Japan’s Potential as a ‘Third Option’ for ASEAN

The countries of ASEAN have traditionally sought to maintain their autonomy under the banner of “centrality,” avoiding excessive dependence on any particular external power — the United States, China, or others — through what might be called an omnidirectional strategy. Expanding cooperation across as many extra-regional partners as possible in areas such as trade, investment, and infrastructure development has been a useful strategy for building the foundations that sustain that autonomy. Among the challenges this entails, none is more important than determining how to engage with the United States and China, respectively, and how to keep a balance between them. The United States remains the world’s preeminent military power and occupies the central position in the global financial and monetary regime. It is also the largest source of investment in ASEAN and the largest export market for many ASEAN member states. As such, its influence in the region should not be underestimated. Yet the second Trump administration’s highly unpredictable foreign policy is eroding American soft power, while China is intensifying its outreach to the Global South, including ASEAN countries. China’s cooperative relationships with the ASEAN states are clearly deepening. Beijing presents its relationship with ASEAN countries as an opportunity, one offering member states the potential for greater stability and development. Evidence for this can be found in China’s four major initiatives for engagement: the Global Development Initiative (GDI), the Global Security Initiative (GSI), the Global Civilization Initiative (GCI), and the Global Governance Initiative (GGI). The GDI, which calls for invigorating the global economy and advancing win-win cooperation toward stronger, greener, and more balanced development, and the GSI, which calls for a common, inclusive, cooperative, and sustainable approach to security, are the cornerstones of these initiatives. In response to this Chinese outreach, ASEAN countries have uniformly endorsed the GDI. ASEAN’s principal documents welcome it, and all ASEAN countries have joined the Group of Friends of the GDI at the United Nations. For ASEAN countries, more active investment, financial support, and technical assistance from China channeled through the GDI aligns with their own development needs. The GSI is a different matter: while Cambodia, Laos, Myanmar, and Timor-Leste have explicitly expressed support, ASEAN as a whole has not. Malaysia, however, has indicated a willingness to begin consultations on joining the GSI. In August 2026, Indonesia and China also agreed to strengthen joint military exercises, defense industrial cooperation, and technology cooperation. ASEAN countries have not, however, abandoned their commitment to autonomy. In March 2025, for example, in response to the launch of the second Trump administration, ASEAN established the ASEAN Geoeconomic Task Force (AGTF); in response to the Middle East crisis, this was subsequently reorganized in March 2026 into the ASEAN Geoeconomic Group (AGG). The AGG is examining what measures ASEAN should adopt amid intensifying geoeconomic competition — measures of existential significance for the bloc. For ASEAN countries grappling with the “geoeconomic turn” as a new challenge, maintaining an omnidirectional strategy and expanding cooperative relationships with third partners beyond the United States and China is becoming ever more critical to securing their autonomy. Japan should recognize these needs and play a role as that third partner, or option, for ASEAN countries. Potential areas for cooperation are wide-ranging: energy security, environment and green transformation (GX), digital infrastructure including AI and semiconductors, infrastructure development, and security cooperation through defense equipment transfers and capacity-building support. The Updated FOIP announced in May 2026 also signals Japan’s intention to reinforce a range of issues that ASEAN countries consider important. Japan should make full use of the key schemes it has available for deepening cooperation with ASEAN: the Asia Zero Emission Community (AZEC), the Partnership on Wide Energy and Resources Resilience Asia (POWERR Asia), Official Security Assistance (OSA), and an ODA framework that now makes it easier to leverage private-sector financing. RCEP, the broad mega-FTA encompassing Japan, ASEAN, and other regional partners, is due for review in 2027. Japan and ASEAN should work together in maintaining a freer and more open rules-based regional economic order. Beyond that, supporting ASEAN countries in their efforts to expand their role in broader global forums, and working together to uphold a rules-based international order, will become increasingly important. The annual survey “The State of Southeast Asia” conducted by the Singapore-based think tank ISEAS–Yusof Ishak Institute has shown consistently that Japan commands the highest level of trust among extra-regional countries from ASEAN nations. The reasons behind this deserve attention. According to the latest edition, published in 2026, the top response to the question of why Japan is trusted was: “Japan is a responsible stakeholder that respects and champions international law” (41.4 percent). This was followed by “Japan has vast economic resources and the political will to provide global leadership” (22.7 percent). In working with ASEAN countries to sustain a desirable regional order, Japan’s reputation as a supporter of the rules-based international order may be its most valuable asset.