Japanese car giant says net profit reached 4.94 trillion yen ($31.9bn) in the year to March.
Toyota has reported record profit and sales figures on the back of the weak yen and strong demand for hybrid vehicles.
The Japanese car giant said on Wednesday that it netted a record profit of 4.94 trillion yen ($31.9bn) in the year to March on revenues of 45.1 trillion yen, double the previous year’s income.
Global sales topped 10.3 million units, an all-time high, buoyed by strong demand in the home market and in North America and Europe.
Sales of hybrid vehicles jumped 31 percent to 3.7 million units.
The financial results far exceeded a company forecast in February of a 4.5 trillion yen net profit on revenues of 43.5 trillion yen.
Toyota offered a more sober outlook for the current year, estimating profit would fall nearly 28 percent due to increased investment.
The carmaker aims to sell 10.95 million vehicles worldwide this year, down 1.3 percent from 2023.
“We’ll make investments in order to firmly protect the supply chain from a perspective of sustainable growth,” Toyota CEO Koji Sato said at a news conference after the release of the results.
“The latest results show that our efforts have borne fruit, but we need [to] keep growing with the vision to become a mobility company,” Sato added.
While Toyota blazed a trail in the hybrid space with the release of the Prius in 1997, it has faced criticism for being slow to embrace fully electric cars.
Toyota sold just 116,500 fully electric vehicles in 2023, while China’s BYD and Tesla shifted about 1.6 million and 1.8 million, respectively.
Nevertheless, Toyota’s hybrid-first strategy has paid dividends over the last year amid falling demand for electric vehicles in the United States and Europe.
Despite falling behind Tesla and BYD in the electric vehicles space, Toyota, which offers more than two dozen hybrid models, has held the title of the world’s largest automaker by sales for four straight years.
In January, Toyota Chairman Akio Toyoda expressed scepticism that battery electric vehicles would ever dominate the market, predicting they would peak at about 30 percent of sales.
Japan calls US president’s remarks ‘unfortunate’, while India says it’s open to immigrants.
India and Japan have rejected President Joe Biden’s remarks calling the US allies “xenophobic” countries who do not welcome immigrants, and grouping the two nations with China and Russia.
India’s Minister of External Affairs Subrahmanyam Jaishankar said the country has historically been open to immigrants and is on strong economic footing, The Economic Times newspaper reported on Saturday.
“First of all, our economy is not faltering,” Jaishankar said at a roundtable hosted by The Economic Times on Friday, after Biden said the four nations were failing to capitalise on the economic benefits of migration.
“I think we should be open to people who have the need to come to India, who have a claim to come to India,” Jaishankar added, pointing to a contentious citizenship law that fast-tracks naturalisation for some non-Muslim immigrants.
Japan, which has the lowest immigrant population of any Group of Seven (G7) nation at less than 2 percent, also took issue with the US president’s comments, its embassy in Washington, DC, describing them as “unfortunate” and “not based on an accurate understanding of Japan’s policies”.
‘They don’t want immigrants’
At a recent campaign fundraiser, Biden criticised the countries for taking in fewer migrants, while arguing migration has bolstered the US economy.
“Why is China stalling so badly economically, why is Japan having trouble, why is Russia, why is India, because they’re xenophobic. They don’t want immigrants,” Biden said at the event, which marked the start of Asian American, Native Hawaiian and Pacific Islander Heritage Month.
“One of the reasons why our economy’s growing is because of you and many others. Why? Because we welcome immigrants.”
The president’s singling out of Japan and India came as a surprise as he has made a point of strengthening ties with the two nations since taking office in 2021.
US President Joe Biden and India’s Prime Minister Narendra Modi toast during a state dinner at the White House, Washington, DC, on June 22, 2023 [Stefani Reynolds/AFP]
Last year, Biden welcomed Indian Prime Minister Narendra Modi to the White House, where he hailed the two countries’ shared “democratic character” and “diversity”.
In April, he hosted Japanese Prime Minister Fumio Kishida for a state dinner, celebrating the United States and Japan’s “unbreakable” partnership, and commitment to “democracy and freedom”.
Japan’s embassy on Friday said it had raised the issue with administration officials, in a statement cited by US media.
It also said that it was “aware” that the administration had clarified that Biden’s comments were intended to highlight immigrants’ role in strengthening the US, “and that his comment was not made with the intent of undermining the importance and permanence of the Japan-US relationship”.
The controversy would not affect Japan’s future work with the US, it added.
The White House subsequently sought to downplay the remarks. It said the president’s “broader point” was to highlight the US’s own diversity, emphasising that “our allies know very well how much the president respects them”.
Japan, despite its historically strict immigration policy, has been slowly opening its doors to outsiders to compensate for its rapidly ageing population.
India, the world’s most populous nation, has faced criticism for its move to implement the 2019 Citizenship Amendment Act, which expedites naturalisation for non-Muslims from Afghanistan, Bangladesh and Pakistan.
While the law eases the migration process for some asylum seekers, critics say it discriminates against Muslims and is unconstitutional.
Workers and activists have taken to the streets across Asia as the world marks May Day.
Rallies took place in South Korea, Japan, Taiwan and the Philippines, among other countries, on Wednesday. The marchers protested rising prices and demanded greater labour rights.
Workers’ rights are celebrated on May Day across the globe, with events used to air general economic grievances and political demands.
In the South Korean capital Seoul, thousands of protesters sang, waved flags and shouted pro-labour slogans before marching through the centre. Organisers said the rally was primarily meant to step up criticism of what they call anti-labour policies pursued by the conservative government led by President Yoon Suk Yeol.
“In the past two years under the Yoon Suk Yeol government, the lives of our labourers have plunged into despair,” Yang Kyung-soo, leader of the Korean Confederation of Trade Unions said in a speech. “We can’t overlook the Yoon Suk Yeol government. We’ll bring them down from power for ourselves.”
Similar rallies were held in several other cities across South Korea. Police mobilised thousands of officers to maintain order, but there were no immediate reports of violence.
In Japan, more than 10,000 people gathered in downtown Tokyo to demand salary increases sufficient to offset price increases. Masako Obata, leader of the National Confederation of Trade Unions, said that dwindling wages have put many workers in Japan under severe living conditions and widened income disparities.
“On this May Day, we unite with our fellow workers around the world standing up for their rights,” she said, shouting “banzai!” or long life, to all workers.
In Taiwan, more than 1,000 representatives from more than 100 workers’ unions took to the streets in downtown Taipei demanding worker rights laws be amended.
Waving banners and shouting slogans, demonstrators marched for hours in the capital calling for the law to be revised to include higher wages, better working conditions and pension packages.
“Prices have been soaring, but wages have not,” Said Chiang Chien-hsing, head of the Taiwan Confederation of Trade Unions.
In the Philippine capital Manila, hundreds of workers and activists marched in the scorching summer heat to demand wage increases and job security amid soaring food and oil prices.
Riot police stopped the protesting workers from getting close to the presidential palace. Waving red flags and holding up posters that read: “We work to live, not to die” and “Lower prices, increase salaries,” the protesters chanted and listened to speeches about the difficulties faced by Filipino labourers.
Drivers of jeepneys, the city’s main mode of public transport, joined the rally as they ended a three-day strike. The operators of the highly decorated vehicles fear that a government modernisation programme could see their often ramshackle vehicles removed from the capital’s streets.
Tokyo, Japan – When Japanese book publisher Kadokawa announced last year it would publish a translation of Abigail Shrier’s Irreversible Damage: The Transgender Craze Seducing Our Daughters, it ignited a culture-war skirmish of the kind rarely seen in Japan.
Trans rights activists organised a protest in front of Kadokawa’s Tokyo offices, while social media users accused the publisher of acts of bigotry – from platforming a “trans hater” to “inciting discrimination through public relations.”
Within days, Kadokawa announced it had cancelled the planned publication and apologised for causing concern.
“We planned to publish the translation, hoping it would help readers in Japan deepen their discussions about gender through what is happening in Europe and the United States,” the publisher said in a statement in December.
“But the title and sales copy ended up causing harm to people directly involved.”
Shrier, a former opinion columnist for the Wall Street Journal, decried the move as an example of mob-driven censorship.
“Kadokawa, my Japanese publisher, are very nice people. But by caving to an activist-led campaign against IRREVERSIBLE DAMAGE, they embolden the forces of censorship,” she wrote on X.
“America has much to learn from Japan, but we can teach them how to deal with censorious cry-bullies.”
Kadokawa, my Japanese publisher, are very nice people. But by caving to an activist-led campaign against IRREVERSIBLE DAMAGE, they embolden the forces of censorship.
America has much to learn from Japan, but we can teach them how to deal with censorious cry-bullies. https://t.co/ReogpOaQtD
When a rival publisher, Sankei Shimbun Publications, announced it would release the book instead, the firestorm raged on.
The publisher, which is known for its conservative editorial line, said it received an email threatening arson against bookstores that carried the title.
Refusing to cede to the activists’ demands, Sankei Shimbun published Shrier’s book earlier this month under the revised title Girls Who Want to Be Transgender: The Tragedy of a Fad Fueled by Social Networking, Schools, and Medicine.
The controversy around the book Irreversible Damage follows a script that has become familiar in the US and other Western countries, where factions on the left and right have been at odds over the line between protecting marginalised groups and upholding free speech.
But such culture war battles have until now been unusual in Japan, where companies are generally hesitant to get involved in politics or hot-button social issues, underscoring how national boundaries are increasingly blurred in the social media age.
“Some of the US’s obsession with culture wars and identity politics and representation is bleeding into Japan,” Roland Kelts, whose book Japanamerica explored the growing influence of Japanese culture in the US, told Al Jazeera.
“Japan has always had permissive attitudes toward gender and gender play. Now it’s rising to the surface of logic and meaning via a bilingual younger generation.”
“The mere existence of an East-West, Japan-US dialogue about sensitive contemporary matters is to me more important than the content of the dialogue or the platform for it,” Kelts added.
Japan has its own history of banning books and successful boycott campaigns.
From 1911 to 1945, the Tokko, dubbed the “Thought Police,” were tasked with suppressing political groups and ideologies that contravened the “national essence,” leading to the banning of literature such as Genzaburo Yoshino’s children’s novel How Do You Live?, which was considered subversive due to its anti-authoritarian messages.
More recently, books casting Japanese culture and history in an unsavoury light have struggled to land on bookstore shelves, including Iris Chang’s The Rape of Nanking, which was pulled by its prospective publisher, Kashiwashobo, in 1999.
Kelts said there was “no decisive superiority” between US and Japanese publishers when it came to upholding libertarian principles, despite US society’s strong emphasis on free speech.
“Japanese publishers fear right-wing retaliation and violence; American publishers fear left-wing cancellation,” he said.
“In this blinkered era, cancellation is becoming a badge of honour, partly because the offended parties are so poorly educated,” he added.
“If you are cancelling a work of art or entertainment, you are giving it a platform in a media world suffocated by content, and if your whining is ill-informed, all the better for your antagonist. That alone is good publicity.”
Though Japan has a history of transgender people in the public eye, including Aya Kawakami and Tomoya Hosoda, elected officials in Tokyo and Saitama, respectively, the country is not widely considered a bastion of LGBTQ rights.
But legal and social mores have gradually shifted towards greater acceptance.
The Supreme Court of Japan struck down a law mandating that transgender people undergo sterilisation surgery to have their gender legally recognised [Richard A Brooks/AFP]
In October, the Supreme Court of Japan struck down a law mandating that transgender people undergo sterilisation surgery to have their gender legally recognised.
Several lower courts have also ruled that the country’s ban on same-sex marriage is discriminatory, although the government has been reluctant to change the law.
Japan’s Diet, the lower house of parliament, is currently considering proposals for a revised law, including the possibility of compulsory hormone treatment, which has been advised against by the World Professional Association of Transgender Health (WPATH).
In a poll by the NHK, Japan’s national broadcaster, last year, only 9 percent of Japanese people thought the human rights of sexual minorities were being protected.
A Jiji Press poll that same year found that only 17 percent were against the passing of an LGBTQ rights bill.
Tokyo Rainbow Pride has also grown into one of Asia’s largest annual LGBTQ events, while the Kanayama Matsuri in Kawasaki, a popular festival where parishioners carry model penises on floats, has become a de facto celebration for Tokyo’s gay, drag and trans communities, attracting tens of thousands of visitors each year.
“Culturally, we don’t have any problem with accepting any kind of sexual orientation in Japan,” Yuko Kawanishi, a sociologist and researcher specialising in cross-cultural mental health issues and gender, told Al Jazeera.
“It’s because of our tendency to emphasise the collective – the nail that sticks out gets hammered down – that it’s a difficult country for anybody who is outside of the majority norm, not just members of the LGBTQ community.”
“Japanese are not historically confrontational,” Kawanishi added. “Most people still want to come to some kind of consensus.”
Jeffrey Hall, a lecturer in Japanese studies at Kanda University, said Kadokawa’s publication of Shrier’s book would have gone largely unnoticed if it had not been publicised on social media.
“[Kadokawa’s account] was posting strongly-worded endorsements of the book’s anti-transgender ideology,” Hall told Al Jazeera.
“It was through these posts that transgender rights activists became aware of the book and launched a protest campaign – an example of people exercising their right to free speech in a democratic society.”
Hall, whose research focuses on conservative activism in Japan, said he believed right-leaning publisher Sankei, as well as conservative commentators and influencers, had used the controversy to their advantage.
“The conservative activists involved in the importation of Western ‘culture war’ discourse are successfully making money with their own book sales and publication of articles attacking LGBTQ rights activists,” he said.
“With money to be made by igniting anger about this issue, do not expect it to go away soon.”
The weakness of the Japanese yen is in the spotlight again after its latest tumble in value.
On Monday, the currency sank to 160.17 against the US dollar, its lowest since April 1990.
The yen recovered to 155.01 per dollar later in the day, prompting speculation that Japanese authorities had intervened to prop up the value of the currency.
The yen weakened slightly again on Tuesday, but held onto most of the previous day’s gain.
Why is the yen falling?
The value of a country’s currency rises and falls relative to currencies elsewhere in line with the laws of supply and demand.
At the moment, investors are being driven to offload the yen due to a yawning gulf in interest rates between Japan and the United States.
While the US Federal Reserve’s benchmark interest rate is currently set at 5.25-5.50 percent, the Bank of Japan’s (BOJ’s) equivalent rate is just 0-0.1 percent.
“The main driver is the rate differential between the US and Japan,” Min Joo Kang, senior economist for South Korea and Japan at ING, told Al Jazeera.
“Also, market expectations rapidly changed on the Fed’s monetary policy.”
The gap in interest rates reflects the very different inflation environments in the US and Japan. While Japan has struggled to get prices and wages to rise after decades of economic stagnation, the US has been battling to bring prices down amid robust economic growth.
For investors, higher interest rates in the US mean an opportunity to make much higher returns on investments, such as government bonds, in that country than they can in Japan.
The more investors sell the yen, the more it declines in value – encouraging investors to keep selling in a self-perpetuating cycle.
Is this a new phenomenon?
Actually, it is part of a longstanding trend.
While the yen’s decline has been especially severe of late, the currency has been on a continual slide since early 2021.
Over the last three years, the yen has lost more than one-third of its value.
The currency is now back to where it was following the collapse of a huge asset bubble in the early 1990s.
While other countries have raised interest rates to tame inflation that spiked during the COVID-19 pandemic, Japan has maintained rock-bottom borrowing costs in an effort to shake the economy out of a prolonged stagnation known as “the lost decades”.
Although the BOJ last month hiked the benchmark rate for the first time in 17 years, Asia’s second-largest economy is still an outlier globally.
Why does it matter that the yen is so weak?
A weak currency is a mixed bag for the economy.
Japan’s weakening yen has helped boost exporters’ profits by making their products cheaper to buyers overseas.
The slide has also encouraged a record influx of foreign tourists – there were 3.1 million visitors to the country in March alone – whose spending helps support local businesses.
But the yen’s slump has sharply raised the cost of imports, particularly food and fuel, putting a strain on household budgets.
The advantage of a falling yen for exporters has also been dampened by the fact that many large Japanese companies carry out a significant portion of their operations overseas.
What can Japan do about it?
Japanese officials have repeatedly expressed concern about the yen’s excessive depreciation and indicated they are prepared to intervene if necessary.
Authorities can pull on two main levers: buying up the yen or raising interest rates.
On Monday, the sudden surge in the yen’s value prompted speculation that authorities had stepped into the currency markets to arrest its slide, which would be the first such intervention since late 2022.
Japanese authorities have not confirmed intervening in the market and official figures that would reveal whether they did so will not be available until late May.
Still, momentum appears to be against any substantial strengthening of the yen in the foreseeable future.
During its intervention in 2022, Japanese authorities spent more than $60bn of its foreign exchange reserves to prop up the yen – only to see it continue its slide.
Meanwhile, the large gap between Japanese interest rates and those elsewhere is likely to persist for some time.
While BOJ Governor Kazuo Ueda has indicated that the central bank could raise rates if inflation picks up, price growth has slowed in recent months.
On Friday, the BOJ held interest rates steady, bolstering expectations that its ultra-loose policy is here to stay.
Meanwhile, the US Fed’s recent signals have dampened expectations that significant interest rate cuts are on the cards this year amid persistently stubborn inflation.
ING’s Kang said she expects the yen’s weakness to continue over the coming months.
“We believe that forex intervention by the Japanese authorities only can slow down the depreciation pace, but cannot change the direction of the currency move,” she said.
“To change the course of the yen’s path, either the BOJ should suddenly strengthen its hawkish voices – we believe this is not likely – or the Fed should give a more clear sign of rate cuts. This also not likely in the near term.”
Search operation under way after the SH-60 patrol helicopters possibly collided with each other during antisubmarine exercise off Izu Islands.
Two Japanese navy helicopters carrying eight crew members crashed into the Pacific Ocean during a night-time training exercise after possibly colliding with each other, killing one person, the defence minister said on Sunday.
Rescuers on Sunday searched for seven others who were still missing.
The two SH-60 patrol helicopters were conducting antisubmarine exercises on Saturday night near Torishima in the remote Izu island group, off the southern coast of central Japan.
Defence Minister Minoru Kihara said rescuers “spotted what are believed to be part of the aircraft in the sea, and we believe that the two helicopters crashed”.
“At this point the cause is unknown, but firstly we do our best to save lives,” Kihara told reporters. Hours later, Kihara told reporters that the crew member who was rescued “was confirmed dead”.
A Japan Maritime Self-Defense Force (JMSDF) vessel conducts a search and rescue operation at the site where two JMSDF helicopters crashed [Handout/Kyodo via Reuters]
He also said the ministry “discovered the flight recorders in places close to each other”, and so the “possibility is high that [the two helicopters] collided”.
“The flight recorders are being analysed,” Chief of Staff Ryo Sakai of the Japan Maritime Self-Defense Force (JMSDF) told reporters, as officials are interviewing the crew of a third helicopter that was joining the drill but was not involved in the accident.
Communication with one chopper was lost at 10:38pm (13:38 GMT) off the island of Torishima, and one minute later an emergency signal was received from this aircraft, broadcaster NHK reported.
Approximately 25 minutes later, at about 11:04pm, the military realised that communication with the other aircraft was also lost in the same area.
The Mitsubishi SH-60K helicopters from the JMSDF are mainly based on and operate from naval destroyers.
The JMSDF said as there were no other aircraft nor vessels in nearby waters, involvement of another country in the incident is unlikely, NHK added.
US Ambassador to Japan Rahm Emanuel said in a message on social platform X that the United States had offered to help with the search and rescue.
“We will stand together, side by side, with our friend and ally, Japan. My thoughts are with the crew members, and their families and friends during this challenging time,” he said.
The crash comes a year after a Ground Self-Defence Force UH-60 Blackhawk crashed off the southwestern Japanese island of Miyako, due to an engine output problem known as “rollback”, leaving all 10 crew members dead, which shocked the nation.
In 2017, a Japanese navy SH-60J, an earlier generation Seahawk, crashed during a night-time flight training off Aomori due to human error.
The Web3 sector is witnessing a rapid expansion globally, as clusters of countries are collectively (as well as independently) setting guidelines and legal frameworks to regulate the sector. In a bid to explore ways to grow the Web3 ecosystem in Asia, Web3 support groups from India and Japan have decided to team up to boost growth in the sector. India’s Bharat Web3 Association (BWA) has struck a partnership deal with the Japan ANICANA Dealers Association (JADA) will now work together to foray deeper into Web3-related research and development.
This week, the BWA and the JADA signed a memorandum of understanding (MoU). Under this agreement, the organisations will embark on joint Web3 initiatives around cryptocurrencies, metaverse, non-fungible tokens (NFTs), advanced gaming ecosystems, and blockchains.
“We hope to exchange insights on use cases, manage risks through regulatory frameworks, and develop policies while sharing compliance best practices,” Dilip Chenoy, Chairperson, Bharat Web3 Association said in a prepared statement.
Both, India and Japan, have already been making strides in the Web3 arena. As per a recent report by Hashed Emergent, India has emerged as a lucrative location for Web3 activities. With over a thousand startups already having been founded in the sector, India currently holds 12 percent of global blockchain developers. The report also noted that India has claimed the top spot for on-chain adoption in 2023, ahead of 150 other countries and boasting over 35 million trading accounts on top Indian exchanges.
Web3 technology in Japan is also expected to grow, and prime minister Fumio Kishida is said to have adopted a friendly stance towards Web3 technology. Last year, the Japanese premier reportedly stated he would help to ffoster the technology with more Web3 promotion policies.
The areas of blockchain gaming and blockchain use cases are seen as major propellers driving the Web3 revolution in Asia, according to market experts.
Bitget, a crypto exchange, launched a $100 million fund pool for Web3 growth and development in April 2023. Other firms like Alibaba Cloud and Near Foundation are also working on growing these technologies in Asia.
With several industry players betting big on Web3 expansion in Asia, industry bodies like the BWA and the JADA are aiming to boost research and development in the Web3 sector. “Our goal is to conduct research, surveys, and provide development support for businesses and products, contributing to the healthy development of the industry and the protection of users. We place great importance on establishing and guiding self-regulation, rules, and guidelines necessary to ensure proper operation,” said Keiko Tanaka, Chairperson, Japan ANICANA Dealers Association in a prepared statement.
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Manila, Philippines – Against a backdrop of rising tension in the South China Sea between Beijing and Manila, the leaders of Japan, the Philippines and the United States have forged an unprecedented level of cooperation to counter China.
But while US President Joe Biden and Japan’s Prime Minister Fumio Kishida have stressed the security aspects of their cooperation, Philippine President Ferdinand Marcos Jr has highlighted its potential economic rewards, touting the partnership with promised investments of some $100bn as a friendship with benefits.
At the televised opening of the summit on April 11, Biden told the other two leaders: “I want to be clear. The United States’ defence commitments to Japan and the Philippines are ironclad. Any attack on Philippine aircraft, vessels or armed forces in the South China Sea will invoke our Mutual Defence Treaty.”
Only afterwards did Biden discuss how the US government would help the Philippines develop key economic areas such as its semiconductor supply chain, and telecommunications and critical infrastructure including ports, railways and agriculture.
In Manila, though, the Presidential Communications Office downplayed the security aspect of the concluded summit, which had expressed “serious concerns about the People’s Republic of China’s (PRC) dangerous and aggressive behaviour in the South China Sea”.
Instead, its news releases dwelt on US and Japan’s expressions of a “strong commitment of support for the economic prosperity of the Philippines”.
Financial analysts told Al Jazeera that while Washington has intertwined its promised economic development with Manila’s security commitments, Manila had chosen to highlight the economic gains to mask a sobering reality – that the country could be dragged into a military conflict with China.
“Marcos needs to sell [this] to Filipinos,” financial analyst Jonathan Ravelas told Al Jazeera on Friday.
“This is bitter medicine but I’m sugarcoating it, so it’s easily digestible,” Ravelas explained of the president’s approach.
Philippine President Ferdinand Marcos Jr at the trilateral summit in the White House [Kevin Lamarque/Reuters]
Besides, if he focused on the security angle, “he might p*** off China,” added the managing director of e-Management for business and marketing services and retired chief market strategist of the Philippines’ largest bank, BDO.
Semiconductor push
Ravelas argues that Marcos Jr, like previous presidents, is keen to turn the country into a manufacturing and logistics hub. “We are geographically located to be part of the supply chain in ASEAN,” being within only three hours by air from regional countries Thailand, Singapore and Malaysia, he noted.
The summit announced the formation of the first-ever Partnership for Global Infrastructure and Investment corridor in the Asia Pacific, called the Luzon Economic Corridor. It will connect Manila to three sprawling areas in the country’s biggest island, Luzon, which can host manufacturers and other large business ventures: the US’s former Subic naval base, the former Clark airbase and Batangas province.
Ravelas noted that US semiconductor manufacturers were looking to diversify their locations and the young workforce made the Philippines a viable alternative.
The US, noted political economist Sonny Africa, has a military agenda and an economic agenda. “In both, the Philippines apparently plays an important part,” Africa, executive director of the socioeconomic think tank, Ibon Foundation, told Al Jazeera.
“Presumably, the alliance will be played up to have both security benefits and economic benefits. While it’s somewhat clear that the country plays a role in security-related moves against China, we feel the alliance is also serious in exploring the Philippines’ role in, for instance, being a location for segments of the semiconductor production, but also as a source of nickel which is essential for so much renewable energy technology. This is the direction of the US to attain domestic energy security,” he said.
On the home front, “the economic benefits will be played up to sweeten deepening Philippine entanglement in the US’s militarist agenda, especially versus China,” he said.
Still, he recognised that the economic aspects of the agreement were not merely “token sugarcoating” but also part of Washington’s “core agenda”.
“[The] US is genuinely out to build semiconductor production chains that are less China and Taiwan-centric and hence, less vulnerable and more resilient (to) conflict-related or other disruptions,” he said. “Similarly, the Philippines has among (the) world’s biggest reserves of nickel which is a critical element in batteries and other renewable technologies.”
Both countries are betting heavily on the Philippines to protect their business interests, amid rising regional tensions over the disputed South China Sea, a key international shipping route.
“Keeping the freedom of navigation will continue to allow the ease of trade not just in our region but globally,” said Ron Acoba, the chief investment strategist and co-founder of Trading Edge, a third-party research provider for local banks and brokerage firms.
The Philippines sits in a strategic position in the South China Sea which “functions as the throat of the Western Pacific and Indian oceans,” according to the Institute for Maritime and Ocean Affairs, a private research think tank in Manila.
China claims sovereignty over nearly all of the South China Sea through which “more than half of the world’s annual merchant fleet tonnage passes through these choke points, and a third of all maritime traffic worldwide,” according to the the institute.
It calculates about two-thirds of South Korea’s energy supplies, nearly 60 percent of Japan’s and Taiwan’s energy supplies, and 80 percent of China’s crude oil imports travel through the waters that are also claimed in part by the Philippines, Brunei, Malaysia and Vietnam.
China’s claim to the sea, based on the nine-dash line that was rejected by an international court in 2016, extends over large swaths of the Philippines’ exclusive economic zone (EEZ), including fishing grounds and potentially vast reserves of oil and gas deposits.
China has blocked all attempts by Manila to exploit the reserves. Under international law, an EEZ extends for 200 nautical miles (370km) beyond a country’s territorial sea and affords them jurisdictional rights over all natural resources.
“Politically speaking, it is correct to highlight the economic significance of the trilateral summit among the US, Japan and the Philippines,” Acoba said.
“But if you ask me, the main agenda really is to send a ‘message’’ to China, that the country is keen in upholding our rights. And that contrary to the prior administration, we are going in the direction of not just upholding but even enforcing our rights.”
Changing dynamic
For Harry Roque, the former spokesman for Marcos Jr’s predecessor Rodrigo Duterte, the pivot back to the US is a big mistake.
He blamed the about-turn for a drop in investments from China.
China’s foreign investments of nearly $20bn rose 37 percent in Asia in 2023 – with half of it going to Southeast Asia – but a report last month in the Japanese media outlet Nikkei said that the Philippines saw no new investment or construction projects at all from China.
The decline came even though Marcos Jr had visited Beijing in January 2023 and the presidential palace claimed he had secured “investment pledges” of $22.8bn.
“Of course, each president to his own,” Roque told Al Jazeera. “If the president wants this kind of policy, this is the kind of relations we have with China. But overall the policy of President Duterte was, let’s move forward on matters that we could on trade and investment and set aside matters that we could not resolve in this lifetime.
“No Chinese (businessman) will invest now because I know for a fact that many Chinese who intend to invest have put it aside already because they fear that their investments might be confiscated given the hostile environment,” he said.
“So no one from China will touch the Philippines as far as capital is concerned,” he said.
The USS Mobile in joint drills with Australia, Japan and the Philippines earlier this month [Leo Baumgartner/Australian Department of Defence via AFP]
After the Washington, DC summit, Marcos Jr said he was confident that the deals with the US and Japan would not undermine Chinese investment.
The three leaders had earlier expressed “serious concerns about the People’s Republic of China’s (PRC) dangerous and aggressive behavior in the South China Sea”, and Marcos Jr stressed the trilateral relationships would “change the dynamic” in Southeast Asia and the South China Sea.
Still, he sought to reassure Beijing, saying the action was “not against any country”.
The shoal, where the Philippines grounded the naval ship Sierra Madre in 1999, lies about 200km (124 miles) from the Philippine island of Palawan and more than 1,000km (620 miles) from China’s nearest major landmass, Hainan island.
Private pollster Pulse Asia revealed that in a December 2023 survey of 1,200 respondents, 79 percent wanted Marcos to work with the US to deter Chinese aggression in the South China Sea.
Only 10 percent wanted his government to work with China to resolve the tension.
Meeting in Washington, DC, the leaders of Japan, the Philippines and the US stress importance of abiding by maritime law.
The leaders of Japan, the Philippines and the United States have voiced “serious concern” over China’s actions in the disputed South China Sea.
Beijing has stepped up its activities in the strategic waterway in recent years, and tensions have risen, particularly with the Philippines, one of several Southeast Asian countries that claim the parts of the sea around their coasts.
Last month, Philippines’ President Ferdinand Marcos said Manila would take countermeasures against China after a confrontation off Second Thomas Shoal injured Filipino soldiers and damaged vessels.
“We express our serious concerns about the People’s Republic of China’s [PRC] dangerous and aggressive behaviour in the South China Sea,” the three leaders said in a joint statement at the end of a first-ever summit between the three countries, which took place in Washington, DC.
Beijing claims almost the entire South China Sea under its so-called nine-dash line, which was rejected by an international court in 2016.
As well as the Philippines, Brunei, Malaysia and Vietnam also claim parts of the sea.
The statement noted the “importance of respecting the sovereign rights of states within their exclusive economic zones [EEZ] consistent with international law, as reflected in the 1982 United Nations Convention on the Law of the Sea [UNCLOS]”.
It also reiterated the three state’s opposition to China’s “dangerous and coercive use of Coast Guard and maritime militia vessels in the South China Sea”.
Second Thomas Shoal, known as Ayungin in the Philippines, has been the site of multiple standoffs between Beijing and Manila in recent months, with China’s coastguard using water cannon against ships trying to resupply a contingent of Filipino sailors living aboard the deliberately grounded Sierra Madre.
The shoal lies about 200 kilometres (124 miles) from the western Philippine island of Palawan, placing it within the Philippines’ EEZ, according to UNCLOS.
It lies more than 1,000 kilometres (621 miles) from China’s southern Hainan island.
United States President Joe Biden has welcomed Japanese Prime Minister Fumio Kishida to the White House, with an upgrade in defence ties topping the agenda.
The meeting is only the fifth official state visit of Biden’s presidency, with the lavish events typically reserved for only the most formidable of US allies.
Moreover, the visits underscore an administration’s strategic priorities, with three of the four previous state dinners – South Korea, India and Australia – emphasising the Indo-Pacific region to counter what US officials describe as China’s increased military and economic assertiveness.
Beijing also loomed large on Wednesday, in a visit that began with Biden welcoming Kishida on the South Lawn of the White House. Biden hailed the “unbreakable” partnership between Japan and the US as “a cornerstone of peace, security, prosperity, in the Indo-Pacific and around the world”.
Kishida referenced the iconic cherry blossom trees that typically bloom in Washington, DC in spring, and were first gifted to the US by Japan in 1912.
“I am confident that the cherry blossom-like bond of the Japan-US alliance will continue to grow even thicker and stronger in the Indo-Pacific and in all corners of the world,” Kishida said.
The two men went on to discuss as many as 70 cooperation agreements in defence, space and technology during a meeting in the oval office, according to officials who previewed the event.
At a joint press conference, Biden announced what he described as the most significant upgrade in military ties since the alliance between the two countries began.
He said the countries would modernise their military command and control structures in Japan to increase interoperability and planning. He also said that Japan, Australia and the US will create a network of air missiles and defence architecture, in the latest move to increase coordination of allies in the region.
The US has about 38,000 troops stationed in Japan, with another 11,000 on US vessels in Japanese waters.
The move is the latest by the US to increase cooperation with key allies in the region.
Beyond strengthening the so-called Quad strategic grouping, which includes the US, India, South Korea and Australia, the Biden administration has also created the so-called AUKUS security partnership with Australia and the United Kingdom, which is helping Australia acquire nuclear-powered submarines.
The leaders of the US, Japan and the Philippines – another key US ally in the region – are also set to hold a first-of-its-kind trilateral meeting on Thursday.
For its part, Beijing has repeatedly accused Washington of “Cold War thinking” that has ratcheted up tensions. Nevertheless, both Biden and Chinese leader Xi Jinping have shown a willingness to engage diplomatically in recent times, with the two leaders holding a call earlier this month, their first direct communication since November.
The White House also announced on Wednesday a plan for Japan to join future US space missions, with Biden promising that a Japanese astronaut “will become the first non-American ever to land on the Moon”.
The two countries also announced a joint partnership to accelerate the development and commercialisation of nuclear fusion, an extremely high-yield, low waste form of energy production that scientists have been trying to harness for decades.
Speaking at the news conference, Kishida said that he and Biden had also discussed North Korea, which has continued to test more powerful missiles in recent years, as well as security in the Taiwan Strait, the waterway off of the self-governing island that China claims as its own.
He drew a direct link between Russia’s war in Ukraine and concerns in the Indo Pacific region.
“Unilateral attempts to change the status quo by force or coercion is absolutely unacceptable, wherever it may be,” Kishida said.
“Regarding Russia’s aggression of Ukraine … Ukraine today may be East Asia tomorrow,” Kishida said.
When asked about a planned $15bn acquisition of the US steelmaker US Steel by Japan’s Nippon Steel, which both Biden and former President Donald Trump have criticised, Kishida said he hoped to cement a “win-win relationship”.
In the evening, Biden was scheduled to host Kishida at an opulent state dinner, with the State Floor of the White House transformed into a “vibrant spring garden;” First Lady Jill Biden is responsible for the event’s planning.
The meal served by White House chefs will include house-cured salmon, aged rib eye with wasabi sauce, and salted caramel pistachio cake with cherry ice cream.
After dinner, singer-songwriter Paul Simon will perform. Kishida is the first Japanese leader to be invited for an official state visit since former Prime Minister Shinzo Abe in 2015.
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