Southeast Asia Global Relations Outlook Part 3: Japan, South Korea, and Taiwan

This is the third part in a short series exploring Southeast Asia’s relationships with key global powers and economic blocs. The series aims to give a snapshot at the beginning of 2024, looking at the events over the past months that have shaped the region’s global relationships, and the dynamics that will determine them moving forward. 

Part 1 looked at Southeast Asia’s relationships with the US and China; Part 2 looked at the ‘next two’ global economic powers, the European Union and India. Part 3 will look at Southeast Asia’s relationships with its East Asian neighbors: Japan, South Korea, and Taiwan.

Introduction

In recent years, Southeast Asia’s East Asian neighbors (other than China) have intensified their efforts to strengthen economic and strategic ties with ASEAN and its individual members, showcasing a dynamic landscape of regional diplomacy and economic cooperation initiatives.

Japan’s longstanding commitment to the region, grounded in the Fukuda Doctrine, has laid the foundation for a robust partnership spanning economic development, security cooperation, and diplomatic dialogue. Similarly, South Korea, under President Moon Jae-in’s New Southern Policy (NSP), has prioritized economic diversification and people-to-people exchanges, significantly expanding trade volumes and cultural interactions with ASEAN nations. Taiwan, though facing diplomatic challenges, has capitalized on converging economic interests, notably through President Tsai Ing-wen’s New Southbound Policy (NSP), redirecting investments towards ASEAN and fostering potential collaborations, particularly in the semiconductor industry.

These concerted efforts reflect a shared recognition of ASEAN’s strategic importance and the region’s growing influence in shaping East Asian geopolitics and economic dynamics.

Japan

Fifty years of solid ties

2023 marked the 50th anniversary of bilateral ties between ASEAN and Japan. To commemorate this, Japan hosted the Commemorative Summit for the 50th Year of ASEAN-Japan Friendship and Cooperation in Tokyo in mid-December. The summit sought to both review the last fifty years of the relationship as well as forge a vision for a stronger future partnership. In a joint vision statement issued after the gathering, leaders agreed to strengthen ties through various areas including maritime security, supply chains, sustainable energy practices, and people-to-people exchanges.^[1]

Leveling relations

Japan’s relations with Southeast Asia remain historically underpinned by the so-called Fukuda Doctrine, the 1977 re-set of post-war international relations by Prime Minister Takeo Fukuda, that sought to increase engagement and cooperation with the region.^[2] 

Initially, with Japan as the pre-eminent economic and technological power in Asia, the dynamics of the relationship were uneven – Japanese assistance to ASEAN countries has totalled US$128.5 billion since 1977. Japanese companies invested heavily in ASEAN supply chains, particularly in the areas of automobiles and electronics, building up manufacturing, export and technological infrastructure across the region.^[3]     

Following half a century of formal ties, the coming decades of the Japan-ASEAN relationship are expected to be more balanced. While the eighties and nineties saw a ‘flying geese model of development’ with Japan as the lead, the regional economic model in the 21^st century has shifted towards a more dispersed production network with components sources from many different countries and with China playing a much larger role in both production and consumption.^[4]

The leveling of the relationship has also been driven by domestic economic factors, including Japan’s overall growth trajectory and on-going demographic challenges. Meanwhile, ASEAN’s combined GDP reached US$3.6 trillion in 2022, around 85 percent of Japan’s. The IMF’s latest projections have the nominal gross domestic product of ASEAN’s ten members overtaking Japan’s US$4.7 trillion in 2026.^[5]

The relationship has transitioned towards a more equal partnership with both sides able to leverage each other’s strengths. Japan can serve as an indirect representative for ASEAN interests in global forums such as the G7 and G20, where it can give voice to broader regional concerns and mobilize the resources needed to address shared priorities.^[6]

ASEAN also serves as a crucial partner for Japan in managing big power interests in its own neighbourhood. With the geopolitics of the Indo-Pacific increasingly characterized by the Sino-US contest, Tokyo may increasingly lean on the convening power of ASEAN to stabilize big power relations through its array of multilateral institutions, such as the ASEAN Regional Forum, the ASEAN Plus Three summit, and the East Asia Summit.^[7]

Security new pillar of relationship

Alongside the leveling of the economic relationship there has been a new focus on security as a pillar of cooperation. Southeast Asia has been identified as a key focus of Tokyo’s reinvigorated national security doctrine, which has developed largely in reaction to China’s assertiveness. Japan relies heavily upon the South China Sea for its maritime supply chains, including energy supplies from the Middle East. To protect these critical shipping lanes, Japan has sought to deepen security cooperation with several ASEAN Member States. Hence, maritime security emerged as a major area of focus at the 2023 Commemorative Summit.^[8]  

To help bolster the defense capabilities of Southeast Asian partners, in April 2023 Tokyo introduced the Official Security Assistance (OSA) to complement its existing Official Development Assistance (ODA). Under the OSA, Japan will be able to provide defense equipment and security-related financial assistance to like-minded countries.^[9]

Since the inception of the OSA, such security assistance has been forthcoming. On the sidelines of the 2023 Commemorative Summit, Japanese Prime Minister Kishida held a series of bilateral talks with ASEAN Member States to step up bilateral security ties. Japan and Malaysia would sign a 400 million yen (US$2.8 million) deal to bolster Malaysia’s maritime security capability through the provision of rescue boats and warning and surveillance equipment. Japan would also sign an agreement with Indonesia offering a grant of up to 9.05 billion yen (US$63.7 million) to fund Indonesia’s maritime security capability advancement plan, including a Japanese-built patrol boat. In the month before the Summit, Japan and Vietnam agreed to upgrade ties to a “comprehensive strategic partnership”, under which they will discuss expanding defense exchanges and transfers of defense equipment.^[10]

The Philippines has also become an enthusiastic recipient of Japanese security assistance. In November, Kishida announced during a visit to Manila that Japan would provide coastal surveillance radar and defense equipment to the Philippines, in addition to several patrol ships it has already provided. Kishida would also agree with Philippines President Marcos Jr. to begin negotiations over a possible Reciprocal Access Agreement, which would allow each country’s troops to enter the other’s territory for joint military drills.

Entering 2024, Japan is expected to step up provisions of defense technology and hardware to not only the Philippines but also Indonesia, Vietnam, and Malaysia through the provision of assets such as coast guard vessels and radars.^[11] 

South Korea

The New Southern Policy

President Moon Jae-in’s introduction of the New Southern Policy (NSP) in 2017 has been the driving force for Korea-ASEAN relations. Under the NSP, ASEAN was recognized as an equal partner to South Korea’s traditional partners, which include the United States, China, Russia, and Japan. President Moon sought to demonstrate his commitment to the NSP by becoming the first South Korean leader to visit all ten ASEAN nations. South Korea’s motivations for introducing the NSP were primarily economic, following China’s economic and social sanctions on South Korea in response to the 2017 Terminal High-Altitude Air Defense (THAAD) missile defense system’s installation in Korea, after which the Moon administration began more broadly diversifying trading partners.^[12]

The NSP laid out three pillars, namely people (socio-cultural cooperation), peace (political-security engagement), and prosperity (economic cooperation). While there have been developments across all three pillars, economic cooperation and people-to-people exchange have seen the greatest flourishing.^[13]

Since the introduction of the NSP, total trade volumes between South Korea and ASEAN have expanded from US$116 billion in 2016 to US$176 billion in 2021, with ASEAN becoming South Korea’s third-largest trading partner. Korean investments into the region also saw a large increase from US$5.2 billion in 2017 to almost US$9.5 billion in 2019. As of 2021, there were over 17,300 Korean enterprises operating in ASEAN compared to 13,400 Korean enterprises operating there in 2017.^[14]

While South Korea has significantly expanded its economic presence within the region, by far the most active relationship is with Vietnam. Vietnam’s share in Korea’s total exports to ASEAN would reach 52% in 2021. By one count, Vietnam would account for 85% of the total increase in Korea’s exports to ASEAN since 2010. Similar dynamics could be seen in Korean total investments into ASEAN. On annual average, Vietnam accounted for approximately a third of Korea’s total FDI into ASEAN since 2010.^[15]  

Significant gains were also made in the people-to-people pillar. In 2019, almost 2.6 million ASEAN nationals visited South Korea, a huge increase from the 1.6 million in 2015. Conversely, there has been an uptick in Korean tourists visiting Southeast Asia, with almost 10 million visiting ASEAN in 2019 compared to 5.8 million in 2015. In the field of education, the total number of registered students in South Korea from ASEAN rose to over 64,000 students in 2019, representing one-third of the total number of foreign students in South Korea.^[16]

November 2020 would see the announcement of the New Southern Policy Plus at the 21st ASEAN-ROK Summit. The New Southern Policy Plus sought to build upon the existing New Southern Policy while also addressing the changing needs of both parties in light of the then-ongoing COVID-19 pandemic. It strengthened cooperation between the two parties in seven key areas: public health, education and/or human capital development, cultural exchanges, rural and urban infrastructure development, future industries, trade and investment, and non-traditional security issues. The overarching theme of the New Southern Policy Plus would be people-centric, obviously in response to the socio-economic impact of the COVID-19 pandemic.^[17]

Renewed focus on security

In November 2022, the new government of President Yoon Suk Yeol announced its new regional strategy, referred to as the Korea-ASEAN Solidarity Initiative (KASI). KASI is embedded within Yoon’s larger ‘Strategy for a Free, Peaceful, and Prosperous Indo-Pacific Region’ which exhibits strong parallels to the United States’ own Indo-Pacific strategy. The policy envisions a broader regional role for South Korea in security and alliance building. In some sense, this represents a possible downgrade in Korea-ASEAN relations from the days of the NSP – ASEAN is now viewed as a subset of Seoul’s larger Indo-Pacific strategy.^[18]

In comparison to the NSP, KASI places more emphasis on deepening strategic ties with the region, including in the areas of national security and defense. This was in response to criticism that the NSP focused too heavily on economic and development cooperation. In terms of national security cooperation, Yoon has proposed expanding collaboration in the defense industry, regularizing the ASEAN-Korea Defence Ministers Meetings, and proactively taking part in joint military exercises with ASEAN.^[19]

In recent years, South Korea’s defense industry has gained a reputation for producing technologically advanced and relatively affordable military equipment. In the last years of the Moon administration, the sector would enjoy conspicuous investments and growth. Certain ASEAN Member States like the Philippines who are seeking to build up their military capabilities have begun to show interest in the Korean arms industry. In response, Seoul has been actively working on establishing government-to-government military supply ties with Southeast Asia, helping lay the groundwork for broader security ties.^[20] 

ASEAN and the Korean Peninsular

South Korea has been an active participant in ASEAN-led multilateral mechanisms. One of the most important for Seoul has been the ASEAN Regional Forum (ARF), due to the participation of North Korea. Thus, the ARF provides one of the few platforms for addressing inter-Korea relations and allows Seoul to regionalise the issue of peace on the Korean Peninsula.^[21]

ASEAN may provide a welcome third party in helping address the issue of peace and nuclear proliferation on the Korean Peninsula, given North Korea’s membership of the ARF and individual ASEAN Member State’s generally good relations with the country. Indeed, the fact that two of the summits between then-US President Donald Trump and Kim Jong-Un were hosted by ASEAN states (Singapore in June 2018 and Vietnam in February 2019) is indicative of Pyongyang’s trust in ASEAN as a neutral and credible third party and facilitator.^[22] 

While North Korea’s recent nuclear and missile operations have stalled negotiations for the moment, ASEAN may still prove useful in helping coax North Korea to reengaging with the regional security architecture and regional norms should Pyongyang demonstrate intentions of doing so again. In this sense, ASEAN will prove a crucial partner for South Korea.^[23]   

Taiwan

Despite the lack of official diplomatic recognition, economic ties between ASEAN and Taiwan have grown significantly given converging interests. While Taiwan seeks to diversify its trade and investments away from China, ASEAN seeks to attract quality FDI to promote local development and to shift local manufacturing into higher value operations. The economic relationship between Taiwan and ASEAN would see a substantial boost after the introduction of President Tsai Ing-wen’s New Southbound Policy (NSP) in 2016. Introduced in order to reduce Taiwan’s trade dependence on China, the NSP sought to promote economic ties with 18 countries across Southeast Asia, South Asia, and Australasia.^[24] 

After the introduction of the policy, Taiwan successfully diverted almost 10 per cent of its investment funds from China to ASEAN. In 2019, 47 per cent of Taiwan’s total overseas investment and production went to ASEAN alone. In 2022, Taiwanese companies invested US$5.2 billion in Southeast and South Asia, compared to the US$5 billion invested into China. This was the first time that investments into Southeast Asia and South Asia outpaced investments into China. This trend is expected to continue given ongoing trade tensions between the US and China, as well as efforts by both sides to derisk the supply chains of strategic materials and components.^[25]

Taiwan’s status as a major producer of semiconductor chips provides one area of possible future cooperation with ASEAN. With many ASEAN economies seeking to leverage upon the green tech revolution and digital economy, Taiwanese-produced chips will play a crucial role in the manufacture of electric vehicles, smartphones, and other tech across Southeast Asia. With Taiwan’s Vice-President and President-Elect William Lai having indicated his support for the NSP, we can expect to see more substantive economic cooperation between both parties in the years ahead.^[26]

Conclusion

The development of Japan, South Korea, and Taiwan’s engagements with ASEAN collectively underscore the region’s pivotal role in shaping the geopolitical and economic landscape of East Asia.

Despite diverse historical, diplomatic, and economic contexts, these countries have demonstrated a shared commitment to deepening ties with ASEAN, facilitating significant advancements in economic cooperation, trade diversification, and people-to-people exchanges and underscoring the strategic imperatives of regional stability and security collaboration.

As the region continues to build its regional and global influence, these partnerships are poised to evolve, contributing to a more interconnected and resilient East Asian community in the years ahead.

About the Southeast Asia Public Policy Institute

The Southeast Asia Public Policy Institute is a research institute based in Bangkok and Singapore, working across the region. Our mission is to support the development of solutions to the most pressing public policy challenges facing Southeast Asia in the 21st century. The Institute undertakes in-depth research to develop actionable policy solutions on a range of issues across sustainability, technology, public health, trade, and governance. We convene dialogues with stakeholders and decisionmakers to drive discussion on the challenges and opportunities facing markets across the region. The Institute draws on a network of in-market researchers, advisors, and partners to provide insights and recommendations for governments, policymakers, and businesses.

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^[1] AFP (2023), ‘Japan and ASEAN vow to widen cooperation after 50 years of ties’ in The Japan Times,

^[2] Lam P. E. (2023), ‘Closer ASEAN-Japan Relations amid Great Power Transition in the 21st Century?’, in Asia-Pacific Review, 30:2, 44-65, DOI: 10.1080/13439006.2023.2248783

^[3] Ibid

^[4] Lam P. E., ‘Closer ASEAN-Japan Relations amid Great Power Transition in the 21st Century?’

^[5] Australian National University (2023), ‘Japan moves to a more equal partnership with ASEAN’ in the East Asia Forum, Seno, S. (2023), ‘Japan’s views on ASEAN must evolve as regional bloc grows stronger’ in Nikkei Asia,

^[6] Australian National University, ‘Japan moves to a more equal partnership with ASEAN’

^[7] Low

^[8] Stratfor (2024), ‘The Implications of Japan’s Growing Interest in Southeast Asia’ by Stratfor, Heydarian, R. J. (2023), ‘Japan-ASEAN in a much more muscular embrace’ in Asia Times,

^[9] Ministry of Foreign Affairs Japan (2023), ‘Japan’s Security Policy: Official Security Assistance’ by the Ministry of Foreign Affairs Japan,

^[10] Yamaguchi, M. (2023), ‘Japan and ASEAN bolster ties at a summit focused on security and economy amid tensions with China’ in AP, Heydarian, R. J., ‘Japan-ASEAN in a much more muscular embrace’

^[11] Heydarian, R. J., ‘Japan-ASEAN in a much more muscular embrace’, Lam P. E., ‘Closer ASEAN-Japan Relations amid Great Power Transition in the 21st Century?’

^[12] Kamaruddin, N. & Deivasagayam, A. D. (2023), ‘The NSP-K and NSP-K Plus: Elevating South Korea’s Middle Power Presence Among Asean Member Countries’, in Asian Affairs, 54:2, 286-304, DOI: 10.1080/03068374.2023.2213114, Govindasamy, G. (2023), ‘Republic of Korea and ASEAN Relations: From the Centre to the Peripheral’ by the Australian Institute of International Affairs,

^[13] Martinus, M. (2023), ‘The Korea-ASEAN Solidarity Initiative: Recalibrating Socio-Economic Connectivity’ in Fulcrum, The Korea-ASEAN Solidarity Initiative: Recalibrating Socio-Economic Connectivity | FULCRUM, Yun, S. & Galas, J. V. (2023), ‘The Evolution of South Korea’s New Southern Policy (NSP-K): The Moon and Yoon Administrations’, in Asian Affairs, 54:2, 250-263, DOI: 10.1080/03068374.2023.2213113

^[14] Kamaruddin, N. & Deivasagayam, A. D., ‘The NSP-K and NSP-K Plus: Elevating South Korea’s Middle Power Presence Among Asean Member Countries’

^[15] Kim, K. (2023), ‘Towards sustainable and resilient ASEAN-Korea economic integration 2.0’ in Asia and the Global Economy 3:2,

^[16] Kamaruddin, N. & Deivasagayam, A. D., ‘The NSP-K and NSP-K Plus: Elevating South Korea’s Middle Power Presence Among Asean Member Countries’

^[17] Ibid

^[18] Govindasamy, G., ‘Republic of Korea and ASEAN Relations: From the Centre to the Peripheral’, Yun, S. & Galas, J. V., ‘The Evolution of South Korea’s New Southern Policy (NSP-K): The Moon and Yoon Administrations’

^[19] Ibid

^[20] Vesprini, A. & Piasentini, M. (2023), ‘Seouls Indo-Pacific Strategy will not make big waves in Southeast Asia’, in 9 Dash Line,

^[21] Kamaruddin, N. & Deivasagayam, A. D., ‘The NSP-K and NSP-K Plus: Elevating South Korea’s Middle Power Presence Among Asean Member Countries’

^[22] Kamaruddin, N. & Deivasagayam, A. D., ‘The NSP-K and NSP-K Plus: Elevating South Korea’s Middle Power Presence Among Asean Member Countries’, Ang, G. T. (2020), ‘A role for ASEAN on the Korean Peninsula?’ in East Asia Forum,

^[23] Ibid

^[24] Chin, H. (2023), ‘How Taiwan-ASEAN Semiconductor Cooperation Can Bolster Taipei’s National Security’ in The Diplomat, Mulyanto, R. (2022), ‘Taiwan makes new push to drum up Southeast Asia investment’ in Nikkei Asia,

^[25] Martinus, M. (2022), ‘ASEAN and Taiwan: Cooperation Opportunities amid Diplomatic Constraints’ in Fulcrum, Chau, T. (2023), ‘Taiwan to continue shifting investment away from China, minister says’ in Nikkei Asia,

^[26] Chin, H., ‘How Taiwan-ASEAN Semiconductor Cooperation Can Bolster Taipei’s National Security’

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