Japan's New Regional Reality: Geoeconomic Strategy in the Asia-Pacific by Saori N. Katada (review)

In Japan's New Regional Reality, Saori Katada argues that Japan's geoeconomic strategy has undergone a significant shift over the past three decades, from a neo-mercantilist focus on promoting its own companies at home to a more "liberal" approach of building rules and institutions that affect the Asian region broadly. While Katada argues that international factors such as the rise of China and waning US commitment have played a role in prompting this response, she places particular emphasis on the influence of domestic factors, detailing how the transformation of Japan's own political economy made it more difficult for its government to use traditional domestic policy levers to promote Japanese companies. That change has led the Japanese government to pursue instead an externally directed, regional approach intended to foster an environment that is conducive to these companies' competitiveness outside Japanese borders. Overall, Japan's New Regional Reality succeeds in providing a comprehensive and nuanced account of this period of dramatic change in Japan's foreign economic policy that will appeal to area specialists and political economists alike. It provides an intellectual basis upon which other scholars can build in future research on Asian regional political economy, as well as geoeconomics and international relations more generally.

The book begins with an overview of Japan's regional geoeconomic strategy, which Katada defines as "the foreign policy track that a government pursues in the region with a particular set of national goals ranging from the promotion of economic benefits to the maintenance of stability and the enhancement of its influence" (p. 11). Specifically, she argues that Japan has transitioned from a bilateral, informal strategy based on embedded mercantilism to a regional, formal strategy based on global and liberal standards. In chapter 2, she positions the book as a project intended to bridge the gap between the literatures on comparative and international economy. Chapter 3 describes how Japan's strategy was affected by external factors such as the Asian financial crisis, the global financial crisis, the US rebalance to Asia, the rise of China, and large economic arrangements such as the Trans-Pacific Partnership and the Belt and Road Initiative. Chapter 4 takes on domestic developments within Japan, particularly the loosening of ties between political parties, the economic bureaucracy, and big business and the decline of state influence over private firms, which Katada argues led Japan to shift to its new regional geoeconomic strategy. In chapters 5–7, Katada further develops her argument, using evidence from three case studies of trade and investment, money and finance, and development and foreign aid to demonstrate the emergence of this new Japanese strategy of building regional rules and institutions and how the interplay between various Japanese domestic actors resulted in three diverse paths of implementation. The final chapter summarizes the findings and points to some tensions in and predicaments for Japan's geoeconomic strategy that the country will likely be forced to confront in the future.

The book's most significant contribution stems from its ambitious scope of inquiry, which includes a comprehensive overview of Japanese strategy across trade, finance, and aid over several decades while also detailing the complex domestic-international nexus of policy change. Katada offers a compelling account of the notable shift in Japan's geoeconomic strategy across these domains, providing a welcome synthesis of many more specific studies that have focused on narrower configurations of variables and time periods. Integrating trade, finance, and aid into a single framework also enables comparative analysis of different geoeconomic tools in an instructive manner. Moreover, Katada's serious examination of international and domestic factors imbues the narrative with richness and nuance, particularly in the way that she describes the maturation and disembedding of Japan's government-business relationship and their consequences for Japan's foreign economic policy. The book correctly points out that it is necessary to bridge the traditional divide between...