Japan’s Declining Power and Shifting Dynamics in Asia

Japan’s status as a major power in Asia is on a downward trajectory, largely attributed to its economic decline. This change is reflected in Tokyo’s fall to fourth place across several key indicators that measure the most powerful and influential nations in Asia. The Asia Power Index, an annual study conducted by Australia’s Lowy Institute, evaluates the relative power of states in the region, analyzing factors such as resources and influence.

The Index, which has been in place for several years, ranks 27 countries and territories across Asia, from Pakistan in the west to Russia in the north, and includes Pacific nations such as Australia, New Zealand, and the United States. It is widely regarded as a comprehensive tool to assess the changing power dynamics in Asia.

In the latest 2024 edition, which covers six years of data, significant shifts have been observed. The United States remains the dominant force in the region, but it faces increasing military competition from China. Despite China’s growing military strength, its overall influence in the region has stabilized. As the report notes, “China’s power is neither surging nor collapsing. It is plateauing below that of the United States but still well above any Asian competitors.”

Although the U.S. continues to hold the top position, it is losing ground to China in the realm of military capability. China’s persistent military advancements have allowed it to close the gap with the U.S., though not enough to overtake its position. The report emphasizes, “The United States has bolstered its standing in Asia, but it is losing ground to China on Military Capability.”

India’s ascent is one of the major takeaways of the 2024 Index. It has overtaken Japan to become the third most powerful country in Asia, though its potential remains underutilized. The survey indicates that “India is rising although a tad bit slowly. India has overtaken Japan to become the third-ranked power in Asia, but its clout remains below the potential promised by its resources.”

India’s growing influence in Asia marks a significant shift in the region’s power balance. However, the report also highlights the gap between India’s projected rise and its actual influence. It states, “The Asia Power Index shows that New Delhi still has limited ability to project power and influence east of the Malacca Strait. However, the fact that its influence remains well below the level promised by its resources suggests it still has ample potential for further growth as a major power.”

Japan, despite its decline in economic prowess, is becoming more active in regional security matters. Tokyo’s transformation from an economic and cultural powerhouse to a more defense-oriented player is notable. The report mentions, “With Japan taking a stand on security issues in the region, its image is changing from an economic and cultural powerhouse to one much more active in defense and security.”

Japan’s once formidable technological edge has eroded due to competition from countries like South Korea, China, and Taiwan. This has significantly impacted its economic standing, although Japan has gained recognition in the defense sector. Increased collaboration with the U.S. and other regional partners has enhanced Tokyo’s role as a regional security provider. The report specifically cites Japan’s signing of a Reciprocal Access Agreement with the Philippines as an example of its growing influence in defense matters.

Despite these developments, the power dynamics in Asia remain dominated by the United States and China. Both countries are engaged in what the report describes as a “long contest.” The survey findings indicate that China’s power has reached a plateau, with no significant increase or decrease in recent years. “China’s power is neither surging nor collapsing but plateauing,” the report states.

This stabilization in China’s power is largely driven by slower economic growth and long-term structural challenges. While China remains a formidable economic force, its growth has flattened, leading the report to conclude that “Flatlining Economic Capability, driven by slower economic growth and longer-term structural challenges, means that China’s economic clout, while still commanding, is no longer growing.”

The U.S. continues to lead China on six out of the eight parameters used to assess power in the Asia Power Index. However, China has made significant strides in military capability, closing more than a quarter of the gap between itself and the U.S. since 2018. The report highlights, “For the first time, experts surveyed for the Asia Power Index judged that China is better able to deploy rapidly and for a sustained period in the event of an interstate conflict in Asia.”

China’s military advancements come at a time of heightened tensions with Taiwan. The self-ruled island has become a focal point of Beijing’s assertive foreign policy. Despite these developments, the report suggests that China’s military power still has limitations when it comes to projecting force beyond its borders.

The 2024 Index provides a nuanced view of China’s power, neither presenting it as an unstoppable force nor as a declining entity. Instead, the report states that “China’s power is neither collapsing nor increasing exponentially. Instead, it shows China finding a new ‘settling point’—with power below that of the United States but well ahead of any other country in Asia.”

China’s military capability has improved, but the report underscores that its ability to project power remains constrained. The survey notes that while China has added more new capabilities than other countries in the Index, it still faces challenges in projecting power on a global scale. “China will not exceed the US in terms of overall Military Capability for the foreseeable future, but that may not be needed to achieve its strategic objectives in East Asia, including Taiwan and the South China Sea,” the report concludes.

The Asia Power Index reveals the evolving landscape of power in Asia, with the U.S. retaining its dominant position but facing increasing competition from China. India’s rise and Japan’s shift toward security play a crucial role in the region’s changing dynamics. Meanwhile, China’s power has plateaued, indicating a stable but uncertain future for its influence in Asia.