The recently concluded Shanghai Cooperation Organisation (SCO) Summit in Tianjin, China, is more than a routine gathering of Eurasian powers. As the geopolitical tides shift in the Indo-Pacific, the SCO Summit offered a clear glimpse into the changing mood of the Global South.
Leaders from across Asia and beyond used the forum to push back against the development models long dictated by Western-led institutions. It signaled a quiet, but steady, revolt against the development orthodoxy imposed by the neoliberal order – a world where financial returns and efficiency metrics have long trumped human needs, equity, and sustainability.
By establishing independent financial institutions, launching green energy commitments, and asserting a multipolar governance model, SCO members are sketching an emerging post-neoliberal world order – one rooted in state coordination, ecological sustainability, and the empowerment of Global South institutions and infrastructures. This reframing reflects a worldview that integrates state-led strategic interventions, regional autonomy, green transformation, and a multipolar governance vision- all hallmarks of a post-neoliberal orientation.
While many countries of the Global South used the SCO forum to reassert their demand for a more just, multipolar developmental architecture, the summit also served as a mirror- starkly reflecting the contrasting strategies of two Asian economic giants: China and Japan.
China’s Green Diplomacy and Developmental Finance: A Strategic Masterstroke
China, sensing the shifting winds, has astutely realigned its global developmental agenda. No longer confined to hard infrastructure through the Belt and Road Initiative, Beijing is now integrating green energy leadership with developmental finance. The Summit at Tianjin witnessed the emergence of an SCO development bank backed by 2 billion yuan in grants, also a mechanism for trade/green-energy settlements in Yuan/Electro-Yuan. China pledged to add 10 million kilowatts each of wind and solar capacity over five years across SCO members. A green energy corridor and a China-SCO green industry cooperation platform were launched to foster sustainable development.
By tying solar manufacturing, wind turbine exports, and battery ecosystems to concessional loans and infrastructure investments, China is not only exporting technology – it is exporting a new vision of development. One that claims to be sustainable, future-oriented, and devoid of the conditionalities that have long accompanied Western and Bretton Woods financing.
This model resonates. For many countries in Africa, Central Asia, and even parts of Southeast Asia, the Chinese offer of clean energy solutions is not just about climate – it’s about sovereignty, affordability, and long-term capacity building. China has put its best foot forward by backing its green technological edge with strategic financing, offering a compelling alternative to the profit-first, austerity-laden model of the past. Result: Across Africa, Central Asia, and the Indo-Pacific, China’s green offerings are meeting a deep demand – for affordable, sustainable energy and low-carbon growth that isn’t shackled to neoliberal conditions.
Japan’s Caution: Technologically Rich, Strategically Poor
In contrast, Japan has failed to seize similar transformative opportunities, despite having a distinct edge in critical urban domains, particularly urban transportation, Transit-Oriented Development (TOD), and resilient city planning. These are sectors where Japan not only has unmatched expertise, but which also align directly with the needs of the Global South: mass transit, affordable housing, and sustainable urbanization.
Japan could have carved out a unique role – offering inclusive, sustainable urbanization models to Global South nations grappling with unplanned growth. Yet, instead of leading a development paradigm rooted in inclusive, people-centered urbanism, Japan has largely defaulted to the old playbook: financing expressways, promoting motorization, and enabling capital-intensive infrastructure that ensures bankable returns for lenders but leaves borrowing countries burdened with debt, fractured cities, and deepening inequality.
This conservative approach reflects Japan’s enduring entanglement with the Bretton Woods institutions and the logic of financialization, where infrastructure must be profitable before it is sustainable, and where equity is a distant afterthought.
India at the Crossroads: Caught Between Two Models
India finds itself navigating a delicate balance. On one hand, it continues its strategic partnership with Japan – a Quad ally, investor in high-speed rail, and proponent of democratic development. On the other hand, India is a vocal advocate of Global South solidarity, a leader within the SCO and BRICS, and increasingly critical of Western-dominated economic models.
At Tianjin, India’s alignment with the Global South’s growing critique of neoliberalism was unmistakable. There is growing discomfort with external policy prescriptions that prioritize efficiency and profitability over employment, environmental justice, and social cohesion. This discomfort is not ideological – it’s existential. As Indian cities choke under the weight of car-centric planning, as informal economies shrink under formalization pressures, and as inequality deepens despite GDP growth, the limits of the Japan-backed, finance-driven development model are now glaringly obvious.
Japan’s Structural Position: Neoliberal Economic Power
Japan’s economic diplomacy is deeply embedded in institutions like the IMF, World Bank, and the G7. Historically, it has supported policy frameworks that prioritize efficiency, fiscal discipline, and market liberalization, largely through export-oriented growth and infrastructure finance – especially through the ADB (Asian Development Bank), which Japan dominates.
Even in its engagement with India, Japan’s investments – such as in the Delhi-Mumbai Industrial Corridor and high-speed rail – reflect a capital-intensive, technology-driven model that aligns more with economic growth metrics than with distributive justice or inclusive development.
A Missed Opportunity – And a Narrowing Window
What makes Japan’s strategic inertia more regrettable is that it had the potential to offer a third way: neither China’s state-led industrial diplomacy nor the West’s private capital-driven model, but a truly human-scale, technologically sound, and environmentally grounded development partnership. Its deep knowledge of disaster-resilient infrastructure, compact cities, and inclusive mobility could have reimagined urban futures across the Indo-Pacific.
Instead, Japan is seen financing highways rather than walkable cities, backing mega-projects over public spaces, and prioritizing logistics over livability. It is missing the chance to be the ethical counterweight to China’s scale, by simply imitating the profit logic of neoliberalism – just in a softer tone.
The Core Question: Can Japan Adapt to the Normative Shift?
Japan is now facing a dilemma. The post-neoliberal turn, particularly among Global South countries, is demanding:
– More inclusive development metrics (sustainability, equity, local empowerment).
– Debt justice and financial sovereignty, especially as debt crises loom large in parts of the Global South.
– Rejection of conditionalities tied to Western finance.
For India, which is increasingly vocal about “Global South solidarity”, accepting policy prescriptions that ignore human-development and sustainability would be politically and ideologically contradictory.
So, can Japan continue business as usual? Probably not – at least not without consequences.
Looking Ahead: Toward an Ethic of Development
If Japan is to strike a robust, futuristic strategic alignment in the Indo-Pacific and the wider Global South, it must recalibrate. The world is tilting toward development paradigms rooted in equity, sustainability, and local empowerment. China is reading the moment. Japan is not.
India, with its unique position in both camps, must insist on partnerships that prioritize human development over financial engineering. The next phase of South-South cooperation will not be about choosing between East and West, but about rejecting models that have failed the majority.
Conclusion: Time for a Reset
There is still space for Japan to course-correct. Rather than chasing China’s scale, it can compete on ethics, innovation, and inclusivity. A Japan-led TOD mission across South Asian cities. A “Metro Marshall Plan” for Southeast Asia. Smart cities designed not for automobiles, but for pedestrians and the planet. These are initiatives well within Japan’s capabilities, and badly needed in the region.
The post-neoliberal world demands more than capital. It demands vision, humility, and alignment with the lived realities of the Global South. China has understood this. Japan, despite its democratic values and technological edge, risks irrelevance if it does not.
India, for its part, must no longer accept development prescriptions that prioritize efficiency over equity. The Indo-Pacific deserves a better development path, one rooted in sustainability, dignity, and local ownership. Japan could help lead it, but only if it chooses to listen.
Author: Yashwant Singh – Assistant Professor at the Department of Sociology at GITAM (Deemed to be) University, Bengaluru Campus, Bengaluru, Karnataka, India. He has an M.Phil in Sociology from the University of Delhi and Ph.D in Sociology from University of Hyderabad, India. His research interests include urban sociology and sociology of development.
(The views expressed in this article belong only to the author and do not necessarily reflect the views of World Geostrategic Insights).