What is the impact of Japan's establishment of the Asian Zero Emission Community (AZEC) on China?
1. Background and main content of the establishment of AZEC in Japan
The Asian Zero Emission Community (AZEC) was proposed by Japanese Prime Minister Fumio Kishida in January 2023 and held the first international conference on the "Asian Zero Emission Community (AZEC)" on March 4, 2023, with Japan's heads of state and 11 countries, including Australia, Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam, discussing the carbon reduction process in Asia. At the meeting, the Japanese government pledged to provide financial and technical assistance as a leader in helping ASEAN member states accelerate economic decarbonization and develop countermeasures to address climate change. Japan and the participating countries also agreed at the meeting that Asian countries will cooperate to promote the development of technologies in energy supply chains such as renewable energy, natural gas, hydrogen and ammonia. On December 18, 2023, Fumio Kishida once again chaired the AZEC summit and adopted the "AZEC Leaders' Joint Statement", which affirmed the basic principles of achieving decarbonization, economic development, and energy security at the same time, and said that he would create a command tower organization to support the policies of various countries under the leadership of Japan.
AZEC proposes to achieve regional decarbonization without sacrificing economic growth and energy security, with the aim of allowing Asian countries to take the lead in the decarbonization schedule, rather than passively cooperating with strict "European standards", so that Asian countries that are still in the transition stage can participate in carbon reduction, and at the same time establish "Asian rules". Japan has pledged to provide $8 billion in assistance to AZEC countries by 2030 for renewable energy, energy efficiency, hydrogen, ammonia and CCUS projects to help develop, demonstrate and deploy decarbonization technologies, including the Japan Bank for International Cooperation (JBIC), Japan Trade Insurance Corporation (NEXI), Japan International Cooperation Agency (JICA), Japan Metal and Energy Security Organization (JOGMEC). Currently, Iwatani Sangyo Co., Ltd. and Power Supply Development Co., Ltd. have agreed to create the first hydrogen supply chain between Victoria, Australia, and Kawasaki, Japan.
2. Japan's motivation for establishing AZEC
1. Deepening Japan's Indo-Pacific Strategy
The "Indo-Pacific Strategy" has been inherited and continued in Japan's diplomacy in the post-Abe era, especially during the Kishida period, and the implementation of relevant policies has tended to be strengthened. The three factors of the basic axis of the Japan-US alliance, the adjustment of its own strategic cognition, and domestic political changes constitute the political background for the Kishida Cabinet to deepen the "Indo-Pacific Strategy". At the policy promotion level, it is manifested in consolidating and consolidating the Quadrilateral security mechanism, further strengthening the efforts to attract and pull "in-regional" and "extra-territorial" countries, and continuously highlighting economic security issues in multilateral and bilateral cooperation and coordination in the Indo-Pacific region, forging a "free and open Indo-Pacific" into a more three-dimensional and comprehensive geopolitical strategy.
(2) The impact of the epidemic and the conflict between Russia and Ukraine have intensified Japan's sense of urgency to seek new economic growth points
In order to support the post-pandemic domestic recovery, Japan formulated the ASEAN-Japan Economic Recovery Action Plan as early as 2020 to maintain close ties between the two sides, minimize the economic impact of the epidemic, and enhance resilience. Currently, most countries in the Asian region rely on cheap coal-fired power generation. With natural gas prices soaring in the wake of the Ukraine-Russia conflict, Southeast Asian countries may struggle to reduce their reliance on coal in the short term, given the cost. From the perspective of energy diplomacy, Japan expects a growing demand for carbon-reducing technologies in Asia in the future. If Japan can actively establish unique technologies and standards in the Asian region that are different from those of the West, it will not only have a real impact on carbon emission reduction and enhance its international standing, but also promote the commercialization and economic growth of Japan's green energy technologies.
(3) Strive for the dominance of climate change cooperation in the Asia-Pacific region
Japan has also tried to play a leading role in addressing climate change and addressing regional security issues. In addition to setting a target of zero emissions by 2050 and a 46% reduction in emissions by 2030, Japan launched the ASEAN Climate and Environment Initiative (SPACE) strategic plan with ASEAN in August 2023 to address the three-pronged crises of climate change, pollution, and biodiversity loss. Japan offered to use its technical expertise to strengthen ASEAN's disaster management and resilience, recognizing the region's vulnerability to climate-induced disasters and extreme weather events.
(4) Hedging the impact of China's "Belt and Road" initiative in Asia
Japanese officials tend to view China's Belt and Road Initiative from a strategic perspective, emphasizing that it is an action or strategic tool with clear political objectives and even grand strategic overtones, rather than a cooperative initiative limited to the economic sphere. At the same time, Japan has been deeply involved in the "Belt and Road" region for many years, and occupies a dominant position in some areas, and in the view of the Japanese side, the economic competition between China and Japan in the "Belt and Road" area is unavoidable. Japan's attitude towards China's Belt and Road Initiative has changed from the initial wait-and-see and resistance to active participation after 2017, but while expressing its willingness to cooperate with China, the use of policy tools to carry out "multi-angle hedging" has not weakened. Japan proposes alternatives to China's Belt and Road Initiative (BRI) for infrastructure development, the promotion of quality infrastructure, and inclusiveness, sustainability, and resilience of investment. Through the Japan International Cooperation Agency (JICA), the country has invested in bridges, metro systems and power transmission lines in ASEAN, with major projects including the second Thai-Laos Friendship Bridge connecting Thailand and Laos, the Wing Bridge connecting Cambodia and Vietnam, and Indonesia's first metro system in Jakarta.
3. The impact of AZEC on our country
(1) Interfere with China's regional economic, trade and emission reduction cooperation
Japan is highly cooperative with the US economic security strategy, has continuously integrated economic security issues into India-Pacific multilateral cooperation, and attempted to build an "economic security alliance" with China with small groups and "small courtyards and high walls", promote the so-called economic "decoupling" between the international community and China, interfere with the process of economic integration in the Asia-Pacific region, and affect the normal economic and trade exchanges between China and neighboring countries. Specifically, for Japanese manufacturing companies, seeking to commercialize new green energy technologies can not only boost exports, but also alleviate the hollowing out of their domestic green industries and facilitate Japanese companies' overseas investment. If Japan can fulfill its capital and technology transfer to Southeast Asian countries, it will have a substitution or even crowding out effect on China's economic, trade and technical cooperation in the region, and squeeze China's share of the green incremental market in the region.
(2) Weakening China's climate discourse and influence
AZEC covers many provisions in favor of Japan, and once other major Asian economies join AZEC, it will form a large free trade area that includes the world's major green commodity consumer markets and suppliers, which may have a subversive impact on the green trading system under the existing framework, and then form a set of new rules for regional climate governance led by Japan, making Japan the biggest beneficiary of climate change in the Asia-Pacific region. This puts forward higher requirements for China, together with ASEAN and other Asian countries, to jointly respond to climate change and promote the pace and standards of green development.
Fourth, countermeasures
(1) Build a green cooperation pattern in the Asia-Pacific region that is beneficial to China
With the Belt and Road Initiative as the starting point, under the framework of RECP and ASEAN+1, we will continue to strengthen China's regional climate change influence by combining trade, investment, technology export and standard rule guidance.
First, through green and low-carbon demonstration projects, we will drive the export of climate-friendly products to ASEAN countries. Strengthen effective cooperation in regional value chains and the integration and optimization of green trade rules, and promote the in-depth opening up of regional green trade and investment.
The second is to actively participate in the formulation of clean energy investment standards, promote the transfer of low-carbon technologies in new energy vehicles and renewable energy to ASEAN and Belt and Road countries, and strengthen international cooperation in related innovation fields.
The third is to speed up the interconnection and docking of green and low-carbon standards, and promote the application of Chinese standards in ASEAN, especially in the construction of the "Belt and Road".
Fourth, we will work with ASEAN and the Belt and Road countries to accelerate the construction of the carbon market system, promote and help them further optimize the carbon emission trading rules, promote the joint construction of national or regional carbon trading markets, and form interconnection with the existing carbon trading system.
Fifth, we will carry out cooperation with Japan and AZEC as appropriate. China's fourth-generation nuclear power technology has ranked first in the world, and the world's largest output of wind, solar and bioenergy. Considering Japan's actual competitiveness in related fields, if Japan and AZEC are engaged in consumer cultivation and market development in Southeast Asia for related industries, I can join the cooperation at the right time to achieve twice the result with half the effort.
(2) Improve mechanisms and policies for multi-level international cooperation on climate change
The first is to establish a public participation mechanism for international cooperation on climate change and promote bilateral and multilateral public participation.
The second is to start by strengthening support for enterprises and non-governmental organizations, establish a policy support system and management service system for enterprises in green industries going global, and strengthen financial and policy support for non-governmental organizations in related fields.
The third is to establish flexible and diversified financing mechanisms to encourage the private sector to invest in green overseas and cooperate with relevant government agencies, innovate green financial instruments, strengthen policy guidance, and ensure that the flow of overseas funds is consistent with the direction of low-greenhouse gas emissions and climate adaptation.
(3) Actively respond to green recovery
In the face of increasingly severe climate change challenges and the lack of regional leadership, China, as a responsible major country and a leader in the construction of global ecological civilization, should promote the sustainable and effective implementation of the Paris Agreement. On the one hand, we will maintain strategic focus, plan climate diplomacy, actively listen to the opinions and suggestions of developing countries, including ASEAN, and continue to play an important role in building a fair, reasonable and win-win global climate governance system. On the other hand, China will actively implement the national strategy to address climate change, and timely analyze and evaluate how China can make better use of renewable energy, energy efficiency, new energy vehicles, climate-friendly infrastructure construction and other measures conducive to green and low-carbon development in its economic recovery policies, so as to avoid the high carbon lock-in effect that may be caused by short-term economic stimulus as much as possible.
