Japanese Foreign Direct Investment in East Asia: The Expanding Division of Labor and the Future of Regionalism

This chapter shows that Japanese multinational corporations (MNCs) in concert with key ministries and agencies of the Japanese government are, attendant to the pursuit of their larger economic objectives, systematically promoting expansion of an East Asian division of labor and integration of regional production on a sector-by-sector basis. It also shows that Japanese foreign direct investment (FDI) is central to this process. The chapter begins with some brief comments on regionalism and globalisam in the changing world political economy and a short analysis of Japan’s global and regional FDI patterns to date and their future prospects. These are followed by an elaboration and explanation of Japanese official and corporate strategies and policies in promotion of regional integration and an assessment of their progress to date. Finally, the chapter assesses some of the likely consequences of the trends analyzed, particularly for other regional actors. It concludes that Japanese FDI is central to accelerating regional economic integration, but not of an exclusive kind; that Japanese celebration of the idea of expanding the regional division of labor, translated into an ideology of ‘cooperation,’ cannot serve as the basis for a widely acceptable regionalism; and that, in any case, the enormous asymmetry of economic power between Japan and its neighbors is a serious problem for the advance of a durable regionalism.