China and Japan, the giants of Asia, account for nearly three-quarters of the region's economic activity and more than half of the region's military spending. Despite their deep economic ties and a doubling of their bilateral trade in the past five years, their relationship is increasingly strained, with dangerous implications for the United States and the world at large.

Historically, relations between Japan and China were clearly structured. One country was always more prosperous or powerful than the other. Before the nineteenth century, China was usually dominant; since the Meiji Restoration, in 1868, Japan has generally been preeminent. The prospect that China and Japan could both be powerful and affluent at the same time has only recently emerged, largely because while China's economy and influence have grown rapidly, Japan's have remained stagnant. China has nuclear weapons and intercontinental ballistic missiles, and its military budget has grown by double-digit rates for 17 consecutive years. Although Japan has a relatively low military profile, with its "no-war" constitution and strong alliance with the United States, its defense-relevant technology is sophisticated and it has recently become more proactive. The stage is now set for a struggle between a mature power and a rising one.

Some liken current Sino-Japanese relations to the Anglo-German rivalry prior to World War I. As with the United Kingdom and Germany a century ago, the contest for regional leadership between China and Japan today is creating new security dilemmas, prompting concerns over Chinese ambitions in Japan and fears of renewed Japanese militarism in China. Both states are adopting confrontational stances, partly because of rising popular involvement in politics and resurgent nationalism exacerbated by revived memories of World War II; mutually beneficial economic dealings alone are not effectively soothing these tensions. Fluid perceptions of power and fear, Thucydides observed, are the classic causes of war. And they are increasingly present in Northeast Asia today.


Many contentious issues confront China and Japan. Among the most pressing is their thirst for energy. Japan depends on imports for 99 percent of its oil and natural gas; coastal China is similarly bereft of resources. Thus, the offshore oil and gas fields under the East China Sea are attractive "domestic" sources of energy for both Beijing and Tokyo -- and both have laid claim to them. China argues that the entire East China Sea continental shelf, extending eastward nearly all the way to Okinawa, is a "natural prolongation" of the Chinese mainland. Japan has declared its boundary to be a median line between its undisputed territory and China -- a line that runs roughly 100 miles west of the Okinawa Trough, which lies undersea just west of Okinawa and is where the richest petroleum deposits in the area are believed to be concentrated.

The conflict began escalating in May 2004 when China started serious exploratory operations in the Chunxiao gas fields, only four kilometers from the median line. Actions by both parties have since raised tensions. In November 2004, a Chinese nuclear-powered attack submarine intruded into Japanese waters near Okinawa for more than two hours, ostensibly by accident. Since the spring of 2005, the number of flights into disputed airspace by Chinese military surveillance aircraft has risen to record levels. In May 2005, Japan's Ministry of Economy, Trade, and Industry (METI) authorized Japanese companies to explore contested areas for natural gas. On the eve of the Japanese elections in September 2005, Chinese warships patrolled near the now-active Chunxiao fields. In response, both Japan's ruling coalition, led by the Liberal Democratic Party (LDP), and the opposition Democratic Party of Japan (DPJ) have prepared bills proposing to protect the operations of Japanese drillers and fishermen in disputed waters -- by force, if necessary.

The Korean Peninsula and the Taiwan Strait also present challenges for the Sino-Japanese relationship and for regional stability. Since the Pyongyang summit in June 2000, trade between South Korea and North Korea has grown by 150 percent, cross-border tourism has boomed, railway lines across the demilitarized zone have been reconnected, and a special economic zone in the peninsula's ancient capital of Kaesong, now in North Korea, has begun to flourish with South Korea's backing. As the likelihood of inter-Korean conflict declines, the long-term rivalry between China and Japan for influence on the peninsula may be rekindled -- a rivalry that helped spark the first Sino-Japanese War, of 1894-95. Unification or reconciliation could also deepen the sense Japan has that its position in Northeast Asia is under siege. Were the military forces of North Korea and South Korea to be combined, they would number close to ten times those in Japan's Self-Defense Forces (SDF).

Like the Koreas, Taiwan and China have grown more intertwined economically. According to most estimates, investment across the Taiwan Strait now totals over $100 billion. More than 70 percent of Taiwan's foreign investment went to the mainland in 2004, 10 percent of Taiwan's labor force works in China, and four Taiwanese-owned firms are among the mainland's top ten exporters. (Taiwan now trades substantially more with China than it does with the United States.) There have also been signs of an emerging political détente between Beijing and Taiwan's opposition parties: Lien Chan, chair of the Kuomintang Party (KMT) that Chiang Kai-shek led to Taiwan at the end of 1949, went to the mainland in April 2005, where he visited his ancestors' graves and the former KMT capital of Nanjing and met with China's president, Hu Jintao. Meanwhile, both countries' military capabilities have increased. China has deployed dozens of submarines and frigates, 800 short-range missiles, over 1,200 fighter aircraft, and tens of thousands of troops along the Taiwan Strait. Taiwan has countered by deploying its own missiles and nearly 300 top-of-the-line fighter planes, mainly U.S.-built F-16s.

Beijing's military buildup has implications for Tokyo: the missiles China has aimed at Taiwan could easily reach Japan's main islands as well as Okinawa, where 70 percent of U.S. defense facilities in Japan, including the indispensable Kadena Air Force Base, are located. Both U.S. and Japanese defense specialists thus view neutralizing this potential threat as a vital goal. The United States and Japan will conduct missile tests in Hawaii during the spring of 2006 to establish the efficacy of ballistic missile defenses. If a missile defense system were deployed, the U.S.-Japanese alliance's capabilities would be enhanced -- and Beijing would be alarmed by the weakening of its relative position. The issue is therefore emerging as yet another area of controversy in Sino-Japanese relations.

As Sino-Japanese tensions increase, it is becoming more and more likely that Japan will revise its constitution in ways that will allow the SDF greater freedom of action, even as other nonmilitary reforms are achieved as well. (The constitution, written in 1947, limits the SDF to a narrowly defensive role.) Beyond the regional tensions themselves, important long-term structural changes in Japanese politics are at work: the combined socialist and communist representation in the Diet has fallen from 14 to 3 percent over the past decade, leaving the conservative LDP and its coalition partner with the two-thirds majority needed to begin amendment of the constitution and leaving the left with only 16 of 480 seats in the Diet's dominant lower house. The recent ascendancy of defense hawks in the DPJ has also amplified the left's collapse.

The current LDP draft amendment, published in October 2005, would retain the historic Article 9, which states that "the Japanese people forever renounce war as a sovereign right of the nation." But the proposal would also clearly legitimate the SDF (an institution whose role has been constitutionally ambiguous); clarify Japan's prerogative to participate in collective self-defense, the linchpin of the security cooperation between Japan and the United States; and simplify procedures for amending the constitution in the future. This procedural change could further exacerbate Sino-Japanese tensions by increasing uncertainty regarding Japan's future rearmament.


The prospect, however distant, of Japanese remilitarization has a disturbing historical resonance in the region. Although World War II is more than a half century in the past and Japanese expansionism in Asia dates back another half century still, this history continues to haunt relations between Japan and China. The War of Resistance Against Japan, as the Chinese call their version of World War II, lasted more than twice as long as Japan's conflict with the United States; it had already been raging for more than four years when Japan attacked Pearl Harbor. By the time the war ended, it had caused far more casualties and atrocities than had the bitter struggle between Japan and the United States.

The debate over the war's legacy remains volatile, hindering efforts at cooperation. There have been occasional signs of progress: Japan's emperor, Akihito, whose father reigned during the conflict, visited Beijing in 1992, for example. Sadly, however, the situation has worsened lately, although generational change might have been expected to bring greater prospects for reconciliation. In China, the legitimacy of the Chinese Communist Party (CCP) is bound up with its perceived role as the stalwart defender of national interests during the war with Japan. The deference the party derives from that legacy grows ever more important to sustaining its rule as social inequities resulting from economic growth increase. Government policy, reflecting CCP concerns, promotes nationalist curricula in schools and intensive broadcasting of accounts of the war. The Internet has facilitated the expression of nationalist sentiments. In the spring of 2005, 44 million Chinese signed an electronic petition opposing Japan's quest for a permanent seat on the UN Security Council.

Positive sentiments toward China among the Japanese have also declined dramatically. According to polls conducted by the secretariat of Japan's cabinet, in October 2005, only 32 percent of respondents felt warmly toward China, down from 38 percent in 2004 and 48 percent in October 2001 (just after Japanese Prime Minister Junichiro Koizumi's only visit to China so far while in office). During the 1980s, before the massacre in Tiananmen Square, similar polls reported that more than 75 percent of respondents had positive feelings about China. The dramatic hardening of sentiment toward China is clearly a reaction to anti-Japanese demonstrations in China, as well as to China's military actions, including the nuclear submarine intrusion into Japanese waters in November 2004.

Five times in four years, Koizumi has visited the Yasukuni Shrine in Tokyo, a memorial where the names of the fallen of Japan's wars are enshrined -- including 14 convicted Class A war criminals from World War II. Only two other sitting prime ministers in the past twenty years visited the shrine at all, and each only went once. In Japan, opinion over Koizumi's visits to Yasukuni is almost evenly split, with six former prime ministers and five of Japan's six largest newspapers opposing them. But the dominant Mori faction of the LDP, to which both Koizumi and the influential chief cabinet secretary, Shinzo Abe, belong, has strong connections to Japan's political leadership of the 1930s and 1940s. (Abe, for instance, is the grandson of Nobusuke Kishi, a member of Prime Minister Hideki Tojo's wartime cabinet; Kishi's legacy remains controversial even though later, as prime minister, Kishi began Japan's policy of providing large-scale reparations to Southeast Asia.) Such ties make the Koizumi government prone to holding conservative conceptions of national interests and render it more suspect than its predecessors in the eyes of many Asians, including the Chinese.

Koizumi has consistently stressed the personal and unofficial nature of his visits to the Yasukuni Shrine. Beijing has nevertheless criticized them sharply. Seasoned U.S. diplomats suggest privately that the Yasukuni issue is more damaging to Japanese regional influence now than it was even two or three years ago, because China is emerging as a skilled diplomatic player that can use the history card more effectively to marginalize Japan than previously due to its growing political and economic clout. Two months after the February 2005 U.S.-Japan Security Consultative Committee meetings, at which Washington and Tokyo decided to make a priority of peacefully resolving Taiwan Strait issues, major demonstrations broke out in Beijing and Shanghai against Koizumi's Yasukuni visits and the standard depiction of the war in Japanese textbooks (which the Chinese see as downplaying Japan's culpability for the conflict). Many observers note that Beijing has particularly strong incentives to prevent any strengthening of the U.S.-Japanese alliance on Taiwan-related matters. And China, claiming that Japan has not sincerely atoned for its wartime aggression, has also used the issue to hinder Japan's bid for the permanent UN Security Council seat that many feel it richly deserves (Tokyo, after all, funds 20 percent of the UN budget, compared to China's 3 percent).

Whatever the personal or political rationale for Koizumi's visits, Yasukuni is a flashpoint for widespread, if often ill-informed, international misgivings about Japan's foreign policies, misgivings that erode the regional and global effectiveness of Japanese diplomacy. The visits make it difficult for leaders in both Japan and China to manage bilateral economic and security relations; hurt Japan's ability to take proactive diplomatic steps (for instance, by preventing Tokyo from taking a leadership role, amply justified by its capabilities, in regional energy and environmental cooperation); reduce Japan's leverage with third countries, such as Russia, that may care little about the visits themselves but care about tensions between Japan and China, with which they do business; and divert Japanese public attention from the serious security issues looming over Northeast Asia. There is a danger that, down the road, Japan could find itself increasingly isolated diplomatically from other countries in the region. Coupled with the security challenges that Tokyo faces, such a situation could drive Japan toward counterproductive unilateralism or an overly militarized variant of the U.S.-Japanese alliance. Either outcome would greatly intensify regional tensions.


The United States has a crucial role to play in easing the tensions between Japan and China. Rather than prescribing specific solutions for every problem, the U.S. approach should continue to be what it has been since the mid-1980s: reaffirming the importance of the U.S.-Japanese alliance while encouraging Japan and China to develop a dialogue of their own.

The United States' long-standing alliance with Japan has been the pillar of U.S. policy in the Pacific for over half a century. Much has been achieved over the past decade on the military side of the relationship, including operational planning since the late 1990s for emergencies in "areas surrounding Japan," as opposed to Japan itself. Since the attacks of September 11, 2001, the SDF has extended its area of operational responsibility to the Arabian Sea, and in January 2004 Japan sent troops to Iraq. In December 2005, Chief Cabinet Secretary Abe announced Japan's decision to begin developing a next-generation missile interceptor with the United States.

Increasingly close bilateral defense relations have not, however, generated equally strong grass-roots support. Many Japanese appear uneasy with U.S. policies on Iraq, military transformation, host-nation support, and the environment, even as they are frustrated by seemingly lukewarm U.S. support for Japan's aspirations to become a permanent member of the Security Council. These undercurrents showed up in a revealing December 2005 Yomiuri-Gallup poll: although 76 percent of U.S. respondents said they trusted Japan, 53 percent of Japanese said they did not trust the United States, 43 percent said they felt that the U.S. military presence in Japan should be reduced, and 27 percent characterized U.S.-Japanese relations as bad.

Clearly, more should be done to deepen the bilateral U.S.-Japanese partnership, with special sensitivity to the complex economic and security issues raised by the rise of China. A bipartisan U.S.-Japanese task force consisting of both countries' best specialists on trilateral relations is needed. The model could be the Japan-United States Economic Relations Group (which brought together prominent businesspeople and academics of both nations to consider long-term economic and security issues) of the late 1970s. Such a step would help consolidate support for the alliance by making it more responsive to broad national sentiments and less tied to parochial interests.

Once the alliance between Tokyo and Washington is consolidated, the best way to defuse the rivalry between China and Japan would be to increase multilateral contacts, both through official mechanisms and through unofficial relations among nongovernmental actors ("Track II"). Enhancing trilateral cooperation among China, Japan, and the United States, especially regarding energy policy, should be a priority. Together, the three countries account for over 40 percent of the world's energy consumption, and they are the three largest oil importers, making their cooperation especially vital. Japan could take a useful step by creating an "energy and environment exception" to its contemplated 2008 termination of development assistance to China, possibly including a provision for U.S.-Japanese-Chinese energy cooperation. The United States, Japan, and China should also form the core of a new North Pacific Regional Energy Consortium, to focus on improving energy efficiency, particularly in China (which currently operates at 40 percent of the United States' efficiency levels and 11 percent of Japan's). Measures such as these could be a balm for the greatest sore in the region, the spiraling rivalry across the East China Sea. Given rising strategic dangers and political uncertainties, a broad Northeast Asia Strategic Dialogue involving China, Japan, the United States, and others is also needed. Such a body could be a spin-off of the existing six-party talks over North Korea's nuclear program (which include China, Japan, North Korea, Russia, South Korea, and the United States), omitting North Korea if necessary. The group's creation should be supplemented by confidence-building measures such as a Sino-Japanese military-to-military dialogue and multilateral contingency planning for disaster-relief activities. Multilateralism keeps nationalism in check, as has been demonstrated by Europe's experience with the Organization for Security and Cooperation in Europe, which provides the continent with a regional security framework.

To improve Sino-Japanese relations, the two countries will also have to stabilize their bilateral policies and cultural networks. During the period between the normalization of relations between Beijing and Tokyo in 1972 and the advent of the Koizumi government in 2001, Sino-Japanese networks were relatively vigorous, particularly those involving the political heirs of former Japanese Prime Minister Kakuei Tanaka (who presided over the normalization). But they have atrophied over the past five years. There have been no full-scale Sino-Japanese summits since mid-2001, and the crucial networks of midlevel bureaucratic coordination have badly frayed. The quiet yet devastating process of generational change has also been a corrosive factor. Veteran statesmen from both China and Japan who really knew the other country and its importance, such as Zhou Enlai, Deng Xiaoping, former Japanese Prime Minister Noboru Takeshita, and former Chief Cabinet Secretary Hiromu Nonaka, are now gone. From a Japanese perspective, it would be sensible to resume ministerial-level dialogues on finance, trade, and energy as well as to reinvigorate networks with China by appointing as ambassador to Beijing a heavyweight political or business figure with strong personal ties to both the United States and China. China has already made a gesture of this sort by naming the well-regarded (and Japanese-speaking) former vice minister of foreign affairs, Wang Yi, ambassador to Tokyo.

Track II conferences about history (especially World War II), involving academics from neutral countries such as Canada as well as Asian specialists from within the region, could improve relations by fostering less-politicized discussions of the war. Germany and Poland, as well as Japan and South Korea, already have joint textbook commissions that could serve as models for China and Japan. An initiative such as this could be particularly effective at de-escalating tensions in the wake of progress in the strategic dialogues outlined above. To help those dialogues along, moreover, U.S. officials should refrain from making casual pronouncements on the delicate matter of wartime commemoration in Japan. As Koizumi has noted, many personal issues are involved in such events. The Japanese people themselves, however, deserve the broadest possible range of options about how to remember the war. For several years, there has been spirited discussion about building a national secular war memorial to supplement Yasukuni, and this deserves serious consideration. Such a model has worked well in both Hiroshima and Okinawa. Apart from providing a way to commemorate the sacrifice of civilians and other heroes of past conflicts not enshrined at Yasukuni, a secular memorial would clearly help improve Japan's relations with other countries in the region and provide foreign leaders with a way to gracefully honor the past sacrifices of the Japanese people.

The United States should encourage regional cultural communication as well. In many areas, such an approach will be far more effective than official action, given the importance of personal networks in Asia. Using mechanisms such as the State Department's International Visitors Program to bring to the United States Japanese and Chinese experts who specialize in the other country's affairs could help create new intellectual networks and generate specific ideas for improving trilateral relations. Informal groups and more formal deliberative forums, such as congressional hearings, should address the deteriorating Sino-Japanese relationship, which is the storm center of the political and military crisis in Northeast Asia. Such discussions could also usefully consider the diplomatic implications of the Yasukuni issue in addition to pressing security concerns such as China's military buildup.

Change in Japan's policy toward China ultimately must come from within. It is unlikely that any significant shift in foreign policy can be made while Koizumi remains in office. He is locked into his positions, such as his promise to go to Yasukuni annually, and it would be difficult for him to escape such pledges, particularly in the context of continuing geopolitical challenges in Northeast Asia. A window of opportunity could well open this September, when Koizumi is scheduled to leave office. Japan's new leader will have opportunities to innovate pragmatically in relations with Beijing without being seen to knuckle under to Chinese influence -- by resuming summit meetings between Japan and China, reinvigorating energy and environmental dialogues, exploring the concept of a secular war memorial, and tacitly refraining from visits to Yasukuni, even as he or she comprehensively strengthens relations with India, Australia, and the Association of Southeast Asian Nations (ASEAN) and takes a hardheaded approach to deepening security concerns. Such actions would enable Japan to take the diplomatic high ground and allow both Japan and China to focus on the very real challenges of stabilizing their relationship, less distracted by the peripheral yet politically contentious issues of history.

Stabilizing the Sino-Japanese relationship is crucial for both the region and the world. Doing so is a matter primarily for China and Japan, but there is an important role for the United States as well. The United States must honor its vital alliance with Japan. Yet it will also have to transcend its "hub and spoke" diplomacy and recognize that many issues need multilateral treatment. If it can do so, the United States will indeed be the "essential power" in Asia, as its diplomatic rhetoric has so often claimed.

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  • Kent E. Calder is Director of the Reischauer Center for East Asian Studies at SAIS, Johns Hopkins University.
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