KISHIDA JAPAN LDP GettyImages 1235573164 captis executive search management consulting leadership board services

Japan’s Ruling Party Picks the Safe Option

KISHIDA JAPAN LDP GettyImages 1235573164 1 captis executive search management consulting leadership board services

Japan’s Liberal Democratic Party (LDP) has chosen the least risky path yet again, selecting a compromise figure to become party leader and the nation’s new prime minister. But the leadership election nevertheless saw a strong showing from the right wing of the party—which, in a consensus-driven party, may lead to a more hawkish foreign policy toward China.

Former foreign minister and party policy chief Fumio Kishida emerged as the clear winner from a convoluted election process that blended votes from the party’s 382 lawmakers with proportional votes from the 1.1 million party members across the nation. In second-round voting, Kishida defeated Taro Kono, a cabinet veteran currently serving as the COVID-19 vaccine czar, by a fairly decisive 257 votes to 170. His victory was led by nearly 2 to 1 support among fellow lawmakers, while the affable and social media-savvy Kono had been the clear leader among the party faithful. With the LDP’s lock on Japan’s parliament, Kishida will almost certainly be officially elected as prime minister by lawmakers in an Oct. 4 vote.

As is usually the case in Japan, his victory presages few major policy changes. Sometimes that’s because there are few options. When it comes to the economy, policymakers have spent three decades, since the economic crisis of the mid-1990s, trying almost every fiscal and monetary lever available. Japan has been a deficit spender ever since the 1990s and now has the highest government debt load, at an estimated 266 percent of annual GDP, among any industrialized nation in the world. It has also tried radical monetary policy, with an asset purchase binge over the past eight years that has created a central bank with holdings approximately equal to the nation’s annual GDP.

Japan’s Liberal Democratic Party (LDP) has chosen the least risky path yet again, selecting a compromise figure to become party leader and the nation’s new prime minister. But the leadership election nevertheless saw a strong showing from the right wing of the party—which, in a consensus-driven party, may lead to a more hawkish foreign policy toward China.

Former foreign minister and party policy chief Fumio Kishida emerged as the clear winner from a convoluted election process that blended votes from the party’s 382 lawmakers with proportional votes from the 1.1 million party members across the nation. In second-round voting, Kishida defeated Taro Kono, a cabinet veteran currently serving as the COVID-19 vaccine czar, by a fairly decisive 257 votes to 170. His victory was led by nearly 2 to 1 support among fellow lawmakers, while the affable and social media-savvy Kono had been the clear leader among the party faithful. With the LDP’s lock on Japan’s parliament, Kishida will almost certainly be officially elected as prime minister by lawmakers in an Oct. 4 vote.

As is usually the case in Japan, his victory presages few major policy changes. Sometimes that’s because there are few options. When it comes to the economy, policymakers have spent three decades, since the economic crisis of the mid-1990s, trying almost every fiscal and monetary lever available. Japan has been a deficit spender ever since the 1990s and now has the highest government debt load, at an estimated 266 percent of annual GDP, among any industrialized nation in the world. It has also tried radical monetary policy, with an asset purchase binge over the past eight years that has created a central bank with holdings approximately equal to the nation’s annual GDP.

All of this has led to a meager growth rate of around 1 percent annually—but that’s actually enough to keep the country prosperous, especially as the population shrinks. Kishida’s predecessor, Yoshihide Suga, had largely followed the so-called Abenomics policy of monetary expansion, fiscal stimulus, and (never fully realized) structural reform initiated by the long-serving Shinzo Abe, who stepped down a year ago after nearly eight years in office. One side effect of this growth model has been a rise in wealth disparity, an issue that Kishida has promised to tackle.

But it is in foreign policy that Japan may be ready for big changes, due to broader trends that can be traced back to Beijing’s doorstep. Japan has traditionally had a “go along to get along” policy with China that seeks to separate security concerns from a thriving economic relationship. While Tokyo condemns Beijing’s crackdowns in Xinjiang and Hong Kong and aggression toward Taiwan, it hasn’t translated that into concrete action.

Even though Japan remains closely allied with the United States, it has declined to follow Washington’s lead in banning cotton from areas where China represses its Uyghur minority and in ending the special economic relationship with Hong Kong. This policy, still nurtured by the more pragmatic wing of the party, is understandable when you consider that China is Japan’s biggest market, accounting for 21 percent of Japan’s global exports in the first half of 2021. The relationship is even more critical in the Asian supply chain, where Japan provides high-value parts for China’s end products.

But the election campaign brought a growing worry about China’s actions to the forefront. Under Abe, Japan had helped to launch the “free and open Indo-Pacific” concept, taken part in naval exercises with a growing number of countries, and strengthened its ties with fellow Quadrilateral Security Dialogue members the United States, Australia, and India.

It was one of the two women in the race, former head of the LDP Policy Research Council Sanae Takaichi, who moved the China issue to the center of the election debates. Once dismissed as being on the right-wing fringe of the party, she campaigned on controversial themes that would be sure to anger China and send shivers up and down Japan’s business establishment.

One symbolic gesture comes in her regular trips to the Yasukuni Shrine that pays homage to Japan’s war dead, including World War II leaders convicted of war crimes, and she has promoted the idea of a new official statement about Japan’s wartime behaviors to replace previous apologies. More practically, she was the only candidate to specifically support the idea of hosting U.S. medium-range missiles meant to counter China. This populist tilt (just 9 percent of Japanese view China favorably) prompted the other candidates to veer right as well. Kishida said in a recent interview with Bloomberg that China’s growing assertiveness has prompted him to change his own view: “China is now a big presence in international society, and I have various concerns about its authoritarian attitude.”

Kishida and Kono both said that they would be in favor of raising Japan’s defense spending above the traditional if unofficial cap of 1 percent of annual GDP. While this is below the NATO rule of 2 percent (a level Takaichi said she would aim for) and the U.S. figure of 3.7 percent, it is still significant for a force ostensibly committed solely to self-defense that nevertheless has the ninth largest military budget in the world.

There have also been increasingly positive noises about Taiwan, a former Japanese colony that has always been close to the hearts of Japanese officials but always in the wings of the international stage. Takaichi, who said she would like to meet Taiwan President Tsai Ing-wen, is not alone in this view. A number of younger LDP lawmakers have recently taken to pledging support for Taiwan. This view was put front and center by the ever incautious Taro Aso, family scion, former prime minister, and now deputy prime minister, who said that Japan would have to seriously consider helping the United States in defending Taiwan against an attack. (Japanese officials insist that Aso was offering a personal viewpoint.)

The question is whether a Kishida government will make any changes in policy toward China or leave much of the rhetoric on the campaign cutting room floor. “Kishida’s willingness to articulate a harder line towards China—even if it was to solidify his support on the right—is a reliable sign of how far the LDP’s center has shifted towards a harder line on China,” Tobias Harris, senior fellow for Asia at the Center for American Progress, wrote on Twitter.

For Kono, the defeat will be a bitter one. In public opinion polls before the party vote, he was the clear leader, polling at 46 percent versus 17 percent for Kishida in a Nikkei and TV Tokyo poll. And within the rank-and-file LDP members’ second-round vote, he bested Kishida in 39 of the country’s 47 prefectures. His failure rested largely on a lack of support from his fellow lawmakers. Despite his strong political pedigree (his father was a leading political figure) and his experience as both a foreign minister and defense minister under Abe, Kono is seen as somewhat mercurial. In June 2020, he suddenly canceled a planned U.S. missile defense system that was meant to protect against an increasingly worrying threat from North Korea, leaving defense planners scrambling for an alternative.

He is also seen a social liberal, coming out in favor of same-sex marriage and LGBTQ rights. That’s not a popular stance within a party dedicated to traditional family structures and the customary view that society should come before the rights of the individual—although same-sex marriage is increasingly supported by the Japanese public.

Without his own power base and lacking in star appeal, Kishida faces another key challenge: how to avoid becoming the latest revolving-door prime minister. With the exception of Abe’s recent record run, the average prime minister in Japan since 2006 has lasted just 381 days in office. Combined with Tokyo’s traditional dislike of controversial global positions, the pre-Abe years saw Japan grow increasingly irrelevant on the global stage. There seemed to be no single cause for this dissatisfaction. Instead, voters in Japan naturally grew disenchanted with a lackluster leadership—until it came to Abe’s theatrics. There’s a traditional honeymoon period, but it’s a short one. Even the uncharismatic Suga took office with a 74 percent approval rating, a number that had fallen to around 30 percent this September when he decided not to turn for reelection.

While the lawmakers’ decision to elect Kishida against the popular wishes within the party is not unusual, the voters will have the rare chance to voice their opinion of this very soon. Within just eight weeks of taking office, Kishida will need to lead the LDP in national elections for the lower house. Corey Wallace, an assistant professor at Kanagawa University in Yokohama, Japan, thinks that will fall within the honeymoon period. However, he notes, next year brings an election for the upper house, giving the voters a chance to see if Kishida makes progress on his agenda of assistance for the middle class and smaller businesses plus encouraging higher wages from the quite profitable private sector. “If he does deliver and leverages the natural economy recovery likely forthcoming if further COVID-19 measures are not required, he could be well positioned to have a long premiership,” Wallace said.

It’s a fairly tall order. Meanwhile, Taro Kono and Sanae Takaichi will no doubt be making their own plans for a future matchup.

Kathleen Benoza contributed reporting to this story.

This is not a CAPTIS article. Originally, it was published here.