Trump knows everything. He knows, but he, you know, do the unreasonable demand to Japanese Prime Minister, and he knows that Prime Minister is facing enormous stress from Japanese public, but yet he doesn't want to compromise to Mr. Abe. So this is very structural. It's not Prime Minister Abe's fault, but we were too optimistic about President Trump. When you look at the scenario, Sheila, in terms of some of the worst-case scenarios, like, for example, the automobile tariffs you touched on in your keynote, and even worse than that would be some sort of confrontation that might even say the U.S. withdrawal from the U.S.-Japan alliance. Are those realistic scenarios? Gordon accused me of being too soft on Mr. Trump, so let me try to rectify that. I don't think they're optimistic, actually. I mean, I don't think they're unrealistic, so I think there's two things to think about. I am not convinced that the tariff as an implement of pressure is well understood by Trump. I mean, I think you can watch, and again, there's others in the room more knowledgeable than I, but I think you can watch the U.S.-China negotiations and see the miscalculation. I think they amply thought that they were going to be able to get the Chinese into a deal last time the Chinese mission came. I think Trump still thinks that way, and you can look at his tweets and his references to friendships with Xi Jinping and things like that. He still thinks he can broker a deal. The Chinese today, and all of you here, have probably been following the comments that have been made in Beijing lately. Chinese are seeing this as yet another piece of the competition that looks like we're inevitably headed towards a Cold War. So the interpretation of the Chinese is not a leverage, pressure, let's get to a better deal. The interpretation of high-level Chinese is that we are destined to be strategic competitors and, in fact, confrontation. So I doubt that he understands the Japanese position well. I mean, he may understand vulnerability of Japan, and he may not have animus towards Mr. Abe personally. I don't think he does, frankly, but I think he wants to use the vulnerability of Japan tactically to American advantage. And you can just look at the way that he interacted with Moon Jae-in. The very quiet, under-the-surface conversation with South Korea has been nothing short of bullying, frankly. Whether it's the opening up of chorus yet again, and the pressure, whether it was during the tensions of the missile launches and this quiet, you have to pay for all of this, or coming out of the conversation with Kim Jong-un, making the statement that these war games are expensive. That's a shot across the bow of the South Korean government, who is currently trying to negotiate a special measures agreement on how much the South Koreans are going to pay for U.S. troops. So I think there's, he tactically uses vulnerability in these alliances. That's what's going on here. And I think it's going to blow up if he does this on the autos with Japan because there's too much at stake for the Japanese. So U.S. Japan Security Treaty has not only Article 5, but I think it was Article 20, by which either U.S. or Japan can withdraw from the U.S.-Japan's duty alliance by one year notice. It is unilaterally, either U.S. or Japan can unilaterally withdraw. So it's kind of fragile treaty, I think. And based on that, yeah, I agree with you. And also I'd like to add that when I talk with Japan's officials who do the trade negotiations, the Trump administration, they have, they started to think this way. Mr. Trump has two, so past president have two balance sheet. One balance sheet is trade. And the other one is a security alliance. U.S. have deficit in both of balance sheet, but this is kind of like a sanctuary. And they never mix this together. But in Trump's mind, he combined this together. And his mindset is that Japan is cheap riding. And maybe, unlike NATO, Japan cannot increase the defense budget to 2 percent of GDP, so easy. So let's fix this trade issue, thereby he can offset the deficit in alliance. This is very dangerous, but I think this is the way I understand when the Japanese, I think Japanese people understand, increasingly understand. So that's why Washington Post scooped that Mr. Trump told Abe that we'll never forget Pearl Harbor in June meeting at White House. I don't think that that was accurate as I kind of checked. There wasn't that kind of wording in that context. Basically he said, as I understand that I speak great, that he said Japan had a samurai spirit in past. Japan attacked Pearl Harbor. Japan also caused war. Japan was a samurai. And why don't you do more to shut down North Korean missile or defend Japan by its own? In that context, he mentioned Pearl Harbor. So it is not so bad, but it is the deflection of his balance sheet combined together, a trade and security. The Japanese have been able to weather the tariffs on steel and aluminium. What options are there for Japan if, as Hiro alludes to, Trump tries to fix the balance sheet a bit more in terms of the trade relationship, the trade side of the ledger, and introduce tariffs on automobiles? Well, U.S. export is mainly agriculture and military products. So one solution is to buy more U.S. military products. And that's what Abe-san is doing right now. And the other solution is that we buy more U.S.-made food. And in my opinion, Mr. Trump's intention to start trade war is to reform Chinese market and also Japanese market. To be fair, Japanese market is not open enough. Not automobile industry, but. And also the fact shows that some of the U.S. companies like Coca-Cola, Goldman Sachs, well, can play fair role in Japanese market. So our rigid countryside farmers can be changed by Prime Minister Abe's initiative, but then he must face the harsh criticism from the conservatives. So I'm not sure, but Japanese government seems to lack fundamental solutions to that. Do you, Sheila, in a broad sense, across these various issues, see Trump not attending APEC or the East Asia Summit, how do you reflect on that? As little as possible. No, it's okay. It's okay. So he did take the Asia trip, and I think a lot of us understood from the early interaction with our European allies, right? He doesn't like multilateral settings. He's not good at it. He doesn't like it. He doesn't like to sit around. And so I wasn't surprised on the Asia trip. He stayed out in the region longer than I thought he was going to do, to be honest with you. Personally, you can see him. You can hear him talk about it. His style is the one-on-one. It's the Abe or the Shinzo Donald. It's the Vladimir Donald. That's who he is. That's where he thrives. That's where he thinks he understands the game. So I think we should expect him to do a lot more of that than sitting in large fora discussing regional governance issues. What I am not sure yet is whether Pompeo and Mattis has largely taken up that slack in the military strategic realm. Secretary Mattis is on the road all the time, making sure that U.S. interests and commitments are articulated and supported. Pompeo needs probably to do more. I expect in Asia Pacific regionalism, you will see him once the North Korea thing stops consuming all of his time. I don't expect Donald Trump is going to do that. It's hard to get a U.S. president to the region anyway, whether it's Obama or Bush or Clinton before them. You have had disappointments in the region because the U.S. president didn't attend. But I don't think we should have a high hopes of Trump. Can I get back to one point, though, that I think it's kind of implicit in Hido's comments as well as Louis's Japanese expectations of this relationship. And I think he used the word incrementalism. That incrementalist mindset. And I'm not sure the double hedge is actually what's happening in Japan. But I'm willing to take your advice on that. It is a difficult time to predict the what next, right? You asked in your question about North Korea, you know, the minute we have military force used in the region, all bets are off. And that would be with Trump or without Trump, because we've never been there before, right? This is not a war fighting alliance in the same way the U.S. ROK or the NATO alliance is. But that close personal relationship is what I thought about Hido's comments. It's really important is risk reduction, is minimizing risk, minimizing that disconnect. I don't know, and I'd love to hear more, Ruri, about who in Japan is thinking about the what next? Who is thinking about the big disconnects? And is Japan prepared? And how is Japan prepared? Should it go badly? I don't hear it in public. It could be in private. But I think risk management or minimization. And let's make sure to try to hug Trump close as best we can. I think that's the strategy, incremental or not. But I think that's the strategy. I don't hear a brand new thinking. I don't know if there's new thinking out here in Australia either. So I kind of like to hear from the other side of the alliance whether or not people see the need for that or they think that Trump is manageable. Well, can I? Oh, absolutely. I'm sorry. I just asked a question. Well, as I pointed out in opening remarks, the Japanese pacifists cannot provide any solutions to the future of East Asia because they are inwards-looking and isolationist. So the alternative to Prime Minister Abe comes from the segment represented by Ishibasan. And Ishibasan is recently trying to sell more independent policy from the U.S. And he is thinking about bringing out the change of U.S.-Japan status of force agreement so far. And that's exactly a nationalist move. But the thing is that Prime Minister Abe's segment is the most future-looking, forward-looking segment of Japanese political society. And what Ishibasan is doing right now is to damage the administration by claiming that Trump and the relationship is sour and Japan has to be more independent. But what kind of concrete steps that Ishibasan wants to take is just for the negotiation was the U.S. about the treaty. So I think that's not the solution. But isn't that also incrementalist in the sense of it's still the United States? The choice is still. But his wording is very different from last year. And well, I sometimes done with him and go to the TV show with him. But well, he's leaning toward the right wing. But it's kind of an anti-U.S. feeling right wing. So it's a dangerous move. And in the private sector, I think there's nobody, no prominent leaders in the private sector that you know, think about the alternatives. Unlike South Korea and society. Yeah. South Korea has a bigger debate. So that's quite Jim. I'm sorry about that. Can we move to the other big bilateral relationship of importance to Japan? And that has been showing some improvement despite the unresolved history between China and Japan. And Abe is visiting Beijing in the next month or so and Xi Jinping visiting Japan next year, early next year. Hero, can you give us a sense of what's driving that improvement? Is it because they were all nervous about Trump or what's driving that? It is very interesting to observe that China's approach to Japan started to change drastically since October or November last year during EPIC and East Asian Summit. China, actually, yeah, Japan and Abe and Xi Jinping's meeting was set in advance. Then China side reached out to Japan and proposed. Why don't you meet Prime Minister Rikochan also? It is very, very kind of unusual. And then there was a good meeting. And also Japan and China had a high-level economic dialogue headed by the Deputy Prime Minister. And Japan has been asking China to hold it because it has been suspended for maybe around eight years. So Japan has been asking, but China was always cautious. But it is China who initiated the resumption of the talk. So Japan wonder why? And tentative conclusion is China is so worried about the prospect of U.S.- China relationship and also unpredictability of Mr. Trump in the midst of a trade war or maybe hegemonic war. So they decided to embrace or ease tension with Japan and hopefully wedge, wedge or embrace wedge between U.S. and Japan thereby they can deter Trump administration. And also easing tension is a good thing anyway for China. And also they successfully get kind of like a dividend, such as, as I said, Japanese conditional support to a Belt and Road initiative. And also Japan is now very willing to push forward RCEP. What is RCEP? Regional Comprehensive Economic Partnership. Right. Yeah, now Japan is very cautious because Japan was TPP and Japan tried to push TPP. But now Abe is willing to conclude a negotiation before the end of this year. And this is a concession to China, I think. Because Japan wanted to push China to TPP standard but gave up and then try to embrace RCEP, which could be lower standard, which standard is relatively lower to TPP. So I'm trying to say is that Trump factor is one of the biggest factors which is bringing impact, the immense impact on, not immense but big impact on sign of Japan relationship. And what outcomes, Sheila, can we expect from these two very much anticipated meetings, what the one in Beijing and in Tokyo next year? So I think the Beijing meeting coming up in October, it's the 40th anniversary of commemoration of the implementation of the peace treaty, the normalization treaty, the peace and friendship treaty. So there'll be a lot of good rhetoric, I think, surrounding that and a lot of discussion about the mutual interests and perhaps a little win-win as well. I think the Thailand project that Hito was suggesting, I think there's been a search for an appropriate project that is allowing Japan to help elevate standards of some of the obor infrastructure and development. I think Japan clearly sees its desire to help raise the standards, be it an infrastructure or even the AIIB and the financial sector, that's where the Japanese feel that's their role in the economic engagement. I think what's going to be interesting though is again back to this public opinion is how the Japanese public opinion will respond to the meeting. One of the things that I've watched over time and this goes back to the tension, period of tensions is the Japanese public opinion on China has been very insensitive to these sort of adjusted opinions. So even though the economic relationship is back on track, even though the regular diplomacy is back on track, that high level and 80% is better than what it was three or four years ago was 90 something percent were basically antagonistic towards the government of China. So I'll be watching to see if the Japanese public sees this as a bigger opening and the business community and others will applaud it and we should, but I'm not sure that the Japanese public will respond to it. That's your opening for the numbers. The fundamental reason that majority of Japanese people hate China has a connection to the feeling that their income is decreasing. The personal income is the personal status. It's not true that richer people likes China and the poorer people hate China. That's not true. It's the opposite. But you know, asking if your household income would increase or decrease in the future, there's a clear connection towards the hate toward China. So it's like if the people answer that their income would increase in the future, the people who hate China decrease by 24 points. So it's a, you know, big connection to that. And also the Japanese public, part of the Japanese public who makes money was Chinese business likes China. And the opposite is true also because the Chinese people who engage the business was Japanese companies and who finds that that kind of business will glow in next 10 years. 88% of them likes Japan. That's enormous number. So my theory, my hypothesis is that economic interdependence in people's level is working, but it's not working well because the China, Japan, export, input business is controlled by state-owned companies from Chinese side. And the Japanese Shousha, I don't know the... Trading company. Trading is managing the Japanese high business. So it's not visible that, you know, the interdependence between China and Japan. And it's also true to, you know, South Korea and Japan relationship because the most of the business is B2B business. So it can't be damaged by the diplomatic tensions. So there is a reason in East Asia that we cannot go well with each other. And it's not improving. So what I think is interesting about that result is we often think of the deterioration of Japanese public opinion towards China as being nationalistic or about the islands or about the pressure or whatever. But if it becomes based on economic zero-sum interpretations of economic well-being, then we have a much deeper structural problem. And in fact, whatever high-level diplomacy happens may not actually fix the larger perceptual problem of the future of Japan and China together. So the recipe, I think rather than incrementalist in terms of approach of, it's an old school approach to a new challenge with China and the summitry and the big statements and the win-win. And it's not working on either side, I think. And I'm not a China expert, but I would be willing to guess that our China experts would say it's not actually going to work necessarily all that well in China as well. For me, just briefly, Japan, according to Paul, people's mindset, emotion mindset about perception between Japan and South Korea mutually is as bad as that of Japan, China, roughly. But I don't worry so much about Japan, South Korea, because we are both of us a democratic country. But China have a kind of propaganda or disinformation lack of freedom of media. So it is very untransparent how public react, Chinese public react and why they react that way. Why they are very muted now. I don't know. So for me, Paul's result in China is a little bit more kind of a source of concern than in Paul in South Korea. When we'll go to the floor and get some questions from the audience in a moment, just one last issue to raise. And it's been a sensitive one in Australia as well as part of the quadrilateral security dialogue. Is it a step forward? Does it unnecessarily or gratuitously antagonize Beijing? Sheila, what are your thoughts on that? So I think you have different perceptions in each country of the Quad on this. And I think for the South Asian experts in the room, correct me if I'm wrong, but I think India is very sensitive to the perception that this is an alliance structure, that the Quad is going to institutionalize some kind of military commitment. I suspect Japan is more comfortable, at least on the maritime side, that this is a place where presence can be collectively demonstrated around a certain set of norms and ambitions. The U.S., I think again this goes back to Peter's question to me earlier. I think the U.S. is largely trying to find its way. I don't think the United States would mind a little hardening towards China, which is why I answered Peter's question the way I did, which is I'd rather the Trump administration didn't have a full-throated Asia-Pacific doctrine at this moment, and I'm glad it's an economically organized strategy. But I think each of the Quad members have slightly different strategic ambitions and slightly different levels of comfort with the military component of what the Quad implies. Some questions. Thank you. I'm going to watch you run up the stairs. The pressure. Ben Ashio, I'm with the Australia-Japan Research Center here. My question is about teasing out the limits of defense reform, and you've already started to discuss this. As Dr. Smith mentioned, Japanese policymakers have become more comfortable with military instruments of power, and Miura-san mentioned in the discussion about the pacifist sentiments on the left, sort of as competing forces here, and that because of this, the Article 9, the Abe government's taken this Kaken approach to add a third paragraph to explicitly recognize the self-defense forces but not to change the second paragraph, the renunciation of war. In taking this approach, how much would this actually change fundamentally the day-to-day operations of the self-defense forces, the way that they'd be dispatched overseas, and also what are the risks of taking this approach in the theoretical circumstance that the public did then voted it down? Thank you. Thank you for your question, and the change of constitution, if the current draft, will change nothing, and will change nothing in the actual operations of usual basis, but that might change one thing, the SDF will be recognized as a force. They will not say it as a military, but they include the civilian control clause in the draft, and that means the reform that the other administration was making since 2015 that, you know, they changed the civilian control system in Japan from bureaucratic control to political control, and that mission will be concluded by changing constitution. Plus, the Japanese diet has no meaningful role in controlling the self-defense force. Self-defense force generals are invisible in Japan. They don't answer the questions in diet. They don't go to diet. So that culture can be changed afterwards, but the most important part in changing constitution is to recognize the SDF and try to pressure the peace movement people to, you know, criticize the SDF. That's a political movement. Just briefly, if, yeah, Emira-san, I agree with Emira-san mostly, and another one, another consequence is what if Japan goes to a referendum and like Brexit, you know, people, Brexit said yes. So what if people say no? I think that will have also immense impact on the future of constitutional revision. You know, it is possible. Especially when Abe tries to change Article 9, though nothing will change, some people get nervous and maybe say no. I don't think that there's going to be another chance in coming maybe years once it happens. That is potentially a big impact, I think. Just a very quick question on the use of force and the instrumentality part of your question. I have a book coming that I will send to you. But a very short answer is, I don't think, I think the constitutional debate over that third paragraph and whatever we're about to see in the diet, I don't think the diet debate is going to get us to a national referendum unless the polling is very explicitly in support. So I think there's no danger that we're going to have a diet and a referendum and a no. I think we're going to have a diet debate and a lot of very careful reading and parsing of public opinion polling and a pullback if there's any sense that it's not going to be successful. I think they're going to set up a referendum so that it succeeds. However, it happens. But on the use of force, on the instrumentality question, I think that's a separate, I don't think many Japanese see that as attached to when the self-defense forces are going to use force. And the conversation that really focused on when the SDF get to use force with others, so the collective self-defense debate, that new legislation in 2015 gave you a very good spread of the thinking on the use of force question. I think a lot of us, including people like Professor Kitoka who was on the advisory committee for the collective self-defense reinterpretation, a lot of us felt actually Mr. Abe would take it further than he did. He was very cautious in that legislation. But it fixed a lot of the loopholes that the SDF had already run into in actual missions. So whether in UMP skipping or working with allies or even working with Australians, right? It fixed a lot of the limitations that the SDF was running into. And so it fixed problems that already existed. It didn't change the missions. It didn't give them new missions to perform. It just got rid of the legalistic barriers to the full performance of missions that had already been assigned to the military. So that's in the book. But I don't think those two are the same thing. Thank you for the discussion. I might just come back to the auto tariffs, because Sheila did mention they're coming. I think we can almost count on them coming. And Miras, on your response that Japan will buy more arms and agriculture from the U.S., might be feasible in the short term, but I think wouldn't there be a lot of political pressure to retaliate? And maybe Japan will weather the storm and suffer huge economic loss from these tariffs for the alliance, maybe. But then I think Trump is just getting started. The domestic macro policies in the U.S., the fiscal expansion, they're going to put pressure on the trade deficits are going to grow. U.S. trade deficits are going to grow. So we're looking at potentially more measures, more damaging measures down the road. What really are Japan's options? Retaliating doesn't help. I mean, surely Japan needs to look to other countries, other partners, even China. Does this sound plausible to you, or is this Japan just has to hold the line and potentially retaliate? We're all looking at you. Well, I have an impression that current administration doesn't have a solution. And it is a hypothetical solution that talks about, but it's in a private sector, I think. And I don't think that... Well, other administration will be for another three years. So during the administration, I don't think that the other side will fight Mr. Trump. Yeah. And it's for security reasons. They cannot damage the alliance. And they are going to change emperors and they are going to change constitution. They cannot risk the alliance. Yeah. So maybe Japan will proceed this way. They know. Maybe Washington also knows that it doesn't help to fix the trade imbalance so much. But maybe Japan may think that he is imposing automobile tax because he thinks that that's, as I said, balance on the alliance is too much huge deficit for U.S. He said he doesn't want to put U.S. soldiers in Korean Peninsula in the 06-12. He wants to withdraw from Korea. Maybe it could be possible also in Japan, but he cannot do that. At least he understands he cannot do that. So he tried to punish. So it is not like economic policy, but it's almost like political policy decision, which discount the value of U.S. Japan alliance. That could be a reaction in Japan. And so retaliation doesn't help. But maybe that will have more immense impact on U.S. Japan alliance. So maybe Japan will try to expand its security cooperation with more quickly, actively with ASEAN, Australia or even NATO. Thereby Japan can offset the damage. Also more effort to expand the TPP to pressure U.S. But that could not be a solution. Just a couple of thoughts. There are some intervening variables. So it's not a Japan-U.S. conversation obviously. How NAFTA, especially the Canadian piece, gets resolved will in fact inform whatever happens with 232. As all of you know, the Japanese auto industry is in North America, not just in the United States. And so Toyota and a whole bunch of other companies will be devastated by a combined, funky response to Canada, and a very academic term, and the imposition of 232 tariffs. So I think the Abbott government will have to respond, because I think the Japanese auto industry will be up against the wall. They will either have to diminish jobs at home to respond. And that's a whole other political question about any Japanese Prime Minister. Are you really willing to hollow out Japanese manufacturing sector and Japanese jobs to satisfy the erratic Mr. Trump? I think there's serious politics at home on this issue that are not just about security treaty versus trade. They're really about the ripple effects of this decision-making process. And I think it starts with NAFTA. And you can see the Canadians, they're not going to swallow something that is going to create those kind of politics for them at home. And I think no democracy can, right? So therein lies the various intervening variables. I don't think we can say right now, because it's the path, it's very path contingent. And I don't know that the Trump administration understands as clearly as it does. Or that he cares, right? Or that he cares. But remember, we have a midterm election in November. So the next couple of months will give us some pretty good markers on both the Trump administration and on the Abe cabinet's thinking on this. Thank you. Thank you very much for your excellent presentations for each. I'm Thomas Attake from National Institute for Defense Studies in Japan. I also wonder why Japan has no alternative or so-called plan B under Trump's presidency, even if a country like Australia has to be able to discuss the so-called plan B under the Trump administration. And I don't think the U.S. withdrawal from Japan is likely in the foreseeable future. But surely the U.S.-led liberal order will continue to decline. But nonetheless, as Rudy and Akita-san discussed, the Japanese policymakers seems to be preoccupied with how to maintain the status quo rather than how to prepare for the worst-case scenario. And I think that's partly because they see some continuity of the U.S.-China strategy rivalry. And as long as this strategy rivalry between U.S. and China continues, Japan, U.S.-Japan alliance will remain very strong because we are in a very, very strong, you know, important position in terms of U.S. strategy against China, where Australia might be less than important for U.S. in terms of their strategy against China. Given that, I'd like to ask a question to Dr. Smith. And how do you see the possibility of the, for example, like, an approach between the U.S. and China, in a sudden approach, how, let's say, how would Trump respond if China provides some very good deal in terms of the trade, you know, trade war between U.S. and how would he respond? Or do you think that U.S.-China rivalry will continue in the foreseeable future? The short answer is I think it's going to continue. I think the trade, the imposition of tariffs, I think the president probably thought that he would be able to entice the Chinese to the table. I think he was led to believe that, perhaps falsely, by his interaction with Xi Jinping personally. I don't think the Chinese government is going to buy it. I think they've attempted some kind of deal-making strategy, but not to not, I don't think they see it as a viable way forward. But so I think that that will continue. I think there's also places, as we all mentioned earlier, that there are places where the Japan-U.S. interests align on China. So whether it's intellectual property rights or the China 2025 plan or on Belt and Road, I think we've got some alignment here that, yeah, we ought to put some pressure on China to change the way it behaves, right? But I think the real question here is where the president feels he's going to be able to pull back. And again, I don't want to make this all about domestic politics in the United States, but it's a lot about domestic politics in the United States. He needs to go into the midterms saying, I won on this, I won on that, and which partially explains there's no nuclear threat for North Korea, but on the trade issue, he is not going to relent. And I would say even beyond the midterms, he will not relent. And that's where I think the pressure on Japan is going to be severe, because I don't think sometimes when I listen to him speak, he can make a difference between China and Japan and the European Union and perhaps even Australia, right? In terms of the economic trade objectives that he has, deficit reduction doesn't doesn't, you know, it's not a solution. And a free trade agreement is not going to bring it about. But he is stuck on those numbers. So whether it's buying aircraft, energy is another place where the Japanese purchase of shale gas could clearly change the deficit number. There are lots of ways we could work on the deficit number. And I think it's, I think that's going to be part of the Abbott cabinet's response. But the auto industry is all about the global network of production, right? It's all about the liberal way in which we organize the global economy. It's not just about Japan. And so I think what he's trying to do is de-incentivize that global system of production. And if you listen to Peter Navarro, and the president is now echoing Peter Navarro's thinking much more frequently than ever in the past, and the people who have advocated for the global liberal order are gone from the administration. They have either quit or they've been asked to go. So I think this administration is getting to be much more interested in economic nationalism, whether or not that tariff tool is effective. He will claim it is effective for political reasons. So I am not as sanguine on the U.S.-Japan relationship because I think it's going to hurt. And it's not just going to hurt the auto industry. It's going to hurt your own economy sooner or later. And that's not tolerable, I think, for any Japanese prime minister. I'm nearly in the Auster area. Auster, I have a trade deficit. And we don't notice, right? Trump doesn't really put a lot of spotlight on you. Auster is exceptionally... We're all coming, by the way. When things get really bad, just move a little place over and dig in for us. We've got room. Thank you. Any other questions? Thank you. Two up here. All the way up there. You have to run again. Good fitness. Yes. Good thing he's young. I'm Yosuke Hanada, a PhD student at the ANU. Thank you very much for your presentations. My question is quite simple about the nuclear option of Japan. I think you discussed the plan B, I think, in this panel comprehensively, but one missing point or discussion is that Japan will go nuclear under what condition? So could you explain how Japanese government has confidence? To what extent Japan's government has confidence in the U.S. extended deterrence at this moment? And then how much? What kind of crisis is necessary for Japan to seriously start a discussion on the nuclear option? That's my question. You know the answer, and you're asking a very sensitive question. I'm just kidding. No, you're not. Japan is under the nuclear umbrella, and it is secured as of now. But one scenario that the U.S. will cut a deal with North Korea only by stopping ICBM and do less or do nothing to stop mid-range ballistic missile, which covers Japan, and also fail to deal with nuclear program, North Korea. What will happen? There is a decoupling between U.S. and Japan, and Japanese people started to feel that, oh, nuclear umbrella, is it? Will U.S. retaliate North Korea by taking a risk of getting, you know, retaliated by North Korea and taking a risk of a nuclear attack from North Korea? Because U.S. is safe. So that may lead to public debate among the public, not among private scholars, like Miura-san, about the, you know, possible nuclear option. But I think that there is another. One is to allow U.S. aircraft which can carry nuclear bomb to allow them to land in Japan in times of contingency. This is a level one. Level two is to allow U.S. to introduce U.S. nuclear missile or B-61 type of missile, a bomb on the land of Japan. And third is the West Germany type. Under the two key system, Japan and U.S. will share the nuclear capability. And fifth is nuclear sharing, like U.K. and U.S. are doing. So, you know, jump on the last step is crazy, I think, last French type of nuclear capability. It is, I think it's a crazy idea. But maybe there's going to be a discussion, not in the government, but among scholars or experts. Well, about the confidence, Japanese people's confidence in the nuclear umbrella is, you know, it depends on the issues. The only 15% of Japanese public lives that U.S. will intervene in the Senkaku Island conflict in case of China's invasion. So it's a very limited number. Considering that the South Korea's 55% of the public believes that U.S. will intervene in North Korean crisis. So Japanese people don't believe in the nuclear umbrella in case of the peripheral issues. But they also don't have the fear of abandonment. So that's the key point. Because, well, last night I hear a lot about the Australian politics and they say that the Australians are fear of, you know, abandonment risk. But Japanese society has no such fear. Well, they fear the entrapment, right? Well, going to the other side of the world kind of argument. And my poll shows that 25% of Japanese public wants to get out of nuclear umbrella of U.S. and remain non-nuclear. So this is a pacifist segment. This is quite big. And another 25% of the public wants to remain under the umbrella. And 11% of the public wants the nuclear sharing. That's a, you know, big word, though. And 8% of the people want to have their own nuclear weapons. So this is the current status of Japanese public opinion. And the poll was conducted last year, December. So this is a recent outcome of my research. So answering your fundamental question when Japan goes to nuclear option is when the U.S. definitely treats from East Asia. So Japanese public don't fear of abandonment risk because they think that the U.S. base will be kept in Okinawa or other regions in Japan. So even pacifist believes in that. So whenever I, you know, talk about the fear of abandonment, the far left people criticize me of speaking demagogue kind of theory. So it is, you know, we are all dependent on nuclear umbrella. So I don't know. When the U.S. will retreat from East Asia, there's no sense of talking about, you know, risking NPT because there isn't such thing, you know, exist in that kind of era. So we shouldn't worry about NPT then. So we only should worry about the total withdrawal of the U.S. Just to try to address your question in a slightly different way. And again, it's important to think about the Japanese public's perception of the effectiveness of the extended deterrent versus the security planning or expert, right? So again, back to your plan B question. I think there's a lot more quiet conversation among the expert community that may not be in the public domain, right? There's some that I know of, may not be policy relevant, but they are talking. But the nuclear one for me is people often don't understand the Japanese government has reviewed its nuclear options periodically over the post-war period. This is not a conversation that doesn't happen in Japan, right, among the planning or the serious policymakers. So when China developed the hydrogen bomb in the 60s, it was a question. When Japan was going to sign on to the NPT, it was a serious question. When it became, when the Cold War ended, there was another policy review. So there have been periodic reviews of when is it okay for our security if we do not, if we exclude the nuclear option? And when you get a couple of responses, I mean, it's always been yes, right? So far. Doesn't mean it's always going to be, right? And so there's two pieces of the puzzle here. When does it make sense for Japan? And then what kind of nuclear option makes sense, which is what Hiro was going through, right? But I think for the most part, the military planners think that the only configuration of nuclear capability that would be sufficient for Japan or make sense for Japan's security would be the force to fret, the SLBM force that's offshore. Japan is too narrow for any kind of other strategic option for missiles and or for bombers, right? So it's always that. It's always in the function of deterrence, never in war fighting, right? Until it gets to the alliance. And then the question of tactical nuclear weapons by the United States, will it help deter aggression against Japan or will it help us fight a war? And I think we're not yet there, unlike the political debate in South Korea, where tactical nukes are part of the conservative right debate. It is not part of the political debate in Japan. And part of it may be the nuclear allergy. Part of it, it just doesn't make sense, you know. And so the debate you do hear in Japan, and it is a politically informed debate, is in the LDP Committee's review of a conventional strike option, right? And that is still presented as a retaliatory capability so that there is no miscalculation on the part of Pyongyang or Beijing that Japan will not respond. So having the capability so that other people won't take advantage of you or feel that they can take advantage of you is still the logic and even for conventional strike. But that we're having that debate inside the LDP, inside a policy relevant committee suggests to me that we are on the cusp of some pretty substantial change. Will the public like a conventional strike? Probably not. But if North Korea behaves in a way, or if the United States behaves in a way that it makes sense, then I think the Japanese policy community will be able to present it as necessary for Japanese defense. We have time for one more. Thank you. Hi, Matthew Lentini. I'm a local here at ANU. Quick question that might be a bit of a segue there. Japan's no straighter to maritime disputes. So I'd like to know the optics in Japan around issues that China ends up having with its neighbours that aren't Japan, like whether it be Vietnam or case in point possibly the Philippines, where there will be a maritime dispute, there might be an issue of someone capitulating to the other, U.S. involvement or lack thereof. So how does Japan see this? And how does that affect either levels of anxiety or policy formulation? Thanks. I would like to pick that. I wrote about this in the book on the Japan-China. But it's important to understand that the Japanese supported strongly the Philippines claim under Unclos that resulted in the arbitration under arbitration outcome that basically said Chinese behaviour in both maritime regions, EZs, as well as its behaviour across maritime boundaries was not in accordance with the Unclos. So it supported the outcome. It supported the use of international law to mediate and to rule on an outcome. It continues to do that officially. I don't think that there is a Japanese position on any one dispute, but clearly coercive behaviour by the Chinese is of concern to the Japanese. And I think that's why in some ways you see more maritime presence around Southeast Asia by Japan, by the maritime self-defense forces, but also by the Coast Guard engagement with Southeast Asian nations as well. So I think you've got a forward-leaning Japanese policy conversation to help the Philippines, for example, or Vietnam and India, for that matter, develop their own ability to provide coastal defenses. So you have some provision of Coast Guard ships. You have training by the Coast Guard and sometimes by the maritime self-defense forces and others to help the capacity of Southeast Asian states that have intrusions by Chinese into their maritime regions. So that's where I've seen the Japanese policy response. On the ASEAN side, I traveled to ASEAN last week and attended a small conference. And on the ASEAN side, too, there are a lot of kinds of disarray for Japan to engage more, not militarily, but especially engage to strengthen their Coast Guard capability. So Japanese maritime Coast Guard is expanding a budget to support ASEAN countries mainly to build its Coast Guard vessels, also training. They set up a special unit only to support those kind of, only to engage that kind of assistance to abroad. So I think, yeah, as she said, there is more and more activity, which is going to be, it will be seen. Okay. Sheila, Lily, Yura, thank you very much. Please put your hands together.