 "Kazuto Suzuki")
India, Japan, Australia, Singapore, Canada and other countries that have significant market sizes should combine forces to balance the powers of indispensable economies such as the United States (US), Russia, China, and the European Union (EU), Kazuto Suzuki, director of Tokyo-based foreign policy research organisation, Institute of Geoeconomics, said.
While the US has indispensability in terms of the US dollar and its market size, China is leveraging its technological and manufacturing prowess as a strategic advantage. Similarly, the EU is a large consumption market, and Russia has some indispensability in terms of its natural resources, particularly oil and gas, Suzuki told Business Standard on the sidelines of the Kautilya Economic Conclave 2025.
Countries and economic blocs such as the US, China, Russia, and the EU are gradually shifting their stance on foreign policy from geopolitical to a geo-economic lens by leveraging the strategic autonomy and indispensability of their markets as a means to coerce others and alter the behaviour of their allies and non-allied countries, he said.
With US trade policies signalling instability, several countries have opted to re-examine their relationships with other larger markets, such as China, the EU, and Russia.
“Countries such as Japan, India, and South Korea are trying to bring back the US to the stability that they are used to, even if they have to pay an additional 15 per cent tariff. They have to start thinking that there is no going back to the good old days of globalisation and that the geo-economic powers have been rebalanced,” he said.
Too much reliance on China, despite its recent warmth towards countries that are seeking to diversify their markets, is also not advisable, Suzuki cautioned. The relative opening up of China, both in terms of its foreign policy and markets, is primarily due to the country now being confident that its products can compete globally, he said.
“Yes, China is an attractive alternative, but it still has a lot of risks in terms of uncertainty and lack of transparency in the decision-making process. So, if you depend on them a lot, the next thing they can do is raise tariffs or exert export controls,” Suzuki said.
Another reason to be cautious when dealing with China, he said, is the trade surplus that the country maintains with other economies worldwide, thereby posing a risk of dumping goods at low prices and making the domestic industry unviable.
An alliance of “middle-power” countries, such as India, Australia, Canada, Singapore, and Japan, will therefore mean that these economies work together to ensure they are self-reliant among themselves and have a trusted network, Suzuki said.
On the other hand, these “middle-power” countries will also need to reassess their relationship with the US in terms of diplomatic and tactical support, especially during challenging times. A lot of the commitment will depend directly on the geo-economic situation of that time, he said.
Even though military-to-military cooperation between Japan, India, South Korea, and others remains strong, the recent US commitment in South Asia or Southeast Asia to counter China's increasing influence does not guarantee a continuous commitment going ahead, Suzuki said.
