Combinative Hedging: Japan and Russia in the East Asian Contested Hierarchical Order

Abstract

The recent developments in world politics have demonstrated that East Asia has emerged as a critical locus for great power politics, characterised by the pluralisation of power centres resulting from the competing strategic interests of the United States and China. Indeed, the regional order’s power constellation is moving towards a contested hierarchical model. The first-tier United States seeks to maintain its ‘plural hegemony’ through social compacts, while China fits within the hierarchy as a second-tier state, gradually emerging as an influential actor on the regional and global stage. Third-tier states, such as Japan, the world’s third-largest economy, and Russia, with its abundant energy resources and military prowess, have become potential swing players of influence within the evolving orders— appropriate to their respective capabilities. Observing this dynamic geopolitical environment, our article discusses the relationship between Japan and Russia as they attempt to protect their interests within a pluralising region. We argue that Japan and Russia take a combinative hedge, focusing on flexible collaboration, enabling risk mitigation and maximising short or long-term benefits.

Introduction

What order has been formed in East Asia and how the regional states respond to the order creation are intriguing questions continually debated by strategic decision- makers and international relations (IR) scholars. The existing explanations of the puzzle inform that arguments have revolved around the dynamics and developments at systemic and subsystem/unit levels. In the systemic arena, three streams of theory are dominant: long-cycle theory (LCT), power transition theory (PTT) and hegemonic stability theory (HST). Essentially, these theories deal with a similar phenomenon of the connections of historical and structural changes to power and position of the most influential states in world politics (Flint, 2017, p. 218; Goldstein, 1988, p, 349; Pop, 2019, p. 677). The LCT argues that superpowers rise and fall following a trend of cyclical leadership shifts over the last 120 years (Modelski, 2014, pp. 177–178). Power transition theorists stress the role of an effective challenger to the status quo, pushing the process towards a new order building (Lemke, 2002, p. 235; Organski, 1958, p. 19). The HST followers, however, illuminate the importance of an existing constructive and stable hegemonic power to make regional states comply with a rules-made order (Snidal, 1985, p. 580; Webb & Krasner, 1989, p. 183).

Despite the significant intellectual contributions of the system-based theories, two limitations are likely to be noted. First, the systemic theorists have overestimated the functionality of a powerful state working from the top of the political stage and, at the same time, underestimated the agency of the weaker or smaller countries. Second, all three systemic theories imagine that there is, and there will be, a single robust type of order established by the regional powers, in which the role of one major state is indispensable to order creation. Nonetheless, these features do not appear in today’s East Asia. Power politics is driving the order in the region towards a contested hierarchical model, in which none of the cyclical power shift, power transition or hegemonic stability picture has taken shape as theorised. Therefore, we should move to see from the subsystem or unit theoretical perspective, which highlights foreign policy behaviour and national strategies of not only the great powers but also the middle-sized ones in response to the top-down disruptions.

There are various state-level responses to the systemic pressure which have been well-theorised. The three most popular subsystem theoretical approaches to East Asia are balancing, bandwagoning and hedging. We focus on hedging as our contribution to advancing national-level security strategies. Thus, it is important to understand the main driving force of change, making East Asia a critical locus for contemporary world politics. East Asia is undergoing pluralisation of power centres due to the competing strategic interests of the United States and China (Nye, 2019, pp. 69–72; Wallerstein, 2003, p. 15). The United States has been trying to maintain its order from declining since the collapse of the Bretton Woods system to the 9/11 terror attacks and perhaps the COVID-19 pandemic. Under the plural order, China has developed itself into an influential player on the regional and international fronts (Bergsten et al., 2008, p. 9).

Furthermore, within the hierarchical order, as depicted by Goh (2013, pp. 208–209), the great and middle states are structured according to their internal economic and military capabilities as well as the external impacts of their national security strategies on the new order–making process. Further, following Goh (2013, pp. 209–222), we classify the main actors in the East Asian power contests into three layers of states. The United States, the first-tier state, seeks to keep up its ‘plural hegemony’ through social compacts, making promises and establishing binding agreements. China fits within the hierarchy as a second-tier state. Third-tier countries, such as Japan, the world’s third-largest economy, and Russia, with its abundant energy resources and military prowess, are rising as potential swing actors of influence within the orders—appropriate to their respective weights. Hegemonic status is achieved under this configuration through negotiations and agreements between the hegemon and smaller or weaker states. These methods stabilise the East Asian region under geopolitical flux, historical mistrust and latent security dilemmas. The great powers’ foreign policy constantly reestablishes power imbalances, with the United States defending its strategic position through partnerships despite the outgoing administration of Donald Trump, who was a sceptic and preferred to act unilaterally (Denmark & Goto, 2020).

Working within the subsystem or national level of explanation, our article looks at the relationship between Japan and Russia as they set out to secure their interests in a pluralising region. The focus is on both sides’ national strategies as elements of the weaker powers/third-tier countries’ agential practices facing the greater first-tier and second-tier ones in a multifaceted regional order-making. Japan and Russia opt for a combinative hedge oriented towards flexible collaboration as the ground on which strategies for risk mitigation and short- to long-term benefit maximisation are feasible to implement. This approach is reflected in the rapprochement policies between the two third-tier states. In this case, rapprochement aligns with the hedging logic. The relationship between rapprochement and hedging explains state behaviour and policy when faced with uncertain, volatile and complex geopolitical settings.

We proceed in four steps. After this introductory section, the article examines the reasons behind third-tier states’ hedges. The third section sheds light on the essence of combinative hedging for Japan and Russia’s interests on multiple levels. The fourth section analyses how Japan and Russia apply combinative hedging towards the United States and China. We also survey the latest developments in Russia–Japan relations following the latest Russian invasion of Ukraine. Finally, we emphasise the significance of combinative hedging for future policies-oriented research and theory-driven studies.

Why Do Third-tier States Hedge?

Third-tier states could opt for several directions in their foreign policy when faced with changing geopolitics. The first option is to either balance or bandwagon. But neither of these options can explain which policies are best suited for the states within the East Asian configuration. Balancing and bandwagoning are unfit, as the dichotomy entails conditions such as the struggle between weaker actors against dominant ones, the formation of alliances resulting from this struggle and a state of either war or peace between the actors involved (Walt, 1987, pp. 14–15). Post–Cold War East Asia is characterised by the ambivalence of smaller countries concerning bigger powers—with the more powerful ones enforcing regional dominance. This pattern of the dominant power consolidating its hegemony over the rest would come to be known as a ‘plural hegemony’. Regarding the formation of alliances, there is no formal alliance in East Asia. Balancing and bandwagoning are risky because of the high level of mistrust between East Asian states. As for a state of war and peace, East Asia is rife with latent hostilities with security threats in the Korean Peninsula, China–Japan–Russia border conflicts and the North Korean nuclear issue (Tønnesson et al., 2013, p. 37). As such, in the region, balancing and bandwagoning are insufficient and inappropriate measures for explaining the behaviour exhibited by the regional players.

Ian (2003, p. 1) offers strategic options as an alternative for states with relatively limited power capabilities facing preponderant powers: beleaguering, binding, bonding and buffering. However, such options are also irrelevant because the four responses only apply under a unipolar order. In the case of East Asia, unipolarity does not exist. The US hegemony in the region is a ‘plural hegemony’ which relies on negotiations and agreements. Moreover, it should be noted that East Asian countries are highly industrialised economies with considerable weight within this hegemonic structure. So, while the United States does exert its presence and acts as a stabiliser for the region, its authority does not take the form of unipolarity.

Hence, we highlight another option. Due to the complexity of the East Asian strategic landscape, the regional state governments require a foreign policy response that can substantially address the immediate short-term national interest and the maintained vigilance needed to anticipate potential threats that might harm efforts in achieving future objectives. Here, hedging serves as a choice for third-tier actors to better situate themselves in the dynamic power contestation. There are two main conceptualisations of hedging strategy. The first conceptualisation relates to the country’s response to strategic risks and economic vulnerabilities, as seen in cases of energy security (Tesman & Wolfe, 2011, pp. 220–221; Tunsjø, 2013, p. 26). The second one presents a policy combination of cooperative and aggressive actions associated with national security and alignment strategy (Chang, 2022; Ciorciari & Haacke, 2019, p. 367). A group of IR scholars have published a comprehensive review of and proposed the notion of hedging as an outcome of risk instead of threat calculation (see Ciorciari & Haacke, 2019; Haacke, 2019; Korolev, 2016). However, we aim to perceive the conceptual elements of hedging from various practices.

Goh explains the practice of hedging as a preventive measure towards unexpected circumstances wherein decisive choices such as balancing, bandwagoning or a policy of neutrality vis-à-vis great powers become difficult for the concerned state to choose. Therefore, hedging is a ‘middle position’—an option that would ensure the fulfilment of immediate interests without jeopardising future interests by inaction or other more radical alternatives (Goh, 2006, p. 1). In other words, hedging is a strategy that prevents partiality yet ensures risk reduction for potential future threats. Moreover, within the context of the broader Asia-Pacific’s highly fluctuant regional security architecture, hedging is a strategic response that leads to multipolar transitions involving great powers and the instability that entails it.

Hedging is viable to deal with three conditions: (a) the presence of direct threats to the state, (b) the long ideological fault lines which tend to encourage conflict between international actors and (c) the intense great power rivalry that can force non-great powers to choose their alliance decisively. States with relatively low to medium capabilities or third-tier states may hold at least five strategic policies with multidimensional components between the balancing and bandwagoning spectrum (Kuik, 2003, p. 165). The first strategic approach is limited bandwagoning behaviour, which refers to a partnership between a non-great power vis-à-vis a great power politically, economically and militarily. However, it is limited to coordination on specific issues based on the principles of mutual respect and a non-zero-sum logic. The second form of strategic policy is a binding engagement to socialise and integrate preponderant powers under a particular order—neutralising a great power’s revisionist objectives and aggressive behaviour. The third form of strategic policy—the neutral point in the hedging spectrum—is economic pragmatism, which maximises profits through direct trade and economic investment. The fourth strategic policy is the rejection of domination, falling into the definitive scope of preventing and counteracting a potential emergence of unnecessary power projection by dominant powers. The fifth and final form of strategic policy is indirect balancing, relating to a state’s approach to increasing its military capabilities. Indirect balancing is realised by utilising defence cooperation with other powers of similar standing. To indirectly balance great power, a weaker or smaller state could increase its military’s quantity or quality—per its perception of the great powers’ activities, particularly in the military sector (Kuik, 2008, pp. 167–171).

Nevertheless, hedging should only sometimes be reliant on potential great power transitions. This is visible in the absence of trust between the United States and China in their anticipation of an emerging multipolar system—preferring to rely on complex networks that affect multi-state relations within the system. The networks act as a structure that influences weaker actors’ decision-making processes (Jackson, 2014, pp. 338–347). The networks are inherently formed from fluid, multidimensional, interdependent relationships rather than a traditional power structure. The relationships between weaker actors will then result in an intertwined pattern, causing one policy taken by the actors in the network structure—in this context, Asia—to be followed by specific reactions by and for the actors involved in the network. Furthermore, the consequences of these relationships are related to the political and security sectors and the economic and socio-cultural ones. Foreign policies of weaker states are not based on considerations regarding the capabilities of the states but on normative aspects such as identity and historical background. Hence, hedging results from the fluctuations in the complex relationships within the network structure, where the management of specific strategic issues is sensitive, fluid and heterarchical.

Jones and Jenne (2022, pp. 213–218) took a somewhat different approach. Using Southeast and East Asian countries’ policies as case studies, hedging elements are found as glorified vital points within the ambiguous and contradictory policy-making of states with relatively low capacities in their responses to challenging situations. Hedging is more of an exercise in reactive prudence than a set of carefully calculated policies, which is a contingent adjustment in response to domestic and international agenda dynamics. Thus, it is no wonder that contradictory, ambiguous policy changes are expected. Jones and Jenne rely on classical realist thinking and diplomatic historiography. This combined approach provides a comprehensive understanding of both Southeast Asian and East Asian states’ position in the face of the great powers. Historical reference and sensitivity are better tools to properly understand the ever-changing complexity of the region’s strategic environment than cold and complex rational calculations.

As explained by the previous scholars’ conceptualisations, the logic of hedging has laid the foundation for the existence and development of concepts relating to international political and economic constellations over the past three decades. Relevantly, the hedging concept has often been used as a comprehensive explanation for states with relatively lower capabilities responding to the behaviour of states with more significant capabilities. This can be seen in the case of the greater Asia Pacific, with the United States as a great power and China as an emerging power, and influential states with lower capabilities, such as Japan, Russia and India, all vying for the advancement of their national interests within the regional and global scope. By examining the foreign policies of Japan and Russia in dealing with the decentralisation of the regional order in East Asia, we aim to highlight on the understudied component of the logic and conduct of hedging by taking into perspective the various strategies for promoting flexible collaborations or avoiding to make explicit political commitments, which then allow hedgers to mitigate risk and optimise their short- to long-term gains of opting for the middle position. In other words, it is essentially combinative hedging, bridging all three fundamental principles and engaging objectives of implementing hedging: flexible collaboration, risk mitigation or functional insurance and benefit maximisation.

Hedging is a strategic action that places international actors in an advantageous middle position, particularly in their dealings with great powers (Gerstl, 2022, p. 20). When the risks are calculated precisely, functional insurance guarantees weaker states’ present and future positions. This is observable in the foreign policy trends of Japan and Russia, wherein the two included each other as independent variables in their calculations in response to the US–China rivalry. The rapprochement between Japan and Russia has added a new twist to the regional power politics of East Asia, particularly to the US–Japan alliance and the China–Russia strategic partnership going forward. The impact could be discerned through some prominent examples, such as the adverse reaction from the United States towards Japan when Shinzo Abe met Vladimir Putin in Sochi at the start of this initiative for rapprochement. Putin’s visit to Yamaguchi in December 2016 was the first official trip of a Russian leader to Japan in over a decade. A peace treaty between the two countries was expected from the Abe–Putin meeting to give Japan and Russia the strategic space to diversify their cooperative relations beyond the United States and China, respectively.

Towards a Japan–Russia Combinative Hedge

The decentred order phase in East Asia has created an increasingly uncertain and complex security environment for Japan and Russia. To achieve their national interests, hedging is the most rational option. Under Prime Minister Koizumi’s leadership, Japan had sought to place itself between the United States and China through a military alliance with the former and economic relations with the latter (Heginbotham & Samuels, 2002, p. 111). The military cooperation with the United States has allowed Japan to apply deterrence against potential threats. In contrast, the strengthening economic ties with China have allowed Japan to be more balanced in its approach and positioning amid the two great powers, noting the relationship between the United States and China as economic rivals. This configuration has worked well enough for Japan’s stability, with its economy and security under control for over a decade. However, entering the second decade of the twenty-first century, Japan found itself in the dilemma of dealing with ups and downs made by the United States as the Obama administration had determined to improve US presence in East Asia, but the Trump government increased protectionist policies. Because of these contrasting developments, Japan started questioning the United States’ commitment to their economic and security relations. Furthermore, to further complicate the situation, Japan must consider China’s increasing progress in the economic sector and its military expansion, as China’s rise has been perceived as a potential threat to Japan (Yoshimatsu, 2021, pp. 2–3).

Meanwhile, Russia has developed its strategy to establish a closer relationship with China against the United States. For example, as permanent United Nations Security Council members, Russia and China tend to adopt similar stances in responding to critical international issues, such as the Syrian conflict. Both opted to veto the four resolutions ushered by the United States to sanction the Assad government. However, despite the seemingly tight-knit Beijing–Moscow relations globally, Putin’s Russia has been competing with Xi’s influence in Northeast Asia and the wider Asia Pacific (Korolev, 2016, pp. 386–391). Both have extended their partnerships with the Central Asian states, competing to gain strategic resources and aid the modernisation efforts of conflicting regional states. This tacit geopolitical rivalry between China and Russia is one reason the otherwise close powers do not abide by formal alliances. Moreover, Russia’s already volatile post-Crimea political and economic relations with the US-allied European countries on its western front—namely with the United Kingdom, France, Germany and Italy—would take a turn for the worse if Moscow were to formalise an alliance with Beijing.

Russia and Japan conducted a mutual rapprochement in 2016 to realise a peace pact. The effort to harmonise the 70-year-long-stagnant relationship had effectively elevated connections between the two countries. It brought a new era of bilateral ties, strategically securing positions responding to the US–China contestations. Japan had hoped to prevent any possibility of an anti-Japan axis from Moscow and Beijing. Further, strengthened Tokyo–Moscow links would balance against potential threats from China in East Asia (Chen, 2016). From Kremlin’s perspective, Japan could act as a valuable economic partner to help close the development gap in the Russian Far East with its advanced technology, industrial and consumer goods and resources. Moreover, from a geopolitical standpoint, Russia’s strengthened relations with Japan could be perceived as an effort to reduce tensions with the Western alliance (Akaha, 2016, p. 14; Arai, 2016, p. 55; Khuziyatov, 2016, p. 66).

The above-mentioned developments suggest the importance of emphasising the flexible collaboration aspect of hedging in explaining Russia–Japan policies towards US–China dynamics in East Asia. Japan and Russia must opt for choices not limited to hedging’s definitive conceptual terms—without straying from the general framework. In its implementation, combinative hedging is more completely formulated than the previous concepts of hedging, as explained by Goh, Haacke, Kuik, Jones and Jenne, with the dynamics of the US–China contestations in Southeast Asia as their case studies. Regarding Russia and Japan’s hedge in dealing with the US–China competition, the region’s trends differ due to the hierarchical order’s pluralisation and contestation. Japan and Russia hold their ground and take the ‘wait and see’ approach in anticipation of a potential shift in global leadership—as they could not afford to take risky precipitous policies that might be too polarising. On the other hand, strategic measures must be taken to address the close relationship between Japan and Russia and the United States and China and the potential impact of such a relationship.

Thus, we argue that Japan and Russia are conducting combinative hedging. Further, what we mean by combinative hedging, in this case, is the act of policy- making between two states, whereby hedging is taken as a strategic outcome without restricting themselves to the common logic for hedging. This is done within the logic of security, interest-achievement and preparation for potential future situations. To these ends, Japan and Russia place strategic risks alongside policies they deem functional insurance. Insurance is a policy designed to prepare weaker actors faced with certain conditions that have been predicted—an example of which would be a formal military alliance. Although seemingly similar, hedging is conceptually different. Hedging acts as a risk mitigator negated by the need for direct practical involvement from the weaker country in legally binding agreements the way insurance does (Ciorciari & Hacke, 2019, p. 369).

Within this context, as understood from the various literature, hedging does not sufficiently explain the multiple risks that could occur if a hedge fails. In the case of Japan and Russia, we believe that both insurance and hedging are at play—combined carefully and comprehensively—as a response to an unprecedented situation that both countries have never faced before. Therefore, a conceptualisation of combinative hedging, consisting of flexible collaboration, risk mitigation and gain maximisation, is relevant. The understanding of combinative hedging as a flexible middle-position option can explain the recent developments in Japan–Russia relations. It is important to note that both risk and uncertainty are context dependent and highly subjective. There is a difference between the two. Risk is a negative consequence of certain situations, while uncertainty is an immeasurable variable (Fruhling, 2014, p. 20; Koga, 2018, pp. 638–639).

The logic of combinative hedging can explain the case of East Asian power games, which are full of potential threats due to their systemic complexity—as the entailing need to strategise, map out and calculate every possible scenario in the future impacts of policy-making is virtually unachievable. Seeing this flaw within the logic of hedging, the combinative idea and practice would narrow the gap—through flexible, cooperative relations, selective strategic risk-taking is viable, and states could anticipate the risk of future potential threats as it would act as a functional insurance free from any binding agreements. Therefore, combinative hedging allows states—Japan and Russia—to secure their neutral position in the middle of the US–China contestations while still achieving their interests optimally.

Applying Combinative Hedging in Complex Situations

Building Flexible Collaborations Between Japan and Russia in Response to the US and China Contestations

Russia demonstrates several hedging policies towards China, and Japan towards the United States. First, as a country with the second-largest military power in the world, Russia does not conduct many bandwagoning actions; within this military context, its relations with China are generally limited to bilateral cooperation for weapons development and a variety of joint training programmes. Despite their strong partnership, neither of the two sides puts the formation of a formal alliance on a major agenda, as both strongly oppose the establishment or expansion of military alliances. Furthermore, a formal alliance with China would be too high stakes for both parties. They would much rather work together to tackle the more significant threat of the United States and its allies’ international economic dominance. In addition, a formal military alliance would only put Russia in an awkward position due to the conflict in the South China Sea in which Russia supports Vietnam and the Northern Sea Route, where Russia seeks to maintain control over the area, while China’s ambition is to incorporate the region into a route for its Belt and Road Initiative (Korolev, 2016, pp. 391–394). At the same time, China has refused to take a firm, supportive stance towards Russia’s activities in Crimea, nor does it recognise South Ossetia and Abkhazia as independent states (Goldstein, 2017; Kashin, 2016, pp. 82–84). For these reasons, there is an apparent restraint in the Russia–China relationship, as special precautions are taken to avoid conflict in their already uneasy relationship. This also suggests Russia’s interest in maintaining a degree of autonomy and staying independent of China despite the two countries’ close ties.

Japan’s bandwagoning practices towards the United States have become more active and flexible after the Defence Guidelines 2015 revisions. This aligns with Prime Minister Abe’s neoconservative ideology and his foreign policy doctrine of ‘proactive pacifism’ as written in Article 9 of the Defence Guidelines 2015, which allows Japan to utilise its collective security rights much more flexibly. Furthermore, by re-militarising, Abe sought to enhance Japan’s global engagement while raising its defensive parameters to guard against potential threats, especially from China. This perceived threat from China is crucial, as Japan expects the United States to increase its commitment to Japan’s interests in East Asia in the face of China. In this context, Japan needs a greater balance between its security and economic interests amid the divided region of East Asia.

Russia seeks to limit China’s interest expansion to Eurasia in the economic sector through the Shanghai Cooperation Organization (SCO). Russia understands the SCO’s importance in bridging China’s Belt and Road Initiative with Russia’s rather ambitious economic project, the Eurasian Economic Union (EEU). Through the SCO, Russia aims to minimise the massive influence of the Belt and Road Initiative. It does this by integrating EEU policies with the Chinese grand plan so that Moscow would have some say and strategic involvement in many Eurasian mega projects that are included in the Belt and Road Initiative. As for Japan and the United States, Trump’s inward-oriented economic policies harmed Japan with the increased import tariffs on Japanese goods. This led Japan to speed up negotiations with the United States on the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) in 2018. After the US withdrawal from the CPTPP, Japan and the other members tried to keep the agreements intact by keeping alive several points, which included trade liberalisation and high-level investment in vast areas of collaboration, such as e-commerce, state-owned enterprises, labour and environmental protection beyond the trade agreements on goods and services in general (Urata, 2019, pp. 14–15). Coinciding with the US withdrawal from the CPTOO, Japan reached a deal with the European Union on free trade negotiations that have been going on since 2013. The agreement covered joint works to uplift or resolve tariffs and non-tariff barriers on Japanese cars, auto parts and EU consumer goods such as wine, cheese, pasta and other foods (Kaneko & White, 2017). This agreement with the European Union provided Tokyo with strategic depth against Trump’s protectionism.

Despite taking these hedging measures, Russia and Japan still needed to fully secure their interests within the context of the contested hierarchical order that has been going on in East Asia. Moreover, as endless possibilities exist, Moscow and Tokyo cannot map out every possible scenario and policy consequence. For this reason, Japan and Russia took the bold strategic decision of rapprochement. Through rapprochement, common hedging rationale is combined with strategic risk-taking to create functional insurance for when US–China contestations threaten their respective strategic interests in regional and global affairs.

Russo-Japanese Rapprochement as Functional Insurance: From Economic Pragmatism to Security Prospects

The rapprochement policy initiated by Abe and Putin in 2016 marked a new chapter in Russia–Japan relations. From this rapprochement, negotiations towards a peace pact between the two countries started with the resolution regarding the ownership of the South Kuril Islands. For more than seven decades, the dispute over the South Kuril Islands has always hindered the Japan–Russia relationship as they have been unable to sign a peace pact since the end of the Second World War. Therefore, when Japan under Abe finally approached Russia for rapprochement, Putin was welcomed.

Russia finds Japan’s capital resources, industrial technology and output in high-quality industrial and consumer goods potentially helpful in developing the Siberian region and the Russian Far East. Also, Russia views Japan’s industrial technology and investment as essential components for improving its productivity to compete in regional and global economic arenas. Japan’s decision to initiate a rapprochement with Russia is linked to its geo-economics considerations. Japan views Russia as one of the largest energy resource-producing countries globally. The Russian Far East, a focal point of their cooperation, is one of the Russian regions with the most abundant energy resources. Hydrocarbon energy reserves consisting of three primary sources, petroleum, natural gas and coal, are Russia’s main exports to Japan. Through this cooperation, Japan can diversify its energy supply to guarantee the availability of resources for domestic energy needs.

The early milestone of the rapprochement policy conducted by Japan was marked by the meeting of Abe and Putin in Sochi, the venue for the opening ceremony of the Russian 2016 Winter Olympics. At the time, Abe’s policy was considered controversial because of the sanctions imposed on Russia by the G7 following the Russian annexation of Crimea (Brown 2016; Streltsov, 2016, p. 28). After Sochi, Abe and Putin met in September 2016 at Eastern Economic Forum events in Vladivostok. There, several deals on three crucial matters were concluded: (a) the extension of Japan-Russia cooperation related to development and exploration in the Russian Far East region, (b) the inauguration of cooperation efforts at the ministry level and (c) the official state invitation to Putin to visit Japan in December 2016 (Kireeva, 2019, pp. 76–77). Finally, in December 2016, Putin attended Abe’s state invitation, and this meeting in Yamaguchi Prefecture became a historic moment for Russia as it was the first for a Russian leader since the last one in 2005. Unfortunately, a peace pact had not been produced from the talks. However, the high-level diplomacy has brought an agreement for a new strategic partnership in the economic sector and joint management of the South Kuril Islands, enunciating the seriousness of the two parties in improving their bilateral ties.

In addition to the new strategic partnership agreement in the economic sector, the two state governments also agreed to draft a financial cooperative to cover eight aspects: increasing life expectancy, constructing a clean city, increasing intensity of exchanges, cooperation between small and medium enterprises, energy fields, promotion of industrial diversification and increased productivity of Russia, development of export-based industries in the Russian Far East, cutting-edge technology cooperation and expansion of Russian and Japanese people-to-people interactions (Khuziyatov, 2016, p. 66). This strategic economic cooperation plan became a historic turning point, with over 45 further agreements on these areas achieved by Japan and Russia following Putin’s visit to Japan. Furthermore, another monumental agreement was the joint decision of the two heads of government to launch expert consultations to prepare collaborative business projects in the South Kuril Islands. They encompassed waste reprocessing, windmill installation, seafood production, island tourism and vegetable production. These economic agreements demonstrate a significant step forward in developing bilateral relations between the two countries, noting that they never signed any peace pact beforehand.

Nonetheless, Japan and Russia’s renewed relations took longer than they had hoped. It is tough to realise their agreements due to the European Union’s significant economic sanctions imposed on Russia and the hampered investment-related deals of Russian companies in Japan. From the US point of view, this heightened proximity between Tokyo and Moscow is ill-timed, as Washington has punished Russia with the economic sanctions imposed by the G7. Furthermore, the US dominance over the international financial system has made it difficult for Japanese companies to obtain USD-denominated loans if they aim to invest money in Russia’s strategic sectors. Furthermore, Russia’s latent internal issues, such as ineffective tariff regulations, troubled bureaucracy and a corrupt legal system lacking transparency and its alleged ties to transnational organised crime, have considerably hindered Japanese investments (Li, 2021). However, the Abe administration maintained its commitments to the approved bilateral economic cooperation to bridge a resolution regarding the South Kuril Islands. Putin also believed that an economic agreement with Japan would bring about a positive contribution to decreasing the gap in the development of the Russian Far East as well as serving as a foundation for a prospective peace pact between the two parties.

On security, Russia–Japan relations have been quite dynamic, with some interesting prospects due to the recent Japanese security policy transformation. Two different perspectives need to be considered to discern the situation. Japan could either move towards greater activeness regarding its alliance with the United States or play it safe by diversifying its cooperation initiatives in the security dimension with other powers within the line of American foreign policy in East Asia. To put these prospects into account, an observation is made on the security relations between Japan and Russia. The security links between the two have increased since the sanction aimed at Russia by the G7; Japan is a member of the group. This is quite strange, considering the assumption that Japan is keeping close to US policies in the international sphere. Thus, although improving Japan–Russia relations has started with economic considerations, security has become an added reason for improvement through this rapprochement pushed by Abe.

The primary motivation behind the progress for cooperation between Russia and Japan can be explained through how the two view each other’s potential in achieving their interests. For Japan, a strengthened Japan–Russia relationship is viewed through the strategic lens of dealing with the dual threats of North Korea and China (Brown, 2018, pp. 874–875). The Japanese government believes Russia holds a fairly constructive role in holding back North Korea’s alarming nuclear programme. Also, concerning North Korea, intensifying Japan–Russia security cooperation would minimise the chance of forming a Beijing–Moscow axis contra to Japan’s interest and security in the broader Asia Pacific region. The formation of such an axis would not be in the interest of the US-led international order, in which Japan is a close collaborator and beneficiary. Furthermore, if Russia were to go all-in in its support of China and further solidify their relationship, it would be detrimental to Japan’s interests. A strengthened China would pose a more significant direct threat to Japan. These fears are legitimate, considering Russia and China’s 2015 massive joint naval training—the largest at that time—in the Sea of Japan following the implementation of the G7 sanctions and another joint military exercise in the South China Sea the year after. With this genuine threat of a potential Russia–China axis, as demonstrated alarmingly by regular joint military training, Japan under Abe opted for rapprochement to constrain the growing special relationship between Moscow and Beijing.

For Russia, considerations about regional geopolitics are at the forefront of the agreement to Japan’s effort for rapprochement. While Russia’s special relationship is evident internationally, a closer look at their regional affairs might provide an alternate situation. From Russia’s perspective, an over-reliance on China would be counterproductive. However, China can challenge the United States; if the former ever surpasses the latte, it could threaten Russia. While this assumption might seem like an exaggeration, Russia’s fear of a Chinese military threat might one day be a reality. In forthright, China’s military strength poses a high risk but low probability of manifesting into existence, at least from Russia’s perspective (Kashin, 2016, p. 87).

Russia’s cooperation with Japan would be a strategic move towards partner diversification, aside from the more extensive economic nature and priority. Furthermore, Japan’s collaboration on establishing a new security architecture in Northeast Asia is needed to advance Russia’s geopolitical positioning. The urgency to resolve the North Korean nuclear programme as a major threat to everyone in the immediate region is important in establishing security. Russia is confident that the problem could be solved by initiating bilateral and multilateral dialogues with North Korea, with the support of East Asian state governments, especially Japan. In addition, Russia needs Japan’s assistance in dealing with its other security concerns. For example, Russia has been more aware of the increasing number of legal and illegal Chinese immigrants in the Russian Far East.

The direction towards security cooperation has become more evident from the July and September 2016 meetings. These were attended by both countries’ foreign ministers and defence ministers in a ‘2 + 2’ format. Subsequently, the security cooperation between the two sides experienced moderate developments, for instance, the re-holding of SAR training by the Russian Pacific Fleet and the Japan Self Defense Force in Wakasa Bay in January 2017. Furthermore, a month later, the foreign ministers of the two countries talked about bilateral cooperation in the face of non-traditional security threats of terrorism, the trafficking of narcotics and transnational money laundering (Brown, 2018, pp. 14–15). These bilateral processes suggest a more integrated Japan and Russia vision for security cooperation.

From the previous exposition, rapprochement could be considered a significant turning point in Japan and Russia’s positions against Washington and Beijing. However, Moscow–Tokyo relations and cooperation are still heavily oriented towards economic aspects, with limited progress within security realms. Even so, the development of the relationship is monumental. The significance of the policy lies in the geopolitical stage where Japan and Russia treat each other as insurance in anticipation of a future, as they cannot predict the outcome given the volatility of the decentred regional order, causing Japan–US and Russia–China relations to be uncertain.

In the short and medium terms, Japan positions the United States as its main ally, and Russia places China as a comprehensive cooperation partner. That being said, a potential change in global leadership would undermine Japan and Russia’s strategic scenarios and calculations at the regional and international levels. Even as its hegemonic order declines, the United States still holds the possibility of maintaining its status as a global power at the probable cost of ignoring Japan’s interests as a loyal ally. In Russia’s case, it can only partially rely on the assumption that China will serve as a benevolent great power or even hegemon that will continue to support common goods. These high-risk and uncertain conditions can sometimes be corrected in traditional power calculations when the policy opts for a safe middle position facing the great powers. Therefore, combinative hedging represented by the dynamics of Russia–Japan relations is one alternative explanation for formulating the country’s strategic position amid the multifaceted regional order.

Russia–Japan Relations After the Latest War in Ukraine

The Russian invasion of Ukraine in late February 2022 significantly impacted the global political and economic constellation. The increasing military tensions between Russia and the Western alliance, the imposition of economic sanctions on Russia and the potential for energy and food crises at the global level are some important consequences of Kremlin’s aggression in Ukraine. When viewed more specifically, the war dramatically impacted the relationship between Russia and Japan. In March 2022, Japan and Russia showed a firm stance towards each other. On the one side, Japan supported the UN General Assembly resolution to condemn Russia’s attack on Ukraine. On the other hand, it also took two economic measures: the ban on imports of Russian goods, especially production machinery, and the provision of aid worth $800 million to the Ukrainian government. Conversely, in response to the unfriendly Japanese actions, Russia withdrew from negotiating a bilateral peace agreement between the two countries (Chikahito, 2022).

Three main points can be drawn about the implications of the latest Russian war in Ukraine on Russo-Japanese relations (Kuo, 2022). The first point is the abrupt setback in the bilateral peace negotiations between the two sides, particularly regarding the dispute over the ownership of the South Kuril Islands. In the Japanese Ministry of Foreign Affairs 2022 Diplomatic Bluebook, the Japanese government changed its statement regarding the South Kuril Islands to the status of ‘illegally occupied by Russia’, a phrase that had never been used since 2003. Russia was also determined to leave the negotiations in mid-March 2022. The consequences of the first point are closely related to the second one. Russia and China are getting closer, so this thwarts one of the main interests of the rapprochement to Russia initiated by Abe—preventing the formation of an anti-Japanese front between Moscow and Beijing. While the third point relates to economic ties between the two countries with various sanctions imposed by Japan on Russia, economic cooperation, one of the important pillars of the Russo-Japanese rapprochement, is meaningless. Investments made by Japan in the Russian Far East were stopped, and the import embargo on Russian goods further emphasises the decline in their economic ties.

Even though it looks unfavourable, Russia–Japan relations can again experience a positive turning point when they recalculate their interests at the global and regional stages. Combinative hedging will still play an important role because Japan and Russia will use each other as flexible collaborators for functional insurance through different perspectives of interests. So far, Japan remains the ‘perfect alliance’ for the West’s economic sanctions against Russia. But strategically, the economic sanctions can become a new leverage for Japan to push Russia back to the negotiation table, considering that Russia’s economic condition will reach an inevitable culmination as sanctions become more and more binding. When that happens, Japan can offer incentives through an agreement based on the interests of the 2016 rapprochement, namely the achieving a peace pact and preventing the strengthening of relations between Russia and China. On the other hand, Japan continually needs Russia’s abundant energy supply. It should be noted that in the energy sector, Japan maintains crude oil and natural gas imports from Russia despite the embargo on Russian coal (Chang, 2022).

Regarding the security sector, Russia and Japan are back to discussing a peace pact; the combinative hedging will be significant. The war in Ukraine assured Japan that the more it could bind Russia to a formal peace pact, the less likely the latter was to do offensive actions against Japan’s northern regions. Tokyo can also use Russia as a buffer between Japan and China. Yet, Russia can direct the relationship with Japan to decrease tensions with the US-led alliance while strengthening its position beside China by avoiding overdependency.

Conclusion

Our article explains how the rapprochement policy conducted by Russia and Japan became a monumental point for improving their relations. But more importantly, it contributes to further research on hedging through combinative hedging. Combinative hedging addresses the conditions faced by Russia and Japan as a consequence of the contested order-making process, going hand-in-hand with the transition within the East Asian security environment.

The evolving dynamics in world politics have presented volatile and complex threats to the future. Therefore, understanding hedging must adequately explain flexible collaboration for contingency efforts as a hedge’s main feature. Additionally, maximising profits by taking the middle position as a flexible collaborator to each other, a characteristic of hedging, has become increasingly significant given the transformative nature of potential short-, medium and long-term threats. With this logic as an underlier, Japan and Russia were driven to reformulate their strategic policies towards the United States and China as the two great powers’ respective partners by considering the potential threat the latter may hold. By formulating and confirming the concept of combinative hedging, we complement the development of studies on Russia–Japan relations and how the two third-tier states position themselves within the dynamic security environment of East Asia. Thus far, Japan and Russia have referred to hedging logic in designing and implementing their foreign policy, especially regarding the interests of the United States and China. The former states perceive hedging as an effective instrument to simultaneously alleviate their feet on different levels to maximise benefits amid dilemmas associated with the great powers’ actions.

Today, the leaders of Japan and Russia pursue the elimination of collaboration restrictions that would encourage them to avoid certain risks. Incorporating each other into the matrix of their respective foreign policy is a form of these risks mentioned above. Still, it is a risk worth the strategic value of serving as a functional insurance for future uncertainties resulting from being in a wedged position, thrust by the systemic dynamics between the greater states’ struggle for power. Japan seeks to achieve this in its formal relations with the United States and Russia and its relational dualism with China.

Combinative hedging is implemented within Russia–Japan relations due to economic pragmatism and security considerations. Nonetheless, they have gradually improved since the meeting of Putin and Abe in 2016, with Putin visiting Japan, setting up various strategic partnership agreements in the economic sectors and re-implementing the high-level ‘2 + 2’ forum. From Japan’s perspective, the rapprochement with Russia is a significant point for Japan’s international cooperation effort through diversifying its partners outside its usual US alliance framework. Perhaps more importantly, Tokyo hopes to prevent any form of an anti-Japan axis between Russia and China. On the other hand, Russia is hopeful of Japan as a potential strategic partner for the economic development of the Russian Far East, also an X factor that could play a part in supporting Russia against the United States. Therefore, despite the strong motivation from both sides, further future cooperation would require a larger boost to design the strategic partnership toolkit that is expected to bring balance to the dynamic East Asian geopolitics.

In succeeding Abe, Prime Minister Yoshihide Suga tried to maintain and pursue further improvement of Russia–Japan bilateral ties. Putin’s consideration for economics has also driven Russia to do the same. However, some problems still pose a hindrance to the peace process. Issues such as Russia’s and Japan’s deadlocked position regarding the Kuril Islands, factors involving the United States and China, and the COVID-19 crisis, with the entailing focus from Tokyo and Moscow on policies to deal with the pandemic, are all major hindrances to further improvement towards peace. The prolonged conflict in Ukraine also poses a significant challenge to the administration of Prime Minister Fumio Kishida of Japan and Putin’s Russia regarding both sides’ economic and security cooperation. Although the war does not escalate into East Asia, the dividing effects on the regional states are unalienable. As a result, either Tokyo or Moscow will continue to consider the importance of each other as functional insurance amid the contested hierarchical region.