Contentious Integration : Post-Cold War Japan-China Relations in the Asia-Pacific 9781472419996, 9781472419989

Citation preview

Contentious Integration

Rethinking Asia and International Relations Series Editor: Emilian Kavalski, Australian Catholic University (Sydney) This series provides thoughtful consideration both of the growing prominence of Asian actors on the global stage and the changes in the study and practice of world affairs that they provoke. It offers a comprehensive parallel assessment of the full spectrum of Asian states, organisations, and regions and their impact on the dynamics of global politics. The series encourages conversation on:

• • • •

what rules, norms, and strategic cultures are likely to dominate international life in the ‘Asian Century’; how will global problems be reframed and addressed by a ‘rising Asia’; which institutions, actors, and states are likely to provide leadership during such ‘shifts to the East’; whether there is something distinctly ‘Asian’ about the emerging patterns of global politics.

Such comprehensive engagement not only offers a critical assessment of the actual and prospective roles of Asian actors, but rethinks the concepts, practices, and frameworks of analysis of world politics. Other titles in this series The Long Peace of East Asia Timo Kivimäki Harmonious Intervention China’s Quest for Relational Security Chiung-Chiu Huang and Chih-yu Shih North Korea and Security Cooperation in Northeast Asia Edited by Tae-Hwan Kwak and Seung-Ho Joo Post-Conflict Development in East Asia Edited by Brendan M. Howe China’s New Diplomacy Rationale, Strategies and Significance Zhiqun Zhu

Contentious Integration

Post-Cold War Japan–China Relations in the Asia-Pacific

Chien-peng Chung Lingnan University, Hong Kong

First published 2014 by Ashgate Publishing Published 2016 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an informa business Copyright © 2014 Chien-peng Chung has asserted his right under the Copyright, Designs and Patents Act, 1988, to be identified as the author of this All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library The Library of Congress has cataloged the printed edition as follows: Chung, Chien-Peng. Contentious integration : post-cold war Japan–China relations in the Asia-Pacific / by Chien-peng Chung. pages cm. -- (Rethinking Asia and international relations) Includes bibliographical references and index. ISBN 978-1-4724-1998-9 (hardback) -Japan. i. Title. DS849.C6C578 2014 327.52051--dc23 2014018159 ISBN 9781472419989 (hbk) ISBN

Contents Preface   Acknowledgment  

vii ix

1

Sino-Japanese Relations in the First Post-Cold War Decade  

2

Proactive Japan and Reactive China  

23

3

China’s Initiatives in Structuring Regional Multilateralism (1996–2004)  

43

4

China–Japan Relations in the Post-Koizumi Era: A Brightening Half-Decade?  

65

5

From Mutual Tolerance to Separate Ways   

85

6

Delayed but Proactive Response: Japan Strikes Back  

103

7

“One-Upmanship” Diplomacy in the Pacific  

127

8

Competitive Multilateralism: ASEAN in the Context of China’s Advance, Japan’s Flanking and America’s Pivot  

147

9

Looking Forward: Japan and China in an East Asian Community  165

Index   

1

183

This page has been left blank intentionally

Preface The Asian-Pacific is now one of the most important regions in the global system, geopolitically and economically, where the interplay of integrative economic, political and sociocultural processes will provide increasing scope for regional leadership to be exercised by state actors which possess the most significant capacities, particularly China and Japan. As such, this book intends to contribute toward identifying and understanding the relationship between the People’s Republic of China and State of Japan as the basis of the construction and maintenance of economic and security arrangements in this broad East Asian and Western Pacific region, and explaining how the purposes and functioning of these arrangements have been challenged by the occasionally testy ties between the two major Asian powers. This book will focus on the China–Japan relationship since the beginning of the post-Cold War era, but within the larger context of the objectives and constraints that each faces in establishing and consolidating regional arrangements to address economic integration and security concerns in the Asia-Pacific. It will explore the dynamic interactions of the participation of Japan and China in these forums, in promoting one’s own agenda and ambitions and obstructing that of the other’s, in contending for leadership of East Asia. It will contend that mismatching identities and opposing interests between China and Japan have led to a desire for mutual cooperation that is at the same time combined with and balanced by an anxiety regarding the other’s intentions, resulting in competitiveness and rivalry, and contestation for leadership, in the construction and maintenance of Asian and Pacific regional arrangements This book will weave together the salient themes of bilateral Sino-Japanese relations, China’s responses to earlier Japanese initiatives to create a framework of regional integration, and Japan’s responses to later Chinese initiatives to formulate a mix of regional arrangements, all executed under the watchful eyes of the United States. In so doing, it attempts to relate the complex interdependence and competitiveness of these three very important countries of China, Japan, and the United States, and their friends and allies, which have direct bearing on the politics, economics and security of the world that we live in. Published works on China–Japan relations tend to focus almost exclusively on bilateral Sino-Japanese relations, to the complete or near exclusion of looking at the functioning of this relationship within the context of the cut-and-thrust dynamics associated with the search for some form of stable and effective regional arrangement. It seems also to be the case that books about attempts by either China or Japan to construct multilateral economic or security forums typically relegate

viii

Contentious Integration

to the background the other’s roles and influences in the process of integrating the East Asia–Western Pacific region. By examining the changing behavior of Japan and China toward each other in regional arrangements in different time periods and grounding this interaction in the shifting sentiments that the populace and officials in each country hold and express toward the other, this book hopes to provide considerations for guiding practical foreign policy-making regarding China, Japan and the United States, and make theoretical inferences for the study of Sino-Japanese relations and regional integration in the discipline of international relations. C.-P. Chung, Hong Kong Summer Solstice, 2014

Acknowledgment The author would like to acknowledge the support given to him by Hua Lee, who in her own ways contributed enough to the writing of this book to be recognized as his spiritual co-author.

This page has been left blank intentionally

Chapter 1

Sino-Japanese Relations in the First Post-Cold War Decade China and Japan in the Search for Integration The relationship between the People’s Republic of China (PRC) and Japan is obviously a very important one for the East Asian region and globally, given the tremendous influence that each country has over its neighbors and the world. Yet this is a very troubled set of bilateral relationship, which can be characterized as one of contention amidst integration, with increasingly more rivalry and less interdependence as the years following the Cold War’s end elapse. Why China and Japan sees each other as one’s rival, and increasingly so as the years wear on, is an important issue underlying, and bedeviling, their relationship which will be explored later. Yet, near to and just after the end of the Cold War, searching for ways to integrate, interweave and multiply the relationship between the two countries was what was expected by the political leaders, bureaucrats, businessmen, academics and peoples of Japan and China. Integration, as it is understood in this context, refers to structured cooperation between states which involves interactions that occur regularly and follow some pattern for certain purposes, and is therefore a more institutionalized and developed form of cooperation. Regional integration driven by the governments of states, through the process known as regionalism, focuses on bringing countries of a region, East Asia/Western Pacific in our case, together for purposes of providing “positive” utilities, such as raising security confidence building, increasing exchanges amongst peoples, promoting greater interdependence among economies, solving collective problems such as cross-border pollution or crime, and establishing common institutions to address common concerns and foster shared interests. East Asian regionalism is the product or culmination of regional economic integration, or regionalization, laced together by multiplying thread-works of cross-border production based on exchanges of trade, capital, technology and organizational know-how in the two broad East Asian regions of Northeast Asia and Southeast Asia. Since the mid-1960s, economic regionalization has been driven by: 1) capital flows and technological transfers from Japan and later the “four dragons” of South Korea, Taiwan, Hong Kong and Singapore to the less industrialized countries of Southeast Asia; 2) adoption by regional governments of open market strategies friendly to trade and foreign direct investment (FDI); and 3) the economic rise of China which made it an important destination for

2

Contentious Integration

investment flows and commodity exports, particularly since the early 1990s.1 Economic integration has been creating more and more shared interests, which has made possible the subsequent development, albeit gradual, of more definite and institutionalized political forms of regional cooperation. Multilateral processes of institutionalization usually involves specifying functional goals, first creating and then clarifying behavioral norms, moving from norms to formal rules, and extending the process to the structuring of concrete entities like permanent committees, staffs, budgets, and internal procedures that can shape ideas or policies. Institutionalization is important for the study of regional organizations and multilateral regimes of states because it gives us a starting point from which to examine policy issues and processes, helps us to identify the roles, interests and norms of the actors involved, assists us in understanding how these actors together determine the shape and speed of regional integration, and finally, allows us to speculate on the future of the institution and the region.2 Indeed, moving from unstructured regionalization to formal regionalism is about institutionalization. With states as members, permanent institutional structures should be expected to have the function of mitigating tensions, yet, ironically, the biggest factor hindering the establishment or consolidation of a regional institution of states is the unease and ill-feeling that major parties have toward one another. Political will and consensus are required to shape the roles and functions that such institutions should take. Japan was the first to see advantages in structuring multilateral arrangements involving states in Asia with which it could develop beneficial relations. This came out of essentially two considerations. On the one hand, Japan believed it could become first among equals, especially of the Asian nations, and exercise due influence, particularly in the economic sense as a developed nation, but given its record as their invader during World War II, thought it prudent to operate under the cover of multilateral institutions. On the other hand, Japan hoped that multilateral institutions could help it to counter pressures from the United States and European countries, whether to open up its markets or contribute more to the defense of Western capitalist interests. The results of early post-Cold War Japanese ideas for regional economic and security cooperation were respectively the Asia-Pacific Economic Cooperation (APEC) and ASEAN Regional Forum (ARF). To their credit, Japan’s leaders had realized early on that there was a need to embrace China, which was engaging in its own economic reform and opendoor policy throughout the 1980s, and guide that nation in its development and modernization drive, in both economic and security aspects of regional integration and deepening interdependence. Still, Japanese policy-makers after the Cold War ended were, as Richard Samuels suggests, conducting a “dual hedge” strategy, in 1 Zhang Yunlin, China and Asian Regionalism (Singapore: World Scientific, 2010), 2. 2 Elizabeth Bomberg, Laura Cram and David Martin, “The EU’s Institutions,” in Elizabeth Bomberg and Alexander Stubb, eds, The European Union: How Does It Work (New York: Oxford University Press, 2003), 643–68.

Sino-Japanese Relations in the First Post-Cold War Decade

3

dealing with both a rising and potentially threatening China, as well as possible US unilateralism.3 For many Americans and Asians as well, the disappearance of the Soviet threat had eroded the political and strategic legitimacy of a US presence in the region, but to many Japanese, US military protection was still needed for both the continuing US engagement with Asia and security of Japan’s trade routes. However, the collapse of the Soviet Union also meant that there was no longer a common enemy facing both China and Japan which had compelled them to submerge differences which they might have had with each other. Thus on the one hand, Japan balances China’s rise by strengthening its alliance with the US to bind its presence in the region and by upgrading its own military capabilities, while on the other hand, Japan hedges against US abandonment or weakening of the alliance by cultivating good or at least cordial Japan–China relations without inciting unnecessary US or regional suspicions about Japan’s leadership ambitions, by promoting the participation of all three countries in regional multilateral settings. Although the Chinese Communist Party (CCP), the PRC’s ruling political party, managed to repress pro-democracy demonstrations during the Tiananmen incident of June 1989, the subsequent collapse of the Soviet Union and democratization of Eastern European communist regimes seriously eroded the ideology-based legitimacy of the CCP in China.4 Integrating China into the global economy by deepening interdependence between China and the world, particularly the major economies of the US, Japan and the European Union, became the only realistic path for the leaders of the PRC to maintain their country’s economic growth and thus preserve the political legitimacy of the CCP elite. In the wake of international isolation as a result of the Tiananmen crackdown, PRC leaders eagerly welcomed the first ever visit of a Japanese emperor to China in 1992, seeing this move as a harbinger of a new stage of improved relationship between Japan and China. Although the Japanese government and public were shocked and disgusted by the brutal repression of student and worker demonstrators by the PRC authorities in the Tiananmen incident, for a few more years Japan still retained an image of itself as a powerful modern country that should mentor China as a developing nation engaging in a modernization drive that was vulnerable and needing of Japan’s help.5 However, by the mid-1990s, Japanese view of China was showing a drastic change. The Japanese government had to retract a visa issued to President Lee Teng-hui of Taiwan to attend the Asian Games in Hiroshima in 1994 due to official Chinese protests. Tokyo was nervous about Beijing’s growing spending on arms acquisitions, expanding missile technology development, and nuclear tests and simulation exercises, the last of which led to Japan suspending grant aid to China 3 Richard Samuels, Securing Japan: Tokyo’s Grand Strategy and the Future of East Asia (Ithaca and London: Cornell University Press, 2007). 4 Kai He, Institutional Balancing in the Asia Pacific: Economic Interdependence and China’s Rise (London and New York: Routledge, 2009), 25. 5 Ming Wan, Sino-Japanese Relations: Interaction, Logic, and Transformation (Washington, DC: Woodrow Wilson Center Press, 2006), 162–3.

4

Contentious Integration

temporarily starting in August 1995. Public opposition in China against Japan’s quest to become a permanent member of the United Nations Security Council, threat of force by China’s People’s Liberation Army (PLA) against separatists on Taiwan during the latter’s legislative and presidential elections in December 1995 and March 1996 respectively, and submarine intrusions into territorial waters claimed by Japan could not have endeared the Japanese to the Chinese. By then, many people in Japan were beginning to see China as a major economic and burgeoning military power, which was also a view that came to be embraced by China’s political and policy-making elite, as well as its general public, by the beginning of the twenty-first century. The US–Japan Joint Security Declaration, signed by US President Bill Clinton and Japanese Prime Minister Hashimoto Ryutaro on April 17, 1996, was considered by China as the affirmation of a US–Japan axis to check the spread of Chinese influence in the Western Pacific. Mainstream Japanese opinion, on the other hand, perceived it as move to make Japan more of a “normal state,” which would entitle it to deploy military forces abroad in support of overseas US military deployments, and the US saw it as a form of defense burden-sharing with Japan. China began to demonstrate a proactive participatory stance in the Shanghai-Five in 1996 and the ARF in 1997. These moves were not coincidental, but very much related to the strengthening of the US–Japan security alliance pursuant to the signing of the Joint Security Declaration, which China had severely and publicly criticized, and the collapse of socialism as a force in Japanese politics. The leftwing Japan Socialist Party had always adopted a more pro-China in its foreign policy stance than the long-time ruling Liberal Democratic Party (LDP) of Japan. In East Asia, integration seems to have moved in stages, from cooperative to dialectical to rivaling modes, mirroring the phases that the relationship between China and Japan has found itself in since the end of the Cold War, particularly from the mid-1990s onwards. Rivalry and cooperation have been the two most important aspects of relations between China and Japan for the quarter-century since 1989. With its economy heading for the doldrums, Japan could no longer feel self-assured that it could continue to rely on economic strength to buttress its diplomatic influence overseas, especially in light of China’s contemporaneous burgeoning economic growth. While China was becoming a truly independent strategic player in world affairs, Japan’s security profile is much closer to that of a middle power, being constrained by the legacy of the Pacific War, which makes its alliance with the US a necessary aspect of its defense policy.6 China began to be very sensitive and tended to overreact to the rising conservative ideological trend in Japanese politics,7 seeing greater support by the Japanese public for a revision of Japan’s postwar constitution, particular the total renunciation of military potential stated in Article 9, as a precursor to Japan returning to its past as a traditional 6 Yoshihide Soeya, Japanese Domestic Politics and Security Cooperation in Northeast Asia (New York: Council on Foreign Relations, December 2010), 6. 7 Ibid., 4.

Sino-Japanese Relations in the First Post-Cold War Decade

5

militaristic great power.8 Neither country was well-prepared for the co-existence of two assertive powers in East Asia for the first time in history. As the changing status of one in the eyes of the other and the rest of the world affects both their pursuit for recognition as major powers, perceptions of relative gains and losses create serious impediments to meaningful bilateral cooperation. By 1997, Sino-Japanese interactions had begun to meet the definition of a rivalry, although contentious behavior was not yet openly displayed amidst the mutual search for forms of cooperation. The word “rivalry” conventionally means “competition for the same objectives.” Indeed, Japan and China are now seeking competing objectives, singling each other out as deserving attention of being considered a threat to one’s own important values and interests, and consequently, showing great concern over what one’s own political, economic or military gains or losses will mean to the competitor.9 Increasingly, this rivalry or competition is taking place, not only in terms of bilateral relations, but within the context of their presence in multilateral arrangements of regional states of Asia and the Pacific. China and Japan in Regional Multilateral Institutions There are many regional arrangements of states in this world. The variety of regionalism in East Asia (Northeast Asia and Southeast Asia) consists of an overlapping selection of bilateral, multilateral and “mini-lateral” (three or more sided subsets of existing multilateral) cooperative groupings in the diplomatic, economic and military realms, with variations in membership and formal scope. These overlapping structures offer diverse arenas for states with an abiding interest in East Asian security or strong ties to East Asian economies to engage and cooperate in. They offer important means to channel peaceful competition for security and economic advantages by China and Japan, and also the United States. The roles and involvement of China and Japan in multilateral regional forums either established or mediated by the Association of South East Asian Nations (ASEAN), the most prominent being the ASEAN Regional Forum (ARF), ASEAN Plus Three (APT), East Asia Summit (EAS), and ASEAN Defence Ministerial Meeting Plus (ADMM+), or other multilateral arrangements such as APEC or the Six-Party Talks may be described as having passed through all or some of the three stages. Stage 1 attempts at cooperation; Stage 2, mutual tolerance amidst rivalry; and Stage 3, either pro forma attendance or purposeful nurturing—the contrasting mode of behavior adopted depending on whether either country believes it is worth its while to expend attention or energy on a specific platform. More specifically, Stage 1 attempts to seek out a mode of cooperation and would characterize Sino-Japanese relations in APEC from 1991 to 2000, the ARF from 1994 to 2004, and the APT from 1997 to 2004. Stage 2, tolerating the other’s 8 Ibid., 9. 9 Wan, 338–9.

6

Contentious Integration

schemes while deploying one’s own stratagems to neutralize them, would describe their relationship in the ARF, APT, and in more retaliatory fashion, EAS from 2005 to 2009. This also roughly corresponds to the period of time when Japan initiated a “Central Asia plus Japan Dialogue” with countries in Central Asia in an attempt to counter China’s rising influence in that region through the Shanghai Cooperation Organization (SCO). This was also the time when China started its own forum with South Pacific island states to rival a similar arrangement set up by Japan several years before. Stage 3, more competitive attention given to APT and EAS by China and Japan respectively, for diplomatic gains, and pro forma attendance in the ARF and ADMM+ by both these countries, reflects their security realignments in other set-ups beginning around 2007 but gathering strength since 2010. The proposed Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP) trade groupings, for which Japan and China has respectively expressed interest, would fit into this stage. These stages correspond to and result from: 1) China’s rise and Japan’s search for effective ways to deal with it through multilateral forums; 2) Japan’s attempts to dilute China’s influence in regional frameworks to deny it clear or overall leadership of East Asia; and 3) Japan’s moves to contain China through alliance-weaving given what Japan believes is America’s support. The dates given are naturally approximates, given the inexactness of affairs in the human world, but the characteristics of the various stages can be quite clearly discerned. In international relations study, from a realist standpoint, the anarchical system of states is one where distrust and conflict among them is the norm and cooperation is difficult to achieve, even with their participation in international regimes that are created to ameliorate distrust and promote cooperation. According to Joseph Grieco,10 to defend its dominant or advantaged position against other states, a state will decline to join, leave, or sharply limit its commitment to a cooperative arrangement if it believes that its partners are achieving, or likely to achieve, comparatively greater gains, even though it is itself achieving, or expects to achieve, absolute gains. This “relative gains problem” in cooperation engenders another proposition which could be tested—the assertion by Duncan Snidal that as the number (n) of parties to a multilateral arrangement increases, concern for relative gains (or losses) are less likely between any two partners (or rivals), because among other considerations, coalitions can be formed to protect oneself.11 Robert Powell pointed out,12 if a state (like Japan or the US) fears that an advantaged partner (like China or Russia) might employ an increase in capabilities accorded to it by 10 Joseph M. Grieco, “Comment: The Relative-Gains Problem for International Cooperation,” American Political Science Review 87, no. 3(1993): 729–35. 11 Duncan Snidal, “Relative Gains and the Pattern of International Cooperation,” American Political Science Review 85, no. 3(1991): 701–26. 12 Robert Powell, “Absolute and Relative Gains in International Relations Theory,” American Political Science Review 85, no. 4(1991): 1303–20.

Sino-Japanese Relations in the First Post-Cold War Decade

7

a gap in gains (perhaps through inking a free trade deal or security agreement) in such a way as to constitute a greater strategic threat, this may have the effect of reducing n, to the number of “worthy rivals” only, when considering relative gains seeking behavior among states. Powell’s argument was refined by Robert Keohane, who noted that a state would be concerned with relative gains only if there were significant expectation of resulting damage to itself,13 from these limited numbers of worthy rivals. China and Japan are certainly seeing each other as worthy rivals. Within the last 20 years, while China has been increasingly powerful economically vis-à-vis Japan, particularly in the arena of trade, Japan has been military reinforced with US backing, especially in the area of conventional security. Such being the case, in consonant with Keohane’s refinement of Powell’s argument on relative gains concerns with respect to one’s perceived rival or rivals, we will expect to find that Japan would naturally desire to play a constraining or even obstructionist role in regional economic (trade) groupings, where it is relatively weaker, while it is in China’s interest to play a similar role in regional (conventional) military groupings, given its comparative vulnerability. In general, the functional effectiveness of a grouping will tend to decrease with increasing membership size, which involves more interests, objectives, and lines of communications to be taken into account, and by reversing the logic, increase with decreasing membership size. It is clear that since the early years of the twenty-first century, the underlying tone of Sino-Japanese interactions in East Asian–Pacific regional arrangements has been one of competition for influence over the surrounding countries constituting the member states of the forums. Unsurprisingly then, to concentrate and maximize one’s own influence in the regional forums where one has the strength or the advantage, China would favor having fewer members within economic groupings, while Japan would prefer the same within security groupings. Conversely, to diffuse and minimize one’s opponent’s influence in the regional forums where one is weak or disadvantaged, Japan would prefer having more members within economic groupings, whereas China would favor the equivalent within security groupings. A major consequence of this contest is that the “ASEAN Plus” arrangements founded or facilitated by ASEAN, of which both China and Japan have membership, have particularly since 2005, become a numbers game—how to form coalitions by bringing in one’s own friends while limiting that of the other’s. This would be in accord with Snidal’s prediction above. However, although it must be recognized that the mode of interaction between China and Japan in regional forums progressed from uneasiness to resentment and then to rivalry, no analysis will be complete unless it is understood that its basis is to be found in the always important but often disturbed bilateral relationship between the two countries. More psychological 13 Robert O. Keohane, “Institutional Theory and the Realist Challenge after the Cold War,” in R. Baldwin, ed., Neorealism and Neoliberalism: The Contemporary Debate (New York: Columba University Press, 1993), 269–300.

8

Contentious Integration

than material, this connection nonetheless reveals deep historical roots to the increasingly tense behaviors exhibited by one to the other which intertwine the need for and the fear of each other. Ghosts from the Past—“Matters Left Behind from History” In Sino-Japanese relations, perhaps nothing is more sensitive and touches more raw nerves than the so-called “problems left over from history,” a phrase rumored to have been uttered by China’s late strongman Deng Xiaoping to refer to outstanding issues between China and Japan. This historical problem actually comprises a host of issues relating to the legacy of history and differing interpretations of events which happened when China was at war with Japan from 1931 to 1945, that is, between Japan’s occupation of Manchuria until its surrender. While many Japanese would prefer to purge this unsettling period from their memories altogether and have exhibited growing resentment of Chinese tendency to give a blanket condemnation of Japan in modern times, anti-Japanese sentiments in China has been reinforced by government-directed patriotic education in schools and mass media programming recounting Japan’s brutal occupation and the role of the CCP in attaining China’s heroic victory. At the very least, the historical problem has tended to create distrust among the Chinese toward the Japanese, as many Chinese believe that Japan will repeat its history of aggression if it does not face up to it. The Japanese, on the other hand, perceive the Chinese authorities as playing the “history card” to squeeze more aid out of Japan or prevent it from acquiring a permanent seat at the United Nations Security Council. Of these historical issues, perhaps the most intractable and vociferous ones involve interpretation of history in Japanese textbooks, issuing of an official apology from Japan to China, and visits to the Yasakuni Shrine by Japanese prime ministers. These historical issues, which have reverberations to this day for Japan’s relations with China and other Asian countries which were victims of Japanese aggression during World War II, became particularly sensitive after Hashimoto Ryutaro assumed the office of Prime Minister of Japan in January 1996. Hashimoto’s premiership signified the return of the politically-conservative and pro-US Liberal Democratic Party (LDP) after the collapse of two governing coalitions in three years led first by Hosokawa Morihiro and then by the left-wing Japan Socialist Party (JSP) under Murayama Tomiichi, who as prime minister, publicly apologized for Japanese atrocities during the war. The middle to late 1990s was also a time of patriotic education campaign in China aimed at reinforcing a sense of national identity, loyalty to the ruling CCP and patriotism towards the state. This form of cultural nationalism was reflected in popular Chinese literature on Sino-Japanese relations, with tacit official approval or at least forbearance. Anti-Westernism, including antiJapanism, was a theme which appeared with regularity in books such as A China that Can Say No (Zhongguo keyi shuobu), in which the Japanese were depicted as either economically weak or military threatening, and always as a proxy for US

Sino-Japanese Relations in the First Post-Cold War Decade

9

ambitions in the region.14 Films, documentaries, novels and books dealing with the war of resistance against Japan and the Nanjing Massacre drew large audiences, particularly among China’s younger generation, which reinforced the image of the Japanese military as being particularly brutal and hinted at the possibility of a revival of militarism in Japan.15 None of these controversies bode well for long-term SinoJapanese cooperation, and public personages and organizations on both sides have tried seeking remedies to them. Writing Common History History textbooks provide the basis for shared memory of a nation, particularly when taught to young people studying in a country’s national education system. For people living in East Asia, the framing of recent national histories has been a contentious one, and the memory of Japan’s invasion and colonization of its neighbors plays a particularly major role. In Japan, with respect to the teaching of history in elementary and middle schools, teachers and schools are obliged to use the textbooks authorized by the Minister of Education. Since the end of World War II, all textbooks are produced by private publishers, authorized by the Minister of Education, and selected by local public boards or the principal of a school.16 The content of Japanese textbooks is a legitimate issue of international concern, so stated Chief Cabinet Secretary Miyazawa Kiichi in a statement issued way back in time on 26 August 1982. This was in response to formal protests lodged by the governments of South Korea, PRC, North Korea and Vietnam, and public demonstrations held by unions in Hong Kong against the Japanese Ministry of Education ordering a history textbook writer to change various passages in the textbook he wrote, including softening the term “aggression” (shinryaku) to describe Japan’s actions in China. The Miyazawa statement clearly states that the views of other governments, particularly China and South Korea, should be taken into account in the screening of Japanese textbooks, and that corrections should be made in response to international criticisms. This “Neighboring Countries Clause” provides a basis to this day for Asian countries to intervene regarding the content of Japanese textbooks.17 By 1985, all middle- and high-school textbooks 14 Song Q., Zhang Z. and Qiao B., A China that Can Say No [Zhongguo keyi shuobu] (Beijing: Zhonghua gongshang lianhe chubanshe, 1996). 15 Caroline Rose, Sino-Japanese Relations: Facing the Past, Looking to the Future (London and New York: RoutledgeCurzon, 2005), 53. 16 Hiroshi Mitani, “Writing History Textbooks in Japan,” in Gi-Wook Shin and Daniel C. Sneider, eds, History Textbooks and the Wars in Asia: Divided Memories (London and New York: Routledge, 2011), 194. 17 This statement can be found in full in English on the Japan Ministry of Foreign Affairs website at http://www.mofa.go.jp/policy/postwar/state8208.html, accessed December 21, 2013.

10

Contentious Integration

referred to the massacre of civilians by the Japanese military in the Chinese city of Nanjing, better known as the Nanijing Massacre, although they varied in their references to the number of casualties.18 In late 1996, the Japanese Society for History Textbook Reform (Atarashi Rekishi Kyokasho o Tsukurukai) was formed for the purpose of correcting what the society’s members considered to be a “masochistic” mainstream view of Japanese history, and publishing new history textbooks that offered a far less “repentant” view of Japan’s wartime past. In 1999, the Japanese Ministry of Education requested textbook publishers to ensure “more balance” in textbooks, and place more emphasis on respect for national symbols such as the national flag and anthem.19 The Tsukurukai and publisher Fusosha submitted a high-school New History Textbook and civics textbook for middle-school use in 2000, which ignited a firestorm of international protests on the backs of public appeals by concerned Japanese writers and academics critical of the government’s revisionist stance on the textbook issue. The textbook used the term advancement (shinshutsu) in place of invasion (shinryaku) to describe the war in Asia; it referred to the “Nanjing Incident” rather than “Nanjing Massacre” by downplaying the number of casualties; and removed all references to comfort women, the Chinese and Korean women pressganged or recruited into being sex-slaves to Japanese soldiers.20 The Chinese and South Korean governments raised concerns about the textbook in 2001, prompting reassurances from Japanese officials that their worries would be taken into account in the screening process, with the revised text acknowledging the mass murders in Nanjing but excluding references to comfort women. Although the decision was deemed “unacceptable” to the Chinese government, in the interest of maintaining their economic relationship, the Chinese authorities appeared to have toned down reports in the official media, clamped down on student protests, and tightened control over anti-Japanese internet sites and discussion boards.21 Following the approval of the revised Fusosha textbook by the Japanese Education and Science Ministry in April 2002, then under the government of the nationalistic Prime Minister Koizumi Junichiro, and in response to the raucous caused by the entire controversy, about 100 teachers, history scholars and civic activists from Japan, China and South Korea established the Japan–China–Korea Committee in Common History Teaching Materials.22 To produce a teaching 18 Rose, 56–8. 19 Negishi M., “Education Ministry Pushes Pride in Flag and National Anthem in Textbook Screening,” Japan Times International, July 1–15, 1999, p. 5. 20 Daniel C. Sneider, “The War Over Words: History Textbooks and International Relations in Northeast Asia,” in Gi-Wook Shin and Daniel C. Sneider, eds, History Textbooks and the Wars in Asia: Divided Memories (London and New York: Routledge, 2011), 252. 21 Rose, 65. 22 Soon-Won Park, “A History that Opens to the Future: The First Common China– Japan–Korean History Teaching Guide,” in Gi-Wook Shin and Daniel C. Sneider, eds,

Sino-Japanese Relations in the First Post-Cold War Decade

11

guide, from May 2002 to May 2005, meetings were held, subgroup discussions and debates were conducted, and drafting, criticism, revision, reevaluation and final publication went on, guided by the adoption of the three principles of peace orientation, multiple perspectives, and global outlook.23 A History That Opens to the Future: The Contemporary and Modern History of Three East Asian Countries was published in May 2005 as the outcome of the committee’s work. Until then, it was the only trilateral non-governmental collaborative effort on writing a “common history” of Northeast Asia. Unfortunately, this was a teacher’s guide rather than a textbook, and the effort was without the backing of the respective governments, so although this project was commendable in its own right as a contribution to global peace studies, the impact of the book was limited. A second project on the contemporary and modern history of the region by the same committee went into operation from 2006 to 2010. The authorization of the second edition of the Fusosha textbooks in April 2005 led to a wave of protest in China, with tens of thousands of Chinese surrounding the Japanese Embassy in Beijing, throwing stones and shouting slogans like “Be ashamed of distorting history!”24 Clearly it was time to narrow the different perceptions of history between the Japanese and Chinese sides, or at least for both governments to ascertain where the two sides’ perceptions differ. During Prime Minister Abe Shinzo’s visit to China in October 2006, the two governments created a joint project to bring Chinese and Japanese experts and historians together to conduct joint research spanning the entire 2,000-year history of contact and exchange between the two countries. The joint effort launched by Japan and China to produce commonly written textbooks and supplementary materials for classroom teaching was based on the “Korea–Japan Joint History Research Committee” constituted in 2002 and composed of 12 academics from South Korea and Japan. The Japan–China committee, constituted in late 2006 and consisting of 10 leading historians from each country, and led by Professor Bu Ping from China and Professor Kitaoka Shinichi from Japan, sought to produce an account of 2,000 years of Sino-Japanese interaction by 2008, in time to mark the thirtieth anniversary of the signing of the Japan–China Peace and Friendship Treaty. It was a serious challenge to insulate the historians involved from political pressures by their governments and nationalistic members of the public so they could devote themselves to a careful investigation of historical facts, and the timetable was perhaps a tad too optimistic. The committee quickly abandoned the original idea of creating a joint textbook or even agreeing to a common viewpoint of events, instead opting for the “parallel history” formula used by

History Textbooks and the Wars in Asia: Divided Memories (London and New York: Routledge, 2011), 234. 23 Ibid., 235. 24 Sneider, 257.

12

Contentious Integration

UNESCO and adopted in the Japan–Korea committee.25 According to Bu Ping, conflicting memories of the Japanese attack on China proved to be the key problem.26 Nonetheless, the committee released a 549-page report on February 1, 2010, which covered ancient, medieval, and modern history. There was obviously some progress in mutually understanding history. Both sides agreed on the word “aggression” to refer to the invasion by the Japanese army, and acknowledged that the causes of war “were created by the Japanese side.” However, they disagreed on the Nanjing Massacre’s casualty total—the Japanese claimed an estimate ranging from 20,000 to 200,000, whereas the Chinese side claimed more than 300,000.27 Apology The matter of offering statements of apologies or regrets by Japan to China and other Asian countries as victims of Japan’s war of aggression very much underlies these countries’ attitudes toward Japan unto this day. Japan has never given China an official apology, in the form of a written statement issued by its government to China and the Chinese people. Neither, it seems, has the PRC asked for one at the time when it established diplomatic relations with Japan in 1972, at least not before the official visit of Jiang Zemin as PRC President to Japan in 1998. The joint declaration announcing the establishment of diplomatic relations between both countries mentioned that “The Government of the People’s Republic of China declares that in the interest of the friendship between the Chinese and the Japanese peoples, it renounces its demand for war reparation from Japan.” In it, the Japanese government also stated that “The Japanese side is keenly conscious of the responsibility for the serious damage that Japan caused in the past to the Chinese people through war, and deeply reproaches itself.”28 However, there was no mention of any apology. It seems as though neither side wished to test the limits of their relationship so early in the day, or conversely, did not feel that including a statement of apology was necessary given the state of their affinity at that time. To Japan’s credit, in the run-up to the fiftieth anniversary of the end of World War II, the government of Prime Minister Murayama Tomiichi attempted to settle the past by producing a definitive and authoritative resolution in the Diet that would include an apology to Asian victims of the war. However, the internal politics of Murayama’s coalition government, including his own Social Democratic Party, the 25 Ibid., 259. 26 Peter Ford, “China Commemorates Nanjing Massacre with Quiet Nod,” Christian Science Monitor, December 14, 2007. 27 “Japan, China Still at Odds Over Nanjing: Joint History Study Skirts Death Toll,” Kyodo News Agency, February 1, 2010. 28 Ministry of Foreign Affairs of Japan, “Joint Communique of the Government of Japan and the Government of the People’s Republic of China,” http://www.mofa.go.jp/ region/asia-paci/china/joint72.html, accessed December 21, 2013.

Sino-Japanese Relations in the First Post-Cold War Decade

13

Liberal Democratic Party and the Sakigake, in addition to the opposition from the right-wing Shinshinto (New Frontier Party) in the Diet, meant that the final draft was a watered-down version of the original, and the wording of the resolution did not include terms like “apology” or “renunciation of war.”29 Murayama redeemed the situation somewhat by issuing a personal statement in August 1995, in which he expressed deep remorse and heartfelt apology over what he regarded as irrefutable facts of history, and subsequent Japanese prime ministers have used his wordings for their own statements and apologies.30 Japan later gave a written apology to the visiting South Korean president Kim Dae-jung in October 1998, but failed to issue a similar apology to China during the visit of President Jiang Zemin the following month, despite protracted negotiations between both sides, and Jiang making the history issue the focus of his speeches at banquets hosted by the emperor and the prime minister. Nonetheless, the joint communique concluding Jiang’s trip mentioned that “the Japanese side is keenly conscious of the responsibility for the serious distress and damage that Japan caused to the Chinese people through its aggression against China during a certain period in the past and expressed deep remorse for this,” which is significant to the extent that this is the first time the word “aggression” has been used in a diplomatic document.31 Although Japan did not seem to have the desire to issue an official written apology to China, Japanese prime ministers were always willing to give a verbal apology when Sino-Japanese relations were affected by other historical issues, such as the revision of Japanese history textbooks and visits to the Yasukuni Shrine by Japan’s prime ministers where, according to the Japanese, the souls of the war dead and Class-A war criminals of Japan are reposed. For example, after worshipping at the shrine as Prime Minister in 2001 despite opposition from China, Koizumi Junichiro expressed his “heartfelt apology and condolences to the Chinese people who fell victim to aggression” during his visit to China, at Beijing’s Marco Polo Bridge no less, where Japan’s military advance into China proper took place.32 For a while, the Chinese leaders thought they had won Koizumi over to their historical point of view. However, when Koizumi once again visited the shrine in the spring of 2002, noisy demonstrations were held in China, and although he gave a few more verbal apologies, Koizumi’s yearly visits to the shrine meant that Sino-Japanese relations never improved during his prime ministerial tenure since the Chinese did not feel any sincerity in his apologies. Why is Japan not willing to give an official apology to China? Firstly, many Japanese feel that giving an apology on the written record will dishonor their 29 Rose, 102. 30 Rose, 103. 31 Rose, 116. 32 Akihiko Tanaka, “The Yasukuni Issues and Japan’s International Relations,” in Tsuyoshi Hasegawa and Kazuhiko Togo, eds, East Asia’s Haunted Presence: Historical Memories and the Resurgence of Nationalism (Westport, CN: Praeger, 2008), 135.

14

Contentious Integration

families and friends who died for their country in World War II. Secondly, they also believe that the responsibility of leading Japan into war lay on the shoulders of the militarists and members of the Japanese public were as much victims of war as their Asian neighbors in having to experience the nuclear bombings of Hiroshima and Nagasaki. In a speech given by Koizumi on April 15, 2005, although he did give a verbal apology to China, he did not mention the word “invasion,” but emphasized that Japan was the only country which suffered nuclear bombs.33 Thirdly, the legacy of the Cold War made the Japanese acquire a “collective amnesia” toward any responsibility for starting and prosecuting the war. Since the US during its occupation of Japan did not hold the Emperor Hirohito accountable for the war in order to gain support from the Japanese public and officialdom against domestic and external communist forces, although the soldiers of Imperial Japan had fought in his name, his subjects felt neither guilt nor obligation to apologize.34 However, all these factors did not affect Japan’s willingness to provide a written apology to South Korean President Kim Dae-jung. As such, the real reason was most likely that it was psychologically and emotionally easier for Japan to apologize to South Korea than to China, because Tokyo does not fear that Seoul will possibly emerge as a great power, rival and threat,35 which the Japanese were already seeing in China by Jiang’s Japan visit in 1998. Yasukuni Shrine The Yasukuni Shrine has not been much of an issue in Sino-Japanese relations since the departure of Koizumi from the prime minister’s office, but during his tenure, bilateral relations were almost completely bedeviled by the annual visits that he made in his official capacity as Japan’s head of government to the shrine, a memorial dedicated in 1869 to worshiping Japan’s war dead, with the spirits of convicted World War II war criminals housed among them since 1978. Although many past Japanese prime ministers had visited the shrine while in office, they claimed that their visits were of a private nature as they did not mention their official titles when they signed the guest book. Even Nakasone Yasuhiro, who made an official visit as Prime Minister to the shrine on August 15, 1985, the fortieth anniversary of Japan’s surrender in World War II, decided to stop his visits there after encountering strong opposition from China and other Asian countries. However, Koizumi had derived his political support from the nationalist wing of the LDP and promised the Japan War-Bereaved Families Association (Izokukai)

33 Mingpao (Hong Kong), “Xiaoquan zhiqian Jing zhiyi chengyi 15wan Riren bai Qingguo pojilu” [“Koizumi apologizes but Beijing doubts his sincerity as 150,000 Japanese visit Yasukuni Shrine”], August 16, 2005. 34 Lam Peng Er, “The Apology Issue: Japan’s Differing Approaches toward Japan and South Korea,” American Asian Review 20, no. 3(2002): 35. 35 Ibid., 45.

Sino-Japanese Relations in the First Post-Cold War Decade

15

to visit the Yasukuni Shrine every year when he campaigned for the leadership of the LDP in 2001.36 As such, Koizumi made yearly trips to the shrine during his tenure as prime minister, though only once on the significant date of August 15, 2006. After Koizumi announced his intention to visit the shrine in May 2005, PRC VicePremier Wu Yi canceled a scheduled meeting with him and upon the materialization of Koizumi’s visit in October 2005, PRC President and CCP Secretary-General Hu Jintao rejected his request to meet at the forthcoming APEC leaders’ summit in Pusan, South Korea. For the Chinese, although their behavior towards the visits of Japanese prime ministers to the shrine has become more cool-headed as times go on and China makes huge relative diplomatic and economic gains regionally and world-wide vis-à-vis Japan, the Yasukuni Shrine is quite simply a symbol of Japan’s military past, and a prime ministerial visit in whatever form represents an inexcusable attempt to justify the war and glorify war criminals.37 Specters of the Future—Contemporaneous Issues Issues regarding territorial disputes, Taiwan, security and threat perceptions, which will very much affect Sino-Japanese relations for the foreseeable future, may be contemporaneously salient, but are products of events and mutual interactions traceable to decades and even centuries ago. In a way, therefore, they may also be considered matters arising from history, which rebound in the psyche of both peoples of Japan and China. The Diaoyu/Senkaku Islands Dispute Of all the contemporaneous issues bedeviling relations between China and Japan, perhaps none is as contentious or rivalry-prone for the two countries as their territorial dispute over the Diaoyu (in Chinese)/Senkaku (in Japanese) islands in the East China Sea. The Diaoyu or Senkaku islands are really eight barren, craggy and uninhabited outcrops jutting out from the sea and totaling about 6.3 square kilometers. The Chinese claimed to have mapped these rocks way back during the Ming dynasty (ad 1368–1644), and both the governments on mainland China and Taiwan argue that the Diaoyu islands belong to Taiwan province and were ceded to Japan together with Taiwan according to the Shimonoseki Treaty upon China’s defeat by Japan in the war of 1895. Japan’s claim was that the islands were “terra nullius” until a Japanese person discovered them sometime between 1879 and 1895. After the end of World War II, the islands were grouped together with the Okinawa 36 Norimitsu Onishi, “Asian Angered, Again, by Visit to War Shrine by Japan Leader,” New York Times, October 18, 2005. 37 Rose, 116.

16

Contentious Integration

archipelago under the administration of the US, and returned to Japan in 1972. Until a United Nations Commission for Asia and the Far East report mentioned the possibility of huge oil and gas reserves under the seabed in the vicinity of the islands in 1968, none of the present claimants—Japan, China and Taiwan—had announced their sovereignty over these islands, but lost no time in doing so and repeatedly over the years, after the report’s release. In 1978, the Seirenkai (Blue Storm Group), a right-wing nationalist caucus within the ruling LDP of Japan, erected a beacon on the largest of the disputed Senkaku islands. China’s paramount leader Deng Xiaoping then suggested shelving this problem for the time being in favor of joint development, saying that “our generation is not wise enough to find a common language on this question, but the next generation will be wiser, and they will certainly find a solution acceptable to all.”38 Whether the generation following Deng on both the Chinese and Japanese sides has been wiser is debatable, but if pursued earnestly, joint development of the oil and gas resources under the sea around the disputed islands is a viable option. China has claimed that it owns the entire continental shelf in the East China Sea all the way east to the Okinawa Trough, in which case the Diaoyu islands, which lies just west of this trough, will constitute Chinese territory. In February 1992, the Standing Committee of the PRC’s National People’s Congress passed a law on territorial waters and contiguous areas which reaffirmed the PRC’s claims to the islands and asserted a legal right to enforce its sovereignty claims by force. Japan’s claim is based on the median line of the overlapping Exclusive Economic Zones (EEZ) of China and Japan, in which case the Senkaku islands will fall just east of this line on Japan’s side. According to the United Nations Law of the Sea, a country may declare a 200-nautical miles (370-kilometers) EEZ drawn from baselines along its coast, and in 1996, Japan announced that its EEZ measured from Okinawa would cover the Senkaku islands. The approaches of Japan and China toward the islands dispute are heavily affected by the state of domestic affairs in both countries, particularly by the rise of nationalism in China and the political influence of so-called “right-wing” nationalists in Japan. The activities of these nationalist groups are most salient to the dispute. It was in 1996 that the largest Japanese nationalist group at that time, the Nihon Seinensha (Japan Youth Federation), constructed a small lighthouse on one of the smaller Senkaku rocks, for the purpose of claiming ownership over the island group for Japan. Soon after, another nationalist group, the Senkaku Islands Defence Association, put up a Japanese flag on the biggest island. Then Japanese Prime Minister and LDP leader Hashimoto Ryutaro said that his party would support Japan’s claim of ownership over Senkaku. In response to criticisms that the Japan Self-Defense Force (JSDF) did nothing to intercept the vessels ferrying the rightists to the islands, the Japanese government said that it could not stop the activities of these nationalists because the Japanese “owners” of Senkaku, who 38 Deng Xiaoping, quoted in Chi-kin Lo, China’s Policy Toward Territorial Disputes: The Case of the South China Sea Islands (London: Routledge, 1989), 171–2.

Sino-Japanese Relations in the First Post-Cold War Decade

17

were not identified at that time, did not voice opposition to these undertakings. In 2005, the Japanese government announced the nationalization of the Seinensha lighthouse and listed it on its official maritime maps. Demonstrations in 1996 against Japan’s sovereignty-cum-EEZ claim extending to the Diaoyu/Senkaku islands were carried out by Chinese persons in Hong Kong, Taiwan and major cities in North America. Meanwhile, Taiwanese fishermen and Hong Kong activists set sail from Taiwan for the Diaoyu islands in fishing boats, only to be turned back by Japanese vessels either just before reaching the main island or briefly after ascending it to plant the flags of the PRC and Taiwan.39 The PRC government did its best to remain vigilant against any sign of protest over the issue in China, as it was worried that even small-scale demonstrations would turn into anti-government protests for its weak stance against perceived Japanese incursion of Chinese territory. Yet there is always an irrational and unpredictable element present in nationalist feelings with regards to the attitude of the Chinese toward the Japanese. When several activists from mainland China and Hong Kong returned from the Diaoyu rocks in their fishing boats to a port in China’s Zhejiang province in June 2003, local officials were on hand to welcome them as the PRC national anthem played in the background, and they were described in news reports as “patriots.”40 It was no coincidence that China started developing the “Chunxiao” gas field beneath the East China Sea not far from the vicinity of the Diaoyu islands around that time, more of which will be discussed in Chapter 4. Taiwan Aside from Diaoyu/Senkaku, what to do with Taiwan has been and remains the biggest problem between China and Japan since Japan formally relinquished sovereignty over Taiwan pursuant to signing the San Francisco Peace Treaty on September 8, 1951 that formally ended its role in World War II. Unification with Taiwan has been a major objective, if not the main aim, of the PRC since its founding on October 1, 1949. There is no gainsaying the fact that, for China, its relations with other countries are greatly determined, or at least seriously affected, by their attitude to this question of Taiwan, and China is particularly concerned about the attitude of Japan. History alone already seems to make China distrustful towards Japan over Taiwan. From 1895 to 1945, when Taiwan was a Japanese colony, most Taiwanese were fearful yet respectful of Japanese discipline, and did not develop a strong anti-Japanese movement towards Japan. Under colonial rule, Taiwan’s agriculture 39 Robin Ajello, “The Flames of Nationalism: Will Diaoyu Activists Hit the Lighthouse Next?” Asiaweek, October 18, 1996, p. 22. 40 Shijie luntan junshi luntan (World Forum Military Forum), “Beijing gai zhengce: Baodiao bian aiguo xingwei” [“Beijing Changes Policy: Protecting Diaoyu Islands Becomes Patriotic Behavior”], http://www.wforum.com/wmf, accessed December 21, 2013.

18

Contentious Integration

and infrastructure were greatly improved and modernized. In comparing with the autocratic rule of the Kuomintang under Chiang Kaishek which followed, many elderly Taiwanese still retained a sentimental longing for the time of Japanese rule. Members of the Taiwanese elite were then educated and socialized to recognize themselves as Japanese, one of whom was Lee Teng-hui, President of Taiwan from 1988 to 2000, who has expressed his fond memories for the colonial rule and culture of Japan which he had experienced in his youth.41 Taiwan under Lee has seen the Taiwanese independence movement develop into a formidable political force in the island’s political scene. Indeed, while the Treaty of Shimonoseki ceding Taiwan to Japan in 1895 was seen as a humiliation by mainland Chinese, for advocates of Taiwanese independence, it was often considered the first step of the island’s estrangement from the mainland as both travels down their separate paths of destiny. In September 1972, when Japan established (normalized) diplomatic relations with the PRC, it at the same time broke off official relations with the Republic of China, retaining only unofficial ties with Taiwan. In the Joint Communique normalizing relations between Japan and the PRC, Japan expressed her “understanding and respect” for China’s position that Taiwan was part of the PRC, but not “recognition” or “acceptance,” which was not accidental. The Japanese government assured its Chinese counterpart that only non-governmental exchanges below the rank of ministers would be allowed between Japan and Taiwan. Still, both retain “unofficial” representative offices in each other’s capital with the size of regular embassy staffs. The name of Taiwan’s “embassy” in Tokyo was later changed from “Association of East Asian Relations,” to “Taipei Economic and Cultural Representative Office” (TECRO) reflecting an upgrading of the political relationship between Japan and Taiwan. Officials of TECRO even enjoy the treatment of immunity given to foreign diplomats in Japan. Political parties of Taiwan and Japan also have regular contacts with each other. Japan’s LDP set up an “LDP Diet Members’ Dialogue Group on Japan– China Relations” in 1973, but this group was enlarged to “Diet Members’ Dialogue Group on Japan–China Relations” in 1997 for all Japanese Diet members to join for the purpose of promoting communications with Taiwanese politicians. In 2000, Ishihara Shintaro, then Governor of Tokyo, attended the presidential inauguration of Chen Shui-bian. Economically, although China remained the favorite of Japanese businesspeople and investors, Taiwan continues to be a large market for Japanese exports, and a major destination for Japanese foreign direct investments. Such ambiguous stances on the part of the Japanese have raised the suspicion of Chinese leaders that Japan prefers to deal with an autonomous or even independent Taiwan. Already in 1987, Deng Xiaoping had reported said that if Taiwan did not reunify with mainland China, someone (meaning Japan) would take it. In 1998, after then US President Bill Clinton on a state visit to China issued a “three noes 41 Daojiong Zha, “The Taiwan Problem in Japan–China relations: An Irritant or Destroyer?” East Asia: An International Quarterly 19, no. 1/2(2001): 210.

Sino-Japanese Relations in the First Post-Cold War Decade

19

policy” on Taiwan, saying the US does not support “two Chinas” or “one Taiwan, one China” and opposes membership by Taiwan of any organization for which statehood is a requirement, Japan would not issue a similar “three noes policy” to visiting PRC President Jiang Zemin, even upon his direct request.42 In 2001, when Lee Teng-hui, then retired as Taiwanese president, was issued a visa to visit Japan for medical treatment, China canceled the proposed visits of several high-level PRC officials to Japan in protest. Taiwan in the Security of Japan and China Geographically, Taiwan is on the southern approach to Japan, along the sea lanes of communication from the Middle East via Southeast Asia and Hong Kong through the Taiwan Straits to the ports of Japan, by way of which more than 90 percent of Japan’s oil, coal, iron ore and wheat transverse. If the PRC takes over Taiwan, and Taiwan becomes a military staging area for the Chinese armed forces, it will be easy for China to disrupt the sea transportation of Japan. As early as 1969, Japanese Prime Minister Sato Eisaku had mentioned to US President Richard Nixon that the maintenance of peace and security in the Taiwan area was a most important factor for the security of Japan.43 Despite having signed the Sino-Japanese Peace and Friendship Treaty with China in August 1978, Japan expressed great concern for the security of the Taiwan area in its 1979 Defense White Paper. In 2000, knowing full well China’s sensitivity in regarding Taiwan as a domestic issue of China, then Japanese Foreign Minister Kono Yohei said that “peace and stability in the Taiwan Straits are critically important to the interests of Japan.” Nothing highlighted the salience of the Taiwan issue in Sino-Japanese relations better than the two missile tests conducted by China’s PLA in the waters around Taiwan in December 1995 and March 1996. In the latter test, one of the four missiles landed outside the city of Hualien on the east coast of Taiwan, located just 60 kilometers away from the southernmost island of Japan’s Okinawa Prefecture. The missile exercises temporarily affected the fishing industry in the area, and also raised the freight insurance and air transport cost of Japan. This episode heightened the security concern of Taiwan to Japan and contributed to closer military cooperation between Japan and the US effected through the US–Japan Joint Declaration on Security in April 1996, announced barely one month after the missile exercise, and the subsequent Guidelines for US–Japan 42 Qingxin Ken Wang, “Taiwan in Japan’s Relations with China and the United States after the Cold War,” Pacific Affairs 73, no. 3(Fall 2000): 368. 43 “Joint Statement of Japanese Prime Minister Eisaku Sato and US President Richard Nixon,” Washington, DC, November 21, 1969, “The World and Japan,” Database Project, Database of Japanese Politics and International Relations, Institute of Oriental Culture, University of Tokyo, http://www.ioc.u-tokyo.ac.jp/~worldjpn/documents/texts/ docs/19691121.D1E.html, accessed December 21, 2013.

20

Contentious Integration

Defense Cooperation in 1997. On announcing the guidelines in September 1997, the ministerial-level US–Japan Security Consultative Committee stated it was considering “cooperation on situations in areas surrounding Japan that will have an important influence on Japan’s peace and security.”44 The ambiguity of the term “areas surrounding Japan” has raised Chinese suspicions. The Japanese and Americans initially interpreted this as “a situational concept” rather than a geographic one,45 but in May 2005, Japan’s Minister of Foreign Affairs said that the Taiwan Straits is a target of cooperation under the guidelines.46 Mutual Threat Perceptions While the Japanese perceive the Chinese Diaoyu landings and missile tests as indications of threats from a rising China, Chinese on the other hand see Japan’s reactions to these activities as overblown and symptomatic of a revival of militarism. The rapid economic development of China has changed the perception of Japanese towards China. More and more Japanese are worried that China will display increasing aggressiveness due to its burgeoning military spending, rising nationalism, and assertive naval maneuvers in the South China Sea, with some of them believing that China would like to restore its historical imperialist status as the “Middle Kingdom” in demanding deference from surrounding countries.47 Some Japanese believe that China will be a threat to the security of Japan since China is a nuclear power and it can affect the sea transportation of Japan. Although the prevailing thinking at that time among the Japanese officialdom was that Japan should try to integrate China into a network of economic interdependence and security dialogues to increase exchange and confidence-building, as suggested by Anami Koreshige, then director-general of MOFA’s Asian Affairs Bureau,48 the missile tests in the Taiwan Straits only succeeded in strengthening the view of a “China threat” in Japan. Consequently, 1996 was the first year that the Japan’s annual Defense White Paper named China as a focus of Japan’s defense. Since then, Japan has alluded to the threat from China every year in the Defense White Paper.

44 Ministry of Foreign Affairs of Japan, “Joint Statement US–Japan Security Consultative Committee Completion of the Review of the Guidelines for US–Japan Defense Cooperation,” New York, NY, September 23, 1997, http://www.mofa.go.jp/region/ n-america/us/security/defense.html, accessed December 21, 2013. 45 Wang, 367. 46 Dongfang Ribao [Orient Daily] (Hong Kong), “Riren anbao tiaoyue zhendiu Taiwan” [“Japan Admits Guidelines for US–Japan Defense Cooperation Targets Taiwan”], May 1, 2005. 47 Wang, 357. 48 Wang, 364.

Sino-Japanese Relations in the First Post-Cold War Decade

21

Given Japan’s desire to maintain the US–Japan alliance, and the proximity of US military bases in Okinawa and elsewhere in Japan to the Taiwan Straits, it would be difficult for Japan to stay on the sideline should the US request for logistic support to intervene in the Taiwan Straits, or if US planes and warships have to take off from bases in Japan, and that would make Japan a likely candidate for missile or other forms of military strikes from China. Hence, Japan has so far preferred to maintain the status quo across the Taiwan Straits. Due to the history of invasion, many Chinese attribute suspicious intents to any move by Japan to raise its international status or adopt new security policies. They believe that any attempts on the part of Japan to adopt a more “normal” defense posture or assertive foreign policy stance must imply a desire to revive Japanese militarism or imperialistic adventurism. To many Chinese scholars, Japan pursues its own agenda of becoming a powerful country by utilizing the US and the US–Japan alliance as a tool,49 to contain China. Pursuant to the US– Japan Joint Declaration on Security in 1996, the role of Japan’s “Self-Defense Force” was no longer for homeland defense only and may assist in protecting, ferrying or supplying US troops in overseas deployments away from Japan. Although the Japanese public by and large believe that there is no danger of a militaristic revival, since Japan’s military is now firmly under the control of a democratically elected government, many Chinese are unconvinced, and as evidence, point to a draft presented by the LDP under Prime Minister Koizumi to revise the Constitution and change the name of the “Self-Defense Force” (Ji-eitai) to “Self Defense Army” (Ji-ei-gun). Although the Japanese government has starting in 1995 publicly campaigned for Japan to be made a permanent member of the United Nations (UN) Security Council on account of her contribution to 20 percent of the UN’s budget and to its peacekeeping operations, this has not passed China’s muster, since the Chinese believe this will provide legitimacy for Japan to engage in more active roles in international affairs and encourage the deployment of its armed forces throughout the world. Koizumi certainly believed as much, commenting that China’s successful opposition to Japan’s latest quest in 2005 was due to its desire to check Japan’s influence in the world.50

49 Zha, 209. 50 Jiao, X.Y., “FM refutes Japan PM’s criticism of China,” China Daily, September 30, 2005.

This page has been left blank intentionally

Chapter 2

Proactive Japan and Reactive China Parallel Purposes—Japan and China versus the United States in Twentieth-Century APEC Following then Japanese Prime Minister Noda Yoshihiko’s decision to “nationalize” three of the islands in the East China Sea under dispute with China, which the Japanese call the Senkaku and the Chinese refer to as the Diaoyu, by spending 2.05 billion Yen from the state treasury to purchase them from their supposedly private Japanese owners in September 2012, anti-Japanese demonstrations erupted in Chinese cities, in which restaurants serving Japanese food, cars with Japanese brands and even persons suspected of being Japanese were attacked. Since then, the vicinity of the Senkaku/Diaoyu islands has been witnessing a cat and mouse game between Japan’s coast guard vessels and reconnaissance aircrafts, and surveillance ships from China’s Fisheries Law Enforcement Command and the China Maritime Surveillance, whose patrols are out to effect “overlapping control” of the Diaoyu waters with Japan.1 During Prime Minister Abe Shinzo’s official trip to Washington DC in February 2013, he obtained from US Secretary of State John Kerry a reiteration of US statements that those islands are within the territorial scope of the US defense commitment to Japan and that the US is opposed to unilateral (read: Chinese) efforts to undermine Japan’s administrative control of the islands.2 Given the state of tension that exists today between Japan and China, and Japan’s desire to enlist US support to constrain China’s actions, it would be hard to recall a time in which Japan and China actually came together to neutralize US influence in a multilateral forum that it had high hopes for, but this was what they did almost 20 years ago in the Asia-Pacific Economic Cooperation (APEC), which Japan was instrumental in creating. Japan Designs Since the late 1960s, Japan has been no stranger to the promotion of regional economic integration and trade liberalization. Japanese policy intellectuals such as Kojima Kiyoshi, Nagano Shigeo and Okita Saburo, who became Japan’s foreign 1 International Crisis Group (ICG), “Dangerous Waters: Sino-Japanese Relations on the Rocks,” Asia Report No. 245, April 8, 2013, p. 11. 2 Richard C. Bush III, “Shinzo Abe’s Visit to Washington,” Brookings Institution February 22, 2013, http://www.brookings.edu/blogs/up-front/posts/2013/02/22-shinzo-abewashington-bush, accessed December 21, 2013.

24

Contentious Integration

minister, together with academics, business people, politicians and officials in Japan played leading roles in pushing for a variety of early regional economic cooperation schemes such as the Pacific Free Trade and Development (PAFTAD) conferences, Pacific Basin Economic Council (PBEC) and Pacific Economic Cooperation Council (PECC). PAFTAD was originally convened in 1968 at the initiative of the Japanese and involved academics researching on a proposal for a free trade area covering the Pacific. Unsurprisingly, participants were only from developed Pacific countries, namely, the United States, Canada, Australia, New Zealand and Japan. PBEC was a non-governmental organization (NGO) launched at about the same time by business leaders from PAFTAD countries and South Korea, Taiwan, Hong Kong, Mexico, Peru, Chile, Thailand, Malaysia, Indonesia, Singapore and the Philippines. The establishment of PECC in 1980 was driven by Prime Ministers Ohira Masayoshi of Japan and Malcolm Fraser of Australia. As the logical next step in the structuring of regional cooperation, government officials participated in a private capacity with scholars and business leaders in PECC, where PAFTAD and PBEC member entities were also full participants. As a relatively closed economy in the 1960s and 1970s, China did not yet express any interest in joining these schemes. The first inter-governmental economic institution in the Asia-Pacific to gather foreign and trade ministers from regional countries would be APEC. The APEC forum was formed in 1989 on the urgings of the governments of Japan and Australia, with 12 founding countries gathering for its first meeting of government ministers on economic matters.3 A quarter-century later, the forum now consists of 21 members. Countries coming together to craft a regime such as this implies a joint search for some common purpose. However, it also means that the medium would reflect the confluence or divergence of the interests and values of its members, as defined by their governing elites. Within APEC, these considerations would surface and harden into opposing interests on matters of liberalization and institutionalization between the US, developed/industrialized countries and newly-industrialized economies (NIEs) on the one hand,4 and China and developing/industrializing countries on the other hand, with Japan moving from the former “camp” to the latter one between 1994 and 1995. Japan’s then Ministry of International Trade and Industry (MITI) had disseminated a proposal to several Asia-Pacific countries in mid-1988 for an 3 The 12 founding members that formed APEC on November 6–7, 1989 in Canberra, Australia, were: Australia, Brunei Darussalam, Canada, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and the United States. Economies that subsequently joined the forum were the People’s Republic of China, Hong Kong and Chinese Taipei (Taiwan) on November 12–14, 1991, Mexico and Papua New Guinea on November 17–19, 1993, Chile on November 11–12, 1994, and Peru, Russia and Vietnam on November 14–15, 1998. 4 The newly-industrialized economies are South Korea, Taiwan, Hong Kong and Singapore.

Proactive Japan and Reactive China

25

annual series of regional economic ministers’ meetings, albeit to focus on trade and investment facilitation and human resources development rather than on the more politically-sensitive goal of trade liberalization.5 Australian Prime Minister Bob Hawke then expressed strong interest in MITI’s idea, and this led to coordination between Japan and Australia to carry out the APEC initiative.6 The “Asia-Pacific” regional concept was an indication that Asian countries were ripe for recognition as a core group in regional economic cooperation and targets for trade liberalization efforts, as a result of their more than two decades of substantial growth. What was in APEC for Japan? Japan’s economic juggernaut in the 1980s boosted a diplomatic effervesce and a supreme sense of self-confidence in its ability to shape the future of a new economic architecture in Asia as the Cold War wound down. Japan was widely perceived to be replacing the US as the next powerhouse in Asia: Japan exceeded total US investment in the region, and also replaced the US as the predominant aid provider in Asia in the early 1990s.7 As the largest industrialized nation in Asia and the second biggest economy in the world then, Japan began to imagine and strive for itself a leadership role in East Asia and the Western Pacific, and realized that multilateral institutions could be a venue to serve Japanese interests and ambitions. Japan hoped APEC would play to its strength as a major economic power and provide a stage for it to claim a leadership role, at least in the Asian half of the forum, through its trade with, investment in, technological transfers to, and financial institutions operating within other Asian countries. In a nutshell, Japan was all for participation in multilateral institutions because these regional forums provide for Japan to exercise its political leadership. At the same time, so doing would assure Japan’s neighbors, which were in the path of its conquest during World War II, of its benign or non-militaristic intents. Japanese officialdom also understood well that it would be impossible to establish a more open and liberal trade and investment regime in Asia unless China took part in it.8 After the June 1989 Tiananmen incident, China had faced severe international isolation and Western economic sanctions, and hence did not participate in the inaugural APEC meeting in Canberra in 1989. Although Japan did sign the joint statement with other Group-of-Seven (G7) members issued at the July 1989 Paris conference condemning the Tiananmen tragedy, Japan worked laboriously to persuade Western countries not to isolate China and did 5 Akiko Fukushima, “Japan’s Perspective on Asian Regionalism,” in Michael J. Green and Bates Gill, eds, Asia’s New Multilateralism (New York: Columbia University Press, 2009), 106. 6 Takashi Terada, “Japan and the Evolution of Asian Regionalism,” in Heribert Dieter, ed., Evolution of Regionalism in Asia (London and New York: Routledge, 2007): 62–3. 7 Donald Crone, “Does Hegemony Matter? The Reorganization of the Pacific Political Economy,” World Economy 45, no. 4(1993), 508. 8 Akio Watanabe and Tsutomu Kikuchi, “Japan’s Perspective on APEC: Community or Association,” in “America, Japan and APEC: The Challenge of Leadership in the Asia Pacific,” NBR [National Bureau of Asian Research], Analysis 6, no. 3(1995): 33.

26

Contentious Integration

not allow non-governmental interactions with China to be interrupted. Unable to ignore China’s huge market and emerging economy, Japan lifted its economic sanctions in early 1990, pressed for China’s entry into APEC at its second meeting in Singapore in 1990, and facilitated its admission at the third APEC meeting in Seoul, South Korea, in 1991. Although the China factor played a large part in Japanese decisions to establish and institutionalize multilateral arrangements in its region, APEC provided Japan with a source of legitimization as a new and important autonomous player in regional affairs. This accords well with the views and visions of mainstream Japanese politicians, who were certainly interested in pursuing a more proactive and independent role in international and regional affairs commensurate with Japan’s economic strength at the turn of the 1990s. Indeed, given Asia’s economic dynamism and Japan’s deep and deepening economic ties to the region, some Japanese bureaucrats and policy-makers even took to enunciating a “theory of Asian capitalism,” with Japan as exemplar,9 in which Japan’s export-oriented and government-directed development model had become an alternative to Americanstyle market-driven capitalism for Asian countries. Due to the rapid economic growth of Asia’s NIEs in the 1980s as well as the attraction of China’s huge market after the domestic economic reforms undertaken there since the late 1970s, Japan’s exports to Asia outside the Middle East had by 1991 exceeded its exports to America. FDIs by large Japanese firms to establish offshore production networks in Southeast Asia that were vertically integrated with their parent companies at home also increased significantly after the 1985 Plaza Accord, through which Japan acquiesced to US pressure to revalue its currency, the Yen, by some 40 percent from a base of 260 Yen to the Dollar within two years. Japan’s total investments in Asia in 1992 reached US$60 billion compared with US$19.5 billion in 1985.10 East Asia as a whole therefore became a new economic engine in driving Japan’s economic growth, particularly given the threats of protectionism emanating from the integrative efforts of “free trade” North America and “fortress” Europe. Japan thus felt a need to advocate for a trade grouping to accelerate economic cooperation among countries on both sides of the Pacific Ocean. Indeed, a major reason for Japan to promote APEC in the late 1980s was to thwart protectionist impulses on the part of the Europeans and Americans, through influencing the development of an open or non-discriminatory transPacific trade liberalizing economic arrangement. Given the purpose of designing this expansive trade structure, Japan had no qualms about the need to bring the US on board, as the biggest economy and most powerful country in the world.

9 Kenneth B. Pyle, “The Context of APEC: US–Japan Relations,” in “America, Japan and APEC: The Challenge of Leadership in the Asia Pacific,” NBR [National Bureau of Asian Research], Analysis 6, no. 3(1995): 47. 10 Yong Deng, “Japan in APEC: The Problematic Leadership Role,” Asian Survey 37, no. 4(April 1997): 355.

Proactive Japan and Reactive China

27

Another major reason for Japan’s APEC initiative was aimed at diverting US attention on Japan’s trade dispute with the US and relying on multilateral institutions to handle US pressure; for in 1989, the US trade deficit with Japan had reached US$49 billion, consisting of half the US global trade deficit.11 The US was frustrated by what it considered to be Japan’s “predatory penetration of foreign markets and the exclusion of foreign goods and services from its domestic markets,” so in 1988, the US Congress passed the Omnibus Trade and Competitive Act, which included a “Super 301” provision that basically called for adopting a tough posture and imposing unilateral sanctions toward unfair trade practices by foreign countries.12 Japan was clearly the number one target. As such, Japan’s powerful MITI saw in APEC a tool to constrain or even thwart US trade pressure on Japan, since it would be much more difficult for the US to sanction Japan in a multilateral setting than bilaterally. APEC would also provide Japan with a multilateral platform to fashion a coalition with developing countries should they also come under market-opening pressure from the US, particularly regarding measures to protect the agricultural sector. Lastly, MITI officials also realized that APEC can also be used to pry open Asian and Chinese markets for exports and investments from Japan as well as the US, and this would be a good way to reduce both the US global trade deficit as well as Japan’s large trade deficit with the US. Therefore, it is not difficult to understand why Japan firmly opposed an early idea from Australia, the country it first enlisted on its APEC plan, of excluding the US from the forum.13 Although the US did join APEC right at its formation, to Washington DC, APEC’s usefulness has always depended on its ability to accelerate the process of trade liberalization within the grouping, particularly in improving US access to East Asian markets in areas where the US is competitive, such as aircraft, telecommunications, banking and insurance, and in strengthening America’s hands in trade negotiations with the European Union (EU). However, while MITI was actively touting the virtues of promoting economic cooperation and regionalism to be led by the governments of the region, Japan’s Ministry of Foreign Affairs (MOFA) was deeply concerned about possible adverse political reactions from countries which had been victims of Japan’s past imperialism. Many Asian countries, especially China, South Korea and North Korea remained suspicious of Japanese ambitions to dominate the region’s economy by constituting a Yen bloc and thus distrusted any expanded role for Japan in Asia. As Huan Xiang, scholar-adviser to the Chinese government on foreign policy in the 1980s put it, “Japan is … extending its force in the AsiaPacific region through trade and investment … to form a so-called economic ring led by Japan … to encompass Hong Kong, Taiwan, South Korea and members 11 Kai He, Institutional Balancing in the Asia Pacific: Economic Interdependence and China’s Rise (London and New York: Routledge, 2009), 96–7. 12 Ibid., 97. 13 Ibid., 98.

28

Contentious Integration

of ASEAN.”14 MITI and MOFA both have a say in setting Japan’s agenda for APEC because, together with the Bank of Japan, these government agencies finance the country’s participation in the forum. As MITI and MOFA could not agree to compromise on how far to push the APEC concept, it was decided that, while MITI officials would visit the ASEAN capitals to lobby quietly for APEC, Australian Prime Minister Robert Hawke would promote the idea of Asia-Pacific economic cooperation through a speech to the Korean Business Association in Seoul in January 1989. It bears keeping in mind that, as a regional trade grouping, APEC had a competitor almost right from its birth that never went away. Worries about emerging trade blocs and protectionism in Europe and North America led Malaysia in December 1990 to propose an East Asian Economic Group (EAEG) that excluded the US, Canada, Australia and New Zealand. US officials opposed the proposal for “drawing a line down the Pacific,” and although the Keidanren (Japan Business Federation) expressed initial interest in the Malaysian proposal, under pressure from Washington, Tokyo did not commit to the EAEG.15 At the 1991 APEC meeting in Seoul, EAEG was renamed EAEC, grouping the ASEAN states with China, Japan and South Korea into an “East Asian Economic Caucus” within APEC to discuss issues of common concern to East Asian economies, despite US opposition.16 As long as EAEC was subsumed under APEC, Americans need worry less about Japan controlling Asian economic interests through leading the EAEC, which was a perception that some Japanese had feared. The creation of EAEC demonstrated that, against a united front displayed by Japan and China, even a superpower like the US would have to give way to their joint preferences. Except for the open, industrialized and heavily export-oriented economies of Hong Kong and Singapore, which are unsurprisingly ardent global free-trade advocates, the EAEC would become a major obstacle for economic liberalization within APEC, and an altogether self-standing ASEAN + 3 conclave by December 1997. China Arrives China hoped that its participation in APEC could help remove the stigma associated with the Tiananmen affair for China’s leaders, soften US protectionism against 14 Huan Xiang, “Relative Detent Befalls the World,” Beijing Review 32 (January 2–8, 1989): 17–18. 15 Naoko Munakata, Transforming East Asia (Tokyo: Research Institute of Economy, Trade and Industry, and Washington, DC: Brookings Institution Press, 2006), 74. 16 Min Shi, “Yatai Jinghe Zuzhi dansheng de lishi Beijing” [“The Historical Background of the Birth of APEC”], in Jianren Lu, ed., Yatai Jinghe Zuzhi yu Zhongguo (APEC and China) (Beijing: Jingji Guanli Chubanshe, 1997) (Economic Management Press, 1997), 11; and Jianren Lu, “Dongmeng guojia de APEC zhengce” [“ASEAN Countries’ APEC Policies”], in Jianren Lu, ed., Yatai Jinghe Zuzhi yu Zhongguo (APEC and China) (Beijing: Jingji Guanli Chubanshe, 1997) (Economic Management Press, 1997): 104–5.

Proactive Japan and Reactive China

29

imports from China, enhance its prospects of gaining admission into the General Agreement on Tariffs and Trade (GATT), and legitimize its expanding influence in the Asia-Pacific region. China’s vision for APEC was that of a consultative forum where decisions should be made gradually and through consensus, and economic and technical cooperation should be carried out on an equal footing with the reduction of trade barriers.17 APEC’s usefulness in keeping the US market open in the face of increasing American protectionist sentiments was also an assessment shared by the countries of ASEAN, and China shared ASEAN’s consensus that APEC should not evolve from a forum for discussion into an arena for economic bargaining or negotiation, a role ASEAN believed should best be left to the GATT or ASEAN itself, and hence APEC ought not be transformed into a formal, structured institution.18 The US has originally argued that, since China was not a market economy, it should not be allowed to join APEC, but Japan was adamant that China was not to be excluded. Although China was not present during the first two annual meetings of APEC, it was obviously too large an Asian-Pacific economy to be left out of the forum, yet its membership has proven to be problematic from the beginning. Since the PRC claims Taiwan as part of its territory and was about to “resume” sovereignty over Hong Kong from Britain, diplomatic realities dictated that the exclusion of China would also mean the exclusion of the vibrant market economies of Hong Kong and Taiwan. This quandary was resolved when, as the 1991 Seoul ministerial meeting approached, Taiwan was prevailed upon by host South Korea to attend APEC meetings as “Chinese Taipei,” together with China and Hong Kong.19 South Korea was then in the process of switching diplomatic recognition from Taiwan as the Republic of China to the PRC. China accepted this arrangement reluctantly, as long as APEC members were designated as “economies” and not “states,” which reflected its diplomatic weakness and isolation in the wake of Tiananmen and its concern not to be left out of an emerging inter-governmental regional economic process, particularly as about 75 percent of China’s trade and 80 percent of its foreign capital in the early 1990s involved other APEC members.20 APEC governments then agreed that China would have an effective veto over who would represent Taiwan at the leaders’ and other meetings, and China has since

17 Joseph A. Camilleri, Regionalism in the New Asia—Pacific Order: The Political Economy of the Asia-Pacific Region, Volume II (Cheltenham and Northampton: Edward Elgar, 2003): 161. 18 Lu, “Dongmeng guojia de APEC zhengce,” 103. 19 J. Richard Walsh, “A Pillar of the Community: The Role of APEC in US Policy,” Journal of East Asian Affairs 7, no. 2(1993): 551, 554. 20 Charles E. Morrison, “APEC in Sino-American Relations: A Vehicle for System Integration,” in Jurgen Ruland, Eva Manske and Werner Draguhn, eds, AsiaPacific Economic Cooperation (APEC): The First Decade (London and New York: RoutledgeCurzon, 2002): 127–8.

30

Contentious Integration

allowed only Taiwan’s economics minister to represent it at APEC meetings rather than its foreign minister. US Overreaches The US was initially not too enthusiastic about APEC, and spent the first three years of the forum trying to figure out its exact purpose. However, when an expert body of economic advisors, known as the Eminent Persons’ Group (EPG), came to be constituted by the forum at its 1992 meeting, and soon took on the task of advocating across-the-board trade liberalization, Washington’s interest in the grouping was greatly raised. The US saw free trade as the solution to correct its mounting trade deficits with economically booming Asian countries, particularly Japan, by breaking down tariff and non-tariff barriers for American exports. US President Bill Clinton was so fired-up with APEC that he took the initiative to call for the group’s first Heads-of-State Meeting or Leaders’ Summit, which took place at Blake Island off Seattle in the US in November 1993. Whilst there, Clinton suggested renaming the Asia-Pacific Economic Cooperation as the Asia-Pacific Economic Community, along the lines of the European Economic Community, precursor of the EU. Clinton also wanted the forum to double-up as an AsiaPacific multilateral security mechanism under US leadership.21 These putative moves at instituting and “securitizing” APEC were successfully opposed by China and the ASEAN countries, which were not yet prepared to pool or surrender their sovereignty. A secretariat was established in 1993 in Singapore to facilitate and coordinate APEC activities, but as a compromise, with a very limited staff, budget, autonomy, and research capability, to avoid its evolvement into an autonomous bureaucracy powerful enough to drive policy. As primarily an economic forum, trade liberalization was to be APEC’s principal objective, particularly for the US under the first Clinton Administration. At least until 1995, America’s economic policy stance on APEC could be summarized as follows: 1) transform APEC as soon as possible into an Asia-Pacific free trade area through negotiations and agreements; 2) liberalize trade in all economic sectors to avoid delay or otherwise allowing member economies to make strategic choices of “pick and choose”; 3) adopt the principle of discrimination between member and non-member economies to avoid non-member economies “free riding” on APEC’s

21 Yunxiang Liang and Wang Xiuli, “Zhongguo de APEC zhengce jiqi dui dongya guoji guanxi de yingxiang” [“China’s APEC Policy and its Influence on East Asian International Relations”], Zhongguo Zhengzhi Yanjiu (Chinese Political Studies) 3(2000): 57; and Jiru Shen, “Zhongguo yu APEC de huxiang shiying ji APEC de weilai” [“Mutual Accommodation between China and APEC and the Future of APEC”], in Yizhou Wang, ed., Construction in Contradiction: A Multiple Insight into Relationship between China and Key International Organizations (Beijing: Zhongguo fanzhan chubanshe, 2003) (China Development Press, 2003), 137.

Proactive Japan and Reactive China

31

trade liberalization efforts; and 4) push for a structured forum with legally binding commitments arrived at through collective agreement.22 As APEC evolved, an “evolutionary approach” generally favored by the Asian, Chinese and member governments of developing economies loosely organized around a forum where commitments are voluntary with emphasis on arriving at consensus unhurriedly through personal diplomacy and informal discussions surfaced; this has often been contrasted with a “legalistic-institutional approach” championed by the US, and supported by Canada, Australia and New Zealand, to build APEC up as a formal and structured organization where the primary function of structured negotiations is to produce binding contracts and agreements.23 In the former case, the appeal and focus is on the contribution to national development and domestic security through technical and economic cooperation, while in the latter case, the construction of a trans-Pacific market is conceived primarily in terms of maximizing individual choice by realizing as quickly as possible the liberalization of trade and associated economic processes through binding, comprehensive targets. The English-speaking industrialized economies saw traditional business practices elsewhere, particularly in the Northeast and Southeast Asian countries, as manifesting widespread collusion between firms, across industries, and among the domestic political and economic elites, based on patronage and close personal ties, and wished to have these entrenched customs and interest networks swept away with the promotion and institutionalization of trade liberalization within APEC. Debates over the extent that trade should be liberalized would become major bones of contention between the US and industrialized Western economies on the one hand, and China and the developing Asian economies on the other. Therefore the side that Japan should decide to fall on would determine which approach, evolutionary or legalistic-institutional, would become the dominant mode of operation for APEC. Concerned that American leaders might be suspicious that Japan was out to craft an exclusive economic bloc under Japanese leadership, Japan had no wish to challenge Clinton’s assertiveness in organizing economic relations across the AsiaPacific and deliberately adopted a low public profile. Tokyo, however, did express a vision and principles of APEC somewhat divergent from that of Washington. At the Seattle Summit of 1993, then Japanese Prime Minister Hosokawa Morihiro stated that “Japan had no desire to see the regional forum institutionalized or turn it into a free trade area … It is very important that we respect the interests of the developing countries …” The interests of the developing countries were apparently served by APEC remaining a loose consultative forum with decisions taken gradually by consensus, permitting member states to liberalize their economies at 22 Wei Liu, “Meiguo de APEC Zhengce” [“America’s APEC Policy”], in Jianren Lu, ed., Yatai Jinghe Zuzhi yu Zhongguo (APEC and China) (Beijing: Jingji Guanli Chubanshe, 1997) (Economic Management Press, 1997), 83; Shen, 141. 23 Camilleri, 144; Liu, 81.

32

Contentious Integration

their own pace, and adopting open and non-discriminatory principles consist with GATT. What was left unmentioned at the meeting was that, with the recession gripping Japan ever harder, any moods by its domestic producers and distributors to lift long-time protectionist barriers, if they were ever entertained, were fast dissipating. China and ASEAN Make Common Cause As a large and expanding economy, China is obviously important in determining the goals and direction of APEC. When China joined APEC, some Chinese had feared that the developed economies might dominate APEC. However, they were soon reassured by the presence of other countries also concerned about the potential dominance of larger powers. APEC membership included the ASEAN collective, which like China, remained highly committed to the norm of upholding sovereignty in the conduct of international relations, and very cautious in making sure that APEC’s institutional development would not constrain members to a course of action that they have no wish to pursue. In the run-up to hosting the 1994 Bogor Summit, President Suharto of Indonesia was convinced by the US and Australia to press the cause for trade liberalization within APEC.24 In response, China and other developing countries in APEC successfully made their case at Bogor for a deadline of 2010 for developed countries to carry out free trade and investment within the forum, while developing countries will have up till 2020 to meet these goals. ASEAN and China has achieved broad agreement by the time of Bogor on what should be their preferred form of cooperation within APEC, which are to be based on the norms or principles of voluntary and unilateral action, consensus, “open regionalism” through non-discriminatory trade and investment liberalization, equal attention to both liberalization and inter-state economic and technical cooperation, and retaining APEC as an official forum for discussion and not negotiation.25 China shares the belief with ASEAN that, because the levels of economic development of members are different, their abilities to sustain market opening efforts are also different, and hence the principle of non-binding unilateral action after consultation should apply with respect to effecting trade liberalization measures. By the end of 1994, China and ASEAN governments have come to an agreement to negate any notion of APEC embracing binding investment principles or adopting dispute settlement mechanisms, both recommended by the EPG. Although the Bogor timetable was non-binding, as with every APEC decision made, how liberalized should trade be had become a contentious issue within the forum, as most developing member economies did not seem to want free trade to be thrust upon them. As such, Bogor did not recommend any final standards for 24 John Ravenhill, APEC and the Construction of Pacific Rim Regionalism (Cambridge: Cambridge University Press, 2001), 106–8. 25 Shen, 143.

Proactive Japan and Reactive China

33

trade liberalization, or figures for tariff reduction or elimination, even as a guide. In rejecting “Western” bargaining methods with specific goals, APEC fell back on the less structured and more informal “Asian” approach characterized by unilateral and voluntary measures that appear to reflect and withstand better the sensitive sovereignty concerns, powerful domestic political–economic interests, diverse political systems, different levels of economic development, and occasionally difficult foreign relations of countries, or “economies,” in the broad Asia-Pacific region. Japan Joins the Asian United Front When leaders to the APEC summit in 1995 in Osaka, Japan, met to finalize the Osaka Action Agenda, where member economies undertook to “gradually reduce tariffs and non-tariff measures,” no quantitative or joint targets were set, nor were they pushed by Japan as the host. While the US, Australia and other major agriculture exporting countries were in favor of trade liberalization in all areas, Japan, and to a lesser extent South Korea, argued for the exclusion of agriculture and other areas that they considered to be politically sensitive from such consideration,26 given the financial and organizational strength of the farmers’ lobby in their legislative electoral processes. Japan was determined to keep tariffs on imported rice, wheat and other cereals at the range of 300 percent to 500 percent,27 to protect its politically-influential agricultural sector, and began to realize that moving closer to the Asian position on the non-binding, voluntary, consensual and non-discriminatory nature of APEC’s functioning may garner it the support of Asian countries in deflecting US pressure on trade liberalization.28 Before Osaka, Japan still tried to act as a bridge, in mediating the organizational preferences of the US and Asia’s developing countries, even if it stood accused of leading APEC from behind. The key test of any sort of Japanese leadership in APEC was its readiness to open its agricultural and rice markets, and as such, Tokyo’s refusal to make any tariff cuts in the agricultural and rice sectors in its negotiating stance at APEC meetings raised serious doubts about its commitment to free trade, and also invited other major Asian agricultural countries like China, South Korean and Taiwan to follow suit, to the chagrin of major food exporters like US, Canada, Australia and New Zealand.29 What APEC’s Japanese hosts sought was the least 26 Mingjun Wei, “Yatai Jinghe Zuzhi fazhan lichengzhong de rougan wenti he woguo zhanlue yu zhengce sikao” [“Several Problems on APEC’s Development Path and Thoughts on Our National Strategy and Policy”], Zhongguo Zhengzhi Yanjiu (Chinese Political Studies) no. 4(1996): 54. 27 Jianglin Zhao, “Riben de APEC Zhengce” [“Japan’s APEC Policy”], in Jianren Lu, ed., Yatai Jinghe Zuzhi yu Zhongguo (APEC and China) (Beijing: Jingji Guanli Chubanshe) (Economic Management Press, 1997), 95. 28 Shen, 145. 29 Deng, 360.

34

Contentious Integration

controversial “concerted and unilateral approach” toward trade and investment liberalization in a “cooperative and volunteering spirit.”30 Osaka marked the end of Japan’s bridging role and active phase in the participation of trade liberalization talks in APEC. The ability and willingness to absorb foreign products is a crucial ingredient in any economic leadership role, and Japan has clearly failed this test with APEC. The major benefit for China is the “flexibility” as arrived at through the artful waffling and compromises by APEC members at the Osaka meeting. Since China is a large developing country with low per capita income compared with other APEC economies, on the difficult road from reforming a planned economic system into a market-oriented one, it wanted APEC to move gradually, and consensually. This in practice means giving every member an effective veto over any proposal that may have an adverse effect on it if implemented. For China and many developing countries, the free trade objective, if pursued too fast and too furiously, risks exposing many of their manufacturing and service industries to competitive pressures against which they could not withstand.31 For Japan, aside from deflecting pressures to remove its own protectionist economic measures, putting the brakes on any concerted APEC push for trade liberalization has the advantage of demonstrating solidarity with Chinese and ASEAN interests and perceptions.32 Osaka also failed to resolve the issue of “non-discrimination,” whereby any trade or investment privileges given by one APEC member economy to another will automatically be extended to all APEC members. This failure was primarily due to the fact that the US was afraid that, if the principle of “non-discrimination” were adopted, Most Favored Nation (MFN) status will have to be automatically and unconditionally extended to a major economy like China that was as yet not a member of GATT or the succeeding World Trade Organization (WTO). Japan was sympathetic to China, but decided against making an issue out of this in order not to antagonize the Americans. To many in the Chinese officialdom, APEC remains one aspect of US strategy to enhance its national economic competitiveness through breaking down the trade and financial entry barriers of member economies to its penetration. Thus when ASEAN suggested abolishing the EPG, headed by the fervent American free trade advocate C. Fred Bergsten, this stance was supported by China to curb what it perceived to be US influence peddling and free trade crusading in APEC. EPG’s mandate was successfully terminated at the Osaka meeting, without opposition from Japan. Disappointed with the “flexibility” already demonstrated by APEC member economies at Bogor, and Japan’s refusal to reduce tariffs in its agricultural sector, US President Clinton skipped Osaka altogether. It was at the Osaka Summit that 30 “Japan Is Torn Between US and Asians at Forum,” New York Times, November 16, 1995, A8. 31 Camilleri, 143. 32 Ravenhill, 99–103.

Proactive Japan and Reactive China

35

the last major joint effort within APEC to push for comprehensive trade and investment liberalization clearly failed. After 1995, the lofty goals of trade and investment liberalization were replaced by that of business facilitation in focusing on simplifying custom and other procedures, reducing the costs of business transactions and promoting the exchange of trade information. ASEAN and Chinese officials have always insisted that economic and technical cooperation should receive at least equal priority with trade and investment liberalization on APEC’s agenda.33 During the leaders’ meeting at Manila in 1996, both the Chinese president and foreign minister came out strongly in favor of strengthening economic and technical cooperation within APEC. Consequently, an “APEC Framework Declaration on the Principles of Economic and Technical Cooperation,” shortened to “Ecotech,” was adopted, which aimed to develop human capital through technical training, foster state or institutional capacity as a foundation for economic growth, and reduce economic disparities amongst APEC member economies. “Ecotech” reflected the importance attached to economic and technical cooperation by developing members of APEC, more so than to trade and financial liberalization, which was the preference of the forum’s more industrialized members. Concerning APEC’s concerted Early Voluntary Sectoral Liberalization (EVSL) scheme, introduced at the 1997 Vancouver summit in Canada, it was clear that Japan, which by then was firmly in the economic doldrums, would not liberalize its agriculture, forestry and fisheries sectors to trade, despite intense pressure from the US.34 With the failure of further EVSL negotiations in 1998, torpedoed by Japan, with support from other Asian countries, in order to protect narrow domestic interests, US efforts to push for more rapid liberalization of trade and capital markets within APEC, albeit for sectors at member economies’ own pace and choosing, have essentially been stymied. Since then, technical and developmental issues have clearly dominated the forum’s economic deliberations. APEC itself lost considerable and perhaps permanent credibility when it proved unable to come up with any concrete measures to assist Asian member economies ravaged by the financial crisis then raging through the region. Up till the time of its joining the WTO, Beijing had sought to use APEC as a shield to resist external pressure for the rapid dismantling of trade barriers, which would have affected its bargaining position at the WTO negotiations, and was altogether opposed to adding capital market liberalization to the APEC agenda, by 33 Thomas G. Moore and Dixie Yang, “China, APEC and Economic Regionalism in the Asia Pacific,” Journal of East Asian Affairs 13, no. 1: 388. 34 Joseph M. Damond, “The APEC Decision-Making Process for Trade Policy Issues: The Experience and Lessons of 1994–2001,” in Richard E. Feinberg, ed., APEC as an Institution: Multilateral Governance in the Asia-Pacific (Singapore: Institute of Southeast Asian Studies, 2003), 96; and Christopher M. Dent, “The Asia-Pacific’s New Economic Bilateralism and Regional Political Economy,” in Christopher M. Dent, ed., Asia-Pacific Economic and Security Cooperation (New York and Basingstoke: Palgrave, 2003), 78.

36

Contentious Integration

arguing that financial liberalization was none of APEC’s business.35 Interestingly, in the whole debate over capital market liberalization, Japan was the proverbial dog that did not bark. It clearly did not want to take a position opposite to that of China in APEC, and did not desire foreign pressure to hasten its gradual moves to remove capital controls or relax foreign investment regulations, but thought it politic not to say anything since the US was clearly behind this push. Adherents of the “Western” design would like to promote and perpetuate the advantages that, as competitive economies, they enjoy or would do so with trade and investment liberalization. Advocates of the “Asian” vision, despite suffering through the adversity that the Asian financial crisis had in varying degrees inflicted on their economies, and conceding that the attendant vested interests, bureaucratic red-tape and corruption did inhibit economic competition, still believe to some extent in preserving the business-political nexus and sovereignty-upholding industrial policies that have brought a respectable measure of political stability, material prosperity and diplomatic influence to countries like Japan, South Korea, Taiwan and Singapore, and later, even China. These two roadmaps reflect differences in value and interest and are not easily reconcilable. If Japan had failed to represent Western preferences to Asia, it could have seized the leadership to represent Asian preferences to the West. However, that too was not to be. Japan’s support for “Ecotech” in the form of economic aid and technological transfers was mainly restricted to the dispensing of Official Development Assistance (ODA), which was, and still is, purposely bilateral. Notwithstanding the pan-Asianist sentiments of politician Ishihara Shintaro and SONY Chairman Morita Akio, who co-wrote the famous tract entitled The Japan that Can Say No: Why Japan Will be First Among Equals, which directly questioned US dominance of the world, Japan’s officialdom consistently declined repeated invitations from Malaysia’s then Prime Minister Mahathir Mohammed to assume a steering role in his Asians-only EAEG, for fear of offending the US, although it did agree to support Mahathir’s subsequent successful formulation of EAEC as a caucus within APEC. However, with the increasing industrialization of many Southeast Asian countries and the stagnation of the Japanese economy, Japan edged further in the direction of Asian regionalism. EAEC ultimately turned into the self-standing ASEAN + 3 with China’s backing and Japan’s acquiescence. Grouping together leaders of ASEAN, Japan, China and South Korea in annual conclaves that are independent of APEC, ASEAN + 3 has since 1997 contested APEC’s role as the premier economic grouping in the East Asia–Western Pacific region. Checked and Balanced in the ASEAN Regional Forum (ARF) Japanese leaders well understood that the peace and security of Japan and Asia would be best achieved by trying to integrate China into the region rather than by 35 Moore and Yang, 400–402.

Proactive Japan and Reactive China

37

attempting to contain it, since many of the security issues in the region could hardly be resolved without China’s participation. As such, the rise of China, together with a perceived need to convince China and other Asian countries of Japan’s peaceful intents with the end of the Cold War, was what initially compelled Japan into multilateral security institution-building as part of its national strategy of engaging and socializing both China and Japan’s broader neighborhood. Indeed, the origin of the ARF may be traced to a proposal raised by a Japanese Ministry of Foreign Affairs official, Satoh Yukio,36 and subsequently made public by then Japanese Foreign Minister Nakayama Taro, with the support of Canada and Australia, to establish a multilateral security dialogue in and for the region at the annual ASEAN Post-Ministerial Conference (ASEAN-PMC) in July 1991. The ASEAN-PMC is where the foreign ministers of ASEAN, after their own conference, meet as a group with their counterparts from ASEAN’s “dialogue partners.”37 Japan wanted to create a regional framework to build mutual trust, promote peace on the Korean peninsula, resolve ongoing disputes in the South China Sea, and join up with other countries sharing similar security concerns to press these issues more forcefully at a multilateral forum.38 Like Japan, many Southeast Asian states were uncertain of China’s strategic intentions. This is not to say that they were threatened by the rise of China, but that they were nonetheless concerned about the potential of its military capabilities and the possible application of these wherewithal in the South China Sea territorial disputes, including the Spratly islands. Consequently, both Japan and the PRC became founding member states of the ARF, born out of the “post-ministerial conference” held immediately after the annual meeting of ASEAN foreign ministers in 1994 in Bangkok, Thailand. Ironically, a risen China is now responsible for Japan’s virtual abandonment of the ARF and pursuit of other bilateral and “mini-lateral” security networks. Initial Stage: Attempts at Sino-Japanese Cooperation (1994–2004) Since the official birth of the ARF at the 1994 ASEAN-PMC, Japan, together with the ASEAN states, has hoped that the forum could collectively persuade or pressure China to provide greater military transparency and reduce the likelihood of a military build-up, by getting the Chinese authorities to understand the security concerns of Japan and other member states. 36 The author is grateful to an anonymous review for pointing this out. 37 The ARF now brings together the foreign ministers of all 10 member states of ASEAN, four Asia-Pacific powers—Russia, the PRC, the US and Japan—plus the European Union, Canada, Australia, New Zealand, Papua New Guinea, India, South Korea, North Korea, Mongolia, Pakistan, East Timor, and since July 2006, Bangladesh, to discuss regional security affairs at annual meetings. 38 Takeshi Yuzawa, “Japan’s Changing Conception of the ASEAN Regional Forum: From an Optimistic Liberal to a Pessimistic Realist Perspective,” Pacific Review 18, no. 4 (December 2005): 468.

38

Contentious Integration

Uneasy about being put on the spotlight, the PRC was initially reluctant to join the ARF but did so because it believed that it could not risk confirming the fears or anxieties of its neighbors, who might perceive its rise as threatening and try to gang up in a regional security institution against the country. Also, since many ASEAN members had given moral support to Beijing when Washington accused it of human rights violations, unfair labor practices, and disregarding the principle of free and fair markets, the PRC felt obliged to join the ARF on ASEAN’s invitation. Beijing was somewhat mollified when it was agreed in the second ARF meeting in Brunei Darussalam in August 1995 that ASEAN, whose mode of conduct for regulating inter-state relations principally rests on respect for national sovereignty, making decisions based on consensus, and commitment to the non-use of force to resolve disagreements, would constitute the “driver’s seat” of ARF. 39 The PRC was also wary of being left out of a regional security organization that included major Asia-Pacific rivals like the US and Japan. The principal contradiction between China and Japan in the ARF which surfaced in time is the very different security concerns and approaches to institutionalizing the ARF held by both countries. Since the issue of the territorial sovereignty claims over the South China Sea or parts thereof was first raised at the second ARF meeting of foreign ministers of participating states, China has been wary of Japan pointing out that, although it is not a claimant to any territory in the South China Sea, the dispute may affect freedom of navigation and is thus a matter of common interest for the international community, including Japan. China does not want to internationalize the issue, preferring to deal with other claimants— Vietnam, Philippines, Malaysia, Brunei and Taiwan—on a bilateral basis behind closed doors, with the advantages accorded to it by its vast size and economic weight. Due to Chinese opposition, discussion on the South China Sea dispute has moved slowly, and Japan has failed to gain access to various working groups which discuss this issue.40 As Japan has been unable to secure its role or influence developments in Southeast Asia via the ARF, it has unsurprisingly become more pessimistic about the effectiveness of the forum. According to the ARF Concept Paper (1995),41 promotion of confidence building measures (CBMs) constitutes the first stage of the forum’s evolution, of which pressing for the transparency of a member state’s military establishment should be the key undertaking. Of particular concern to China was the movement towards developing and deploying a Theatre Missile Defence (TMD) system 39 US Department of State, “Chairman’s Statement: The Second ASEAN Regional Forum Ministerial Meeting, Bandar Seri Begawan, Brunei Darussalam, 1 August 1995,” http://www.state.gov/t/ac/csbm/rd/4376.htm, accessed November 8, 2006. 40 Joel Rathus, Japan, China and Networked Regionalism in East Asia (Basingstoke: Palgrave Macmillan, 2011), 144–5. 41 ASEAN Secretariat, The Asean Regional Forum: A Concept Paper, http:// aseanregionalforum.asean.org/files/library/Terms%20of%20References%20and%20Conc ept%20Papers/Concept%20Paper%20of%20ARF.pdf, accessed May 17, 2011.

Proactive Japan and Reactive China

39

that Japan has been carrying out with the United States since 2003. Japan’s perception of North Korea as a threat, which became its rationale for engaging in TMD research, was not shared by China. China’s concern was that its own comparative small stock of nuclear weapons, considered by Beijing to be the ultimate deterrence against an act of de jure separatism on the island of Taiwan, could be knocked out by such a system. Consequently, China has responded by limiting its military transparency.42 Although the Concept Paper then went on to identify the development of preventive diplomacy (PD) as the ARF’s second stage of evolution, the Chinese are concerned that moving to this stage could induce, or at least permit, superpower intervention in what they consider as their internal affairs, such as, again, Taiwan. Even with CBMs, one of the very few steps taken so far is the Annual Security Outlook (ASO), a compilation which would ideally contain Defence White Papers or their equivalent from each of the ARF countries. While Japan has contributed every year and made detailed submissions, China has either skipped a few years, or its occasional submissions have studiously avoided discussing its defense policy or budget.43 China does not include such items as purchase of weapons from abroad, expenses relating to the People’s Armed Police, funds for refitting an acquired aircraft carrier, or research and development (R&D) expenditures in its understated military budget.44 In 2010, ARF ministers widened the ASO’s scope with the Simplified Standardized Format, which includes the publication of national defense doctrines, defense expenditure, and the total number of personnel in a country’s armed forces.45 However, contributions to the ASO and the amount of information to be divulged are still voluntary. After China’s People’s Liberation Army fired missiles into the Taiwan Straits in 1996 prior to Taiwan’s presidential election, Japan tried to being the issue to the ARF’s attention, but this initiative was strongly opposed by China on grounds that Taiwan is a domestic issue for China.46 At the 1997 ARF meeting, China criticized the recently concluded revised Japan–US defense guidelines, referring to bilateral military alliances as “relics of the Cold War.” After hosting the Intersession Group on Confidence-Building Measures (ISG-CBM) in 1997, China has been much in favor of the ARF focusing on a Non-Traditional Security (NTS) agenda.47 Then 42 Christopher W. Hughes, “Japan’s Military Modernization: A Quiet Japan–China Arms Race and Global Power Projection,” Asia Pacific Review 16, no. 1(2009): 84–99. 43 Rathus, 155. 44 Kazuhiko Togo, “Regional Security Cooperation in East Asia: What can Japan and Australia Usefully do Together?” Australian Journal of International Affairs 65, no. 1 (February 2011): 42. 45 Kozuki Toyohisa, “Closing Asia’s Security Gap,” Financial Express (New Delhi), July 20, 2012. 46 He, 104. 47 Takeshi Yuzawa, Japan’s Security Policy and the ASEAN Regional Forum (London: Routledge, 2007), 80.

40

Contentious Integration

Chinese Foreign Minister Tang Jiaxuan made a pronouncement of his country’s interest on developing NTS cooperation at the ARF foreign minister’s meeting in 2002.48 Declaratory CBMs are acceptable to China, but only to the extent that they are conducted on a voluntary basis and states can maintain their control over information to be disclosed.49 Japanese officials have perceived the push for NTS or CBMs that require only voluntary declarations or participations as running contrary to Japan’s interest in promoting CBMs that focus on military transparency.50 The PRC has dragged its feet on moving forward from confidence building to preventive diplomacy, and opposed exploring conflict resolution approaches, the third stage of the ARF’s evolution.51 The PRC is concerned that the latter two stages of the ARF process, if adopted, would legitimize the involvement of third parties in preempting or resolving a crisis, which China, with existing boundary disputes and irredentist claims, would prefer to settle on its own terms without undue external involvement. The PRC relented at the twelfth ARF meeting in Vientiane, Lao, in July 2005 to a first meeting of an ISG on CBM and PD involving a Defense Officials’ Dialogue in Hawaii in October 2005; however, due to resistance from reluctant countries, China among them, all intra-state disputes and humanitarian contingencies were excluded from the scope of PD.52 The PRC has ensured that the institutionalization of the ARF has been kept to a minimum, to reduce the risk of any concerted effort to constrain its freedom of action in matters related to its national security. Institutionally, Japan’s proposal for the ARF Chair, which rotates on an annual basis and concurrently serves as the ASEAN Chair, to be able to call an emergency meeting without prior notification or make changes to a communique without consensus, were thwart, not least by Chinese objection.53 Japan has long called for the creation of a permanent ARF secretariat to coordinate the ARF’s activities, but it was only in June 2004 that ASEAN senior officials finally agreed to establish an ARF Unit, but only within the ASEAN secretariat.54 Furthermore, the ARF Unit was charged with only four limited functions: 1) to support the ARF Chair in interacting with other 48 Speech by Chinese Foreign Minister Tang Jiaxuan at the Ninth ARF Foreign Ministers’ Meeting, Ministry of Foreign Affairs of the People’s Republic of China, July 31, 2002, http://www.fmprc.gov.cn/eng/wjb/wjbz/2461/t14057.htm, accessed May 17, 2011. 49 Tsuyoshi Kawasaki, “Neither Skepticism nor Romanticism: The ASEAN Regional Forum as a Solution for the Asia-Pacific Assurance Game,” Pacific Review 19, no. 2(June 2006): 234. 50 Rathus, 156. 51 Chen Zhiming, “Comments on the ARF,” Southeast Asian Studies (Dongnanya Yanjiu) no. 6(November/December 1998): 37. 52 Yuzawa, “Japan’s Changing Conception of the ASEAN Regional Forum,” 472–3; John Garofano, “Power, Institutions, and the ASEAN Regional Forum,” Asian Survey 42, no. 3(May/June 2002): 517. 53 Yuzawa, “Japan’s Changing Conception of the ASEAN Regional Forum,” 473. 54 Rathus, 158.

Proactive Japan and Reactive China

41

regional and international organizations, defense officials’ dialogues, and Track II organizations; 2) to function as a depository of ARF documents or papers; 3) to manage an ARF database or registry; and 4) to provide secretarial services and administrative support for ARF meetings at various levels.55 The essential idea behind the ARF is that the process of dialoguing should lead to socialization of member states’ behavior that will build up trust and in turn lead to the dissolution of conflicts of interests. As a sign of distrust and rivalry between China and Japan, a Japanese proposal to address the problem of piracy through joint action by local states including the Japanese coast guard under the rubric of the ARF was opposed by China.56 Increase communication and interaction between China and Japan within the ARF has not led to greater trust or confidence, but rather the opposite. Principally because of the PRC’s obstructionist or passive role, the ARF’s development has slowed down and drifted.

55 ASEAN Secretariat, http://www.aseanregionalforum.org/Default.aspx?tabid=49, accessed June 18, 2006. 56 IISS “Japan’s naval power: responding to new challenges,” Strategic Comments 6, no. 8(September 2000).

This page has been left blank intentionally

Chapter 3

China’s Initiatives in Structuring Regional Multilateralism (1996–2004) Between 1996 and 2003, largely coinciding with the years in which Jiang Zemin was in charge of China, a major development in international politics has been the establishment and institutionalization of several regional multilateral processes or regimes in Northeast, Southeast and Central Asia, with the PRC as a primary moving force of this development. A multilateral regime refers to a set of mutual expectations, rules and regulations, organization plans, efforts and commitments that have been accepted by a group of states.1 In the Asian region, China’s involvement in constructing multilateral regimes, forums, institutions or organizations reflected not just its aspiration to shape the rules of the game for regional cooperation,2 but also its increasing level of comfort in subscribing to norms of predictable and interdependent behavior among states.3 It was dawning on the Jiang Zemin leadership that structuring regional arrangements would consolidate a peaceful external environment for domestic economic growth and foreign investment in China, on which the political legitimacy of the ruling CCP has depended since suffering a major dent due to the Tiananmen crackdown. So doing would also advance China’s national interest and project its influence by raising its positive profile and dispelling concerns and misgivings about China’s growing economic and military strengths.4 Scholars have widely perceived that the PRC government, in its conduct of diplomacy, has been moving from a position of staunchly advocating state sovereignty, non-interference, and bilateral relationships, to an increasingly keen 1 John Gerard Ruggie, Constructing the World Polity: Essays on International Institutionalization (London and New York: Routledge, 2002), 56. 2 Kuik Cheng-Chwee, “Multilateralism in China’s ASEAN Policy: Its Evolution, Characteristics, and Aspiration,” Contemporary Southeast Asia 27, no. 1(2005): 119. 3 This point was made by Alastair Iain Johnston in his chapter on “Socialization in International Institutions: The ASEAN Way and International Relations Theory,” in G. John Ikenberry and Michael Mastanduno, eds, International Relations Theory and the AsiaPacific (New York: Columbia University Press, 2003), 107–62. Johnston was describing China’s willingness to be “socialized” into certain norms adopted by member states of the ASEAN Regional Forum (ARF), but the parallel is close enough to be applied here. 4 Wang Jianwei, “China’s Multilateral Diplomacy in the New Millennium,” in Yong Deng and Fei-ling Wang, eds, China Rising: Power and Motivation in Chinese Foreign Policy (Lanham, MA: Rowman & Littlefield, 2005), 188.

44

Contentious Integration

embrace of cooperative multilateralism from the middle to the late 1990s.5 Since then, China has intended wherever and whenever possible to take the lead in institutionalizing regional groupings, in time encountering considerations impeding its push for greater institutionalization of regime architectures, particularly where Japan is involved. China’s Approaches to Regional Multilateralism: Rising Confidence China’s interest in regional organizations is not a natural consequence of its economic reforms or open-door policy, but rather a calculated response to unexpected and changing circumstances. Following the Tiananmen Incident in June 1989, China experienced diplomatic, economic and military boycott by Western countries and Japan. Its re-emergence was led by establishing diplomatic relations with Indonesia and Singapore in 1990, ending the Japanese boycott in 1991, and convincing South Korea and Saudi Arabia to switch official relations from Taiwan to the PRC in 1992. Beijing thus recognized the importance of having good relations with Asian countries in breaking out of its foreign policy isolation and expanding its diplomatic space. China also realized by the late-1990s that no country or bloc of countries was about or able to challenge the supremacy of the US in the world political-economic-military order. Also, given that Washington has shown no sign of withdrawing its security presence in the East Asia–Western Pacific region, Beijing has to engage the region as much as possible to find more friends and hedge against potential US encirclement of China. China’s increasingly affirmative assessment of regional dialogue groups and organizations principally reflects its growing realization that these groupings wish to engage China in the long-term, are open to Chinese perspectives on preserving sovereignty norms while seeking cooperative security in interstate discourse, and may even be of use in balancing US power and influence in the region.6 Diplomats and bureaucrats from the Department of Asian Affairs of the PRC Ministry of Foreign Affairs who attended various international forums began convincing their national leaders that China’s cooperation in multilateral settings helps reassure others of its best intentions.7 By 2000, Chinese international affairs experts had concluded that, to secure a peaceful environment conducive to domestic political 5 Jane Perlez, “China Shoring Up Image as Asian Superpower,” International Herald Tribune, December 2, 2004; Evan Medeiros and R. Taylor Fravel, “China’s New Diplomacy,” Foreign Affairs 82, no. 6(November/December 2003); and David C. Kang, “Getting Asia Wrong; The Need for New Analytical Frameworks,” International Security 27, no. 4(Spring 2003), 57–85. 6 David Shambaugh, “China Engages Asia,” International Security 29, no. 3(Winter 2004/05): 73. 7 Susan L. Shirk, “China’s Multilateral Diplomacy in the Asia-Pacific,” Before the US–China Economic and Security Review Commission, “China as an Emerging Regional

China’s Initiatives in Structuring Regional Multilateralism (1996–2004)

45

stability and economic development, China needed to be more proactive in shaping its regional environment. Relations with China’s Asian neighbors were given the highest priority. Overcoming traditional sensitivities regarding sovereignty and the fear that some foreign countries might pursue policies in multilateral forums unfavorable to Beijing, China’s leaders under Jiang Zemin perceived that China should discharge its responsibilities in international society commensurate with its status and influence as a rising power with one-fifth of the world’s population.8 More than anything else, this understanding has led to China’s late but full-blown participation in a plethora of regional multilateral organizations. Of course, Beijing will not allow the status of Taiwan to be discussed at any of these forums, which it considers to be an internal affair of the Chinese nation. China has since successfully tied its political, economic and security interests and international standing to its promotion and institutionalization of all kinds of regional and sub-regional cooperation in Asia. To convince Asian states that China’s rise will not threaten the regional order and their national interests, and to use its role and diplomacy in Asia as a launch pad for greater influence in world affairs, China has by the turn of the twenty-first century been making active and skillful use of regional multilateral economic and security institutions, particularly the ASEAN + 3 (10 + 3)/ASEAN + China (10 + 1),9 Shanghai Cooperation Organization (SCO), and Six-Party Talks (6PT), to accelerate regional integration and cooperation with neighboring states. It is conceivable that most, if not all, of these organizations would not even have existed without China’s push or participation, in contrast to APEC or ARF, of which other states were the driving forces. The degree of institutionalization of a regional multilateral organization is more or less collectively determined by an upward index of the objectives outlined and achieved, established norms and procedures or written set of rules, presence or size of physical structures or permanent staff, number and type of committees created, and regularity and level of meetings. Notwithstanding China’s obvious enthusiasm for helping to establish, develop and structure regional multilateral organizations, it is apparent that the 6PT, 10 + 3 and SCO reflect low, middle and high levels of institutionalization. This is even though the forums have become progressively institutionalized as the four party talks (4PT) transformed into the

and Technology Power: Implications for US Economic and Security Interests,” February 12–13, 2004. 8 Wang Yizhou, “Zhongguo yu guoji zuzhi guanxi yanjiu and ruogan wenti” [“Several Issues Concerning the Study of China’s Involvement with International Organizations”], Zhongguo Waijiao [China’s Foreign Relations], no. 11(August 2002): 51, 54. 9 In this chapter, the terms ASEAN + 3 and 10 + 3 are used interchangeably, as are the terms ASEAN + China and 10 + 1, as all these terms are invariably used in the scholarly literature to refer to these processes.

46

Contentious Integration

six party talks (6PT), China’s relations with ASEAN consolidated within the 10 + 3 structure into the 10 + 1, and the Shanghai-5 expanded to become the SCO. The extent of China’s push for institutionalization of cooperative regional multilateral processes clearly reflects considerations of both power politics and shared interests: 1) the distribution of power among the forum participants, and whether the major players are well-disposed towards China or not so; and 2) the importance of the issues that the specific forum is set up to deal with, particularly in relation to China, but also other participating states. These major players and participating states include Japan of course, but its roles and functions in multilateral arrangements regarding the Korean peninsula’s security matters, Southeast Asia, and Central Asia were not initially apparent or active, particularly since it was mired in the economic doldrums during the time period under discussion here. It merits pointing out, though, that before Sino-Japanese relations sunk to a low in 2005, mutual tolerance was still their dominant mode of behavior towards each other in regional forums that they both participate in. Four-Party Talks (4PT) and Six-Party Talks (6PT) Initial Stage: Attempts at Sino-Japanese Cooperation (2002–2007) To deal with the threat by the Democratic People’s Republic of Korea (DPRK or North Korea) to withdraw from the Non-Proliferation Treaty (NPT), the USDPRK Agreed Framework was signed in 1994, pursuant to which the US agreed to provide two light-water reactors (LWRs) and heavy fuel oil in exchange for which North Korea agreed to suspend its plutonium enrichment program. However, just days after the signing, the US Congress fell to the Republican Party, which did not support the Framework, with the consequence that the construction of the LWRs was halted and fuel oil deliveries fell behind schedule, as Washington cited inaction on the part of the North Korean in fulfilling their part of the bargain.10 It was an attempt by the US Clinton Administration to resuscitate the Framework that the 4PT was launched to bring in North Korea’s immediate and most concerned neighbors to pressure Pyongyang to keep to the agreement. The 4PT between the US, North Korea, China and South Korea on keeping the Korean peninsula nuclear-free, held in three preparatory meetings and six rounds of talks between December 1997 and August 1999, ultimately failed. While North Korea demanded direct talks with the US, the US wanted to expand the talks to include Japan, if not Russia as well, especially if economic incentives or sanctions were to be considered as options to induce North Korea to abandon its nuclear program. 10 Leon V. Sigal, “North Korea: Negotiations Work,” MIT Center for International Studies, February 2007, http://web.mit.edu/cis/pdf/Audit_02_07_Sigal.pdf, accessed December 8, 2013.

China’s Initiatives in Structuring Regional Multilateralism (1996–2004)

47

After the North Korean leadership admitted to then visiting US Assistant Secretary of State James Kelly in October 2002 that the DPRK was enriching uranium for nuclear weapons, the US wanted the nuclear issue settled through multilateral diplomacy, while North Korea desired to conclude a bilateral nonaggression treaty with the US. North Korea then quitted the NPT. By providing a neutral “good office” and brokering a trilateral talk among the US, DPRK and China in April 2003, China played a pivoted role in breaking the standoff. The US then impressed upon China the need to host an expanded series of “six-party talks” comprising the US, China, North Korea, South Korea, Japan and Russia. The US had wanted Japan involved in case “side-payments” have to be offered as economic incentives to get North Korea to engage in nuclear disarmament, so China suggested Russia as a counterweight on its side to balance a possible US–Japan axis in the talks. To bring all parties of the proposed 6PT to the table, Chinese diplomats engaged in a flurry of “shuttle diplomacy” to Pyongyang, Washington, Tokyo, Seoul and Moscow in July 2003.11 This mode of contact was to be repeated before each subsequent 6PT. After the second round of talks, China successfully pushed the participating states to set up a permanent working group of senior officials,12 and after both second and third rounds of talks, China issued a written Chairman’s Statement each time. In the Joint Statement concluding the fourth round of talks in September 2005, North Korea agreed in principle to halt its nuclear weapons program, while the US gave an assurance not to attack North Korea, and the other four countries promised to provide an unspecified amount of energy aid to North Korea.13 However, when what became the first session of the fifth round of talks was held in November 2005, the chief US negotiator charged North Korea for breaking its promise to stop operating its nuclear facilities, and US authorities sanctioned a bank in Macao for laundering US dollars for the North Korean government. The talks collapsed. Then unexpectedly, in October 2006, North Korea announced that it had detonated a nuclear device underground. This led to the passing of Resolution 1718 of the United Nations Security Council supported by all its permanent members, which called on all UN member states to inspect cargoes bound for North Korean ports or border crossings for parts and material to build nuclear bombs. To apply pressure on Pyongyang to return to the negotiating table, China sanctioned a steep reduction of oil pipeline supplies to North Korea from September to November 2006.14 State Council Tang Jiaxuan was sent to 11 Wang, “China’s Multilateral Diplomacy in the New Millennium,” 186. 12 Ibid. 13 “Nuclear Pact on Shaky Foundations,” South China Morning Post, September 20, 2005, A1. 14 Christopher Twomey, “Explaining Chinese Foreign Policy toward North Korea: Navigating the Scylla and Charybdis of Proliferation and Instability,” Journal of Contemporary China 17, no. 56(August 2008): 417.

48

Contentious Integration

Pyongyang as a special envoy to convey a very strong warning to then North Korean leader Kim Jong-il personally not to conduct a second test and also to encourage North Korea to return to the 6PT.15 Beijing’s “frantic behind the scene negotiations” led to the second session of the fifth round of talks at the end of 2006,16 which, however, ended in failure. After China again cut off oil supplies for North Korea between February and March 2007,17 an accord was achieved at the end of the third session of the fifth round of talks on February 13, 2007, under which North Korea undertook to seal its main nuclear reactor at Yongbyon within 60 days under the supervision of International Atomic Energy Agency inspectors, in exchange for an immediate delivery of 50,000 tons of heavy fuel oil, with a further 950,000 tons promised after it disarmed all its nuclear programs.18 The first phase of the sixth round of 6PT talks, which took place in March 2007 to implement the February 13, 2007 Accord, quickly collapsed as North Korea refused to continue without receiving the frozen Macao bank funds, which were finally released to Pyongyang in June. The second phase of the sixth round of talks, which took place in September 2007, basically affirmed the September 19, 2005 Joint Statement and the Accord of February 13, 2007.19 However, distrust and suspicion between North Korea on one side and the US and Japan on the other clearly remained. Although the 6PT has been conducted at the level of the deputy foreign minister of participating countries rather than the lower rank of assistant foreign minister or ambassador at the earlier 4PT, and China’s erstwhile Vice Minister of Foreign Affairs, Wu Dawei, its representative to the talks, also headed the pivotal “Korean Peninsula Nuclear Disarmament” Working Group of the 6PT when it was formed in March 2007, the 6PT remained ad hoc and could not be anything more than minimally institutionalized. Even though China was trusted by all participants to host the 6PT, there are many heavy players in the forum with their own agenda. North Korea, a maverick, has demanded US economic aid, security guarantees and diplomatic recognition prior to giving any promises of eliminating its nuclear weapons program, and demonstrated clear reluctance to return to the 6PT after every round and session 15 Yongho Kim and Myung Chul Kim, “China in the North Korean Nuclear Quagmire: Rethinking Chinese Influence on North Korea,” Issues & Studies 44, no. 3 (September 2008): 170. 16 “North Korea Talks Set to Resume,” British Broadcasting Corporation, October 31, 2006. 17 Twomey, 417. 18 Alexa Olsen, “Korean Nuclear Deal Delays Disarmament,” Associated Press, February 13, 2007. 19 Wang Yan, “Full Text of Joint Document of the Second Session of the Sixth Round Six-Party Talks,” China View, http://news.xinhuanet.com/english/2007-10/03/ content_6829017.htm, accessed September 1, 2008.

China’s Initiatives in Structuring Regional Multilateralism (1996–2004)

49

of talks. The US requires “complete, verifiable and irreversible” abandonment of North Korea’s highly-enriched uranium (HEU) program, as well as its plutonium program, either for weapons making or electricity generation, before it will provide that country with the security guarantees and diplomatic recognition that it had asked for. Japan also wants to include past cases of abduction of Japanese citizens to North Korea in 6PT discussions. While the US and Japan are reserving all their options, China, Russia and South Korea have been against economic sanctions or military strikes against North Korea to coerce it into halting its nuclear program. Rather, South Korea under President Roh Moo-hyun had indicated that it was willing to supply the North with all of its electricity, while both Russia and China promised more economic aid, if Pyongyang were to dismantle its nuclear weapons. Nonetheless, China’s leverage is by far the greatest, because half its foreign aid goes to North Korea and 80 percent of North Korea’s energy need is met by fuel imports from China.20 China considers North Korea a buffer state against US forces in South Korea, and does not wish to see the collapse of the North Korean regime as a result of US coercive action, which might precipitate tens or hundreds of thousands of North Koreans crossing the Yalu River boundary into China as refugees, or bring US troops to the Chinese border. Furthermore, the interests and policies of China and the US diverge across a number of important regional issues, notably on US arms sales to Taiwan, and US efforts to develop and deploy the TMD with Japan. Although there is no direct rivalry with Japan over the 6PT, the Chinese officialdom and populace retains strong memories of Japanese imperialism and their atrocities in China. As such, China has opposed both the use of the North Korean nuclear issue or preparation against terrorism involving nuclear weapons as means for the Japanese government to justify an increased role for Japan’s SelfDefense Forces in regional security and international peacekeeping, as well as any expansion of its military capabilities, as indeed has been the intention of the Japanese authorities. ASEAN Plus Three (APT/10 + 3) Initial Stage: Attempts at Sino-Japanese Cooperation (1997–2004) APT was formed in December 1997 as the first sole East Asian states-only regional grouping. It was created in the midst of the Asian Financial Crisis for the purpose of allowing ASEAN to meet with its three dialogue partners—China, Japan and South Korea—on a regular basis at the levels of heads of government, ministerial and senior officials. One major purpose of the APT was to boost regional cohesion among East Asian countries to reduce economic and financial dependence on the 20 Interview with then US Secretary of State Colin Powell (Fox Sunday News, February 9, 2003).

50

Contentious Integration

US and extra-regional powers. Asian governments have developed strong impetus, especially since the early 1990s, to pursue closer relations to provide their own region with some balance against the imminent formation of exclusive trade blocs in Europe and North America.21 There were also arguments increasingly made by East Asians then that their region needed to develop a regional identity, to increase its weight in the world and have a stronger voice in global financial and trade institutions that are still largely dominated by the West. These material and ideational vectors for Asian regionalism only became more salient as the Asian financial crisis intensified. As the original goal of the grouping was to stabilize East Asia’s economies after the Asian crisis, the finance ministers of all 10 + 3 states came together in the city of Chiang Mai in northern Thailand in May 2000 to work out a regional currency-swap mechanism. With this meeting, APT took on a principal economic integration function when the finance ministers of member states agreed to create a network of individually-negotiated bilateral (national for international) currency swap arrangements, by which China, Japan, South Korea and the five largest and freest ASEAN economies (Indonesia, Malaysia, Philippines, Singapore, and Thailand) pledged to lend one another part of their hard currency reserves if any of their currencies came under speculative pressure. This marked the beginning of financial integration in the East Asian region, in the form of the Chiang Mai Initiative (CMI). Although no swap was ever activated, CMI represented one of the most tangible outcomes of APT, to supplement existing financial arrangements in addressing balance of payment and short-term liquidity difficulties in the East Asian region. In 1999, China had supported the formation of the East Asian Vision Group of academics, which came up with the blueprint report “Towards an East Asian Community” in 2002. At the sixth APT Summit held in Phnom Penh, Cambodia, on November 4, 2002, as a small initial step towards realizing that community, China announced that it would waive all or most of the debt owed to it by Vietnam, Laos, Cambodia and Burma, the poorest member states of ASEAN. By acting responsibly in not devaluing its currency to boost exports, as widely feared, to forestall competitive devaluations by crisis-hit countries, and by offering aid packages and low-interest loans worth a few billion US dollars to several Southeast Asian states, the PRC government did much to replace the image of China as aloof or arrogant with one of China as a helpful neighbor and responsible power. While China was widely praised for not devaluing its currency, which would otherwise have led to a crippling round of competitive currency devaluations that regional countries already hit hard by the crisis could ill-afford to engage in, Japan’s currency depreciated, and its banking and financial system was partially affected by the crisis. Coming on the heels of US rejection of Japan’s 21 David Capie, “Rival Regions? East Asian Regionalism and its Challenge to the Asia-Pacific,” in James Rolfe, ed., Asia Pacific: A Region in Transition (Asia-Pacific Center of Security Studies, Honolulu, Hawaii, 2004), 155.

China’s Initiatives in Structuring Regional Multilateralism (1996–2004)

51

earlier Asian Monetary Fund proposal as a response to the crisis, for fear that the proposed stock of $100 billion would circumvent International Monetary Fund (IMF) conditionalities for borrowers, East Asia’s difficulties provided both an opportunity to demonstrate region-wide economic interdependence and a need for China and Japan to participate actively in creating and consolidating the APT. By April 2005, 16 bilateral currency swap arrangements have been signed under the CMI, amounting to US$37.5 billion.22 APT finance ministers then announced their intention to “multilateralize” the CMI in May 2005 and created working groups to hammer out the details. The “Plus Three” states then agreed to raise the share of funds available for swapping without an IMF program from 10 percent as previously agreed upon to 20 percent.23 There were already by then 48 dialogue mechanisms under the 10 + 3 process, coordinating 16 areas of cooperation, which included economics, finance, foreign affairs, politics, security, labor, health, tourism, environment, agriculture, forestry, social welfare, energy, transnational crime, information and communications technology (ICT) and youth affairs. However, though there are fairly regular meetings of 10 + 3 leaders at the level of presidents and prime ministers, full ministers, and senior officials, and documents to set and record the agenda of these meetings, there is no secretariat, permanent staff, binding agreement, or written set of rules to structure the grouping. The semi-institutionalized character of the 10 + 3 principally reflects several factors. Firstly, the leaders and ministers of the 10 ASEAN countries and China, Japan and South Korea have consistently exhibited a preference for maintaining the incremental, consensus-building approach of the forum and non-binding nature of understandings reached—the fabled “ASEAN Way”—to avoid or minimize open conflict. Secondly, former Malaysian premier Mahathir Mohammed notwithstanding, leaders of ASEAN were not in favor of creating a separate 10 + 3 secretariat,24 for fear of diluting ASEAN’s already limited influence within the enlarged grouping. However, ASEAN leaders did consent to the establishment of a 10 + 3 unit within the existing ASEAN Secretariat in December 2003 to coordinate and monitor 10 + 3 cooperation. Thirdly, China’s proposal at the sixth 10 + 3 summit in November 2002, that the 10 + 3 process be expanded from economic cooperation to include regional political and security issues such as

22 Christopher M. Dent, “Taiwan and the New Regional Political Economy of East Asia,” China Quarterly, no. 182(May 2005): 390–91. 23 Joint Ministerial Statement of the eighth ASEAN + 3 Finance Ministers’ Meeting, Istanbul, Turkey, May 4, 2005, paragraph 6(IV), http://www.aseansec.org/17448.htm, accessed September 1, 2005. 24 Alice D. Ba, “The Politics and Economics of ‘East Asia’ in ASEAN–China Relations,” in Ho Khai Leong and Samuel C.Y. Ku, eds, China and Southeast Asia (Singapore: Institute of Southeast Asian Studies, 2005), 181.

52

Contentious Integration

combating terrorism and other trans-national crime,25 and subsequent suggestion of a separate free trade area for China, Japan and South Korea,26 might have diffused the focus of the 10 + 3 process. Yet overall, it has become apparent since 2004 if not before, that the biggest obstacle to institutionalizing the 10 + 3 is the head-to-head competition for influence in Southeast Asia between China and Japan, and Japan’s refusal so far to acquiesce in China’s leadership in the 10 + 3. One of the main reasons for Japan’s participation in 10 + 3 is to balance or dilute the influence of China in Southeast Asia, which Japan has for decades considered to be its investment destination, export platform, and resource hinterland. By aggressively pursuing a strong China–ASEAN axis within the 10 + 3 since 2001 to establish a free trade area between China and ASEAN, China has triggered strong competition between itself and Japan for influence in Southeast Asia, with the Japanese government’s decision in 2002 to set up a “closer economic partnership” with ASEAN widely seen as an attempt to compete and catch up with China’s proposal. Even before the formation of the 10 + 3, Japan had launched the Asian Monetary Fund initiative in the midst of the Asian crisis as a lender of last resort to affected countries, but quickly retracted the idea once the US objected to it on the basis that it might turn out to be an avenue to circumvent International Monetary Fund borrowing terms. Japan desires to act as the leader of the region, yet it would do nothing that might earn it the disapproval of the US government and harm their close economic relations and security alliance. Because of its important trade and investment links with the US and Western countries, Japan wanted to prevent the forum from integrating into an exclusionary Asian economic bloc with China as its putative leader, and worked to create an East Asian “community” of nations that would include 10 + 3 countries as well as Australia, New Zealand, and India. The East Asian Summit, which held its first meeting in December 2005, was a step in this direction. By then, relations between China and Japan had become emotionally-charged, inflamed by Japan’s former Prime Minister Koizumi Junichiro’s repeated visits to the Yasukuni Shrine, rival claims to petroleum deposits under the East China Sea, and demonstrations against Japanese establishments in Chinese cities that turned violent. With Asia’s two main powers in a disagreeable mood towards one another, regional integration within 10 + 3 could hardly be expected to advance.

25 Joint Communiqué of the First ASEAN Plus Three Ministerial Meeting on Transnational Crime (AMMTC + 3), Bangkok, January 10, 2004, http://www.aseansec. org/15645.htm, accessed September 1, 2005. 26 Deng Xianchao and Xu Derong, “Lun Zhongguo Yazhou diquzhuyi zhanlue de goujian ji yingxiang yinsu” [“China’s Strategy of Asian Regionalism”], Dongnanya Yanjiu [Southeast Asian Studies], no. 2(2005): 6.

China’s Initiatives in Structuring Regional Multilateralism (1996–2004)

53

ASEAN + China27 To increase across-the-board and concrete cooperation with ASEAN without the presence of a potentially obstructionist foreign power, further intensify intraAsian trade and investment, and re-center the growth of regional production networks and supply chains from Japan to China, the PRC took a leading role toward institutionalizing a separate China–ASEAN 10 + 1 axis. The genesis of 10 + 1 is the first China–ASEAN Senior Officials’ Meeting (SOM) at Hangzhou, China, in April 1995. A regular China–ASEAN dialogue was instituted in July 1996. There are five parallel mechanisms that form the overall structure of the ASEAN–China dialogue. They are the ASEAN–China Joint Cooperation Committee (ACJCC), ASEAN–China Senior Officials Political Consultations Committee, ASEAN–China Joint Committee on Economic and Trade Cooperation, ASEAN–China Joint Science and Technology Committee, and ASEAN Committee in Beijing. Inaugurated in February 1997, the ACJCC acts as the coordinator of all ASEAN–China dialogue mechanisms at the working group level.28 While keeping watch for developments on the APT front, China has been focusing more energy on the so-called ASEAN + China arrangement, its dialogue partner relationship with ASEAN. At their summit in 2002, China and ASEAN signed four key agreements: 1) the Framework Agreement on Comprehensive Economic Cooperation and Establishment of the China–ASEAN Free Trade Area; 2) the Memorandum of Understanding on Agricultural Cooperation; 3) the Declaration on Conduct (DOC) in the South China Sea; and 4) the Joint Declaration on Cooperation in the Field of Non-Traditional Security Issues. The Framework Agreement on Comprehensive Economic Cooperation in 2002 aimed to build an ASEAN–China Free Trade Area (ACFTA) by 2010. A particularly enticing aspect of the Agricultural Memorandum to Cambodia, Laos, Vietnam and Myanmar was its “Early Harvest” provision, by which China undertook to reduce or remove tariff on the agricultural, fruit and meat imports of these countries starting from July 2005 without reciprocity for five years hence. With the DOC, Beijing reaffirmed the norms of restraint, non-use of force, and peaceful settlement of conflict in handling its disputes with other claimants over the South China Sea islands. The Joint Declaration on Non-Traditional Security aimed to promote cooperation in combating cross-border drug smuggling, human trafficking, money-laundering, spread of epidemics, and terrorist activities.

27 ASEAN + China and ASEAN + Japan are regular dialogue mechanisms established by China and Japan respectively with ASEAN that are considered by some people as subsets of ASEAN + 3. 28 ASEAN Secretariat, “The First Meeting of the ASEAN–China Joint Cooperation Committee: Beijing, February 28–29, 1997, Joint Press Release,” ASEAN Economic Bulletin (July 1997): 87.

54

Contentious Integration

As China and ASEAN became more economically important to one another, especially in light of Japan’s prolonged recession, they developed a growing basis for increased cooperation and structured interaction. It was this rationale that led then Chinese Prime Minister Zhu Rongji to announce in November 2001 China’s plan to create an FTA between China and ASEAN by 2010. To this end, an Agreement on Trade in Goods, Agreement on Trade in Services, and Agreement on Investment were signed in 2004, 2007 and 2009 respectively. China is considered a vast and fast-growing marketplace for ASEAN produce, and ASEAN leaders and business persons generally perceive China and the proposed ACFTA to be much more of an opportunity than as a threat. For China, by providing economic benefits to Southeast Asian countries, the proposed ACFTA would weaken any regional preconception of a “China threat,” and help to foster regional economic integration. Since 2002, a tri-annual summit has also been held among heads of government and business leaders from China, Thailand, Laos, Cambodia, Vietnam and Myanmar, countries connected by the Mekong River, on the development of the highways, railways and custom services linking the Greater Mekong Subregion (GMS), and the PRC government has backed soft loans to Chinese business interests in the Mekong River Basin.29 At the end of 2005, trade between China and ASEAN approached US$130 billion, Chinese investments in ASEAN reached US$35 billion,30 and China had until then carried a trade deficit with ASEAN as a whole since 2000. With the improvement in the ASEAN economies, unlike before, diversion of foreign direct investments (FDI) from Southeast Asia to China was by then no longer much of an issue. Unlike China, due to the resistance of Japan’s politically-influential agricultural lobby, Tokyo had difficulties negotiating FTAs with ASEAN countries aside from Singapore, as agriculture and fisheries are important exports for most of them. A Japan–ASEAN Comprehensive Economic Partnership Agreement was concluded with Brunei, Malaysia, Indonesia, Philippines and Thailand only in April 2008, which allowed Japan to recoup some ground lost to China due to its laggardly momentum in tightening and furthering economic integration with ASEAN as a whole. At the ASEAN summit in October 2009, ASEAN government leaders reportedly supported greater use of China’s renminbi currency for trade transactions in Southeast Asia. With the operationalization of the China–ASEAN FTA on January 1, 2010 and in tandem with China’s increasing economic strength in Southeast Asia, business settlements in renminbi are a growing trend in China– ASEAN trade. Both China and the ASEAN states believe that their relationship can enhance domestic regime stability for all, not only by promoting economic performance 29 Clarissa Oon, “Beijing to Spur Investment with Soft Loans,” Straits Times, July 5, 2005, p. 9. 30 Donald Greenlees, “ASEAN Hails the Benefit of Friendship with China,” International Herald Tribune, November 1, 2006, http://www.iht.com/articles/2006/11/ 01news/asean.php?page=1, accessed November 5, 2006.

China’s Initiatives in Structuring Regional Multilateralism (1996–2004)

55

through freer trade, but also by buttressing the coercive capacity of governments in dealing with non-military threats. The governments of Southeast Asia and China remain politically challengeable, have growing but limited capacities, and depend on economic growth for legitimacy. This means that non-military domestic or cross-border threats to regime survival are more likely to be of concern to these governments than traditional military threats. After becoming SecretaryGeneral of the Chinese Communist Party in late 2002, Hu Jintao envisioned a Chinese military capable of handling non-traditional security (NTS) matters such as on terrorism, transnational crime, and natural disaster, both domestically and overseas.31 Japan uses the protection of human security as a guiding principle in its large foreign aid program, but the concept of human security, which privileges the security of citizens rather than their governments or the state, sits uncomfortably with the national security concept adhered to by the governing elites of Southeast Asia.32 Pursuant to the 2002 China–ASEAN Joint Declaration on Cooperation in the Field of Non-Traditional Security Issues, official China–ASEAN declarations explaining the principles guiding NTS cooperation between them cite instead the protection of state sovereignty, and make no mention of human security rationales for cooperation; NTS is unlike traditional security only in that the threat medium is non-military.33 When China voiced a bold proposal for establishing a strategic partnership with ASEAN at the ASEAN foreign ministers’ meeting in Phnom Penh in June 2003, the proposal, though not publicized, was viewed by some in Japan as a means to construct a special China–ASEAN security relationship and to keep Japan and the US at arm’s length from the affairs of Southeast Asia.34 At the seventh China–ASEAN summit in Bali, Indonesia, on October 8, 2003, China became the first non-ASEAN state to formally accede to ASEAN’s Treaty of Amity and Cooperation (TAC), which commits China to respecting the principles of nonaggression and non-interference in the domestic affairs of signatory states. The summit also produced a “Joint Declaration on Strategic Partnership for Peace and Prosperity,” and China proposed direct military-to-military consultations for the first time.35 This series of moves by China compelled Japan to swallow its 31 Daniel Hartnett, “The PLA’s Domestic and Foreign Activities and Orientation,” Hearing of the US–China Economic and Security Review Commission on China’s Military and Security Activities abroad (Washington, DC: US–China Economic and Security Review Commission, March 4, 2009), http://www.uscc.gov/hearings/written_ testimonies/09_03_04_wrts/09_03_04_hartnett_statement.pdf, accessed May 13, 2011. 32 David Arase, “Non-Traditional Security in China–ASEAN Cooperation: The Institutionalization of Regional Security Cooperation and the Evolution of East Asian Regionalism,” Asian Survey 50, no. 4(July/August 2010): 830. 33 Arase, 812. 34 Michael Vatikiotis, “China’s Tight Embrace,” Far Eastern Economic Review, July 17, 2003: 28–30. 35 Evan Meideiros and M. Taylor Fravel, “China’s New Diplomacy,” Foreign Affairs 82, no. 6(November/December 2003): 22–35.

56

Contentious Integration

qualms regarding its possible inability to publicly criticize human rights violations in some ASEAN countries and sign onto the TAC in 2004. China has also been willing to support ASEAN’s declaration of Southeast Asia as a nuclear weaponsfree zone, thus taking a stance exactly opposite to that of the US, Japan’s prime security partner. The China–ASEAN “strategic partnership” has been administered through an annual cycle of summits and high-level meetings that has guided not only the formation and operation of the China–ASEAN FTA, but also NTS cooperation between them. Japan had reasons to worry that if China and ASEAN were to build a robust multi-functional community while other regional initiatives lagged behind, it would be a matter of time before South Korea and Japan felt compelled to join a refashioned APT dominated by China. Thus when China began pushing for the institutionalization of the APT into an East Asian Summit (EAS), Japan saw both an opportunity and the necessity to counteract Beijing’s integrative juggernaut. Shanghai-5/Shanghai Cooperation Organization (SCO)36 The SCO, and its predecessor, the Shanghai-5 is the first multilateral security organization largely initiated and promoted by China. The PRC’s main role in the SCO is that of a chief architect, as China considers its involvement in the SCO a “key point” of its foreign policy.37 China’s chief and original goal in the organization was to gain the cooperation of Central Asian governments to reduce the threat of Muslim Uighur separatism in China’s Xinjiang Autonomous region, by denying the separatists cross-border funding, weapons or sanctuary. Since then, the SCO has become a tool for enhancing Chinese power and influence in Central Asia. As a result of the PRC’s role as the driving force, the SCO’s development has speeded up and expanded into new directions, such as economic relations and energy cooperation among member states. This has been a cause for concern with the Japanese, particularly since they have been increasingly looking at China as a rival. The formation of the SCO also represents Russia’s implicit recognition of the PRC’s legitimate role and rising influence in the Central Asian region where Soviet Russia once had exclusive control. Since Jiang Zemin became the first PRC Head of State to visit Central Asia in 1996,38 either the president or prime minister of China has considered the region 36 For a more detailed account of the institutionalization of the SCO, read Chien-peng Chung, “China and the Institutionalization of the Shanghai Cooperation Organization,” Problems of Post-Communism 53, no. 5(September/October 2006): 3–14. 37 Fu Ying, “China and ASEAN in a New Era,” China: An International Journal 1, no. 2(September 2003), 310–11. 38 Zhu Tingchang, “Lun Zhongguo mulin zhengce and lilun yu shijian” [“On the Theory and Practice of China’s Neighborly Policy”], Zhongguo Waijiao [Chinese Foreign Affairs], no. 8(August 2001): 18.

China’s Initiatives in Structuring Regional Multilateralism (1996–2004)

57

important enough to visit it at least once a year. China has made active and skillful use of the Shanghai process, where PRC officials regularly attended summit meetings, ministerial gatherings, and work conferences, to accelerate regional integration and cooperation with neighboring states in post-communist Eurasia, as part of Beijing’s official “Good Neighbor Policy.” This was the result of a foreign policy consensus achieved among China’s leaders and international affairs experts at the end of the twentieth century, that for China to have a peaceful environment conducive to its domestic political stability and economic development, Beijing needed to be more proactive in shaping its own neighborhood. This is particularly so in the security aspects. China’s leaders since Jiang Zemin have given multilateral cooperation a prominent place in its national security doctrine, which envisages the development of a virtuous cycle of mutual security through cooperative means. The SCO began in 1996 as the Shanghai-5 process, with China on one side and Russia with Kazakhstan, Kyrgyzstan, and Tajikistan on the other, engaging in negotiations to settle outstanding border disputes. The process was so named because the first meeting of the heads of the five states took place in China’s Shanghai. This in turn led to confidence-building measures such as agreements to withdraw troops from, and limit the size of military maneuvers at, border areas with the PRC, and to give notification of, and allow observers to, military exercises. In subsequent annual meetings, Chinese and Russian leaders came to an understanding about their mutual security interests in Central Asia. China’s security concerns in Xinjiang, Russia’s fight against the rebels of Chechnya and the suppression of Islamist dissidents in the Central Asian states of the Shanghai-5 are linked in a common cause with a joint pledge to oppose the “three evils” of separatism, terrorism and Islamic extremism. The “Shanghai-5” mechanism for boundary demarcations and confidencebuilding between the head of state of China, and those of Russia, Kazakhstan, Tajikistan and Kyrgyzstan, was established with the holding of its first summit in Shanghai on April 26, 1996. On April 26, 1997, the heads of the five countries held a second meeting in Moscow and signed an Agreement on Mutual Reduction of Military Forces along China’s borders with Kazakhstan, Tajikistan and Kyrgyzstan. At the third summit in Kazakhstan’s Almaty on July 3, 1998, discussions expanded into non-border issues such as cooperation against the common threat of terrorism, religious fundamentalism, and separatism, which became the focus of the Shanghai-5 and subsequently the SCO. At the fourth summit in Kyrgyzstan’s Bishkek on August 24, 1999, the group agreed to institute constant meetings between officials of various government departments in member states. On July 5, 2000, the fifth summit at Tajikistan’s Dushanbe mooted the idea of establishing a Shanghai-5 Council of National Coordinators to provide organizational support for the purpose of fostering regularized coordination. With the admission of Uzbekistan in June 2001, this Shanghai-5 process was renamed the SCO. The SCO has in recent years added to its core focus of fighting the “three evils” by advancing cooperation in conducting joint anti-terrorist military exercises, interdicting all types of cross-border smuggling, and promoting

58

Contentious Integration

trade, investment and infrastructure development among member states. The SCO is now an organization of six regular member states and four observer states that are geographically contiguous and share a common concern for Eurasian or Central Asian affairs. On June 15, 2001, when the SCO was founded in Shanghai, the “Shanghai Convention against Terrorism, Separatism and (Religious) Extremism” was signed by leaders of the member states, clearly defining the cardinal purpose of the organization. The leaders also adopted a flag and an emblem for the organization. The SCO Charter of 26 articles, which provides the purposes, principles, structure and operational rules of the organization,39 was adopted by the second heads of SCO states meeting in St Petersburg in June 2002. According to the Charter (Article 16), SCO bodies will take decisions by consensus, abstention notwithstanding, except for those on the suspension or expulsion of members from the organization, which will be taken by “consensus minus one vote of the member state concerned.”40 The supreme decision-making body of the SCO is the Council of Heads of States. It holds regular sessions once a year and makes decision and issues instructions on all important matters pertaining to the organization. Below this level, the Council of Heads of Government meets annually to discuss strategies of cooperation and priorities for the organization, as well as to approve its budget for the following year. Lower down, a mechanism of annual meetings exists for ministers of foreign affairs, economy, transport, culture, defense, law enforcement; heads of department on extreme measures (disaster coordination); and general public prosecutors. SCO functions are coordinated by a Council of National Coordinators of SCO member states meeting at least three times a year, and joint working groups under the charge of senior officials in the relevant ministries of member states tackle issues of common concern. An inaugural meeting of parliamentary speakers of SCO states was held in Moscow in May 2006,41 the first gathering of the heads of the supreme courts of SCO states took place in Shanghai in September 2006, and the first meeting of the ministers of education of SCO states was held in Beijing in October 2006. The SCO has two permanent bodies:42 1) the SCO Secretariat, located in Beijing, consists of 30 people delegated by the member countries in proportion to their financial contribution to the SCO budget. The Secretariat works closely with the Council of National Coordinators in preparing drafts, making 39 Wang Jianwei, “China’s Multilateral Diplomacy in the New Millennium,” 182. 40 The Shanghai Cooperation Organization website, http://www.sectsco.org/article. asp?id_temp2=1&LanguageID=2, accessed March 7, 2006. 41 GOV.cn (People’s Republic of China Government Official Web Portal), “Joint Communiqué of 2006 SCO Summit (full text),” http://www.gov.cn/misc/2005–06/15/ content_311296.htm, accessed June 19, 2006. 42 RIA News Agency, Moscow, in Russian 0315, “Russian Diplomat Appointed Deputy CEO of Shanghai Cooperation Organization,” BBC Monitoring Former Soviet Union, January 15, 2004.

China’s Initiatives in Structuring Regional Multilateralism (1996–2004)

59

suggestions, implementing resolutions, and exercising budgetary supervision for the organization.43 The largest contingent of delegates is from the PRC. 2) The Regional Anti-Terrorist Structure (RATS), sited in in Tashkent, has a staff responsible for collecting and sharing intelligence on suspected terrorist groups operating in SCO member states. The Secretariat was inaugurated on January 15, 2004 and the first meeting of the RATS Executive Committee was held on October 31, 2003. Both the SCO Executive Secretary and the RATS Executive Committee Director are appointed by the Council of Heads of States for a period of three years, with members taking turns according to the Russian alphabetical order of their country’s name. The Secretary is assisted by four deputies in charge of political– security, economic–humanitarian, administrative–legal–budget and information analysis–media–external affairs.44 The first SCO Secretary-General was China’s Zhang Deguang, and the first Director of RATS was Vyacheslav Kasymov from Uzbekistan. The SCO heads of state meeting in 2004 established a council of permanent representatives from member states to exercise direct supervision over the activities of the RATS.45 In 2004, the SCO created a team of observers to monitor presidential and other elections in member states. Subsequently, the SCO heads of government meeting in October 2005 in Moscow signed agreements to establish a mechanism to provide mutual aid and their quick deployment to member states for disaster relief and other emergencies.46 The meeting also created an SCO–Afghanistan Contact Group composed of members of the SCO Secretariat staff and senior diplomats from Afghan embassies in SCO states,47 the purpose of which is to maintain a direct line of communication between the SCO and Afghan authorities to discuss issues of mutual concern, particularly about narcotics smuggling by drug traffickers from Afghanistan. Member states of the SCO, to a large extent, share common interests, threats and norms, especially with regards to security concerns. Although the SCO has stated that it is not a military alliance directed against any external parties,48 both leaderships of China and Russia have been united in a strategic partnership since 1996 against what they perceive as existing US “hegemonism” and “unipolarity,” and interference in the internal affairs of sovereign states. Russia was wary of 43 The Shanghai Cooperation Organization website, http://www.sectsco.org/news_ detail.asp?id=96&LanguageID=2, accessed September 1, 2005. 44 The Shanghai Cooperation Organization website, http://www.sectsco.org/html/ 00041,html, accessed April 19, 2007. 45 “Declaration by the Heads of Member-States of the Shanghai Cooperation Organization,” Xinhua News China, July 5, 2005. 46 “Premier Wen leaves for home after SCO meeting in Moscow,” Xinhua News Agency, October 27, 2005. 47 The Shanghai Cooperation Organization website, http://www.sectsco.org/news_ detail.asp=735&LanguageID=2, accessed February 7, 2006. 48 Xu Tao, “Lun Shanghai hezuo zuzhi de jizhihua” [“On the Institutionalization of the Shanghai Cooperation Organization”], International Politics (China), no. 10(2003): 1.

60

Contentious Integration

American support for the regime changes in the former Soviet republics of Ukraine, Georgia and Kyrgyzstan while China had opposed US arms sales to Taiwan, and both aim to maintain their interests in Central Asia, if not to augment them. The Dushanbe Declaration issued at the close of the fifth summit of Shanghai-5 leaders confirmed the right of each state to choose its own path of political, economic, and public policy development, declared against intervention into the internal affairs of other states under the pretext of “humanitarian intervention” and “human rights protection,” and supported efforts by member states to protect their own independence, sovereignty, territorial integrity and social stability.49 This declaration, more than any other document, defines the norms of the Shanghai-5 forum and the succeeding SCO. One can fairly say that the SCO is an instrument for both China and Russia to jointly maintain their sphere of influence in Central Asia. Cooperation among governments against fundamentalism, terrorism, and separatism has remained the focus of the SCO. However, recognizing that poverty is a major source of instability in Central Asia and China’s Xinjiang, the SCO enterprise has since 2003 expanded to economic cooperation in the form of encouraging trade, investment and infrastructural development among member countries.50 Expanding the SCO’s focus from primarily counterterrorism to include economic cooperation, which was first noted at the summit level in the “Tashkent Declaration of Heads of Member States of SCO” on June 17, 2004,51 also reflects China’s increasingly high priority in stabilizing Central Asia to gain access to its petroleum and natural gas resources.52 To further SCO cooperation, especially in the areas of non-traditional security, leaders at the 2004 SCO Tashkent summit signed an agreement to tighten border customs around Afghanistan to enforce general policing of the smuggling of illicit arms, ammunition, explosives, and narcotics from that country.53 The focus of the group has since broadened to include taking joint measures to halt cross-border organized international crime, illegal immigration and mercenary activities.54

49 “Approve of Special Services Cooperation,” ITAR-TASS News Wire, July 5, 2000. 50 Hua Yujie, “Shanghai hexuo zuzhi: dique anquan yu jingji jinbu” [“Shanghai Cooperation Organization: Regional Security and Economic Progress”], International Politics (China), no. 4(2005): 90–91. 51 The Shanghai Cooperation Organization website, http://english.scosummit2006. org/en_bjzl/2006-04/20/content_104.html, accessed November 11, 2013. 52 David Shambaugh, “China Engages Asia,” International Security 29, no. 3(Winter 2004/05): 74. 53 School of Hawaiian, Asian and Pacific Studies, University of Hawaii at Manoa, “Declaration by the Heads of Member-States of the Shanghai Cooperation Organization (Astana, July 5, 2005),” http://russia.shaps.hawaii.edu/fp/russia/2005/20050705_sco_07. html, accessed March 7, 2006. 54 Xinhua News Agency, “SCO Pledges to Deal with New Security Challenges,” China Daily, July 6, 2005.

China’s Initiatives in Structuring Regional Multilateralism (1996–2004)

61

The climate of the July 2005 SCO summit at Kazakhstan’s Astana was heavily influenced by western and US criticisms of Uzbekistan President Ismail Karimov’s violent suppression of the rebellion in Andijan, eastern Uzbekistan, in May 2005. These reproaches spread fear and suspicion throughout Central Asia that the US was supporting dissidents to subvert or overthrow the ruling regimes in the region. Reflecting anti-US feelings among the SCO member states, the joint declaration at the end of the summit called for a timetable to withdraw US-led anti-terrorist forces from Afghanistan, and for a deadline to terminate both the use of temporary facilities and the military contingents’ presence in Kyrgyzstan and Uzbekistan, citing the end of large-scale operations against terrorism in Afghanistan.55 Accordingly, the Uzbek government gave US forces 180 days from July 29, 2005 to evict its Karshi-Khanabad air base,56 which was completed by the end of November. US cancellation of aid for 2006 to Uzbekistan due to dissatisfaction over its human rights record and widespread regional suspicion of American involvement in the Andijan riots and the overthrow of Kyrgyz President Askar Akayev only seemed to have made Central Asian governments believe that sticking closer to China and Russia would better ensure the longevity of their regimes. Besides, the SCO obviously offers tangible benefits to its members.57 Beijing and Moscow have designed the grouping to preserve the current status quo and, unlike the US or other Western countries, refrained from encouraging any market or democratic reforms. For Central Asian governments, Russia and China represented support without strings attached over issues such as human rights or democratic governance. Central Asian countries also yearn for whatever support Russia and China can offer to help them fight against local Islamic fundamentalist groups such as the Islamic Movement of Uzbekistan and the Hizb-ut-Tahrir. For China, Russia’s Siberia and Central Asia could provide the energy resources, particularly oil and natural gas, to fuel its growing and rapidly industrializing economy. In return, China could provide fellow SCO states with a market for trade and source of investment. Through joint military exercises, the SCO has also come to be seen as a means to limit US influence in the Central Asian region that is strategically important to both Russia and China. The SCO has also sparked the interest of foreign countries in acquiring membership in the organization. Iran, Pakistan and India became observer members of the SCO at its 2005 summit, joining Mongolia, which was admitted the year before.

55 Hu Qihua, “SCO Summit Flexes Anti-Terror Muscles,” China Daily, August 8, 2005. 56 Jim Garamone, “Uzbeks ask US to leave Karshi-Khanabad,” American Forces Press News, August 1, 2005. 57 The following discussion in this paragraph runs parallel to the analysis by Philippa Fogarty, “Shanghai Grouping Moves Centre Stage,” http://news.bloc.co.uk/2/h/asia-paci fic/5076032.stm, accessed June 25, 2006.

62

Contentious Integration

As the SCO is an obvious tool for enhancing Chinese power and influence in the Central Asian region, China as its principal driving force has every incentive to push for the institutionalization of the organization. Aside from getting the support of Central Asian governments in its fight against Uighur separatists in Xinjiang to deny them cross-border funding, equipment or sanctuary, China’s main goals are to stabilize Central Asia, as the region is turning out to be a potentially important source of oil and gas for its growing economy. To avoid the SCO from being sidelined by the post-September 11, 2001 US military presence in Central Asia, it was Beijing which pushed hard for the institutionalization of a regional antiterrorist center at the 2002 St Petersburg summit,58 which was realized as the RATS. At that summit, China successfully persuaded the group to take a stand against the deployment of the theatre missile defense (TMD), for such a US missile shield, of which Japan was involved in the research and development, would make China’s relatively small nuclear deterrent force obsolete. Further reflecting China’s instrumental role and influence, a permanent secretariat building entirely funded by the PRC was erected in Beijing in late 2003.59 China has been cooperating ever more closely with SCO states in combating internal and external threats emanating from terrorism, Islamic fundamentalism, and separatism. The military exercise between Chinese and Kyrgyz forces in October 2002, and the joint anti-terrorist exercise of SCO militaries, except that of Uzbekistan at the Chinese–Kazakh border in August 2003, effectively began the process of turning the grouping into a quasi-military bloc. China implicitly condoned the harsh actions of Uzbek President Karimov in putting down the Andijan protests, with the first SCO Secretary Zhang Deguang from China calling the disturbance “a terror attack carried out by armed religious extremists.”60 Karimov took up an invitation to visit China only one week after quelling the riots back home. One important reason why Central Asian countries joined up with China in the SCO was to reduce their overwhelming trade dependence on Russia, a legacy of their being member states of the former Soviet Union. Reflecting China’s goal of building comprehensive strategic partnerships, particularly for its own energy security, at the 2003 annual SCO meeting in Moscow, Chinese President Hu Jintao made a strong push for an early focus on building transport infrastructure throughout Eurasia.61 Ahead of the 2005 SCO summit at Astana, Hu committed China to set aside a special fund for the training of 1,500 people

58 Xinhua News Agency, “Jiang Zemin Calls for Regional Anti-terrorism Mechanism between SCO,” January 7, 2001. 59 Telephone interview with Mr Du Wei, then Assistant Secretary of the Shanghai Cooperation Organization, February 27, 2006. 60 Goh Sui Noi, “Security Summit Will Also Discuss Economic Ties,” Straits Times (Singapore), July 5, 2005. 61 “Hu Jintao’s Speech at the SCO Moscow Summit,” People’s Daily, May 30, 2003.

China’s Initiatives in Structuring Regional Multilateralism (1996–2004)

63

from other SCO countries within the following three years,62 chiefly in the areas of economic, scientific–technical and humanitarian cooperation. The SCO has since carried out more than 120 projects in areas of customs cooperation, cross-border transportation, law and regulations harmonization, energy development, and road and railway construction, most of which involves China.63 China has even voiced the idea of establishing an SCO Free Trade Area. It is obvious that China is far less vulnerable on its western continental front than on the eastern coastal side to troubles such as potential power projection by the world’s dominant sea power, nuclear concerns on the Korean peninsula, a more militarily assertive Japan having islands disputes with China, and the intractable Taiwan problem.64 By strengthening the SCO and forging strategic partnerships with Russia and Central Asian states, and at the same time, minimizing the US role and undermining its influence in Central Asia as much as possible, such as calling for an end to the US military presence and use of facilities in the region, China would enhance its geopolitical security on the western border and counterbalance its vulnerabilities in the east. Conclusion The record of China’s success at institutionalizing regional multilateral organizations, and its own influences in them, though commendable, is uneven. China has been remarkably successful in its push for a high degree of institutionalization with the SCO because the only other major participant, Russia, is a friend, and members have a salient accord in pursuing the aims of antiterrorism and trade promotion. The 6PT is minimally institutionalized because, although the issue of nuclear disarmament of North Korea is important to China, there are many heavy players with their own agenda in the forum, particularly the US and Japan, and North Korea itself is a maverick. The semi-institutionalized character of the ASEAN + 3 reflects both the consultative nature of the forum that leaders of ASEAN and China, Japan and South Korea have decided upon, and the competition for influence between China and Japan. To increase cooperation with ASEAN without the presence of foreign powers, China has worked towards institutionalizing a separate China–ASEAN axis within the rubric of ASEAN + 3. There seems to have been much agreement among scholars in the field of integration studies that increasing the number of participants in a multilateral institution will lead to a decrease in its effectiveness, with more players pursuing their own agenda within the group, increasing transaction costs, and complicating 62 Xinhua News Agency, “Hu: SCO Future Hinges on Action,” July 6, 2005. 63 Xinhua News Agency, “SCO Summit Starts to Push for Closer Regional Cooperation,” People’s Daily (English edition), July 5, 2005. 64 This view is shared by Lanxing Xiang. See Lanxing Xiang, “China’s Eurasian Experiment,” Survival (Summer 2004): 118.

64

Contentious Integration

the lines of communication.65 The results obtained here are conflicting. The sample is admitted small, yet it can be observed that increasing the number of parties in the talks on North Korean nuclear disarmament from four to six did not seem to have increased or decreased the effectiveness of the forum in moving it closer to finding a resolution. By expanding its membership from five to six with the addition of Uzbekistan, the transformation of the Shanghai-5 into the SCO actually saw more measures of institutionalization being put in place. When China dealt with ASEAN in a more bilateral fashion by pushing cooperation in the 10 + 1 within the context of the 10 + 3, the number of countries involved obviously went down, but the efficacy of this sub-grouping seems to be higher than that of the larger forum. East Asian regionalism has been criticized by many observers for lacking a country that is ready and able to play a leadership role in overriding structural difficulties and resolving differences of opinion in integrating the region. China is apparently willing to bear the cost of leading the drive for greater institutionalization in Asian regional organizations because, as compared to reaping the benefits of raising its international status and securing a peaceful and stable external environment for its economic expansion, the price of leadership, such as hosting the 6PTs, reducing or eliminating tariffs for agricultural imports from the poorer Southeast Asian countries, or budgeting for an SCO secretariat staff, is quite low and can be kept relatively well-hidden for a large and authoritarian country. As well, the extent to which the principle of non-interference in the affairs of neighboring states is held by China means that pursuing security cooperation and functional interdependence with Beijing pose very little political risk to the other Asian states. Yet, to the extent that China was pushing for the institutionalization of regional multilateral processes, the scope of its achievement has been shown to be limited by two primary considerations—the distribution of power among the forum participants and the extent to which the major players are well-disposed towards China, which shows up China’s influence relative to the other members, and the importance of the issues that the specific forum is set up to deal with, which shows up the relevance and saliency of China’s proposals to participating countries. While China by 2005 was far less suspicious of multilateral arrangements than even five years before, its comfort level for participating in regional institutions, and hence its behavior in these organizations, was heavily dependent on its ability to maximize its relative power, interest and autonomy within these bodies.

65 Samuel P. Huntington, Political Order in Changing Society (New Haven and London: Yale University Press, 1968), 22; Tae-hyo Kim, “The Six-Way Multilateral Approach: Dilemma for Every Party,” Korea and World Affairs 27, no. 3(2003): 353.

Chapter 4

China–Japan Relations in the Post-Koizumi Era: A Brightening Half-Decade? The tenure of Japanese Prime Minister Koizumi Junichiro (2001–2006) marked a turning phase in which participation of Japan and China in regional arrangements would witness cooperation overtaken by competitiveness. This will be addressed in the next two chapters, but it should be noted here that an important underlying cause was the particularly vexing China–Japan relations during his prime ministerial term which never really recovered even after he left office. Since 2002, Beijing had resented Koizumi’s annual official visits as prime minister to the Yasukuni Shrine, and his “unapologetic” attitude towards Japan’s role in World War II.1 Rioters damaged many Japanese establishments in major Chinese cities in the summer of 2005 over Koizumi’s very public campaign to push for a permanent seat at the United Nations’ Security Council for Japan. The violence shocked Japan’s business community so much that, since then, major Japanese companies have come up with a “China + 1” business strategy to diversify the risks of concentrating production in China, and Southeast Asian countries have become substitute production platforms, although for the Japanese firms concerned, it seems less easy to source for raw materials or supply of parts in these places than in China. China’s authorities sometimes even displayed an assertive and proactive stance. On one occasion in 2005, five Chinese warships appeared together near a disputed area in the East China Sea.2 An event like this raised alarms for the Japanese and has since made them keep a close eye on the path of China’s rise. Given the state of Sino-Japanese relations, the five years since Koizumi left office, particularly the change in Japan’s ruling party, were initially expected to realize a recovery and reconciliation in bilateral ties. While tensions did decrease, “icebergs” blocking improvement in relations did not thaw completely, thus yielding the chance that they would harden again. During this period, competition for political and economic influences and interests in the same region, concern over one another’s future security posture, relations with Taiwan, territorial disputes, misunderstanding or neglect about the other’s historical sensitivities and feelings of distrust, all of which were occasionally manipulated by nationalists, 1 “Japan PM Urges China Co-operation,” British Broadcasting Corporation, December 30, 2007, http://news.bbc.co.uk/2/hi/asia-pacific/7164720.stm, accessed September 21, 2012. 2 Norimitsu Onishi, “Chinese Warships Remind Japanese of Challenge at Seas,” New York Times, September 11, 2005, http://www.nytimes.com/2005/09/11/world/asia/11ihtrivals.html, accessed September 21, 2012.

66

Contentious Integration

still pervaded the relationship. Therefore, although there is to date mutual desire, indeed a necessity, for cooperation on many issues affecting both countries, this typically couples with a disconcerting or anxious feeling towards the other’s intentions that results in competitiveness. Concern over relative gains is a very real aspect of this relationship. However, there are deeper roots to this need/fear complex. A Cooperative/Competitive—Need/Fear Conundrum While many Chinese have taken pride in seeing their country rapidly catching up to Japan in economic weight and technological advancement, China has also become a prominent export market and investment destination for Japan, such that both countries’ economies remain highly complementary.3 While many Japanese acknowledge that China is very important for Japan’s economic recovery over the dozen years since 2000, China’s growing economy overtaking Japan’s in size in 2010, its rising military strength, and its deepening relations with other states also mean that they are increasingly viewing China as a competitor to their country.4 This mixed cooperative/competitive feeling has thus characterized the development of China–Japan relations in recent years, as captured in the catchphrase “cold politics, hot economics,”5 which is unfortunately not unfounded, as we observe recent developments between the two countries. Since diplomatic relations between Japan and the PRC were established in September 1972, the Japanese have generally followed a policy of separating political and economic spheres of interaction (seikei bunkai) with regards to China.6 As such, economic exchanges between both countries have never been significantly disturbed by any political crisis in either country, and can be considered the anchor, probably the only one, of relations between Japan and China. Although Sino-Japanese ties went to the lowest point after World War II during the Japanese Prime Ministership of Koizumi, during which Japan’s 2004 National Defense Program Guidelines identified China as a “potential threat” to Japan for the first time,7 together with North Korea, yet not only with trade in

3 Yongming Fan, “Searching for Common Interests between China and Japan: A Chinese view,” Journal of Contemporary China 17, no. 55(2008): 379–80. 4 Fan, 379–81. 5 Maaike Okano-Heijmans, “Japan’s Economic Diplomacy towards China: The Lure of Business and the Burden of History,” Clingendael Diplomacy Papers 14(2007): 4. 6 Ibid. 7 Xie Xiaodong, “Japanese Policies towards China: Changeability and Stability,” China International Studies (January/February 2013): 107–8.

China–Japan Relations in the Post-Koizumi Era

67

goods and services, but Japanese investments in China have kept increasing at a steady pace despite the frosty political atmosphere.8 Whether relations between China and Japan will improve as time goes on highly depend on whether the political iceberg between them continues to harden or gets melted down by the leaders of the two countries. Even though Japanese leaders have for the five years since the departure of Koizumi as Japan’s Prime Minister in September 2006 shown warmer attitudes towards China, and the leaders of both countries have duly acknowledged the importance of their bilateral relations, it still proved difficult to overcome the long-existing ‘political cold, economically hot’ deadlock under current circumstances. Closer economic cooperation between China and Japan does not necessarily lead to more harmonious political relations. This is because economic relations are strongly influenced by business interest groups, which are pragmatic and always looking out for opportunities to make money. On the other hand, political relations are much more visible and excitable, particularly should politicians or members of the general public exploit them to score points over opponents or push their own agenda. The political temperature would rise if there were any disagreement between the two countries. The disputes over the Diaoyu/Senkaku islands and the surrounding East China Sea serve as good examples. No concrete progress has yet been made in preliminary negotiations over the persistent East China Sea boundary dispute, let alone starting working-level negotiations for a requisite boundary treaty.9 While both countries have made a statement announcing a “China–Japan Mutually Beneficial Relationship Based on Common Strategic Interest” at the conclusion of the visit by Hu Jintao as PRC President to Japan in 2008, their differences have not disappeared. The major outstanding problems remain security concerns, historical legacies and the Taiwan issue. Security concerns include fear of the adoption of an assertive military approach by the other side, Japanese worries about a lack of transparency of the PRC’s People’s Liberation Army, and of course, territorial disputes. With historical legacies, the problems for the Chinese revolve around Japanese government leaders’ visits to the Yasukuni Shrine; and for the Japanese, repeated Chinese demands for satisfactory apologies for the wrongdoings of the Japanese Army in China during World War II. Regarding Taiwan, the critical point which would trigger China’s concern is whether Japan intends to uphold the letter, if not the spirit, of the Joint Communique issued at the

8 Lincoln Ping Ping Zhu, “On the Phenomenon of ‘Political and Economic Disjunction’ in Sino-Japanese Relations,” NCUB Journal of Economics and Information Science 42, no. 1(2007): 141–52. 9 Reinhard Drifte, “The Future of the Japanese–Chinese Relationship: The Case for a Grand Political Bargain,” Asia-Pacific Review 16, no. 2(2009): 55–74.

68

Contentious Integration

time of the establishment of diplomatic relations,10 in continuing to “respect and understand” China’s position that Taiwan is a part of China As witnessed in the 2010 “trawler incident,” in which the captain of a Chinese fishing trawler was detained and charged by Japanese authorities for trespassing before being released, it seems that a major setback could still appear during the course of overall upward China–Japan bilateral relations. While both sides have managed to avoid further escalation of the situation, an event such as this showed that China–Japan relations are volatile and demonstrates the tendency of “two steps forward, one step back” at best, and perhaps even “one step forward, two steps back.” While both governments have managed bilateral disputes and crises carefully to avoid escalation for the sake of common interests, fragility exists in their relations due to the problems noted above. Some observers have opined that, although China has been seen as a rescuer for Japan’s economy in helping to get it some ways out of the doldrums, this might not have as powerful an effect on the Japanese public and elite as many Chinese expected,11 because China is still perceived by many Japanese as a potential security threat to Japan due to the authoritarian nature of the Chinese government’s regime type.12 Such a regime would presumably require an external enemy to keep its subjects in line, and Japan could not be a more convenient foe for China, given the many problems between them, or so goes the Japanese reasoning. This desire for mutual cooperation, coupled with anxiety regarding the other’s intentions resulting in competitiveness, or a “need/fear” complex for short, is what makes China–Japan relations so delicate, since it is hard for either China or Japan to transcend their cooperative/competitive emotions or keep bilateral relations at a stable equilibrium. This need/fear complex can be illustrated from economic, diplomatic and social perspectives. Economically, both China and Japan are crucial trading partners for each other. China is usually the largest export destination for Japan, and vice-versa. It is justifiably said that China’s economic growth has to some extent “pulled” the Japanese economy out of its despair.13 Meanwhile, Foreign Direct Investment (FDI) from Japan provides China with technologies and capital

10 Japan’s Ministry of Foreign Affairs, “Joint Communique of the Government of Japan and the Government of the People’s Republic of China,” September 29, 1972, http:// www.mofa.go.jp/region/asia-paci/china/joint72.html/, accessed September 21, 2012. 11 Brian P. Klein, “Can China Lift Japan Out of Recession,” Council on Foreign Relations, April 10, 2009, http://www.cfr.org/japan/can-china-lift-japan-out-recession/p19 079, accessed September 21, 2012. 12 Daniel Kliman, “China: Japan’s Rising Power Conundrum,” Council on Foreign Relations, August 14, 2009, http://csis.org/files/publication/090814_platform.pdf, accessed September 21, 2012. 13 Hitoshi Tanaka, “A Japanese Perspective on the China Question,” East Asia Insights: Toward Community Building 3, no. 2(2008): 1–5.

China–Japan Relations in the Post-Koizumi Era

69

to produce high technology equipment and spare parts. Thus, both countries can benefit by increasing bilateral trade and investment. Nevertheless, China’s steadily growing economy overtakes not only Japan’s leading positions in many economic rankings, but also its trade opportunities with other Asian countries. It is believed that China’s relations with ASEAN countries are closer than Japan–ASEAN relations in the economic field. The ASEAN– China Free Trade Area (ACFTA) has reduced tariffs and boosted further economic interactions between the ACFTA economies. As such, this arrangement has aroused Japan’s fear of being marginalized in the region’s economy and diplomatic discourses. In short, need and fear are intertwined. From a social perspective, fear outweighs need in both Chinese and Japanese outlooks. Nearly 53 percent of Chinese respondents dislike or very much dislike Japan, according to a survey conducted by the Chinese Academy of Social Sciences in 2006. In a survey conducted by the cabinet office of the Japanese government in 2008, over 66 percent of Japanese respondents dislike or very much dislike China. Thanks to the PRC’s decades-long official “Patriotic Education Campaign,” the Chinese have become very sensitive to “hurt” issues related to national prestige, like Japanese prime ministers’ visits to Yasukuni Shrine and the dispute over the uninhabited Diaoyu/Senkaku rocks. On the other hand, the Japanese are apprehensive about China’s rapidly rising defense expenditures and capabilities. Tensions between the two countries will benefit few in the region, and certainly not China and Japan themselves, or the regional arrangements in which they are interested participants. The peoples of both countries are “sensitive to perception of intentions and to manipulations of these perceptions” by the other party,14 but have not communicated sufficiently with each other over how and why were these perceptions formed. It was also the case that, by the beginning of this century, the old generation of Chinese and Japanese leaders who had personally experienced the horrors of war, as well as the old China hands in Japanese government ministries and the old Japan hands in Chinese government ministries, who were willing and able to reach out to the other side to work things out when troubles arose, were either dead or retired. Minor incidents can thus lead to political and diplomatic hurricanes between two countries. Indeed, both countries have suspected each other’s intentions since the Cold War’s end. However, such a need/fear complex also shows how tied together are their salient divergent and common interests. In the following, several events and episodes will be discussed to provide illustrations and explanations of recent developments in China–Japan relations, before hesitant cooperation gave way to outright rivalry.

14 Drifte, 55–74.

70

Contentious Integration

Can there be a True “Warm Spring” after a “Cold Winter”? Koizumi’s stepping down from the prime ministerial office in October 2006 presented a much needed opening for both sides to make some moves on improving their bilateral relations. After the prolonged period of “cold” political relations, China–Japan ties finally changed for the better when Koizumi’s successor Abe Shinzo chose China as his first foreign visit for a summit meeting. This was the first time in five years that the most senior leadership of both countries met in a joint summit. The prospect of improving the bilateral relationship became even brighter because Abe’s successor Fukuda Yasuo showed an even more explicitly friendly attitude towards China, by clearly expressing, as opposed to his predecessor’s vague attitude, that he would not visit the Yasukuni Shrine. With Koizumi’s resignation, China noticeably resumed its prior positive attitude towards Japan. While Abe and Fukuda, as Japanese prime ministers who at least then held relatively moderate views toward China, visited Beijing in 2006 and 2007, both PRC Prime Minister Wen Jiabao and President Hu Jintao in turn visited Japan in 2007 and 2008 respectively. The mutual visits undoubtedly restored bilateral relations to the pre-Koizumi level. However, potential for conflicts seemed to be always casting a shadow over China–Japan relations, regardless of the apparent deepening of cooperation in various areas. Mere “symbolic expressions” of goodwill cannot be considered a mark of true progress for China–Japan relations if no solid measures were taken to resolve their deep-seated divergences.15 Despite the overall friendly atmosphere, discussion over sensitive issues such as their dispute over maritime territories had yet to bear fruit. A military hotline between China and Japan has yet to be set up, even though such similar channels have already been established between China and the United States, and China and South Korea. This hinted at difficulties in further advancing China–Japan relations. In 2009, the Democratic Party of Japan (DJP), which has long called for a more “independent” relationship with the US and closer relations with Asia,16 became Japan’s ruling party with a majority in the Lower House of the Diet. Yet relations between Tokyo and Beijing have not advanced much closer even under such auspicious economic and political atmosphere then prevailing, but seemed to have reached a plateau. The Visits of China’s Leaders to Japan and the Dumpling Incident It would be untrue to say that improvement in China–Japan relations over the past few years before Japanese Prime Minister Noda Yoshihiko “nationalized” the Diaoyu/Senkaku islands in 2012 was all show and no substance. There were 15 Tanaka, 1. 16 Wenton S. Konishi, “The Democratic Party of Japan: Its Foreign Policy Position and Implication for US Interest,” CRS Report for Congress (2009).

China–Japan Relations in the Post-Koizumi Era

71

actually several remarkable events to show that relations between China and Japan had passed its lowest point, although beneath the surface of the apparent “warming,” major disagreements still existed which could at any time turn the relationship “cold.” In 2007, China’s Premier Wen Jiabao made the first ever address in the Japanese Diet by a Chinese prime minister. Wen’s visit to Japan must be considered a major ice-breaking event after the Koizumi years of frozen relations. Although Wen mentioned Japanese aggression in World War II in his Diet address, the overall atmosphere was positive and the trip was considered to be a constructive one.17 Following Wen’s visit, the trip by China’s President Hu Jintao in 2008 was an even bigger harbinger for improvement in bilateral relations. Dubbed as an engagement of “Ping-Pong diplomacy” in Japan, Hu was the top Chinese leader to visit the country in a decade. Hu received a reception of the highest standard: a meeting with Japan’s Emperor Akihito. Discussions over several important areas were conducted, and hopes were raised that progress would be made in narrowing down disagreements. The Joint Press Statement issued at that time included an agenda covering 70 items, such as a bilateral strategic dialogue, peacekeeping operations cooperation, joint historical research, youth exchanges, collaboration on environmental protection and energy conservation, and tourist promotion.18 Yet, despite the friendly atmosphere surrounding Hu’s trip,19 the long-term effectiveness of bilateral summits for resolving Sino-Japanese disputes and quarrels became increasingly questionable. An event earlier that year exemplified the feeling of deep mistrust between two countries that cannot be easily mitigated by mere mouth work. In February 2008, the Japanese public was shocked by the fact that about 175 Japanese were suffering from food poisoning after eating Chinese-made frozen dumplings. The cause of the poisoning was that the dumplings had been tainted by insecticide. This “dumpling incident” caused widespread panic in Japan and many stores completely removed all Chinese-imported processed products from their shelves.20 17 “China PM Seeks War Reconciliation: Chinese Prime Minister Wen Jiaobao has Used a Landmark Address to the Japanese Parliament, the Diet, to Urge Japan to Face Up to its World War II Actions,” BBC, April 12, 2007, http://news.bbc.co.uk/2/hi/asiapacific/6547199.stm, accessed March 13, 2012. 18 “Joint Press Statement on the Strengthening Exchange and Cooperation between the Government of Japan and the Government of the People’s Republic of China,” Japan’s Ministry of Foreign Affairs, May 7, 2008, http://www.mofa.go.jp/region/asia-paci/china/ pv805/press.html. 19 “Ping-Pong Diplomacy, This Time in Japan,” New York Times, May 6, 2009, http:// www.nytimes.com/2008/05/06/world/asia/06iht-japan.1.12605519.html, accessed March 13, 2012. 20 Martin Fackler, “Insecticide-Tainted Dumplings from China Sicken 175 in Japan,” New York Times, February 2, 2008, http://www.nytimes.com/2008/02/02/world/ asia/02japan.html?ex=1359608400&en=cc061004f7a93b9f&ei=5088&partner=rssnyt&e mc=rss, accessed March 13, 2012.

Contentious Integration

72

While food poisoning itself would usually be a purely technical or criminal issue, the stalemate in revolving this matter to mutual satisfaction, even though the case was brought into the agenda of Hu’s Japanese summit, demonstrated how much easier it was for China and Japan to exaggerate each other’s faults than to promote understanding to overcome disagreements, reflecting their basic dislike of and mistrust against each other.21 Although the culprit was finally apprehended in China in 2010 and confessed to having acted out of disgruntlement against his pay and colleagues in the food company where he was working,22 the feelings of “cynicism and skepticism” toward the Chinese generated by this episode are still very much alive in not a few Japanese persons.23 .

Taiwan in China–Japan Relations Taiwan is a necessary gauge to measure the degree of closeness in China–Japan relations. Due to historical legacy and contemporary strategic imperative, the “Taiwan problem” has always been one of Japan’s concerns with regards to China. On the whole, Japan has chosen to maintain a relatively low profile in its policies towards Taiwan, and Tokyo had made only minor adjustments to them since breaking off official relations with Taipei in 1972 in favor of Beijing. The Japanese are in a dilemma. They would be very reluctant to be seen as pitting themselves against the Chinese should a military conflict across the Taiwan Strait lead to the US choosing to intervene on behalf of Taiwan,24 yet to remain aloof may mean breaking up the US–Japan alliance. Hence, Japan favors the status quo on Beijing–Taipei relations. The former pro-independence Taiwanese president Chen Shui-bian actively sought to enhance political ties with Japan after taking the office in 2000. To resist an increasing powerful China, he suggested that Japan join a proposed “AsiaPacific Democracy Alliance” in September 2002 and sign a free trade agreement with Taiwan, US and ASEAN countries. Then Japanese Prime Minister Koizumi, coming from a pro-Taiwan Liberal Democratic Party (LDP) faction, subsequently took some positive yet subtle steps to respond to Taiwan, such as allowing visafree travel for Taiwanese tourists to Japan, while some influential LDP political figures visited Taiwan and intensified political exchanges with their Taiwanese counterparts. These moves could be seen as signaling warmer ties between Japan and Taiwan. Overall, political, economic and security relations between Japan 21 Drifte, 56. 22 Fu Xiao, “Sino-Japanese Relations: A Chinese Perspective,” in Niklas Swanstrom and Ryosei Kokubun, eds, Sino-Japanese Relations: Rivals or Partners in Regional Cooperation? (Singapore: World Scientific Press, 2013), 68 n. 36. 23 Tanaka, 1. 24 Daojiong Zha, “The Taiwan Problem in Japan-China Relations: An Irritant or Destroyer?” East Asia: An International Quarterly 19, no. 1(2001): 208–9, 216, 221.

China–Japan Relations in the Post-Koizumi Era

73

and Taiwan drew closer, despite their being technically unofficial ones, during the early 2000s.25 Under pressure from Beijing, reference to Taiwan was avoided in the communiqué issued at the conclusion of the 2007 Japan–US Security Consultative Committee meeting composed of the foreign and defense ministers of both countries, contrary to the mentioning of “peaceful resolution of tensions in the Taiwan Strait as a ‘common strategic objective’” in the communiqué of the previous meeting held two years prior.26 One could interpret this move as the result of improvement in China–Japan relations and both Japan and the US wanting to avoid angering China. However, it is doubtful that Japan will move further away from Taiwan even if there is an improving trend in China–Japan relations. The late former Japanese Minister of Finance and influential figure in the LDP, Nakagawa Shōichi, once expressed concern about China’s intention behind the double-digit annual expansion in its military budget and doubted the peacefulness of China’s rising. He was especially worried that if Taiwan were to fall under the control of China, Japan will be the next victim of China’s venture. The timing of this comment was not coincidental, because it was released around the period when then Japanese Prime Minister Abe was trying to consolidate the building of his “Mutually Beneficial Relationship” with China.27 While it seemed to be only a personal opinion of Nakagawa’s, yet this view represents at least the school of thinking of a sizeable minority of Japanese politicians, and a portion of the Japanese population. Taiwan is obviously a major strategic concern to Japan and China’s control of the island might not be the best scenario for Japan’s security consideration. Professor Ihara Kichinosuke of Tezuayama University expressed a similar comment in 2009, saying that because a Taiwan under mainland’s influence would be a hazard to world stability and Japan’s security, it was imperative to put Taiwan under the coverage of the US–Japan security treaty.28 China had gradually showed its assertive face in recently years, with Chinese “research ships” and warships venturing into Japan’s exclusive economic zone (EEZ) and disputed maritime areas more frequently than before, and this was widely perceived in Japan as a sign of increasingly aggressive China attitude on challenging regional stability, represented by the continued presence of US security influence in Asia. What is more worrisome to the Japanese is that a relatively

25 David Fouse, “Japan Taiwan Relations: A Case of Tempered Optimism,” AsiaPacific Center for Security Studies: Special Assessment (2004): 4.1–4.7. 26 Drifte, 59–60. 27 Maosen Zhang, “The Threat of Chinese Military Expansion, Nakagawa: Japan Should Fear Becoming a Chinese Province,” Liberty Times (Taipei), February 28, 2008, http://www.libertytimes.com.tw/2007/new/feb/28/today-p7.htm, accessed May 17, 2011. 28 “Japanese Scholars Unhappy with Closer Cross-Strait Relations Promote Taiwanese Independence,” Ta Kung Pao (Hong Kong), June 30, 2009, http://www. takungpao.com.hk/news/09/06/30/EP-1105413.htm, accessed May 17, 2011.

74

Contentious Integration

small navy could interrupt shipping along Japan’s sea lanes of communication.29 However, the Taiwan Strait is just one of Japan’s sea lanes since ships can sail to and from Japan passing to the east of Taiwan,30 so the Strait’s importance should not be overstated. After all, Taiwan’s security might not be the centerpiece of Japan’s maritime security focus. It is the growth of China’s overall naval strength and its extension beyond Taiwan into the Pacific Ocean that truly concerns Japan. Nevertheless, no matter how important Taiwan is in the eye of some Japanese, one should not expect too much from Japan on how far it could or would independently go when handling the Taiwan issue. After all, China’s market as an export destination is too large for Japan to ignore and one of the better options to prevent China from becoming a serious security threat is to maintain friendly relationship with it.31 Japan is not likely to distant itself too far from either China or Taiwan for the reason that Japan’s national interests are served by maintaining good or at least cordial ties with both places. “Dual hedge” strategy was a term used to describe Japan’s approach when handling its relations with the US and China,32 at least until Prime Minister Noda’s Senkaku “nationalization.” Perhaps such a term can also be used to describe Japan’s handling of its relations with China and Taiwan, to avoid being paralyzed by an unpleasant cross-Strait conflict scenario, or forced to make an unpalatable political choice of siding with one party, caused by a negative turn in China–Taiwan relations. Japan has been walking a fine line between Taiwan and China for decades and will try hard not to let itself be entangled in any potential Taiwan crisis. The attitude of Japan towards Taiwan was not dictated by a single consideration, but was rather a product of several factors: influence of the US, protecting Japan’s own interest from potential threats from China, the pro-Taiwan lobby in Japan’s Diet,33 and Japanese sentimental affinities for their previous colony. The removal or shifts in any single factor will not be enough to totally undermine the strategic value of Taiwan for Japan.34 We can surmise that no matter whether a pro-China or pro-independence leader assumes office in Taiwan, given prevailing Taiwanese public opinion, there are serious doubts as to how far independence or political union with China can go. Also, whichever party leader occupies the office of prime minister in Japan will only bring about a small adjustment to Japan’s Taiwan 29 Christopher W. Hughes, “Japan’s Response to China’s Rise: Regional Engagement, Global Containment, Dangers of Collision,” International Affairs 85, no. 4(2009): 841. 30 Gregory W. Noble, 2005. “What Can Taiwan (and the United States) Expect from Japan?” Journal of East Asian 5(2005): 22. 31 Noble, 5. 32 Gaye Christoffersen, “Japan and the East Asian Maritime Security Order: Prospects for Trilateral and Multilateral Cooperation,” Asian Perspective 33, no. 3(2009): 113. 33 As of December 2009, 188 out of the total 772 Diet members belong to the proTaiwan caucus. Wang Haibin, “Pro-Taiwan Japanese Dietmen and Japan’s China Policies,” Contemporary International Relations (Xiandai guoji guanxi) 254, no. 12(2010): 41–6. 34 Jason Chen, 2006. “Japan’s Policies towards Taiwan,” Stanford Journal of East Asian Affairs 6, no. 1(2006): 58–9.

China–Japan Relations in the Post-Koizumi Era

75

policy. The overall approach of Japan toward Taiwan will not see major shifts, at least not in the near future. Democratic Party of Japan Government The historical change of Japan’s government from the LDP to the DPJ in the fall of 2009 marked a new era in Japanese politics. Improving relations with Japan’s Asian neighbors and reconciling historical problems with them had always been the foreign policy platform for the DJP. The party also desired to deepen intraregional cooperation and build an East Asian Community as a goal. Furthermore, the DPJ had expressed its wish to embrace a more autonomous foreign policy approach than that of the LDP. However, the importance in the Japanese psyche of the US–Japan alliance as the cornerstone of Japan’s national security should not be understated. In fact, the DPJ still views Japan’s alliance with the US as the ultimate safeguard for Japan’s safety, although it had sometimes criticized the United States’ foreign policies, especially the ones supported by the LDP,35 in order to differentiate itself from that party. Even though the DPJ government wanted to embrace a centrist approach in Japanese foreign policy to avoid alienating its Asian neighbors and over-relying on the US, there were domestic obstacles to do it. The coalition government formed by the DPJ consisted of the Social Democratic Party and the People’s New Party, which have inherent disagreements on governing approaches. Many members of the DPJ came from different political parties, and some were conservative ex-LDP members.36 It was therefore always doubtful that any new policy proposal could have been put into practice smoothly without straining the coalition or the factionalized DJP, particularly one which required major leaps in changing the nation’s foreign or security approaches. Furthermore, even though the DJP coalition was running the government of Japan, the LDP still controlled the Upper House of the Diet. Yet, the main difference between the LDP and the DPJ lay in Japanese domestic politics. Despite its eagerness to make an impression of change on the Japanese people, overall DPJ foreign policy approaches more or less followed the established line of the LDP while mixing in some new ideas. In checking China’s rising military presence in the China Seas and Western Pacific, Japan has to rely on the US–Japan alliance, particularly as Japan’s relative strength decreases vis-à-vis China’s. Although the DPJ suggested a more independent China policy from that pursued by the LDP, this objective would not have been easy to achieve, given Japan’s tight relations with the US, and the US has a suspicious take on China. As such, the US will continue to influence heavily Japan’s overall approach in its China 35 Konishi, 2–5. 36 Kao Lan, “New Mental Construct of Japanese Foreign Relations: Middle Way Foreign Relations,” Contemporary International Relations (Xiandai guoji guanxi) 241, no. 11(2009): 55.

76

Contentious Integration

policies. On the other hand, one positive factor that might have fostered China– Japan relations is that DPJ leaders did not share the same historical perspective of the LDP, particularly that of its nationalistic wing. The DJP’s first Prime Minister Hatoyama Yukio stated several times that he would not visit the Yasukuni Shrine, and his successors Kan Naoto and Noda Yoshihiko never made a trip there in office. This attitude was and would be an important barometer of Sino-Japanese ties, since China often regarded an official visit to the shrine and Japanese prime ministers’ attitude on shrine visits as indicators of a Japanese government’s degree of respect for Chinese feelings.37 Disputed Waters The handling of disputed maritime territories exemplifies a major cooperative/ competitive characteristic of China–Japan relations: it improves with many small steps but often stop short in the face of an obstacle. The Chinese government had in 2003 announced that it would start extraction from what it termed the Chunxiao oil and gas field in the East China Sea. China had claimed that, since Chunxiao was located within China’s Exclusive Economic Zone (EEZ) boundary, its development was irrelevant to Japan. However, as the field lies close to the western edge of Japan’s claimed EEZ line, the view of the Japanese government was that, once extraction started, oil and gas reserves underneath the seabed on the eastern side of its EEZ line would be siphoned off by the Chinese drilling. Once drilling over Chunxiao, and another nearby hydrocarbon field, Tianwaitian, started in 2005, Japan’s Ministry of Economics, Trade and Industry (METI) proposed three oil and gas fields for development in the East China Sea, with one of them being Chunxiao itself, or what the Japanese refer to as Shirakaba. In July 2005, the Japanese government approved a license for Japan’s Teikoku Oil Company Limited to drill in the East China Sea, following which Chinese warships were sighted near the Chunxiao and Tianwaitian gas fields.38 Japanese geologists believe the reserves there may hold some 7 trillion cubic feet of natural gas and nearly 100 billion barrels of oil, a huge prize for Japan and China, both energy-starved countries.39 Following the improvement of overall bilateral relations in the post-Koizumi era, the chances of resolving disagreements involving exploitation of oil and natural gas underneath the East China Sea seemed to have increased. Japan and China had from October 2004 held several rounds of talks to explore the possibility 37 Huo Xin, “An Investigation and Analysis the Democratic Party of Japan’s Policy towards China,” International Studies (Guoji wenti yanjiu) 299, no. 6(2009): 27. 38 Kenji Hall, Hiroko Tashiro and Dexter Roberts, “The Japan-China Oil Slick,” Bloomberg Business Week, November 6, 2005, http://www.businessweek.com/ stories/2005-11-06/the-japan-china-oil-slick, accessed May 17, 2011. 39 Ibid.

China–Japan Relations in the Post-Koizumi Era

77

of engaging joint development of the East China Sea seabed. A breakthrough came in late 2006 when Abe visited China and brought up the issue, and again in April 2007, with Wen’s visit to Japan. In the joint press statement following Wen’s trip, the East China Sea issue was mentioned. It indicated that both China and Japan had agreed to “conduct joint-development as a provisional framework … at a relatively large stretch of water which is acceptable for both sides … until final delimitation is carried out based on the principle of mutual benefit,” and to “hold higher-level consultation” to speed up the negotiation process in order to be able to adopt concrete measures by the fall of 2007.40 It is noteworthy that this was the first time that the issue of joint-development of the East China Sea appeared on a China–Japan joint statement document. The East China Sea issue was subsequently mentioned by Hu and Abe at the June 2007 Group-of-Eight (G8) summit that both attended.41 It all seemed that both countries were on the right track to arrive at a win–win situation regarding the issue, if they could put aside their differences in order to focus on a practical solution. With the overall improvement in relations, even if a comprehensive solution to the disagreement were not forthcoming, there was hope that a workable “partial solution” could be reached.42 However, what transpired was a different story. Several rounds of talk were held following Wen’s 2007 Japan visit, but did not yield much progress. Despite both sides being willing to put aside overall differences, they could reach a consensus on neither the actual form nor the exact location of the joint-development proposal. After Fukuda’s Beijing trip in December 2007, a consensus on the East China Sea issue was again announced. Nevertheless, Fukuda’s comments on this issue during the joint press conference did not mention any concrete progress. He merely reinstated some general points regarding the joint development, such as his determination to “build a relationship of mutual trust” and “settle the issue as soon as possible.” His response, indeed, gave the impression that the whole exercise was stalling and the comment was just rhetoric.43 Although the importance of cooperation on developing hydrocarbon under the East China Sea without harm to the legal position of either side was once again reaffirmed in the joint statement after Hu’s Japan visit in May 2008, no progress report was issued.44 Still, on June 2008, a joint press release was distributed by the foreign ministries of China and Japan on a formalized plan for joint development and cooperation. 40 Ministry of Foreign Affairs of Japan, “Japan–China Joint Press Statement (Provisional Translation),” April 7, 2007, http://www.mofa.go.jp/region/asia-paci/china/ pv0704/joint.html, accessed March 13, 2012. 41 Zhang Zhirong, “The Staggered Results and Lessons from the Sino-Japanese East Sea Negotiations,” Contemporary International Relations [Xiandai guoji guanxi], 229, no. 11(2008): 28. 42 Kung-wing Au, “The East China Sea Issue: Japan–China Talks for Oil and Gas,” East Asia: An International Quarterly 25, no. 3(2008): 223. 43 Au, 234–6. 44 Zhang, 28.

78

Contentious Integration

The Chunxiao gas field operated by China was mentioned in this joint statement, but it also emphasized that this gas field was not part of the joint development plan, but merely a possible object of cooperation. Japanese companies could invest in this gas field according to the “laws of China governing the exploration and exploitation of offshore petroleum resources.”45 Although China has carefully avoided any implications of joint-development of the Chunxiao gas field in the talks, serious domestic objection emerged within China. Chinese and Japanese foreign ministries officials swiftly made efforts to clarify the differences between cooperation and joint-development, but public criticism from the Chinese public persisted.46 By then, more than two years had passed since the agreement of April 2007, and little tangible progress on the East Sea issue had been made. It was apparent that both sides had failed to put the cooperation or joint-development ideas into practice. In February 2010, Japan threatened to take legal action against China if China began to start gas production on Chunxiao unilaterally because Japan was afraid that the gas under the side of the maritime border claimed by Japan would be siphoned away.47 Later, in September 2010, it was reported that China had moved equipment to the drilling platform above the Chunxiao gas field.48 This was shortly after the Chinese trawler’s captain who rammed his trawler into a Japanese coast guard vessel in the East China Sea came under Japan’s detention. Further steps to develop potential East China Sea natural gas fields are yet to be determined, but it could be seen that this issue, like so many others with Sino-Japanese relations, reflects the triumph of suspicion over trust, and cooperative intents succumbing to competitive instincts. Progress would be made when ties improved, but both sides were slow to reach agreement on the implementation details, so when relations worsen, fear overtakes need, and progress made could be lost. Trawler Incident On September 7, 2010, a Chinese trawler was intercepted near the disputed Diaoyu/ Senkaku islands by Japanese Coast Guard vessels for allegedly operating within 45 Alexander M. Peterson, “Sino-Japanese Cooperation in the East China Sea: A Lasting Arrangement,” Cornell International Law Journal 42, no. 3(2009): 462. 46 Peterson, 463. 47 Takashi Hirokawa and Sachiko Sakamaki, “Japan May Take China to Tribunal Over East China Sea Gas Field,” Bloomberg Business Week, February 22, 2010, http:// www.businessweek.com/news/2010-02-21/japan-may-take-china-to-tribunal-over-eastchina-sea-gas-field.html, accessed March 13, 2012; “Japan Threatens Legal Move on China,” China Post (Taipei), February 23, 2010, http://www.chinapost.com.tw/asia/ regional-news/2010/02/23/245540/Japan-threatens.htm, accessed March 13, 2012. 48 “China Moves Drilling Equipment into Disputed Water,” British Broadcasting Corporation, September 17, 2010, http://www.bbc.co.uk/news/world-asia-pacific-11340 220, accessed March 13, 2012.

China–Japan Relations in the Post-Koizumi Era

79

Japan’s maritime borders. During the interception, the Chinese trawler collided with a Japanese patrol vessel and the crew of the Chinese vessel was then arrested by Japanese Coast Guard personnel. The trawler’s captain was accused by Japanese authorities for having deliberately rammed his boat against the Japanese vessel and detained. The event ignited a series of diplomatic arguments between Beijing and Tokyo. Although the Chinese government initially refrained from confronting Japan, it protested this action by canceling a scheduled talk on East China Sea gas field development with Japan. On September 13, 2010, Japan released all the crewmen of the trawler but continued to hold the captain in custody. The incident intensified as four Japanese, belonging to a Japanese company which was to bid on a World War II chemical weapons disposal service in China, were arrested by Chinese authorities on grounds of filming in a forbidden military zone,49 in an apparent tit-for-tat against Japan’s action. China then made several further moves which had no direct relevance to the trawler event, including temporarily suspending rare earth export to Japan, delaying the processing of imports from Japan at Chinese customs and canceling several civilian and culture exchange events with Japan.50 After being charged by Japanese authorities for trespassing Japanese waters, the trawler captain, Zhan Qixiong, was released on September 25, but the repercussions did not end yet, with China asking Japan for compensation for the damaged trawler, Japan demanding an apology from China for intrusion into its waters, and China announcing it would increase its fleet of surveillance vessels in the East China Sea.51 Regardless of how one interprets this incident, it could be considered a lose–lose situation for both Japan and China. On releasing the captain, Japan’s government was criticized by its own population for giving in to Chinese pressure, particularly to its fear of a Chinese embargo on rare earth that Japan needs for many of its industrial manufactures. China, while the apparent victor of this event, might have undone what it had long been trying to achieve, that is, build an image of a benevolent rising power. Exerting pressure on Japan by making use of unrelated issues may be an effective tactic, but it may also alert the world to the fact that China would use whatever means it can when handling a territorial issue. Combined with the rapidly growing technological sophistication of the Chinese military, particularly its navy, this potentially unfavorable image is triggering concern which could push many Asian countries which have territorial disputes with China, such as India 49 “Four Japanese Filmed China Military Zone,” British Broadcasting Corporation, September 24, 2010, http://www.bbc.co.uk/news/world-asia-pacific-11398933, accessed March 13, 2012. 50 Jeffrey Hornung, “China’s Pyrrhic Victory,” CSIS: Japan Chair Platform, October 20, 2010, http://csis.org/files/publication/101020_Hornung_SenkakuIncident_Japan Platform.pdf, accessed March 13, 2012. 51 “China Boosts Maritime Surveillance Fleet Amid Disputes,” British Broadcasting Corporation, October 28, 2010, http://www.bbc.co.uk/news/world-asia-pacific-11646489, accessed March 13, 2012.

80

Contentious Integration

over the Himalayas and Vietnam and the Philippines over islands in the South China Sea, to get closer to the US. This would not be a result that China would like to see. It was unwise for China to have insisted on an apology from Japan, thus embarrassing a potentially friendly administration. Apology was not something the DJP government could offer at an acceptable political cost. On being pushed too hard, Japan might not only deploy more warships in the disputed waters and strengthen its alliance with the US, although there will always be doubts whether, if push comes to shove, the US will get directly involved on behalf of Japan in support of its territorial disputes in which the US has little stake, but also seek closer security ties with Australia and India in order to balance an increasingly pushy China.52 According to a major Japanese newspaper, the Yomiuri Shimbun, Japanese public opinion towards China slumped after Beijing’s tough response to the incident, registering a record high of 84 percent respondents saying they do not trust or like China.53 On the visit of Japanese Prime Minister Noda to India in December 2011, it was agreed that Japan’s Maritime Self-Defense Force and the Indian navy will conduct joint exercises in 2012.54 Korean Peninsula Crisis The whole world was surprised and shocked on November 23, 2010, when North Korea bombarded the South Korea-controlled Yeonpyeong Island with artilleries. The shells killed two South Korean military personnel and two civilians, and South Korean forces responded by returning fire. In the following days, the US showed its support for South Korea by conducting a joint military exercise with it, involving several warships that included the nuclear-powered aircraft-carrier USS George Washington in waters contested between both Koreas in the Yellow Sea.55 For China, this episode was more than just a problem of Korean peninsula stability; it added a lot of strategic complications for Beijing and brought adverse result to its long term strategic interest. The Yeonpyeong crisis brought changes in the following aspects. First, it triggered the speeding up of both quantitative and qualitative upgrading of Japan’s Self Defense Forces (SDF) in order to deal with an increasingly unpredictable and aggressive North Korea; secondly, the framework of Japan–South Korea–US trilateral security relations would become more 52 Mahbubani, Kishore, “The Paradox of Blinking,” Project Syndicate, 2010, http:// www.project-syndicate.org/commentary/mahbubani9/English, accessed March 13, 2012. 53 International Crisis Group (ICG), “Dangerous Waters: Sino-Japanese Relations on the Rocks,” Asia Report No. 245 (April 8, 2013), p. 22. 54 “Japan, India Agree to Boost Cooperation in Security, Economy,” Mainichi Daily News, December 29, 2011, http://mdn.mainichi.jp/mdnnews/news/20111229p2g00m 0dm009000c.html. 55 “Factsheet: West Sea Crisis in Korea,” National Campaign to End the Korean War, 2010, http://www.endthekoreanwar.org, accessed March 13, 2012.

China–Japan Relations in the Post-Koizumi Era

81

prominent; and thirdly, the bilateral relationship between Japan and South Korea would be deepened. Already in response to the launch by North Korea in April 2009 of what it called a satellite, but which Japan believed to be a ballistic missile, Tokyo for the first time conducted a national drill of its Ballistic Missile Defense System. A Japan–US coordination center at Yokota Air Base was established to focus on missile defense cooperation, while a new SDF “Central Readiness Forces Command” was prepared at Camp Zama to create a joint army operations facility.56 In addition to being directed at North Korea, these measures could be used against its friend and ally, a rising, and possibly increasingly menacing, China.57 One of the immediate side effects for China was seen on 6 December 2010, when the US Secretary Of State, Foreign Minister of Japan and Foreign Minister of South Korea turned down Beijing’s call for a new round of Six-Party talks unless North Korea showed enough concession on denuclearization. Besides boosting their security relations with the US, Japan and South Korea also started to explore ways to foster cooperation with each other in the security sphere. South Korea and Japan subsequently sent observers to each other’s joint military exercises with the US. The trio rejected the Six-Party Talks proposal because they viewed this offer as nothing more than an occasion for China to stand by North Korea. It was like Cold War style alignment re-emerging in Northeast Asia among the six parties, with the US, Japan and South Korea on one side and China and North Korea on the other,58 with Russia tilting towards the latter. The Yeonpyeong incident, after all, presented a very good justification for the US to “re-enter” East Asia in terms of direct and active military involvement. China must have felt downright uneasy about this “re-entering,” as it has expressed grave concern to the US about the naval exercise in the Yellow Sea, stating it opposed the military drill within what China considers to be its exclusive economic zone (EEZ).59 Although China may not have anything to do with North Korea’s sudden aggressive behavior, Beijing’s failure to blame or condemn Pyongyang for this act did not satisfy Japan, South Korea and the US alike. For Japan, this case only proves the partiality of the Chinese government when it comes to handling an international crisis involved with its socialist ideological brethren North Korea, which Japan regards as the belligerent party. Although this episode might not have done immediate damage to China–Japan relations, Japan might from then on have doubted the intent of every Chinese move on Korean affairs. For China, that Japan 56 Emma Chanlett-Avery and Bruce Vaughn, “Emerging Trends in the Security Architecture in Asia: Bilateral and Multilateral Ties Among the United States, Japan, Australia, and India,” CRS Report for Congress (January 7, 2008), p. 7. 57 Ji-Young Lee, “Japan–Korea Relations: The New Cold War in Asia,” Comparative Connections 12, no. 4(2011). 58 Ibid. 59 See-Won Byun, “North Korea’s Provocations and their Impact on Northeast Asian Regional Security,” Asia Foundation (2010) http://asiafoundation.org/resources/pdfs/Byun NorthKoreasProvocationsDec2010.pdf, accessed March 13, 2012.

82

Contentious Integration

got back closer to the US was a disturbing development, as Beijing had been trying to obtain Japan’s cooperation to exert greater influence in Asian affairs, and the “reentering” of America and its strengthened partnership with Japan would become a definite obstacle to regional recognition of the rise of China. The Yeonpyeong incident and its aftermath had definitely further alienated China from Japan. Mismatching Identities Overall China–Japan relations had for a time emerged perceptibly from the shadow of the Koizumi era. Indeed, a sort of “honeymoon” period was witnessed in the immediate post-Koizumi years. These results came with a shift in attitude on the history issue by Koizumi’s successors, mainly demonstrated by Japanese prime ministers’ decisions not to visit the Yasukuni Shrine. The change in Japan’s ruling political party also gave a breath of fresh air to China–Japan relations, given less historical-cum-nationalistic burdens on the shoulders of the DJP. China’s response to the catastrophic earthquake and tsunami that hit Japan in March 2011, by quickly dispatching a 15-man rescue team and committing 30 million yuan (US$4.57 million) in emergency aid to Japan,60 was greatly appreciated by the Japanese government and public. Even so, while Japan allowed US air force planes and warships to deliver disaster relief, the Kan government disallowed the entrance of the Chinese naval hospital ship ‘Heping Wanshou’ into Japanese waters.61 Mutual suspicions clearly still existed, and adverse incidents could at any time cause instability to China–Japan relations. It is not obvious why many Chinese have an atavistic dislike for the Japanese, and why many Japanese see a rising China as a threat to their country. No Chinese can lose dignity by having any Japanese official visiting any shrine in Japan or changing any Japanese textbook on Japan’s World War II invasion of China, provided they choose to feel that way. For the Japanese, the maintenance of Japan’s unofficial relations with Taiwan is accepted by China, and the PRC is not out to export its form of government to Japan or any other country. China is a nuclear power and Japan’s security is guaranteed by the US, so any dispute over uninhabited rocks is most unlikely to result in war between the two Asian countries. Creating an East China Sea Joint Development Zone is not impeded

60 “China Sends Condolences to Japan Following Tsunami,” The Hindu (New Delhi), March 14, 2011, http://www.thehindu.com/news/international/article1536992.ece, accessed March 13, 2012. 61 Livedoor-blog is one of the famous online blogs among Japanese netizens. On a post related to the sailing of Chinese medical navy to Japan, more than 400 out of 500 comments were against China’s People’s Liberation Army entering Japanese waters. See http://jishin.ldblog.jp/archives/51652293.html, accessed March 21, 2013.

China–Japan Relations in the Post-Koizumi Era

83

by legal or technical issues but rather a lack of political will on both sides.62 Obstructing each other’s shipping would definitely result in a conflict that neither can afford, especially since bilateral trade between Japan and China are among one of the most voluminous in the world. Japan’s trade and investments with East, South and Southeast Asian countries are still increasing, although in many of these aspects China is racing ahead from a lower base. Perhaps the most fundamental problem underlying the cooperative/competitive conundrum derived from the need/fear complex identified in the essay, is the mutually incompatible national identity that both Japan and China has of itself, as the paragon of development for Asian and other non-Western countries. Foreign wonderment at the rise of China and Chinese self-confidence threatens the longheld self-image of Japanese as the “privileged” Asians and most advanced nonWestern nation respected and treated by Westerners as their equals. Conversely, the Chinese cannot understand why Japan will not acquiesce in the “natural” leadership of a larger country which used to be a prime source of Japanese cultural borrowings and is now experiencing a much faster pace of economic growth. While Japan relishes its value as a trusted friend and vital ally of the American superpower, to sustain the global dominance of which Japan has staked its fortunes and aligned its interests, China perceives Japan as engaging in persistent attempts to bring in the US at every possible turn to obstruct China’s rise or diffuse its influence amongst neighboring states. Chinese insistence on Japanese reflection over issues of history—official apology, shrine visits, textbook revisions and comfort women—is read by the Japanese as Beijing denying them any cause to have pride in their country or make international contributions militarily. On the other hand, the Japanese perceive the Chinese party-state’s forging of a nationalist identity for the country to replace the moribund communist ideology and thwart the appeal of democracy as directed against Japan by treating it as a hypothetical enemy. In other words, both sides see each other as morally inferior to oneself. Hence, despite the ties that bind Japan and China, what results is the difficulty of finding a respectable place for the other, or recognizing any legitimacy in the other’s interests, in one’s own self-centric political–economic–security universe, such that any gain or praise for the other is perceived as a loss or slight to oneself. Thus behind every cooperative attempt driving interdependence lays a competitive sentiment fueling rivalry, since every desire to work together is finely balanced by a sense of disquiet that one could be out-shone or out-maneuvered in the quest. While awaiting the finding of a satisfactory solution to this identity mismatch, it is imperative that both countries avoid raising controversial issues, exercise vigilance against the risk of accidental clashes at sea, put aside their existing disputes and differences, and focus on making more pragmatic moves on developing and steadying their bilateral relations. 62 Chris Acheson, “Disputed Claims in the East China Sea—An Interview with James Manicom,” The National Bureau of Asian Research, July 2011, http://www.nbr.org/ research/activity.aspx?id=159, accessed March 13, 2012.

This page has been left blank intentionally

Chapter 5

From Mutual Tolerance to Separate Ways While Hu Jintao was consolidating his leadership over China and Zheng Bijian, then Executive Vice-President of the Party School of the Central Committee of the CCP, was circulating his thesis of China’s “peaceful rise” around 2003 and 2004, the Japanese were mired in economic doldrums. Average annual Gross Domestic Product (GDP) growth rate for Japan between 1991 and 2008 was about 1 percent; and around 0 pecent from 2009 to 2012.1 Japan’s Consumer Price Index, which measures inflation, fluctuated around 0 between 1992 and 2008, and was all negative from 2009 to 2012.2 Japan had become increasing uneasy about the rapid rise of China, to the extent that some Japanese suggested that it would be unwise to continue providing official aid for China’s development, as this would be tantamount to nurturing a rival, and the Chinese did not seem grateful for what Japan had done for them.3 One of the prominent results of the troubled China–Japan relations is competition for political and economic influence in the surrounding Asia-Pacific region. An increasingly popular view has emerged by the mid-2000s within Japan that there is a need for it to recover regional influence in East Asia in the aftermath of Japan’s decade-and-a-half economic recession and in the face of boosted Chinese economic strength.4 Official and academic discussions in neighboring countries over whether to regard China or Japan as the hub of East Asian regionalization signified this subtle yet intense contest between the two countries. Since 2002, Japan’s diplomatic approach towards ASEAN countries has become more proactive contrary to traditional Japan reactive foreign policy style, in taking steps to foster top-level dialogues and construct strategic relations. This started with Japanese Prime Minister Koizumi’s own Japan–ASEAN Comprehensive Economic Partnership proposal in 2002 to diffuse the advantages offered by China to Southeast Asian countries by the China–ASEAN Free Trade Agreement then already under negotiation. Although Japan still tries to avoid 1 Extrapolated from Cabinet Office, Japan: Trading Economics, http://www.trading economics.com/japan/gdp-growth, accessed September 21, 2013. 2 Extrapolated from the World Bank: Inflation, Consumer Prices (Annual %), http:// data.worldbank.org/indicator/FP.CPI.TOTL.ZG/countries?page=4, accessed September 21, 2013. 3 Kim Beng Phar, “Japan Loses Yen to Aid China,” Asia Times Online, November 18, 2004, http://www.atimes.com/atimes/Japan/FK18Dh02.html, accessed September 21, 2013. 4 Robert G. Sutter, Chinese Foreign Relations: Power and Policy since the Cold War (Plymouth: Rowman & Littlefield Publishers, 2008), 220.

86

Contentious Integration

taking up a larger role in security, out of deference to US leadership and regional sensitivities as victims of Japanese aggression, it did not stop making attempts to regain regional influence and put China on the reactive even with the warming of China–Japan relations, beginning in late 2006 with Koizumi’s resignation.5 Of course, the optimistic view is that, since regional economic integration has to be conducted in a peaceful environment, it is essential for both countries to take leading roles to ensure such an environment continues to exist. However, “peace” itself is also product that both of them have been trying to promote, each with its own version, to neighboring Asian countries,6 whether it is the existing “Pax Americana” supported by Japan as a US ally or an increasingly possible substitute “Pax Sinica.” Koizumi’s nationalistic appeals to the right-wing of his party and the electorate by his annual visits as prime minister to the Yasukuni Shrine certainly did nothing to encourage the Chinese leadership from reaching out to him, and although bilateral relations between China and Japan showed some minor improvements after he left office, the leaders of Japan did not stop striving to blunt Chinese regional integration initiatives. With Japanese and Chinese activities in multilateral regional economic and security arrangements marked by the constant search for relative gains, or to avoid relative losses, by each against the other, these arrangements began to witness looming competitiveness in Sino-Japanese relations, which reflects the running out of patience with one another and rising exasperation, with both sides finding it increasingly difficult to maintain a façade of cooperation. While APEC summits provide the leaders of both countries with “photo opportunities,” and the chance to win other APEC leaders to their points of view; in the ARF, they represent different security interests and visions of institutionalization; in the APT, they compete to contribute to finances and personnel; in the EAS, it is about membership numbers and the preferred structure; in the 6PT the differing agenda that they put forward reflects domestic regime concerns; and both have their own groupings when dealing with Central Asian states. Asia-Pacific Economic Cooperation (APEC) in the Twenty-First Century Limited Post-9/11 Security Cooperation Heterogeneity of political systems, sovereignty claims, border disputes, secessionist actions, security tensions and mutual suspicions among members have caused APEC meetings to exclude security and political issues from their agenda. China and other developing countries in ASEAN have always emphasized that regional 5 Sudo Sueo, “Japan’s ASEAN Policy: Reactive or Proactive in the Face of a Rising China in East Asia,” Asian Perspective 33, no. 1(2009): 154–5. 6 Haruko Satoh, “Japan and China: Reaching Reconciliation or Stuck in the Past,” Asia Programme 6, no. 2(2006): 7.

From Mutual Tolerance to Separate Ways

87

cooperation, in both economic and security spheres, must take into account the principles of national sovereignty and non-intervention in the domestic affairs of states. However, since the APEC summit of 2001, it was agreed that such issues could be discussed, but only if they pertain directly to the economic security of member economies. Just one month after the September 11 attacks, China as the host of the 2001 APEC summit in Shanghai agreed to include counter-terrorism in the agenda as advocated by the US.7 This was ironical, considering it was the US which had as early as 1993 wanted security issues to be discussed in APEC meetings but failed to override Chinese opposition. Still, no government wanted its precinct to be the target of an act by a terrorist group, or to be accused of sympathizing with the actions of terrorists attacking a fellow APEC member. As such, for the purpose of combating terrorism, all members of APEC were on the same boat, although they were facing different terrorists pursuing different aims and employing different means to achieve those aims. The resultant “APEC Leaders’ Statement on Counter-Terrorism” directed members’ finance and transportation ministries to, respectively, freeze the funds of terrorist organizations and improve air and maritime security. This statement was the first political-cum-security declaration by APEC since its formation. Under an arrangement made by China as the host of the summit, no representatives from Taiwan (seated as Chinese Taipei) or Hong Kong were allowed to attend the discussions pertaining to terrorism, since they were regarded by the Chinese as only non-sovereign economies.8 Since 2002, countering terrorism and tightening customs security have become regular topics of discussion in APEC meetings, although less fervently as the years go by, but talks have broadened to include the need to safeguard human security by focusing on food security, disaster management, infectious diseases preparedness, combating corruption, and even environment and energy conservation.9 No member country can sensibly object to these discussions being carried out, of course, but economically, APEC was going nowhere. To Each its Own: Pro Forma Attendance By the start of the twenty-first century, bilateral trade agreements have emerged as the preferred mechanism for APEC member economies to realize reciprocal market access, despite complex rules of origin documentation and the possibility 7 Kai He, Institutional Balancing in the Asia Pacific: Economic Interdependence and China’s Rise (London and New York: Routledge, 2009), 33. 8 Jianren Lu, The Five Big Challenges to APEC in Coming Years, November 10, 2004, http://www.iaps.cass.cn/english/Articles/showcontent.asp?id=692, accessed February 27, 2007. 9 Ministry of Foreign Affairs of Japan, “APEC Japan 2010 Economic Leaders’ Meeting Summary,” November 14, 2010, http://www.mofa.go.jp/policy/economy/apec/ 2010/docs/aelm_summary.html, accessed September 21, 2013.

88

Contentious Integration

of trade diversion, consequently making APEC itself virtually redundant as a forum to advance overall freer trade. Having secured a Free-Trade Agreement (FTA) with Singapore by the end of 2002, the US concluded FTAs with Australia, Chile, Peru and South Korea, and has been negotiating similar deals with Thailand, New Zealand, Indonesia, Malaysia and Peru. The spirited pursuit of bilateral FTAs with these member economies of APEC and also countries outside the grouping reflects Washington’s ambivalence about the continuing prospects of a regional economic forum that is seemingly ineffective, at least from the point of view of securing definite commitments from East Asian governments to liberalize US exports to regional economies. Since 2002, Japan has signed bilateral Economic Partnership Agreements (EPAs) with all ASEAN countries except Myanmar, Lao and Cambodia, which came into operation in 2008, and with Mexico, Chile, India, Switzerland and Peru. It is negotiating EPAs with South Korea, Australia, Canada, Mongolia, Columbia and the Gulf Cooperation Council. By the time when Japan was once again due to host the APEC Summit in Yokohama on November 13–14, 2010, over 35 percent of the output of core Japanese manufacturing firms was already produced outside Japan, much of it in other Asian economies, but inward investment, critical to economic revitalization, were still kept at bay by trade barriers and domestic regulation, particularly with agriculture and much of the service sector, with FDI in Japan at only 3 percent of its GDP compared to the world’s average of 30 to 45 percent in Southeast Asia.10 At least one major US car company, Ford Motor Co., has subsequently complained that Tokyo is still not prepared to address barriers to importing American cars.11 For China, APEC is now far from being the only regional governmental forum in which it is a member. Nonetheless, taking part in APEC activities had the important consequence of raising the confidence and reducing the suspicion of the Chinese leadership and foreign policy-making community in interacting with foreign officials and diplomats, particularly in the 1990s. While the US is widely viewed as having backed down from a multilateral free-trade approach, at least before the onset of the Global Financial Crisis in 2008, and Japan is seen as engaging in more protectionist economic policies, China has increasingly stressed a more pro-active foreign policy and liberal economic agenda, in endorsing multilateral structures, supporting freer trade, and sponsoring security arrangements.12 China has become keen to promote regional institutions where the US is excluded and its allies are 10 Peter Drysdale, “What Can Japan Do With APEC?” East Asia Forum, November 12, 2010, http://www.eastasiaforum.org/2010/11/12/what-can-japan-do-with-apec/, accessed September 21, 2013. 11 Doug Palmer and Michael Martina, “Free Trade Gets Boost at APEC from Japan,” Reuters News Agency, November 11, 2011, http://www.reuters.com/article/2011/11/12/usapec-f-idUSTRE7AB04O20111112, accessed September 21, 2013. 12 Michael Ewing Chow, “ASEAN–China F.T.A.: Trade or Tribute?” The Singapore Yearbook of International Law no. 10(2006): 261.

From Mutual Tolerance to Separate Ways

89

either also barred or in a subordinate position, such as the Shanghai Cooperative Organization, ASEAN + 3 and ASEAN + China, under the rubric of which ASEAN states and China signed the Framework Agreement on Comprehensive Economic Cooperation in 2002 to begin negotiations to realize an ASEAN–China FreeTrade Area between China and all ASEAN states by 2015. China’s participation in APEC can be expected to continue at some perfunctory level, but the flow of real diplomatic energy would swing toward the realm of bilateral relations and multilateral organizations where China feels not only more comfortable, but also more economically influential. For Japan and China, after having achieved much of what they wanted from APEC, or resisted what they had not wanted in the forum, have since the mid-1990s viewed each other largely as competitors for regional influence and strategic challengers rather than as economic partners, although they have not been excluding each other from their own markets. At the APEC summit in Bali, Indonesia, in October 2013, Japan expressed concern over China’s increasingly assertive naval activities, after a meeting among Japanese Foreign Minister Kishida Fumio, US Secretary of State John Kerry and Australian Foreign Minister Julie Bishop, at which they stressed that they “opposed any coercive or unilateral actions that could change the status quo in the East China Sea,” without directly naming China.13 China was none too pleased with this meeting and statement, but still, APEC has for the first decade of its existence offered a valuable demonstration: Should Japan and China possess the political will or economic interest to work together, no one could stand in their way. This is something to bear in mind for discussions of regional integration in East Asia. ASEAN Regional Forum (ARF) Second Stage: Mutual Tolerance Amidst Rivalry (2005–2009) In 2006, for the first time, Japan’s Self-Defense Force began planning for three invasion scenarios from China involving a Taiwan Straits crisis, the contested Diaoyu/Senkaku islands, and the disputed gas fields in the East China Sea.14 By the time Abe Shinzo became prime minister of Japan later that year, Japan has turned its attention to building up security networks outside of the ARF and China, and the ARF to Japan clearly remained no more than a supplementary security arrangement to its bilateral alliance with the US. Still, taking the opportunity afforded by a common venue, and the occasional appearance of North Korea as 13 “China naval activities raised at APEC,” Japan Times, October 6, 2013, http:// www.japantimes.co.jp/news/2013/10/05/national/china-naval-activities-raised-at-apec/#. UmyFebGwqzE, accessed October 26, 2013. 14 Richard Samuels, Securing Japan: Tokyo’s Grand Strategy and the Future of East Asia (Ithaca, NY: Cornell University Press, 2007), 169.

90

Contentious Integration

a member of the ARF, the forum would sometimes address the country’s nuclear activities. The foreign ministers of Japan, South Korea and the US held a separate conclave at the sidelines of the July 2011 ARF to call for a resumption of the sixparty talks on North Korea’s nuclear disarmament at the meeting.15 Third Stage: Pro Forma Attendance (2010 onwards) Perhaps to a greater degree than Japan, China has also become less enthusiastic about the ARF. This was particularly since China was put on the defensive at the forum’s meeting in Vietnam’s Hanoi in July 2010 when ASEAN delegates, Japan, and then US Secretary of State Hillary Clinton brought up China’s behavior on the issue of the territorial dispute over the Spratly islands, and voiced concern about the security of sea lanes of communication in the South China Sea.16 Prior to the start of the July 2011 ARF meeting in Bali, Indonesia, diplomats from ASEAN and China reached agreement on a statement regarding a set of eight guidelines to implement the Declaration on the Conduct of Parties in the South China Sea, in which all parties involved had come to an understanding on the non-use of force in pursuing a settlement to the South China Sea dispute. Agreement was made possible only after ASEAN conceded China’s key demand that the dispute is bilateral and should not involve China meeting ASEAN as a group to discuss the issue.17 The South China Sea was again subjected to debate at the July 2012 ARF meeting in Phnom Penh, with then Japanese Prime Minister Noda Yoshihiko raising the issue,18 and Ms Clinton saying that “ASEAN should speak with one voice on the South China Sea and should have unity.”19 The occasion for her call was that, in a meeting of deputy foreign ministers on July 8, 2012,20 ASEAN and 15 Asia Pulse (Rhodes, Australia), “Japan to Urge Chinese Restraint in Territory Rows,” July 20, 2011. The six parties are North Korea, South Korea, the United States, China, Russia and Japan. North Korea has been a treaty ally of China since 1961. 16 Ian Storey, “China’s Missteps in Southeast Asia: Less Charm, More Offensive,” China Brief Volume (Institute of Southeast Asian Studies, Singapore), 10, no. 25(December 17, 2010), http://web1.iseas.edu.sg/?p=952. 17 Ian Storey, “Kudos for progress but more needs to be done,” The Straits Times (Singapore), July 30, 2011. 18 Straits Times (Singapore), “Japan warns that South China Sea row could damage regional stability,” November 19, 2012, http://www.straitstimes.com/breaking-news/seasia/story/japan-warns-south-china-sea-row-could-damage-regional-stability-20121119, accessed September 21, 2013. 19 Bangkok Post, “Clinton urges ASEAN unity over islands,” July 13, 2012, http:// www.bangkokpost.com/news/local/302200/clinton-urges-asean-unity-over-islands, accessed September 21, 2013. 20 Vietnamese News Agency, “ASEAN-China consultation on COC opens,” July 9, 2012, http://en.vietnamplus.vn/Home/ASEANChina-consultation-on-COC-opens/20127/2 7213.vnplus, accessed September 21, 2013.

From Mutual Tolerance to Separate Ways

91

China had agreed to start talks on a legally-binding maritime Code of Conduct to manage the South China Sea disputes, but three days later, just before the start of the ARF meeting, China’s attitude suddenly shifted and it refused to begin talks,21 until “conditions are ripe.”22 The ARF’s joint statement subsequently failed to mention the talks for the Code of Conduct. The Code of Conduct is now negotiated under the purview of the ASEAN + China arrangement. Despite the anticipation of little or no progress on issues to be addressed by the ARF, regular attendance by Chinese and Japanese leaders at its meetings can be expected to continue, if only because it would be undiplomatic for them to miss a forum in which security concerns are aired among world leaders and that is hosted by ASEAN, a grouping that both sides would want to be on good terms with as much as possible. ASEAN Plus Three (ASEAN + 3/APT) Second Stage: Mutual Tolerance Amidst Rivalry (2005–2009) Against Japan’s attempts to widen the APT process in terms of membership, China was keen to pursue its deepening, particularly in an area in which it is increasingly having an advantage—international finance. The key institutional development in APT from 2005 onwards is the multilateralization of the CMI, to collapse the network of bilateral swaps under the CMI into a single pool from which members may borrow. To this end, an agreement was reached on May 4, 2008 that 80 percent of the Chiang Mai Initiative Multilateralization (CMIM) scheme would come from China, Japan and South Korea, with the rest coming from ASEAN. At the APT conference at Pattaya, Thailand, in April 2009, in the wake of the Global Financial Crisis, South Korea accepted a quota of 16 percent of the total, or US$24 billion.23 As to the remainder of the “Plus Three” quota of the CMIM, both China and Japan sought to provide the largest financial contribution, and enjoy the corresponding clout.24 Even while negotiations to realize the CMIM were being carried out, a bilateral swap arrangement outside APT was signed between Japan and India on June 30, 2008, for an amount of US$6 billion, or US$3 billion each way.25 The fact that Japan insisted on the swap keeping a 20 percent link to the IMF, as per CMI conditionality, suggests that this reflected Japanese thinking on shifting the CMI 21 “Editorial: Division Serves to Weaken ASEAN,” Japan Times, July 21, 2012, http://www.japantimes.co.jp/text/ed20120721a2.html. 22 “Divided we Stagger: ASEAN in Crisis,” The Economist, August 18, 2012. 23 Joel Rathus, Japan, China and Networked Regionalism in East Asia (Basingstoke: Palgrave Macmillan, 2011), 114. 24 John D. Ciorciari, “Chiang Mai Initiative Multilateralization,” Asian Survey 51, no. 5(September/October 2011), 938. 25 Rathus, 113.

92

Contentious Integration

from APT purview to one under the aegis of the East Asia Summit,26 a grouping consisting of the APT countries, India, Australia and New Zealand. Japan would not be alone in executing a deal like this, however. By the end of 2009, China had signed bilateral swap agreements worth 360 billion yuan (about US$52 billion) outside the Chiang Mai framework.27 Third Stage: Competition and Compromise (2010 onwards) As China was reluctant to accept having to make a lower financial contribution, and therefore have a lower voting weight, than Japan in the CMIM,28 negotiations between the two countries dragged on for the greater part of the year. Finally, in March 2010, a compromise was worked out, whereby Japan and China each contributed US$38.4 billion, or 32 percent of the total of US$120 billion. However, China’s share would include US$4.2 billion from Hong Kong, which was suddenly added to the membership of the CMIM.29 This would be the first time in an international or regional economic forum that China has been accorded equal financial voting weight with Japan. Not surprisingly then, Japan wants to include not only India, Australia and New Zealand, but also the US and even Russia in an expanded arena, to counter China’s growing influence. As the biggest country with the largest economy in East Asia, China would be relatively more influential in a smaller setting, which is the main reason why China is content to work with the membership size of APT. In May 2010, senior officials involved with the forum unveiled plans to create an APT Macroeconomic Research Office (AMRO) in Singapore “to monitor and analyze regional economies” and thus contribute to the “early detection of risks … and swift decision-making of the CMIM.”30 In the process of selecting the director for AMRO, Sino-Japanese dueling was again brought forth as both China and Japan pushed for their candidate. A compromise was reached in April 2011 whereby the Chinese candidate, Wen Benhua, a senior PRC official who had served in the People’s Bank of China, the Asian Development Bank, and the IMF, would hold the post for the first year, while the Japanese candidate, Nemoto

26 Ibid. 27 China News Agency, October 21, 2009, http://www.chinanews.com.cn/cj/cj-gncj/ news/2009/10-21/1923726.shmtl, accessed September 21, 2013. 28 Chaitrong Wichit, “Japan and China Vie to Be Top Contributor to Regional Fund,” The Nation (Thailand), April 10, 2009. 29 “ASEAN, China, Japan S Korea Finalise Crisis Pact,” Agence France-Presse, May 3, 2009. 30 Joint Ministerial Statement of the thirteenth ASEAN + 3 Finance Ministers’ Meeting, Tashkent, Uzbekistan, May 2, 2010, paragraph 9, http://www.aseansec.org/ documents/JMS_13th_AFMM+3.pdf.

From Mutual Tolerance to Separate Ways

93

Yoichi, a counselor at Japan’s Ministry of Finance, would serve for the remaining two years of the term.31 East Asia Summit (EAS) First Stage: Attempts at Cooperation (before 2005) Perhaps nothing illustrates the shift from cooperation to rivalry as the primary mode of conduct for Japan and China within the context of multilateral arrangements better than the formation and evolution of the EAS. The EAS was conceived of by its architects, the East Asian Study Group constituted by the APT, and enthusiastically supported by the Chinese, as a more structured way for China, Japan and South Korea to cooperate with the 10 countries of ASEAN on political, economic and security matters. Since all APT members were expected to have an equal opportunity to chair the proposed EAS, so doing would propel China into playing a bigger role by being the “core and engine” of the process of East Asian integration, and by allowing it to participate in “agenda setting and norm building as a major power.”32 Indeed, China’s authorities harbored ambitious goals for this arrangement: a concerted East Asian voice in international affairs, a regional parliamentary committee, an East Asian security cooperation council with a set of defense ministers’ meetings, and joint action on cross-border issues.33 Beijing also believed that nurturing a multilateral forum that excluded the US would mitigate US influence in East Asia. Rivalry with Japan was a major contributory factor to China’s push for the earliest possible evolution of the APT into the EAS. After China had agreed with ASEAN to establish a free trade agreement, Japan was clearly discomfited, and Japanese Prime Minister Koizumi Junichiro proposed the idea of building an East Asian Community (EAC) that included Australia and New Zealand on his visit to several ASEAN states in early 2003. Japan was concerned that China and Malaysia under the anti-western Prime Minister Mahathir Mohammed would take the initiative in forging an EAS out of the APT without admitting new members. Although Japan’s Ministry of Finance, because of its jurisdictional responsibilities, promoted the APT, the Ministry of Foreign Affairs, and to some extent, Ministry

31 Ciociari, 946. 32 Qin Yaqing and Wei Ling, “Structure, Processes, and the Socialization of Power,” in Robert Ross and Zhu Feng, eds, China’s Ascent: Power, Security, and the Future of International Politics (Ithaca, NY: Cornell University Press, 2008), 134. 33 Joseph Y.S. Cheng, “Sino-ASEAN Relations in the Early Twenty-First Century,” Contemporary Southeast Asia 23, no. 3(2001): 432.

94

Contentious Integration

of Economics, Trade and Industry favored a wider vision of regionalism.34 In June 2004, Japan’s Ministry of Foreign Affairs issued a blueprint of Japan’s vision in building an EAC. In it, Tokyo noted that “Australia and New Zealand are essential partners in various forms of economic cooperation (to Japan and China) … and India plays an important role in regional cooperation.”35 Japanese officialdom obviously desired that any EAC be defined as APT + 3, or ASEAN + 6. China’s possible domination of the region also worried some other countries like Indonesia and Singapore, to the extent that they lobbied for the inclusion of countries outside geographic East Asia, such as those suggested by the Japanese.36 Second Stage: Vetoing the Others’ Proposal (2005–2009) By early 2005, a clear message had come from the US that it objected to the exclusive regionalism represented by the putative EAS as envisaged by China.37 The led-up to the first EAS meeting at the end of 2005 also witnessed anti-Japanese demonstrations in China, China blocking Japan’s attempt to become a permanent member of the United Nations Security Council on account of insufficient repentance for its war-time past, and a visit of the Japanese prime minister to the Yasakuni Shrine housing the souls of the war dead and Class-A war criminals of Japan.38 All these led to a souring of relations between China and Japan, which did not augur well at all for the new, and supposedly cooperative, forum. When China failed to convince ASEAN countries not to invite non-APT countries to the first EAS summit in Kuala Lumpur in 2005, it favored a draft declaration for the summit that would portray the APT states as a core group having a dialogue with a secondary group made up of Australia, New Zealand and India.39 This position met with strong opposition from Japan. Beijing then offered to host the second summit, but this was vetoed by Japan. When Japan bid to co-chair the first EAS summit with Malaysia, the proposal was refused by China.40 34 Akiko Fukushima, “Japan’s Perspective on Asian Regionalism,” in Michael J. Green and Bates Gill, eds, Asia’s New Multilateralism (New York: Columbia University Press, 2009), 113. 35 Ministry of Foreign Affairs of Japan, “Issue Papers Prepared by the Government of Japan,” June 25, 2004: 16, http://www.mofa.go.jp/region/asia-paci/issue.pdf, accessed February 27, 2013. 36 He, 45. 37 Kazuhiko Togo, “Japan and the Security Structures of Multilateralism,” in Kent E. Calder and Francis Fukuyama, eds, East Asian Multilateralism: Prospect for Regional Stability (Baltimore, MD: Johns Hopkins University, 2008), 175. 38 Robert Marquand, “Nationalism Drives China, Japan Apart,” Christian Science Monitor (December 29, 2005), 1. 39 Bruce Vaughn, “East Asia Summit: Issues for Congress,” CRS Report (December 9, 2005), 2. 40 Eric T.C. Cheow, “East Asia Summit’s Birthing Pains,” Straits Times (Singapore) (February 22, 2005).

From Mutual Tolerance to Separate Ways

95

When Japan’s membership criterion for the EAS was adopted at its first meeting, China and Malaysia countered that the APT should be the primary vehicle for community building in establishing an EAC.41 This was obvious tit-for-tat on the part of both Japan and China. With Japan and China competing for supremacy, ASEAN moved to manage this community building effort by insisting that only ASEAN countries get to host the EAS. ASEAN ministers usually begin their discussions first with their counterparts from Japan, China and South Korea, followed by consultations with other relevant ministers from the rest of the EAS countries. Beijing became frustrated by the decision to include non-APT countries in the EAS, believing that their inclusion would make the EAS less efficient as it would be more difficult to reach consensus with a higher number of members.42 Furthermore, by including countries that China perceive as aligning together to marginalize it, the EAS would decrease rather than increase Chinese influence.43 The Chinese are probably right on both counts. The EAS declaration, calling for “an open, inclusive, transparent and externally-oriented” regionalism,44 was part of the Japanese proposal to expand the scope of membership to countries which embrace “universal” political values stressing human rights and democracy that China explicitly rejects, bring these states together to serve collectively as a counterweight to China’s influence in both the forum and the region, and alleviate American fear of a closed, Asiaonly type of regionalism. With its vision for the EAS blocked, China then changed strategy, basically abandoning its support for the EAS to achieve anything and attempting to neutralize its effectiveness for Japan by welcoming as many foreign countries into it as possible. According to Cui Tiankai, who was at the EAS’s founding as head of the Asian Affairs Department at the Chinese Foreign Affairs Ministry, “… the whole process of membership is open.”45 As such, whatever momentum the EAS has is due to Japan’s efforts at promoting it. In 2007, Japan floated a Comprehensive Economic Partnership of East Asia (CEPEA) at the EAS embracing all of its member states, seeing it as the best metric of Japan’s ultimate goal of realizing its vision of an EAC, but this hardly possible without a China–Japan FTA. Although the EAS has identified five priority areas of concern—energy conservation, education, finance, disaster response and epidemics (such as the H1N1 bird

41 Jae Cheol Kim, “Politics of Regionalism in East Asia: The Case of the East Asia Summit,” Asian Perspective 34, no. 3(2010): 128. 42 Kim, 125–6. 43 Yan Wei, “A Broader Asia without China,” Beijing Review, September 20, 2007. 44 Asahi Shimbun, December 15, 2005. 45 Edward Cody, “East Asian Summit Marked by Discord: New Group’s Role Remains Uncertain,” Washington Post, December 14, 2005, A24.

96

Contentious Integration

influenza)46—EAS ministerial meetings have functioned as an expanded yet more cursory version of the various ministerial meetings of the APT. Third Stage: Pro Forma Attendance (2010 onwards) Although reentering the Asian family of nations is an economic imperative for Japan, the relationship with the US remains the linchpin of Japanese security and foreign policymaking. Tokyo has since the departure of Prime Minister Hatoyama Yukio supported US engagement in the EAS, in tandem with US President Barack Obama’s “pivot” to Asia. In contrast to the eight years of the George W. Bush presidency, the Obama administration has from its beginning demonstrated a clear multilateral preference, premised on the understanding that deepening key bilateral ties and engaging multilateral institutional structures can go together. With the US and Russia joining in as full members of the EAS in 2011, although Russia has been participating as an observer since the first EAS in 2005, the focus of its meetings will become more diffused, to include discussions of more sensitive political issues and security problems. Yet, according to Guan Youfei, Deputy Director of the PRC Ministry of National Defense’s Foreign Affairs Office: “China holds a consistent stance: The South China Sea issue is not an issue between China and ASEAN, nor can the issue be discussed under the framework of ASEAN + 8.”47 If so, although the trans-Pacific expansion of the EAS may make it less distinct from the ARF, the mandate of the former will be even narrower than that of the latter. Beijing would gain influence by being at the center of regional cooperative arrangements that do not include the US and help to make rules for East Asia. As such, why did it agree to US participation in the EAS? This is because Beijing knows that many Asian nations actually welcome an American presence in the region’s forums, and open opposition by China might increase its neighbors’ suspicions of its intentions to dominate the region.48 China knows that the EAS is favored by not a few countries in the East Asian region because they are nervous about Beijing’s intentions.49 China does want to accomplish East Asian integration, at least in the economic sphere, but not at the expense of complicating its relations with America, the only country that can conceivably put a stop to the rise of China. China’s strategy in any forum in which the US and Japan are both present is not to openly criticize 46 Asia News Monitor (Bangkok), “United States/Russia/East Asia: Participation of US, Russia makes East Asian summit,” November 17, 2011. 47 Asia Pulse (Rhodes, Australia), “Chinese, US Defense Chiefs Plan Hanoi Meeting,” October 7, 2010. 48 Ming Wan, “The Great Recession and China’s Policy toward Asian Regionalism,” Asian Survey 50, no. 3(May/June 2010): 535. 49 Beeson, “The USA’s relations with East and Southeast Asia” in Andrew T.H. Tan, ed., East and Southeast Asia: International Relations and Security Perspective (London and New York: Routledge, 2013): 173.

From Mutual Tolerance to Separate Ways

97

any proposal on the table, except to ignore it, or keep it on a discussion mode until China considers it to be in its interest for a decision to be made. Six-Party Talks Since the February 13, 2007 Accord: Is the Party Over? As agreed to in the February 13, 2007 Accord reached under the 6PT, which committed North Korea to seal its main nuclear reactor at Yongbyon in exchange for heavy fuel oil deliveries, the US removed North Korea from its list of state sponsors of terrorism in October 2008. However, the latest round of the 6PT, which closed on December 11, 2008, failed to produce any results, with the representatives from the United States, North Korea, South Korea, China, Japan, and Russia unable to reach an agreement on the details of a verification protocol. North Korea was unwilling to allow for on-site inspections and collection of nuclear samples. Then unexpectedly, on April 5, 2009, North Korea launched what it referred to as a communications satellite, but which the US, Japan and South Korea called a ballistic missile. In response, the UN Security Council, supported by the US and Japan, issued a statement on April 14, 2009 condemning the launched, which led Pyongyang to announce that it was restarting its nuclear program and leaving the 6PT for good. On May 25, 2009, North Korea tested a nuclear weapon that was over 20 times more powerful than the one it exploded three years before.50 China stated at the UN that it was “firmly opposed” to the test,51 but did not back up its words of opposition with any action. PRC Foreign Ministry spokeswoman Jiang Yu said China believes North Korea must let international inspectors see its nuclear facilities, and that the issue must be resolved through the six-party talks.52 Japan had by then given up all hopes that China would be an effective host or mediator in the 6PT, sensing Beijing’s reluctance to make any moves that would paint North Korea into a corner and conceivably provoke it to lash out belligerently with unpredictable consequences. China’s role as a mediator in the North Korean nuclear crisis has traditionally been composed of two major elements: to persuade Pyongyang to return to the 6PT by offering economic incentives and to convince the US to adopt a “soft approach”—giving more incentives and applying less pressure—in its dealings with North Korea. However, China’s then Defense Minister, General Liang Guanglie, has stated during his visit to Pyongyang in November 2009 that 50 Bill Powell, “Your Move, China,” Time (June 15, 2009), 15. 51 Bill Powell and Stephen Kim, “Spotlight: North Korea’s Nuclear Test,” Time (June 8, 2009), 10. 52 Voice of America, “China Urges N. Korea to Accept International Nuclear Inspections,” December 20, 2010, http://www.voanews.com/content/china-urges-north-kor ea-to-accept-international-nuclear-inspections--112239234/166784.html, accessed September 21, 2013.

98

Contentious Integration

Beijing would not provide North Korea with any military aid unless it decided to denuclearize, and China’s assistance to North Korea since its 2009 nuclear test has been far less than the requested level.53 The Chinese leadership’s influence over Kim Jong Un, who succeeded his father Kim Jong-il as North Korea’s supreme leader upon the latter’s death at the end of 2011, is uncertain. North Korea’s sinking of the South Korean Cheonan warship and its artillery attack on the South Koreaheld Yeongpyeong Island in 2010 and revelation of a newly unveiled uranium enrichment plant at Yeonbyon have also impeded any US “soft approach.” Former US Secretary of State Hillary Clinton has said North Korea must do more to improve ties with South Korea before Washington will consider resuming talks,54 but with the detonation of a third nuclear device in February 2013, North Korea’s current leadership has shown that it is not prepared to do that just yet. Of course, the most important determinant of the convening of the 6PT, let alone its success, is North Korea’s willingness to talk, particularly to the US. As long as the North Korean regime believes that nuclear weapons are the only means of guaranteeing its survival against the existential threat it believes it is facing from the United States, there is a very slim chance that it will relinquish its nuclear weapons capability. Therefore, a durable solution to the acute security dilemma on the Korean peninsula can only be achieved when the US sincerely engages in talks with North Korea to work towards normalizing ties between the two countries and establishing a permanent peace regime on the Korean peninsula. As of June 2014, despite Chinese persuasion to give up its nuclear weapons, North Korea has not indicated any willingness to do so, although it has called for a resumption of the 6PT negotiations.55 Shanghai Cooperation Organization: Anticipating External Involvement Since 2005 For Central Asian countries, SCO is important for the purpose of discussing or raising initiatives with the region’s larger and more powerful immediate neighbors, as well as for boosting both military and economic cooperation with them. For Russia and China, this forum serves the important additional purpose of warning other actors, principally the US and its allies, not to intervene in the

53 Zhu Feng, “Flawed Mediation and a Compelling Mission: Chinese Diplomacy in the Six-Party Talks to Denuclearize North Korea,” East Asia no. 28(2011): 211–12. 54 Matthew Lee and Robin McDowell, “US Tough on North Korea, South China Sea,” Associated Press, July 23, 2011, http://news.yahoo.com/us-tough-north-korea-southchina-sea-133420204.html, accessed September 21, 2013. 55 British Broadcasting Corporation (BBC) Monitoring Asia Pacific (London), “China vows to spare no efforts to persuade North Korea to give up nuclear weapons,” 10 April 2014.

From Mutual Tolerance to Separate Ways

99

region, which is strategically important for Russia and important for China in terms of economic security. In terms of military cooperation, what developed out of the first SCO multilateral exercise in 2003 was a series of Peace Mission exercises. The first Peace Mission exercise was conducted between Russia and China in August 2005, staged in Russia’s Vladivostok and China’s Shandong province and Yellow Sea, which saw the participation of 10,000 army and naval personnel from both countries. This was significant to the extent that only a month before, the SCO summit held at Kazakhstan’s Astana had called for a timetable to withdraw US-led military forces from Afghanistan, and for a deadline to end their use of military facilities in SCO countries. Peace Mission 2007 involving forces contributed by all SCO states was held in China’s Urumqi and Russia’s Chelyabinsk in August 2007, with force strength of 6,500. Peace Mission 2009, conducted bilaterally between Russia and China, involved 2,600 personnel. Under the rubric of the SCO, China and Kazakhstan conducted in 2006 the Tien-Shan antiterrorist exercise, which was expanded to include Kyrgyzstan and Tajikistan in the TienShan 2009 exercise.56 Officially, Peace Mission 2010, hosted by Kazakhstan and involving all SCO states except Uzbekistan, focused on neutralizing terrorist formations with hypothetical support from a foreign state, which was in itself telling, but it was more so an opportunity for China’s People’s Liberation Army to demonstrate its troop transportation efficiency, the speed of deployment by rail, and Chinese strategic airpower with precision strikes.57 Although the exercises were ostensibly targeted against terrorists, in all of them with the exception of Peace Mission 2007, the presence of submarines, early warning aircraft, long range strategic bombers, cruise missile drills, and other pieces of heavy equipment actually fit better as rehearsals against a well-armed hypothetical adversary more in keeping with twentieth-century warfare.58 Responding to Beijing’s request, on April 25, 2011, the first meeting of SCO chiefs of the general staff was convened in Shanghai,59 and in May, troops from China, Kyrgyzstan and Tajikistan engaged in antiterrorism drills in China’s northwestern Xinjiang region, home to its restive Muslim Uygur minorities. To promote paramilitary coordination, teams of rescue and medical workers from member states of the SCO have also taken part in joint drills for earthquake and disaster relief work, the first time in Russia in 2009, and subsequently in China in 2013.60 At the June 2011 SCO summit in Astana, member states criticized US plans to implement a ballistic missile defense (BMD) system in Eastern Europe’s former 56 Roger N. McDemott, “The Shanghai Cooperation Organization’s Impact on Central Asian Security,” Problems of Post-Communism (July/August 2012), 62. 57 McDemott, 63. 58 Ibid., 62. 59 Ibid., 59. 60 “Shanghai Cooperation Organization States Conclude Disaster Relief Drill,” BBC Monitoring Asia Pacific, June 16, 2013.

100

Contentious Integration

Warsaw Pact countries, saying that so doing will “harm strategic stability and international security.”61 Beijing in particular was worried that the BMD system in Europe may be applied to Japan, and cover Taiwan, in China’s neighborhood. Since fighting drug smuggling is a necessary mission of the SCO, the Astana summit allowed Afghanistan’s application for observer status in SCO. This is sure to increase the influence of Russia and China in Afghanistan after US troops are scheduled to withdraw from that country in 2014. China has already become the largest investor in Afghanistan, with the state-owned China Metallurgy Group and Jiangxi Copper spending some US$3 billion to develop the Aynak copper mine.62 Japan is financing infrastructure development and providing health and educational personnel through ODA to aid in the reconstruction of Afghanistan, but unlike China, seems to be getting little back in return. As economic and energy cooperation had by 2004 become no less important an agenda amongst SCO countries than the fight against the three evils of separatism, terrorism and religious fundamentalism, China, through its state Import–Export Bank, has since been a prolific lender to other SCO states, supporting more than 50 programs related to the development of communications, transportation, energy and agriculture in these countries, with President Hu Jintao announcing $10 billion of loans to fellow SCO member states in 2009 alone.63 It was in light of these developments that Japanese Foreign Minister Kawaguchi Yoriko visited Astana in April 2004, where she met the foreign ministers of Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan to initiate what became a series of “Central Asia plus Japan Dialogues” to counteract China’s rising strategic and economic influence in Central Asia. Japan had also succeeded in convincing Russia to reroute the main trunk of the planned East Siberian oil pipeline, originally scheduled for laying to Daqing in north-eastern China, to Russia’s Sea of Japan coast. However, on September 23, 2011, the energy ministers of China, Russia, Kazakhstan, Tajikistan and Kyrgyzstan met in China’s Xian to establish a working group to jump-start the realization of an SCO Energy Club, after talking about it for years, which gives priority to meeting the needs of both oil and gas suppliers and demanders in the SCO.64

61 Andre de Nesnera, “Shanghai Cooperation Organization Opposes US Missile Defense Plan,” Voice of America News, July 7, 2011. 62 Sriparna Pathak, “Yet another Great Game in Afghanistan: The US and China,” Institute of Peace and Conflict Studies (ICPS) (New Delhi), September 1, 2010, http://www. ipcs.org/article/south-asia/yet-another-great-game-in-afghanistan-the-us-and-china-3228. html. 63 Stephanie Ho, “Analysts: Shanghai Cooperation Organization Flourishing, Thanks to Generous Backing,” Voice of America News, June 14, 2011. 64 Galiia A. Movkebaeva, “Energy Cooperation Among Kazakhstan, Russia and China Within the Shanghai Cooperation Organization,” Russian Politics and Law 51, no. 1 (January–February 2013): 85.

From Mutual Tolerance to Separate Ways

101

In early 2013, Turkey became a dialogue partner of the SCO, being the first member state of the North Atlantic Treaty Organization (NATO) to have such a close relationship with the SCO. Turkish Prime Minister Recep Erdogan said that the quest for dialogue partnership, a move supported by the main parliamentary opposition leader after a visit to China, was in response to the opposition to Turkey’s membership in the European Union by several of its member states.65 Turkey also hosted two visits by Japanese Prime Minister Abe Shinzo in 2013, the purposes of which some Chinese analysis saw as having to do with dissuading the Turkish government from acquiring a long-range air missile defense system, the FD-2000, from China, for which Turkey has come under some criticisms from Western governments and its NATO partners. At the 2013 SCO summit in Bishkek, China supported Russia’s initiative towards transferring Syria’s chemical weapons under international supervision for subsequent destruction, and more worrying for the West perhaps, PRC President Xi Jinping expressed respect for Iran’s legal right to nuclear energy.66 In an unprecedented string of tours for a top Chinese leader, Xi visited the capitals of four of the five Central Asian republics in September 2013, those of Turkmenistan, Kazakhstan, Uzbekistan and Kyrgyzstan. China’s trade volume with Central Asia has by then exceeded $46 billion.67 On the top of his agenda was building good relations with China’s Central Asian neighbors as the new leader of China, as Beijing is concerned that, with the pending withdrawal of NATO and US forces from Afghanistan in 2014, religious extremists and drug traffickers will find it easier to move across the borders between that country, Central Asia and China.68 Besides, China has in recent years strove to diversify its dependence on Middle Eastern oil by constructing pipelines from Central Asia that are considered safer than the more vulnerable sea routes from the Middle East, such as the China–Kazakhstan oil pipeline from Atasu in western Kazakhstan on the shores of the Caspian Sea through China’s Xinjiang Autonomous Region to its eastern seaboard, to be joined by a gas pipeline from Turkmenistan through Uzbekistan and Kazakhstan to Xinjiang, which started construction in 2009. When Kazakh President Nursultan Nazarbayev visited China in September 2013, he and Xi signed trade and finance accords worth $30 billion, including 65 “Turkey Seeks Observer Member Status in Shanghai Cooperation Organization,” BBC Monitoring European, February 3, 2013; “Turkish Minister Comments on Ties with Shanghai Cooperation Organization,” Anatolia News Agency, Ankara, in English, 1130GMT, April 28, 2013. 66 Radio Free Europe, “Liveblog—Eurasian Leaders Gather for SCO Summit in Bishkek,” September 13, 2013. 67 “Rising China, Sinking Russia,” The Economist, September 14, 2013, http://www. economist.com/news/asia/21586304-vast-region-chinas-economic-clout-more-matchrussias-rising-china-sinking, accessed February 28, 2014. 68 Radio Free Europe, “China’s Xi Seeks Central Asian Ties for Energy, Security,” September 4, 2013.

102

Contentious Integration

loans from China’s Development bank and Export–Import Bank,69 and since China extracts 22 percent of Kazakhstan’s oil and has purchased an 8.4 percent stake in its vast Kashagan oil field in the Caspian Sea,70 Beijing allocated $1 billion to building an oil refinery in Atyrau.71 As it is, China has stepped in to salvage Kazakhstan’s failing banks, lending $5 billion to the state-owned Development Bank of Kazakhstan and another $5 billion to KazMunaiGaz,72 thus earning China Nazerbayev’s gratitude, and cementing its influence in this largest of the Central Asian states. Still, although China’s ability to pursue a policy of interdependence with Central Asian countries has greatly advanced its interest in the region, Japan has managed to a large extent to construct an image of itself as a role model for Central Asian leaders and peoples, more of which will be discussed in Chapter 6.

69 Jane Perlez, “China Looks Westward as it Bolsters Regional Ties,” New York Times, A13. 70 Ibid. 71 Movkebaeva, 84. 72 Perlez, “China Looks Westward as it Bolsters Regional Ties.”

Chapter 6

Delayed but Proactive Response: Japan Strikes Back Against China’s apparent success at cultivating multilateral forums to augment and institutionalize its role and influence in Central Asia, Northeast Asia and Southeast Asia, how to secure its own interests in these forums, while balancing its relations with China and the United States, has become a major foreign policy challenge for Japan. By the end of the first decade of the twenty-first century, East Asia has found itself in a new and prominent position as one of the key drivers of the world political economy, foremost as a result of China’s rise, but also because the United States and Europe had been economically laid low by the “Great Recession” beginning in 2008. China overtook Japan as the second largest economy in the world by the end of 2010. By 2030, India, Korea and ASEAN are likely to have bigger and faster-growing economies than a demographically-matured Japan mired in government debts. Japan in that case could find itself in the ranks of a middle power among more powerful countries and blocs in its own region. This provides a present, and pressing, opportunity for historic reconciliation between Japan and its Asian neighbors, particularly China, to dissipate lingering distrust and tension. Indeed, a major challenge for Japan is to find ways to cope with China’s burgeoning economic, diplomatic and security presence in Asia and the Pacific, in particular, its rather successful attempts so far to cultivate multilateral forums to augment and institutionalize its regional role and influence. Aside from US fixation on tackling terrorism, Afghanistan and Iraq, the prolonged economic recession in Japan also allowed China to quietly use its economic muscle and diplomatic charm to draw Asian states further into its sphere of interest and influence. Tackling both opportunity and challenge will have a direct impact on Japan’s relations with the US. It has been said that the drivers of Japan’s national strategy in modern times have been to pursue autonomy and respect in the international system, based on calculations of the geopolitical strength of China, while allied with the world’s greatest power, which in our times is the US, yet avoid being “entrapped” in the latter’s security commitments.1 If so, they have found expression in Japan’s foreign policy posture at least since 1997, which has demonstrated both integrative and hedging tendencies: to enmesh itself economically with China and other Asian 1 Michael Green, “Japan in Asia,” in David Shambaugh and Michael Yahuda, eds, International Relations of Asia (Lanham, NY: Rowman and Littlefield, 2008), 170–91.

104

Contentious Integration

countries by participating in regional arrangements, while at the same time, insure against strategic uncertainties in the region by upgrading and sticking to its security alliance with the US, and if possible, involve the US in these regional groupings. After coming to power in September 2009, the DPJ, at least under its first two prime ministers, had desired to adopt a diplomatic posture that would bring Japan closer to its Asian neighbors, and seek more balance in its relations with the US, while still maintaining the US–Japan alliance as security insurance. In so doing, Japan searched for more substantive and institutionalized relations not only with China, and also with countries surrounding China, and regional groupings in which China already has a strong presence, in Central Asia, Northeast Asia and Southeast Asia. Thus how to do more than react and take the initiative to secure its own interests in regional forums centered on Asia, such as the Shanghai Cooperation Organization, the ASEAN plus Japan or the Six-Party Talks, while balancing both vital yet changeable sets of relationship with China and the US, have become Japan’s foreign policy imperatives in recent years, and will remain so for the foreseeable future. Japan and the Central Asian States of the Shanghai Cooperation Organization (SCO) Japan would like to have a larger say in the affairs of Central Asia. However, if there is a contest between Tokyo and Beijing for the region, then this must be an unequal one. Japan is matched up not just against China, which has been building up its interests and influence in Central Asia since the mid-1990s and is now a formidable presence in the region, but also against Russia, whose interests and influence in the region dates back to the times of the Soviet Union and Tsarist Russia. Both China and Russia are the largest and most powerful member states of the Shanghai Cooperation Organization (SCO), which includes the Central Asian states of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Compared to its role in the security-related ASEAN Regional Forum (ARF), China has demonstrated much activism in institutionalizing cooperation in the SCO. This is because China has a much greater level of influence over Russia and the Central Asian member states of the SCO, which are fellow authoritarian regimes that share the notion of non-intervention in the domestic affairs of sovereign states, while the Chinese are uncomfortable with the presence of the US and Japan in the ARF, where they often raise the issues of the Spratly islands dispute and preventive diplomacy. The series of biannual military exercises involving chiefly Russia and China but also other SCO member-states known as “Peace Mission,” which began in 2005, are conducted on the initiatives of China. The “China–Russia Strategic Partnership,” which supposedly buttresses the SCO and first came to public attention after former Russian President Boris Yeltsin’s visit to China in March 1996, appears as a virtually meaningless catch-all civil

Delayed but Proactive Response

105

diplomacy concept to many Japanese.2 Still, China’s activism in institutionalizing cooperation in the SCO had sparked Japan’s attention in Central Asia. Japan’s sustained interest in post-Soviet Central Asia as a region started with former Prime Minister Hashimoto Ryutaro’s “Eurasian Diplomacy” or “Silk Road Diplomacy” in 1997. This initiative was taken not in response to concerns about any other country it seems, at least not yet, but rather to expand Japan’s roles and presence in Central Asia, with an eye on the region’s rich hydrocarbon resources. Japan might have been signaling to the Russian government, futilely as it turned out, that as with Central Asia, funds for oil and gas investments in Siberia would be forthcoming if Russia agrees to return to Japan the islands that constitute the Southern Kuriles to Russia or the Northern Territories to Japan, which the Soviet Union has occupied since 1945. As relations between Japan and Central Asian states beside the autarkic Turkmenistan became more comfortable, and to counter China’s rising activism in seeking hydrocarbon resources from Central Asian states and its rising influence in the region, a “Central Asia Plus Japan Dialogue” was initiated by Japan when then Foreign Minister Kawaguchi Yoriko visited Astana, Kazakhstan, in April 2004, where she met the foreign ministers of Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan. Aside from securing support for Japan’s quest to be a permanent member of the United Nations Security Council, this dialogue initiative involves five areas of engagement: 1) policy dialogue; 2) business promotion; 3) intraregional (Central Asian) cooperation; 4) intellectual conversations; and 5) cultural and people-to-people exchanges.3 A second foreign ministers’ meeting was held in June 2006 by then Foreign Minister Aso Taro of Japan and the same four Central Asian countries in Tokyo, with Afghanistan as an observer. The Dialogue was crowned by the visit of former Japanese Prime Minister Koizumi Junichiro to Kazakhstan and Uzbekistan in August 2006. This set of ministerial meetings then went into hiatus for four years, because the succeeding administrations in Japan were too short-lived to permit any longterm diplomatic initiatives. Still, meetings among the vice-ministers of Japan and Central Asian countries and the director-generals and deputy director-generals of the bureaus of their foreign ministries, including Turkmenistan from 2007, have taken place since the Koizumi visit.4

2 Interview with Iida Masafumi, Senior Fellow, National Institute of Defense Studies (NIDS), Ministry of Defense, Tokyo, Japan, on March 10, 2010. 3 Christopher Len, “Understanding Japan’s Central Asian Engagement,” in Christopher Len, Uyama Tomohiko and Hirose Tetsuya, eds, Japan’s Silk Road Diplomacy, Paving the Road Ahead (Washington, DC and Stockholm: Central Asia-caucasus Institute and Silk Road Studies Program, 2008), 31–46. 4 Interview with the Deputy Director, Central Asia and Caucasus Division, European Affairs Bureau, Ministry of Foreign Affairs of Japan (MOFA), Tokyo, Japan, on March 12, 2010.

106

Contentious Integration

There are two major reasons why Japan desires to be actively involved in Central Asian affairs. One is geopolitical, since Central Asia is at the crossroads of Russia, Middle East, South Asia and East Asia, and can be considered as being in Japan’s neighborhood. The other is geoeconomics, as Japan is trying to diversify its supplies of oil from the Middle East and liquefied natural gas from Southeast Asia and Russia’s Sakhalin, which makes Central Asia, with its abundance of oil and natural gas resources, a region whose governments are worth courting. Japan’s efforts are spurred on by the construction of an oil and gas pipeline from Kazakhstan to China starting in 2005, and subsequently, a natural gas pipeline from Turkmenistan to China. Under two agreements signed between the Kazakhstan National Atomic Energy Corporation (Kazatomprom) with the China National Nuclear Corporation (CNNC) and China Guangdong Nuclear Power Company (CGNPC) in December 2008, several joint ventures under 51 percent Chinese control have been created to supply Beijing with uranium.5 Japan is also concerned about plans by Russia and Kazakhstan to create an energy club linking suppliers and consumers of hydrocarbon resources within the SCO. Not having contiguous boundaries with or direct access to the oil and gas resources of Central Asian states, Japan has engaged in “swap trade,” such as with Azerbaijan through its exports to a third country like Malaysia, from which Japan then buys the hydrocarbon.6 Since neither China nor Russia has considered inviting Japan to be a member or even an observer in the SCO, the “Central Asia Plus Japan Dialogue” initiative is important to the extent that it has furnished Japan with a platform to dispense aid to Central Asian countries and receive precious minerals like uranium or rare earth in return. Official Development Assistance (ODA), provided to Central Asia by Japan as the region’s largest donor, is an important arm of its Central Asian diplomacy, and is concentrated on providing hard infrastructure and human resources training in the two largest countries in the region—Kazakhstan and Uzbekistan, although some amount of medical supplies are also given to the smaller states of Kyrgyzstan and Tajikistan.7 By 2006, 216.5 billion Yen in ODA loans had already been provided through the government-owned Japan Bank for International Cooperation to fund 20 programs and projects in Central Asia, covering areas of road and railway construction, airport upgrading, telecommunications network expansion, electric power generation, water supply and sewage disposal, and provision of education equipment and training.8 This ODA diplomacy is perhaps not surprising, since 5 Elaheh Koolaee and Mandana Tishehyar, “China and Japan’s Energy Security Approaches in Central Asia: A Comparative study,” China Report 45, no. 4(2009): 272. 6 Ibid. 7 Interview with the Assistant to the Deputy Director, Central Asia and Caucasus Division, European Affairs Bureau, MOFA, Tokyo, Japan, on March 12, 2010. 8 Japan Bank for International Cooperation, “Central Asia and ODA Loans,” http://www.jica.go.jp/english/publications/jbic_archive/others/pdf/centralasia_e.pdf, accessed December 31, 2011.

Delayed but Proactive Response

107

apart from hydrocarbon, Kazakhstan in particular, but also Uzbekistan, looms large as a source of uranium for Japan. Japan’s Kansai Electric Power Co, Nuclear Fuel Industries Ltd, and trading house Sumitomo Corp jointly signed an accord in 2007 with the Kazakh stateowned nuclear firm Kazatomprom for processed uranium to fuel Kansai’s nuclear power plants.9 Japan will import 30 percent of its uranium for electricity generation from Kazakhstan as part of a civil nuclear cooperation agreement signed with the Kazakh government on April 30, 2007,10 during the visit of the then Japanese Economy, Trade and Industry (METI) Minister Amari Akira to that country, accompanied by some 150 government officials and representatives of Japanese companies.11 Kazakhstan holds an estimated 20 percent of the world’s uranium reserves, and in exchange for Japanese companies getting access to them, in October 2007, Toshiba Corp, Japan’s biggest maker of nuclear reactors, sold Kazatomprom a 10 percent share in its Westinghouse Electric Co., thus enabling Kazatomprom to access cutting-edge nuclear technologies.12 Rare-earth metals are increasingly essential for making computer screens, hybrid cars, superconductors and the iPod—important export products of Japan. As such, when China’s customs officials blocked rare earth shipments to Japan around the time that the bilateral dispute over the Diaoyu/Senkaku islands heated up, and China was then supplying 95 percent of the world’s and 90 percent of Japan’s rare earth,13 with the result that rare earth prices soared, Japan’s METI immediately invited a team of executives from Kazatomprom to Tokyo in October 2010 to press Kazatomprom to accelerate the rare earth joint ventures it had discussed launching earlier that year with Sumitomo and Toshiba.14 While Kazatomprom’s joint venture with Sumitomo was already established in March 2010, with the name of Summit Atom Rare Earth Company (ASRECO), its joint venture with Toshiba would become operationalized only in September 2011.15 To provide long-term energy security for Japan, in 2011, Itochu Corporation of Japan signed a 10-year contract with the Uzbek state-owned Navoi Mining and 9 Reuters News Agency, March 2, 2010. 10 Asahi Shimbun, May 3, 2007. 11 Hisane Masaki, “New Energy Fuels Japan’s Diplomacy: From the Middle East to Central Asia,” Japan Focus, http://www.japanfocus.org/-Hisane_MASAKI/2416, accessed May 15, 2010. 12 Taipei Times, August 14, 2007. 13 Roman Muzalevsky, “Japan Eyes Central Asia for Strategic Resources,” Asia Times, December 5, 2012, http://www.atimes.com/atimes/Japan/NL05Dh01.html, accessed February 28, 2014. 14 Richard Orange, “Japan Looks to Central Asia for Rare Earth Supply,” The National, October 31, 2010, http://www.thenational.ae/business/energy/japan-looks-tocentral-asia-for-rare-earth-supply, accessed April 30, 2012. 15 Bakytzhan Khochshanov, “Kazatomprom and Toshiba to cooperate on rare earth metals,” Halyk Finance, http://www.halykfinance.kz/en/site/index/research/news:77797, accessed April 30, 2012.

108

Contentious Integration

Metallurgical Combinat (NMMC) to procure from Uzbekistan per annum 500 to 1,000 tons of uranium concentrate, a type of fuel for nuclear power generation.16 All the while that Uzbekistan was engaging in uranium exploration with Chinese companies, the government-run Japan Oil, Gas and Metals National Corporation and NMMC received a five-year license from the country’s authorities in 2013 to prospect for uranium at two sites in its Navoi region.17 In terms of “soft power,” China has established Confucius Institutes in Central Asia, two each in Kazakhstan and Kyrgyzstan, and one each in Uzbekistan and Tajikistan, to teach Chinese language and culture, and select students for scholarships and exchanges to China. As for Japan, apart from providing material assistance and dispatching technical advisors to Central Asian states, the government has established Japan Centers for Human Development, which offer Japanese language training, an introduction to Japanese culture, vocational training and business management courses.18 The Japanese government has also welcomed bureaucrats from these states to Japan for training, principally to learn the Japanese language and write rules, codes and regulations pertaining to facilitating international commerce and investment, but also on how to run a free-market capitalist system efficiently.19 While recognizing that values of democracy and human rights cannot be imposed or transplanted from the outside, Japanese officials would quietly impart these lines of thinking to the Central Asian bureaucrats as beneficial to their countries’ prosperity and stability.20 The unstated premise is that, if adopted, these political values will loosen the hold that authoritarian neighbors like Russia and China have through the SCO over the Central Asian states.21 The Japan International Cooperation Agency (JICA) has also funded many full scholarships for mid-level career government ministry officials from Central Asian states to study for graduate degrees in Japanese universities. A third Foreign Ministers’ “Central Asia plus Japan Dialogue” Meeting was held in Tashkent, Uzbekistan, in August 2010, between Japan and all five countries of Central Asia with Okada Katsuya representing Japan, where it was decided that Japan would help the five countries to train border personnel on measures to cope

16 Ahmad Rashid Malik, “Bolstering Uzbekistan’s Ties with Japan,” PanOrient News (Tokyo), February 12, 2011, http://www.panorientnews.com/en/news.php?k=760, accessed April 30, 2012. 17 “Japan, Uzbekistan to Conduct Joint Uranium Exploration,” Japan Times, July 6, 2013, http://www.japantimes.co.jp/news/2013/07/06/national/japan-uzbekistan-to-conduct -joint-uranium-exploration/#.UxW3mEZWGzg, accessed February 28, 2014. 18 Timur Dadabaev, “Japan’s Search for its Central Asian Policy: Between Idealism and Pragmatism,” Asian Survey 53, no. 3(2013): 529. 19 Interview with the Deputy Director, Central Asia and Caucasus Division, MOFA. 20 Ibid. 21 Yomiuri Shimbun, August 29, 2004.

Delayed but Proactive Response

109

with terrorists and traffickers of illegal drugs,22 and that a Senior Officials’ Meeting would henceforth be held annually within the framework of the dialogue.23 Japan’s ODA yen loans to Central Asia until 2010 were about US$2 billion and mostly used for infrastructure development; while grant aid totaled US$600 million, of which about US$260 million was for technical assistance toward capacity building.24At the meeting with visiting foreign ministers of Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan in November 2012 in Tokyo held under the rubric of the “Central Asia plus Japan Dialogue,” then Japanese foreign minister Gemba Koichiro discussed Afghanistan’s application the year before for observer status in the SCO and the pending US troop withdrawal from that country in 2014, and pledged to carry out US$700 million worth of economic development programs in the five Central Asian countries over the next few years.25 As Central Asia is not yet a critical supplier of oil and gas resources for Japan, Japanese involvement in Central Asia still lacks general understanding and support in the home country, and compared to Russia and China, Japan possesses neither geographical propinquity to the region, nor serious weight in its politicalsecurity affairs.26 Japan has nothing comparable to the SCO for institutionalizing its presence in Central Asia. Still, if the “Central Asia plus Japan Dialogue” could be turned into a regularized set of meetings, with an expansion in ODA and areas of cooperation, it would strengthen Japan’s economic roles and diplomatic influence in Central Asia, and conceivably weaken that of China and Russia in the region. Although the SCO provides China with a regular platform for maintaining high-level diplomatic contact with and offering tangible benefits to the Central Asian republics, Japan’s contributions to much-needed development projects in the region have made it an admired Asian role model and reliable partner in the eyes of Central Asian elites and masses alike for their countries’ modernization programs. Although the Central Asian republics are quite comfortable with their memberships in the SCO, which adopts an attitude of not interfering in the internal affairs of sovereign states, they have no intention of sacrificing their relations with countries outside the organization, particularly Western countries, to avoid being dominated by Russia, or China, or both. It is in this context that relations with 22 Anonymous, “Japan Pledges Increased Assistance for Central Asia,” BBC Monitoring Asia Pacific (London), August 8, 2010. 23 Ministry of Foreign Affairs of Japan, “‘Central Asia plus Japan’ Dialogue Third Foreign Ministers’ Meeting Joint Press Release,” http://www.mofa.go.jp/region/europe/ dialogue/fm3_1008/jp.html, accessed December 31, 2011. 24 Data available from Japan’s Ministry of Foreign Affairs website, April 10, 2010, http://www.mofa.go.jp. 25 “Japan to Carry Out US$700 million in Aid Programs in Central Asia,” Asia News Monitor (Bangkok), November 13, 2012. 26 Akio Kawato, “What is Japan up to in Central Asia,” in Christopher Len and Uyama Tomohiko and Hirose Tetsuya, eds, Japan’s Silk Road Diplomacy, Paving the Road Ahead (Washington, DC and Stockholm: Central Asia–Caucasus Institute and Silk Road Studies Program, 2008), 15, 26.

110

Contentious Integration

Japan, as a “Western” yet Asian country, helpful but not interventionist, will prove most useful to Central Asian states. Japan in the Six-Party Talks (6PT) The rationale for Japan’s involvement in the 6PT, hosted by China in Beijing since August 2003, just as it was for Japan’s research and testing on a Theatre Missile Defense (TMD) system, has been North Korea’s development of its nuclear weapons and associated missile program. Japan shares a common goal with the other countries in the 6PT of achieving a peaceful, negotiated resolution to the North Korean nuclear disarmament issue. Yet, a major stumbling block to Japan’s effective participation in the 6PT since its inception has been the repeated demands by the Japanese delegation for a complete accounting from North Korea’s authorities of what happened to Japanese citizens abducted from Japan to North Korea during the 1970s and 1980s and whose whereabouts are still unknown. The other members of the 6PT are extremely reluctant to allow Japan to raise this so-called abduction issue at the talks, which they feel should be done bilaterally between Tokyo and Pyongyang, rather than in a forum whose main purpose should be to discuss North Korea’s nuclear disarmament. Japan is in fact considered an annoyance, if not a nuisance, by fellow 6PT participants for linking the nuclear, missile and abduction issues, for they know that successive Japanese governments have considered the disarmament of North Korea’s nuclear weapons and the facilities for manufacturing them to be the main goal of the talks.27 The other 6PT members feel that this issue has already been dealt with in the Japan– DPRK Pyongyang Declaration concluding the visit of Koizumi as Japanese Prime Minister to North Korea in September 2002, Paragraph 3 of which contains an undertaking by North Korea that abductions would not happen again in the future.28 Since North Korea tested a long-range Taepodong missile over Japan’s airspace in 1998, the Japanese public and officialdom have fixated their attention on the range and accuracy of North Korea’s missile program. Indeed, Japan’s TMD cooperation with the US has since been predicated upon North Korea’s missile threat. Although it is widely acknowledged within Japan that, for the next round of the 6PT, if and when it takes place, Tokyo should be more concerned about Pyongyang’s missile development, the Japanese government will still have to raise the abduction issue. Although the matter is no longer as emotionally portrayed by Japan’s television programs or traumatic for the Japanese public as it was in the 27 Interview with Takagi Seiichiro, Professor, School of International Politics, Economics and Communication, Aoyama Gakuin University, Tokyo, Japan, on March 4, 2010. 28 Ministry of Foreign Affairs of Japan, “Japan–DPRK Pyongyang Declaration,” http://www.mofa.go.jp/region/asia-paci/n_korea/pmv0209/pyongyang.html, accessed March 23, 2010.

Delayed but Proactive Response

111

two years from October 2002,29 when the only batch of five abductees released to Japan sought not to return to North Korea, it is still a live issue in Japanese politics.30 As any Japanese prime minister will know, even with his political party having a majority of seats in the Lower House of the Diet which chooses the prime minister, the government will be severely criticized by opposition politicians and punished by the electorate if it fails to raise the issue at the 6PTs.31 In any case, there has been little practical difference between the positions of the DPJ and LDP, as the DPJ has voted in favor of most resolutions and bills sponsored by previous LDP governments to denounce and punish North Korea.32 Since Koizumi’s second visit to North Korea in May 2004 to bring to Japan the relatives of the released abductees, no Japanese government minister has set foot on that country, although secret contacts between Japanese and North Korean officials have taken place throughout the years. The 6PT is now virtually the only, albeit intermittent, channel whereby some official contact between Tokyo and Pyongyang takes place. However, facing North Korea’s recalcitrance to address the fate of the remaining abductees to the satisfaction of the Japanese government and public, Japan will not be able to provide aid money to North Korea, which is practically the only leverage it has on the domestic development and international posture of that country. This is even though North Korea may be interested in asking Japan for financial assistance, in the form of loans, grants or humanitarian aid, as it has done in the past, through non-official intermediaries, front companies, or Chongyron, the pro-Pyongyang Korean resident’s association in Japan.33 Since North Korea announced that it exploded an atomic bomb in October 2006, even its trading vessels were forbidden to dock at Japanese ports. Indeed, standing tough against North Korea was a strategy adopted by the first Abe Shinzo government to maintain its popularity amongst the Japanese electorate,34 so the second Abe government could hardly be expected to do anything else about it. However, 29 See Hyung Gu Lynn, “Vicarious Traumas: Television and Public Opinion in Japan’s North Korea policy,” Pacific Affairs 79, no. 3(2006). 30 In a poll taken in July 2008 by Japan’s Livedoor polling agency on Japan–North Korea relations, while 31.5 percent thought that the nuclear issue should be the first priority, those who believe that the abduction issue should be of primary concern to the Japanese government registered 68.49 percent. “日本の北朝鮮外交 どちらを重視する べきだと思いますか?” [“Japan’s North Korean Diplomacy Do You Think It Should Be Emphasized?”], http://news.livedoor.com/issue/list/388/, accessed May 15, 2010. 31 Roundtable discussion with Tsunekawa Jun, Iida Masafumi, and Masuda Masayuki, respectively Senior Research Fellow, Senior Fellow, and Research Fellow, National Institute of Defense Studies (NIDS), Ministry of Defense, Tokyo, Japan, on March 3, 2010. 32 Yochiro Sato, “The Democratic Party of Japan and North Korea Policy,” Asia Pacific Bulletin, no. 43(November 16, 2009). 33 Interview with Takagi. 34 Geun Lee, “The Clash of Soft Powers between China and Japan: Synergy and Dilemmas at the Six-Party Talks,” Asian Perspective 34, no. 2(2010): 125.

112

Contentious Integration

tying normal trade with North Korea, or even humanitarian aid to that country, to resolution of the abduction issue to Japan’s satisfaction can only mean that North Korea would tilt even more toward China for food, energy supplies and investment funds, in all of which the Chinese are currently the biggest providers, and further reduce Japan’s already meager influence over North Korea. Neither China, which has arguably the most leverage over North Korea’s behavior, nor South Korea, are interested in taking up what they consider to be Japan’s parochial, if not quixotic, cause, and the US has maintained that, despite its strong support for Japan’s predicament, it will not let the abduction issue block a nuclear deal.35 As such, Japan’s normalization efforts with North Korea, effective participation in the 6PT, and consequent role in the future construction of a Northeast Asian security community, are all held hostage to Japanese hostages allegedly still held in North Korea. It is doubtful whether Japan will even have the 6PT to return to as a forum to pressure the North Korean authorities on the hostage issue. In April 2009, North Korea announced that it would not return to the 6PT, after denunciation by the UN Security Council that it had tested a longrange missile, instead of a rocket carrying a communications satellite, as claimed. When China proposed restarting the 6PT in November 2010, it was turned down by Japan and South Korea, with then Japanese Foreign Minister Maehara Seiji denouncing North Korea as having run amok, for bombarding Yeonpyeong island off its coast held by South Korea.36 Doubtful that China could be counted on to pressure North Korea after the Cheonan and Yeonpyeong incidents, Japan and South Korea conducted historical trilateral foreign ministerial talks with the US on December 6, 2010, and have markedly leaned towards the US since. Japan is waiting for the US to establish diplomatic relations with North Korea, at which point the Japanese government believes it would have an excuse to resume aid to and trade with North Korea, while keeping adverse public opinion at bay as it continues to press for the release of alleged surviving abductees.37 Given the distrustful state of relationship between North Korea and the US, that could be a long wait. ASEAN Plus Japan When China and ASEAN announced in November 2001 their intention to conclude a Free-Trade Agreement (FTA) within 10 years, as previously described, it came as a 35 Emma Chanlett-Avery, “North Korea’s Abduction of Japanese Citizens and the Six-Party Talks,” CRS Report for Congress (19 March 2008): 2. 36 Yuka Hayashi, “Japan Rejects Session on Koreas,” Wall Street Journal, November 29, 2010, http://online.wsj.com/article/SB100014240527487045848045756441218549060 74.html, accessed April 30, 2012. 37 Interview with Inoguchi Takashi, President and Chairman of the Board, University of Niigata Prefecture, on April 19, 2010.

Delayed but Proactive Response

113

major shock to Japan. Since the years of war reparations in the 1950s to Southeast Asian countries, Japan has considered the region its sphere of attention, and given much more aid to regional countries than China. The Japanese government concluded that China’s primary purpose for reaching an FTA with ASEAN is to ensure a steady supply of raw materials and energy resources for sustaining its economic growth, and at the same time, ease ASEAN’s concerns regarding China as a threat.38 Japan provides a challenge to China’s influence within APT as a whole, but the ASEAN + Japan dialogue partnership lacks anything as tangible and advanced as the China–ASEAN FTA. Japan has found it difficult to start its own FTA negotiations with ASEAN on opening its agricultural market to Southeast Asian countries, given the political campaign contributions typically made by its farmers’ lobbies. However, fearing that China was using its initiative on the FTA to replace Japan as the main actor with the most influence in Southeast Asian affairs, Koizumi, during his visit as Japanese Prime Minister to Southeast Asia in January 2002, proposed a Comprehensive Economic Partnership with ASEAN that would include, besides trade and investment, development of science and technology, human resources and tourism.39 A Japan–ASEAN Comprehensive Economic Partnership Agreement was concluded with Brunei, Malaysia, Indonesia, Philippines and Thailand only in April 2008, since the resistance of Japan’s politically-influential agricultural lobby meant that Tokyo had difficulties negotiating FTAs with ASEAN countries aside from Singapore, as agriculture and fisheries are important exports for most of them. Japan had already signed an FTA in 2002 with Singapore, which conveniently has no agricultural exports. Although the official stance of Japan’s MOFA bureaucrats is that the country is not concerned about China’s burgeoning role and influence in Southeast Asia,40 off the record, most of them would admit that Japan is very worried. Japan was initially reluctant to sign on to ASEAN’s Treaty of Amity and Cooperation (TAC), apprehensive that the TAC’s non-interference principle would restrict Japan’s human rights diplomacy or security co-ordination with the US.41 However, with China’s ascension to the TAC in October 2003, Japan announced its intention to sign the TAC in December 2003, which it did in the following year. Yet, despite the oft-spoken assumption that Southeast Asia is an arena for the contestation of 38 Tomotaka Shoji, “Pursuing a Multi-dimensional Relationship: Rising China and Japan’s Southeast Asia Policy,” in Jun Tsunekawa, ed., The Rise of China: Responses from Southeast Asia and Japan (Tokyo: National Institute of Defense Studies, Japan, 2009), 170. 39 Ministry of Foreign Affairs of Japan, “Speech by Prime Minister of Japan Junichiro Koizumi, Japan and ASEAN in East Asia: A Sincere and Open Partnership,” Singapore, January 14, 2002, http://www.mofa.go.jp/region/asia-paci/pmv0201/speech.html, accessed March 19, 2010. 40 Interview with the Deputy Director, First Southeast Asia Division, Southeast and Southwest Asian Affairs Department, Asian and Oceanian Affairs Bureau, Ministry of Foreign Affairs of Japan (MOFA), Tokyo, Japan, on March 12, 2010; and interview with the Deputy Director, Central Asia and Caucasus Division, MOFA. 41 Shoji, 171–2.

114

Contentious Integration

interest and influence between Japan and China, the region is also a locality where Japan and China can engage in concrete collaboration. Development and conservation efforts involving the Mekong River Basin used to be carried out largely through the Greater Mekong Sub-region scheme funded by the Asian Development Bank (ABD). To explore ways of harmonizing cooperation for developing the basin, Japan and China have convened three meetings of the “Japan–China Policy Dialogue on the Mekong Region,” the first one in Beijing on April 25, 2008, the second one in Tokyo on June 11, 2009, and the third one in Jinghong City, Yunnan, on April 16, 2010, all headed by the Deputy Director-General of the Southeast and Southwest Asian Affairs Department of the Japanese MOFA, and the Deputy Director-General of the Department of International Organizations and Conferences of the PRC MOFA, with respective members of their delegations.42 The role of China obviously has to feature, since it contains the headwaters of the Mekong. By 2010, China has constructed four dams on its stretch of the river in Yunnan province to generate hydroelectricity, which it insists, have little impact on the environmental situation of the river basin, although the water level is falling and fish numbers have been reduced because of pollution and silting. Japan also wants to involve China in Mekong affairs because there are no major rivers in Japan, thus the expertise of China is necessary in managing and sharing the waters of a river of that scale.43 However, the bulk of Japanese attention on regional development and conservation focuses on the Southeast Asian countries through which the Mekong River runs—Myanmar, Laos, Thailand, Cambodia and Vietnam. At the Japan—CLV (Cambodia, Laos and Vietnam) Foreign Ministers’ Meeting in January 2007 on developing the Mekong Basin, Japan announced approximately US$20 million in assistance, out of a total of about US$40 billion for Cambodia, Laos, Vietnam and Myanmar.44 Another US$20 million in assistance was promised at the Japan–Mekong (Burma, Thailand, Cambodia, Laos and Vietnam) Foreign Ministers’ Meeting in January 2008. At this meeting, Japan pledged to invite 10,000 young people to Japan over the following five years for study tours and training, later expanded to 30,000, and committed itself to providing further assistance to complete the road and rail infrastructures of the East–West and Southern Economic Corridors.45 Hosting the Mekong–Japan Summit of November 6–7, 2009 in Tokyo, Hatoyama Yukio pledged 500 billion Yen of ODA in the following three years to his prime ministerial counterparts from 42 Press Releases, International Press Division, Ministry of Foreign Affairs of Japan, April 28, 2008, June 15, 2009 and April 16, 2010. 43 Interview with the Deputy Director, First Southeast Asia Division, MOFA. 44 Ministry of Foreign Affairs of Japan, “Japan–Mekong Region Partnership Program,” http://www.mofa.go.jp/region/asia-paci/mekong/goal.pdf, accessed March 18, 2010. 45 Ministry of Foreign Affairs of Japan, “Mekong-Japan Action Plan 63,” http://www. mofa.go.jp/region/asia-paci/mekong/summit0911/action.html, accessed March 18, 2010.

Delayed but Proactive Response

115

the five Mekong countries, promulgated a “Green Mekong Initiative” to address water resource management, and announced that a Mekong–Japan Summit will be held in Tokyo once every three years, with meetings of foreign and economic ministers and senior officers to be held regularly.46 At the Japan–Mekong Summit in April 2012, Japan pledged 600 billion Yen (US$7.4 billion) in aid over three years to help with building infrastructure projects in the five Mekong states to enhance intra-connectivity between parts of the Mekong sub-region.47 Japan also said it would forgive US$3.7 billion of Burma’s debt as a way to support the country’s democratic and economic reforms,48 and incidentally, to reduce China’s economic influence in that country. Construction of the East–West and Southern Economic Corridors, which have drawn the attention and funding of the Japanese government, have been seen as means of rivaling the North–South Economic Corridor, which is heavily financed by China, although the ADB has made financial commitments to all three corridor projects.49 The North–South Economic Corridor contains two road-and-rail lines: one starts at Kunming, Yunnan’s capital, weaves through northeastern Burma and northwestern Laos, and south through Thailand all the way to Bangkok. The section from Kunming to Laos up till the bridge across the Mekong into Thailand has already been completed. The other also starts at Kunming but goes through Hanoi to the port of Haiphong in Vietnam. Both routes seem to reflect a development strategy of linking the Mekong countries economically to China’s southwestern provinces of Yunnan and Guangxi. China has also dredged a section of the Mekong from Simao in Yunnan to Chiang Saen in Thailand to facilitate riparian trade between Thailand and China.50 Alternatively, the East– West Economic Corridor being constructed is an all-weather road from the port of Mawlamyine on the coast of Burma, east across central Thailand to southern Laos via the Second Mekong International Bridge built by Japan in 2006, and further east to terminate at Vietnam’s port of Hai Van. Construction of the Southern 46 Ministry of Foreign Affairs of Japan, “Joint Press Conference by the Leaders of Japan and the Mekong Region Countries following the Mekong–Japan Summit Meeting,” http://www.kantei.go.jp/foreign/hatoyama/statement/200911/07mekong_e.html, accessed March 18, 2010. 47 Reuters News agency, “Japan to give Y600 billion in aid to Mekong nations over 3 years,” http://www.reuters.com/article/2012/04/21/us-japan-mekong-aid-idUSBRE83K 03420120421, accessed April 30, 2012. 48 Voice of America, “Japan Pledges $7.4 Billion in Aid to Mekong Region,” http://www.voanews.com/content/japan-pledges-74-billion-in-aid-to-mekong-region148373895/180890.html, accessed April 30, 2012. 49 Descriptions of the economic corridors below are given by the pamphlet, “Together Toward the Future, Mekong and Japan,” Ministry of Foreign Affairs, Tokyo, Japan, 2009. 50 Christian Talliard, “Corridor Linkages in the Greater Mekong Subregion: New Implications for Peninsula and Regional Powers,” in Guy Faure, ed., New Dynamics between China and Japan in Asia: How to Build the Future from the Past? (Singapore: World Scientific, 2010), 209–10.

116

Contentious Integration

Economic Corridor, a highway linking Bangkok, Phnom Penh and Ho Chi Minh City, has hardly begun. Although the coming into force of the China–ASEAN Free-Trade Agreement on January 1, 2010 and the consequent scrapping of tariffs on 90 percent of bilaterally traded commodities will have the effect of binding ASEAN closer to China economically, the grid of economic corridors may still be seen as means of enmeshing the economies of mainland Southeast Asia to all of the more vibrant Northeast Asian economies, including Japan and South Korea, to create an integrated regional East Asian economic system or community. Japan’s ODA to the Mekong countries is mostly funding for the construction of hard infrastructure, but it also involves the transfer of clean, green and efficient technology that generates electricity through solar and wind power, and gift of water purification devices, since environmental conservation is high on the Japanese agenda.51 By providing more energy-saving electrical devices, Japan hopes that Laos and Cambodia will stop constructing more hydroelectric dams on tributaries of the Mekong running through their territories that might pollute or silt the river. Although Japan’s Foreign Direct Investment (FDI) in ASEAN as a whole far exceeds that of China’s, the reverse is true with Laos, Cambodia, Vietnam and Myanmar, where much of Chinese grants and low-interest loans have gone into the construction of public buildings, utilities, and transport infrastructure, and the rate of FDI increases from China to all ASEAN countries have grown exponentially in recent years.52 In 2009, while Japan’s FDI in Laos, Cambodia, Vietnam and Myanmar was US$206 billion, China’s FDI in these countries reached US$384 billion.53 There are now more tourists from China in Southeast Asia than those from Japan. Myanmar, Laos, Cambodia and Vietnam are too strongly bonded to China economically for Japan’s presence to count for much, since agricultural products are major components of their export structures, and the Japanese market is still very protectionist when it comes to the import of rice, vegetables, fruits and fisheries. However, promoting ODA, trade and investment ties with the other more industrialized ASEAN countries may lead to more intensive commerce in industrial and manufactured products and even a full-fledged ASEAN–Japan FTA in the future.54 Japan is also trying to project “soft power” in Southeast Asia, through its toy figures, Manga comics, cartoon programs and television series. Japan’s relations with ASEAN is central to regional integration, for the promotion of which the DJP government had recognized that more efforts should be made to open up the Japanese labor market to maids from Thailand, the Philippines and Indonesia, if 51 Interview with the Deputy Director, First Southeast Asia Division, MOFA. 52 Ibid. 53 Zhao Hong, “Japan and China Woo ASEAN,” eai bulletin (Singapore) 15, no. 2 (October 2013): 7. 54 Roundtable discussion with Tsunekawa, Iida, and Masuda.

Delayed but Proactive Response

117

necessary, over the protectionist objections of Japan’s Ministry of Health, Labor and Welfare, and Ministry of Agriculture, Forestry and Fisheries.55 A proposal to involve Japan and the US in coast guard patrols in the Straits of Malacca was first proposed by Japanese Prime Minister Obuchi Keizo in the late 1990s and resurrected by the first Abe Administration, but rejected by the littoral states of Malaysia and Indonesia.56 Malaysia and Indonesia have large Muslim majorities who are not altogether warm towards involvement of external nonMuslim countries in what they consider to be their maritime territories. Otherwise, taking part in coast guard exercises with Southeast Asian nations to train for operations against piracy and smuggling is good diplomacy for Japan. Nonetheless, community building in East Asia cannot be fully realized unless and until civil wars and separatist conflicts in Southeast Asia are addressed to the satisfaction of all parties involved. Although in the case of Aceh, Japan attempted to mediate between representatives of the Indonesian government and the separatist Garanakan Aceh Merdeka (GAM) by holding an international conference in Tokyo, and subsequently dispatched 1,000 JSDF soldiers to take part in relief efforts in the aftermath of the 2004 tsunami, Japan did not involve itself in peace-monitoring after a peace accord brokered by the EU and ASEAN was reached between GAM and Jakarta.57 In 2004, Japan joined the International Monitoring Team (IMT) along with Malaysia, Brunei and Libya, which has been involved in peace negotiations between the government of the Philippines and the separatist Mindanao Islamic Liberation Front (MILF). Currently, only Malaysia and Brunei provide troops to the IMT peace monitors, yet both Manila and the MILF see Japan, being neither a Christian nor Muslim country, as a neutral broker, and welcome its involvement on the ground. A way for Japan to demonstrate a new and more autonomous security posture would be to send JSDF personnel for peace-monitoring to Mindanao, outside the framework of the UN or the US–Japan Security Alliance.58 However, special domestic legislation will have to be enacted to provide a legal basis for the JSDF to join the IMT peace-monitoring effort, even with a peace agreement in place, since existing legislation only allows for the JSDF to be dispatched for UN peace-

55 Remarks by Funabashi Yoichi, Editor-in-Chief, Asahi Shimbun, at the Public Symposium “Building an East Asian Community,” hosted by the Japan Institute of International Affairs (JIIA), with the support of the Ministry of Foreign Affairs, Japan (MOFA), on March 17, 2010, at Conventional Center Goshiki, Grand Prince Hotel, Akasaka, Tokyo. (All subsequent references to “Symposium” denote this symposium.) 56 Interview with Ogawa Shinichi, Visiting Professor, Ritsumeikan Asia Pacific University, College of Asia Pacific Studies, Beppu, Japan, on March 5, 2010. 57 Lam Peng Er, Fellow, National Institute of Defense Studies (NIDS), Ministry of Defense, Tokyo, Japan, Seminar, “The Role of the Japanese Self Defense Forces in Southeast Asia: Contributing to International Peace Cooperation?” March 10, 2010. 58 Ibid.

118

Contentious Integration

keeping or specifically for humanitarian and rescue missions.59 Such legislation may not come quick or easy, since politicians are aware that the Japanese public is not likely to accept more than a few casualties from overseas missions by the SDF.60 Yet, if this can be done, it would greatly enhance the diplomatic and strategic profiles of Japanese involvement and cooperation in Southeast Asian affairs. Japan–China Relations: Implication for Regional Integration Regional forums or multilateral arrangements of national governments in Asia and the Pacific serve as mechanisms to engage China and observe its behavior, particularly for Japan. Indeed, some of the earliest trans-Pacific regional groupings, such as the Asia-Pacific Economic Cooperation (APEC) and the ASEAN Regional Forum (ARF), were actively championed by Japan from the late 1980s to the mid-1990s, until Japan’s own protectionist sentiments and China’s foot-dragging on military transparency retarded the effective functioning of these respective arrangements. China has increasingly influential and involved roles in the newer regional arrangements such as the Shanghai Cooperation Organization, the ASEAN + 3 or the Six-Party Talks, but even so, it is still far from dominating these Asia-centered forums. While Japan may be said to be reacting to China’s mounting position in these groupings over the past decade, China is, in a sense, a reactive state toward the United States. Unless the US displays hostile intentions toward China, China is likely to prefer the existing open form of regionalism, given its much internationalized global trade and investment structure, rather than to try putting together a Sino-centric regional bloc that the US might find potentially alienating.61 The Japanese nation had found it very hard to accept China’s rise since the 1990s or that it might challenge Japan’s diplomatic and economic influence in the neighboring countries of Asia and the Pacific. However, most Japanese now believe that the continuing rise of China is inevitable.62 One Japanese academic even opined that the Pacific may in the coming decades be divided in the middle between Chinese and American spheres of influence, with Japan having to decide whose leadership it wants or has to follow.63 A typical Chinese scholar will point out that China has many domestic issues to deal with to have the desire or capability to 59 The enabling legislation for the former is the International Peace Cooperation Law (1992), also known as the Peacekeeping Operations (PKO) Law, and a prime example of the latter is the Special Measures Law on Humanitarian and Reconstruction Assistance (2003) permitting the deployment of SDF ground forces to Iraq for reconstruction duties. 60 Interview with Lam. 61 Interview with Ogawa. 62 Interview with Takagi. 63 Interview with Anno Tadashi, Associate Professor of Political Science, Sophia University, on March 11, 2010.

Delayed but Proactive Response

119

throw its weight around in the world or upset relations with an important economic partner like Japan.64 Still, the opinion is reflective of feelings of insecurity held by a rising number of Japanese toward an increasingly powerful yet enduringly unfathomable and thus potentially threatening neighbor.65 Japan was greatly alarmed by China’s demands for apologies and compensation, and temporary halting of its rare earth export to Japan following the collision of a Chinese fishing boat with two Japanese Coast Guard cutters in September 2010 near their mutually disputed Senkaku/Diaoyu islands in the East China Sea,66 and consequently reinforced its maritime patrols in the vicinity.67 However, Japan failed to rally states in the region to criticize China’s behavior. On the part of the Chinese, they found it unacceptable that the boat captain was apprehended, detained and charged by the authorities under Japanese law when, before this incident, Japanese authorities had quickly released those caught without fanfare.68 Resource acquisition is of course very much the basis of China’s forum diplomacies. A mid-level bureaucrat at Japan’s Ministry of Foreign Affairs (MOFA) believes that, although it is understandable for China to acquire as much energy resources as it can, it should subscribe to international norms in refraining from trading with or investing in countries that fragrantly violate the rights of their own citizens.69 This may reflect Japan’s desire to have China follow the US lead in managing world affairs, just as Japan itself do in facilitating the attainment of universal democratic values through cooperation in trade and investment,70 and making human security, which stresses the security of persons from fear and needs rather than that of states or governments, as a guiding principle in its large foreign aid program.71 However, even if the Chinese authorities do adopt Western moral standards in evaluating commercial relations with foreign countries, given 64 Remarks by Professor Wang Yizhou, Associate Dean, School of International Studies, Peking University, at the Symposium. 65 Linus Hagstrom and Bjorn Jerden, “Understanding Fluctuations in Sino-Japanese Relations: To Politicize or to De-Politicize the China Issue in the Japanese Diet,” Pacific Affairs 83, no. 4(2010), 719–39. 66 Hakamada Shigeki, “Meltdown of Japan,” GFJ (Global Forum of Japan) Commentary, December 31, 2010, http://www.gfj.jp/eng/commentary/101231.pdf, accessed January 31, 2011; and Okada Shoichi, “Is DPJDPJ Capable of Ruling,” GFJ (Global Forum of Japan) Commentary, October 31, 2010, http://www.gfj.jp/eng/commentary/101031.pdf, accessed January 31, 2011. 67 Yoichi Kato, “China’s Naval Expansion in the Western Pacific,” Global Asia 5, no. 4(2010), 18–21. 68 The author thanks an anonymous reviewer for pointing this out. 69 Interview with the Deputy Director, Central Asia and Caucasus Division, MOFA. 70 Ministry of Foreign Affairs (MOFA), Diplomatic Bluebook 2007, http://www. mofa.go.jp/policy/other/bluebook/2007/index.html, accessed April 30, 2012. 71 David Arase, “Non-Traditional Security in China-ASEAN Cooperation: The Institutionalization of Regional Security Cooperation and the Evolution of East Asian Regionalism,” Asian Survey 50, no. 4(2010): 830.

120

Contentious Integration

the resources’ value to China, actual practices may differ, and the Japanese are culturally sensitive enough not to press the point.72 At least since June 2004, when Japan’s Ministry of Foreign Affairs prepared a set of “Issue Papers” calling for functional cooperation, introduction of an “open, transparent and inclusive” regional structure such as an East Asian Summit (EAS), and creation of a sense of community,73 there has been broad agreement within Japan and both the LDP and DPJ favoring an institutional framework based on ASEAN plus China, Japan and Korea, or ASEAN + 3 (APT), and including Australia, New Zealand, and India, with the US participating in some future capacity.74 As the DPJ’s first Prime Minister, Hatoyama had desired to orientate his country’s foreign policy posture more toward its Asian neighbors than previous Japanese administrations, chiefly by proposing a vision for an East Asian Community (EAC). He saw good relations between Japan and China as the basis to transform the East China Sea into “a lake of fraternity,” so that such a community can grow, as the European Coal and Steel Community did in the process of turning into the European Union (EU), on the basis of reconciliation and friendship between France and Germany.75 However, Hatoyama did not have time to provide clarification on the constitutive membership of his proposed EAC before he resigned as prime minister less than nine months into his term of office. In any case, as long as Japan and China cannot overcome their distrust of each other, they will have to allow ASEAN to “drive” regional East Asian integration through its preferred informal, consensual and incremental means, but ASEAN may not be a powerful or effective enough driver of such integration processes. For all the talk of rivalry, an often overlooked aspect of Sino-Japanese relations was their ongoing interactions or proposed collaboration on joint projects. The value of Sino-Japanese trade has already exceeded either Sino-American or Japanese–American trade. Also, since 2000, Japan has counted on a surging Chinese economy to absorb its exports, which saw increases in Japanese trade volume with the rest of Asia practically accounted for entirely by China between 2000 and 2010.76 Japan and China actually arrived at an agreement in June 2008 to conduct joint exploration of the Chunxiao/Shirakaba gas field in a disputed stretch of the East China Sea, although that has yet come into practice due to the unsettled conditions surrounding the claim itself. Kan Naoto, Hatoyama’s successor as Prime Minister, even while stressing the need to build a trusting relationship with the US, had pointed out the necessity of placing particular importance on 72 Interview with Ogawa. 73 Ministry of Foreign Affairs of Japan, “Issue Papers Prepared by the Government of Japan,” June 25, 2004, http://www.mofa.go.jp/region/asia-paci/issue.pdf, accessed April 30, 2012. 74 Remarks by Ro-Myung Gong, Former Foreign Minister of South Korea, at the Symposium. 75 Remarks by Hatoyama Yukio, then Prime Minister of Japan, at the Symposium. 76 International Monetary Fund, Direction of Trade Statistics.

Delayed but Proactive Response

121

China.77 Indeed, any emerging East Asian Community or the rise of an Asian Century must have as its basis cordial if not friendly relations between China and Japan. However, Sino-Japanese relations have both cooperative and competitive elements, demonstrated most clearly in Japan’s attempts to match up with China’s more consolidated influence in Asian–Western Pacific regional arrangements formed since the mid-1990s. As such, it bears watching how these two major Asian powers can work with each other to maintain security and create prosperity for themselves and countries in their neighborhood. This task has not been made easier by critical Japanese perceptions of military upgrading or assertiveness on the part of China’s burgeoning People’s Liberation Army (PLA), and acute Chinese sensitivities toward any pronouncement or action by Japan’s authorities on the disputed Diaoyu/Senkaku islands and adjacent maritime territories in the East China Sea claimed by China. Japan–United States Relations: Implication for Regional Integration For Japan, the US market is still of great importance, especially since Japan has been put on the defensive in the contest with China for economic influence in Asia and Asia-centered regional forums. At the same time, the US–Japan alliance, widely considered by the US to be the core of its international spokes-and-hub security system and bedrock of stability in the East Asia–Western Pacific region, is valued by many Japanese as a hedge to manage the military rise of China.78 On the economic side, a Japan–US Free-Trade Agreement (FTA) is still in the stage of preliminary discussion, if and when talks take place. Even if such an FTA should come about, it would have little impact on trade in industrial products, since there is hardly any tariff left to be reduced or eliminated on such goods by both sides, although the US still imposes a 20 percent tariff on imported fourwheel drives from Japan.79 Hence such an FTA would have more of diplomatic rather than economic significance. Most Japanese analysts feel that Japan cannot adopt a security or military posture independent from that of the US, because Japan does not have nuclear weapons, and the maximum range of its anti-ship or land-based missiles is only around 300 kilometers, too short-range to pose as a threat or deterrence to either China or North Korea, the coastlines of which they cannot reach.80 To the extent the Japan does not have “first strike capability” against China or North Korea, they say, Japan’s TMD system is solely for the defense of the Japanese homeland, 77 Japan Times, June 5, 2010. 78 Remarks by Shiraishi Takashi, Executive Member, Council for Science and Technology Policy, Cabinet Office, and President, Institute of Development Economies— JETRO, at the Symposium. 79 Roundtable discussion with Tsunekawa, Iida, and Masuda. 80 Ibid.

122

Contentious Integration

which makes joint research and development of the shield permissible under the Japanese Constitution.81 Since Article 9 of the Japanese Constitution forbids Japan from possessing the right of collective self-defense, barring any changes to this provision, the Japan–US Security Alliance must remain unequal, for while US military forces are based in Japan to defend it from external attacks, Japan is not constitutionally permitted to render any frontline military assistance to the US which might involve an active combat role for the JSDF. However, due to the very different cultural orientation of the Japanese from the West, and the legacy of the Pacific War, the US–Japan alliance is perceived by some Japanese as a purely interest-based security arrangement.82 In the unlikely event of incoming missile strikes, Japanese have expressed worries that the US may wait too long before deciding whether to risk American cities in striking back against the enemy.83 Although as opposition leader in the Diet’s House of Representatives, Kan had once asked all US forces to leave Okinawa,84 Japanese politicians will find it very difficult to adopt security positions over the objections of the American government. Still, with the nonrenewal of the Diet’s mandate to provide maritime logistical support to US forces operating in the Indian Ocean, the unpopularity of the US military in Okinawa amongst the local populace due to incidents of rape by soldiers and anti-base demonstrations in all likely destinations for the relocation of the Futenma base for US marines, and the rising relative cost of providing security to Japan while America’s share of the world economy slides, the US military has been beefing up its arsenal and manpower at Guam, midway between Taiwan and Hawaii, should some of its bases on Japan have to be closed. Alongside economic multilateralization in the form of APEC, security multilateralization was promoted by the Kaifu, Miyazawa and Hosokawa governments of Japan from August 1989 to April 1994 just around and after the end of the Cold War, particularly with the establishment of the ARF. However, after the 1995 Nye Report which recommended the retention of at least 100,000 US troops in the Western Pacific was accepted by the Clinton administration, and the PLA conducted a missile exercise in the Taiwan Straits in early 1996 to influence the presidential vote in Taiwan, discussions to revise the guidelines for the US–Japan alliance began in 1996, and security bilateralism once again became the primary focus of the governmental cabinet and foreign ministry of Japan.85 Meanwhile, China’s enunciation of a multilateral and multi-dimensional “New Security Concept” in 1996–1997 was to set the stage for its active involvement in Asian regionalism. Against the evolution of a security complex in Eurasia between China and Russia with the SCO, territorial disputes with both countries, China’s 81 Interview with Ogawa. 82 Interviews with Ogawa; Tsunekawa; and Inoguchi. 83 Interview with Tsunekawa. 84 Japan Times, November 2, 2003. 85 Interview with Anno.

Delayed but Proactive Response

123

expanding maritime military might, and extensive pursuit of its economic interests in, and effect on the multi-polarization of, the region and the world, Japan realized that it would be to its own interest to team up with the US in promoting liberal democratic values in Asia-centered regional forums and taking on a greater share of joint defense burdens in geographic areas surrounding Japan. By the time Japan succeeded in bringing aboard the East Asian Summit (EAS) fellow democracies Australia, New Zealand and India at its inaugural meeting in Malaysia’s Kuala Lumpur in 2005, and keeping the door open to future US membership by having the Japanese proposal for an “open, inclusive, transparent, and externally-oriented” form of regionalism included in the EAS founding declaration, Tokyo had very obviously shifted from a search for Asian values and traditions as the basis for community building to a foreign policy emphasizing universal values.86 The joint statement that came out of the ministerial meeting of the US–Japan Security Consultative Committee in February 2005 agreed on common security objectives of promoting “fundamental values such as basic human rights, democracy, and the rule of law in the international community.”87 This so-called “value alliance” (kachi domei) was reaffirmed in the joint statement concluding the final visit of Koizumi as prime minister to Washington in the summer of 2006. Since then, “value-oriented diplomacy” has quickly become a new pillar of Japanese foreign policy. Along with the EAS came Japan’s “Arc of Freedom and Prosperity” concept, enunciated by Aso Taro as Koizumi’s Foreign Minister, to support both old and budding democracies lining the fringes of the Eurasian continent from northern Europe to northeastern Asia outside Russia and China, through trade, investments, aid and the promotion of democracy.88 Abe, on succeeding Koizumi as prime minister, went one step further in attempting to craft universal values onto Japan’s foreign and security policy, by articulating a vision of increased cooperation among the four large Asia-Pacific democracies— Australia, India, Japan, and the United States.89 With the exception of Hatoyama, this idea was pursued to various degrees by succeeding Japanese prime ministers, particularly in the realm of security cooperation, an issue which will be explored more thoroughly in Chapter 8. Suffice to say that, by emphasizing the values that China rejects, Japan hopes to create a values-based community that will allow it to assert a leadership role in regionalism, failing which it can at least make sure 86 Yul Sohn, “Japan’s New Regionalism: China Shock, Values, and the East Asian Community,” Asian Survey 50, no. 3(2010): 514–16. 87 US–Japan Security Consultative Committee, “Joint Statement,” February 19, 2005, http://www.mofa.go.jp/region/n-america/us/security/scc/joint0502.html, accessed April 30, 2012. 88 Ministry of Foreign Affairs of Japan, Diplomatic Bluebook 2007, http://www. mofa.go.jp/policy/other/bluebook/2007/index.html, accessed April 30, 2012. 89 Shinzo Abe, Towards a Beautiful Country: My Vision for Japan (Tokyo: Vertical, 2007).

124

Contentious Integration

that, with the presence of other friends and allies of the US beside itself, China will not gain a dominant position in a regional arrangement like the EAS or the Asian-Pacific region as a whole. Japan’s Position or “Mission” in Asia and the World If there was a “mission” pursued by Japan since it was usually acknowledged to have attained developed nation status on hosting the Tokyo Olympic Games in 1964, it would have been to raise the level of industrialization and standard of living of people in Asia,90 particularly to atone for what it has done to the countries which it had attacked and occupied during the Pacific War from 1941 to 1945. By the late 1980s to early 1990s, Japan’s economic and diplomatic influence had become preeminent enough to cause concern in some quarters of the American and Chinese elites who felt that Japan was out to dominate the region. However, between the collapse of Japan’s 100 billion Yen Asian Monetary Fund initiative in late 1997 to help Asian countries in financial crises and the abandonment of its efforts to establish diplomatic relations with North Korea in late 2002 when the latter announced its nuclear bomb-making intentions, both due to quiet US objections and lack of support from China, Japan practically ceded leadership of forums and initiatives for regional integration in Asia and the Western Pacific to China. Boosted by the growing strength of its economy and confidence of its leaders, China stepped up very quickly to the podium. As such, the rise of China and its heightening, extending and deepening roles and influence in the regions of Northeast Asia, Southeast Asia and Central Asia make many Japanese feel that their country has lost its “mission.”91 This need not be so, since countries in these regions value Japan as a significant investor and balancer against domination by China. However, Japan must be perceived by Japanese themselves and other Asians as being embedded in Asia, and not standing apart from it, or acting as a surrogate for US priorities, interests or values. In the middle of the second decade of the present century, the centrality of China in Asian and world affairs is such that any attempt to isolate or contain it would be impractical, so the issue for Japan is how to relate in its own best interest to China. For participation in regional forums, where China already has a strong presence, Japan adheres to three fundamental goals: transparency, inclusiveness and equality, and insists that they should not be race-based.92 Japan would prefer a functional approach to be the guiding principle in the organization of regional arrangements, meaning that its involvement in the types of forums and levels of 90 Roundtable discussion with Tsunekawa, Iida, and Masuda. 91 Interview with Masuda Masayuki, Research Fellow, National Institute of Defense Studies (NIDS), Ministry of Defense, Tokyo, Japan, on March 3, 2010. 92 Remarks by Nogami Yoshiji, President of the Japan Institute of International Affairs, at the Symposium.

Delayed but Proactive Response

125

cooperation will differ depending on particular issues and functions.93 For example, Japan believes that while the Chiang Mai Initiative currency swaps may be most effectively dealt with by APT, Closer Economic Partnership Agreements (CEPAs) may be more meaningful if conducted within the rubric of the East Asian Summit, given the strong economic ties that Australia has with Japan, or China.94 Japan also wishes to bring India into any East Asian grouping, as India is vital to maritime security in the Indian Ocean, through which most of Japan’s oil supply from the Middle East transverse, and India’s presence will also add weight to the Asian integrative process.95 For any vehicle of regional integration including Japan, China and ASEAN, Japan would insist on retaining ASEAN in the “driver’s seat” (although this does not mean that ASEAN would automatically be the driver,) so that no country can dominate this regional initiative unilaterally.96 In so doing, and by bringing fellow democracies such as Australia, New Zealand and India into regional arrangements, Japan hopes to offset China’s roles and influence in these groupings discreetly, without incurring unfavorable reaction from China’s leaders or the nationalistic wrath of the Chinese public.97 When Singapore’s former Prime Minister Lee Kuan Yew said in Washington DC in October 2009 that the US should remain in Southeast Asia to counterbalance China, he was blasted for days by China’s netizens. Although it would not be to Japan’s interest to allow the US to set the context of its interactions with China and Asia-centered multilateral forums, there is no question that, even with the reduction of American bases and troops on Japanese soil, Japan would adhere to the US–Japan alliance. There is no country with which Japan shares similar political values and on which it can rely in terms of security as much as the US,98 and the US will always remain amongst the top three trading and investment partners of Japan.99 The trump card of Japanese diplomacy is that Japan is considered militarily non-threatening to countries or groups of countries, because it is not territorially contiguous with any country; its trade and investment posture is extremely globalized, which makes it deeply committed to maintaining world peace; it relies heavily on ODA, technological transfers and personnel training as economic 93 Remarks by Nogami and by Funabashi, at the Symposium. 94 Ibid. Meetings of the East Asian Summit include the leaders of the ASEAN + 3 and Australia, New Zealand and India, with those of Russia and the United States invited as observers from 2005 to 2011. Russia and the US became full members of the ASEAN + 3 from 2011 onwards. 95 Remarks by Shiraishi, at the Symposium. 96 Remarks by Nogami Yoshiji, at the Symposium. 97 Remarks by Funabashi Yoichi, at the Symposium. 98 Interview with Leszek Buszynski, Professor, Graduate School of International Relations, IUJ, on April 16, 2010; and remarks by T.J. Pempel, Professor, University of California, Berkeley, at the Symposium. 99 Interview with Lim Hua Seng, Professor, Graduate School of Asia-Pacific Studies, Institute of Asia-Pacific Studies, Waseda University, Tokyo, Japan, on April 19, 2010.

126

Contentious Integration

arms of its foreign policy; it has no independent policy in terms of traditional security; and it upholds liberal democracy and the rule of law, where in marketing these “universal” values, Japan tends to be mindful of the reaction of China and some of the Central and Southeast Asian countries which have different political systems. If Japan plays its cards right, even if it may not be able to trump rising China’s roles and influence in regional groupings, it will be able to assert its own interests and at the same time constrain Chinese behavior, while adopting a more active and commensurate security posture with the US and its other allies and friends, in regions of the world that are important diplomatically, economically and strategically for Japan.

Chapter 7

“One-Upmanship” Diplomacy in the Pacific In the first years of the twenty-first century, the Pacific Ocean is turning out to be an arena where the vision of a resurgent Japan as a “normal nation,” promoting nationalism domestically and extending its influence abroad, meet up with a strategy of peaceful rising (so far) and projection of “soft” (diplomatic, ideological and cultural sources of) power by the People’s Republic of China, fortified by an expanding economy. Japan is returning to the region in vigor since its defeat in World War II, and China is staking a claim to a share of the influence in, and resources from, the Pacific islands. As the worldwide quest for raw material and food supplies by both countries gets more pressing, the vast Pacific becomes, in a sense, a treasure trove, into which the hands of Japan and China can be expected to dip even further. Japan and China are clearly headed in the direction of full-scale competition for diplomatic influence over the island countries of the Pacific Ocean, fishery and mineral resources from these states, and even some form of strategic presence around them. As such, the main target of China’s “multidimensional” diplomacy in the Pacific is, and will very much be, Japan, and vice-versa, with Taiwan’s involvement in the region being their secondary consideration. Pacific Island Countries (PICs) in Regional Forums The point of entry for the involvement of both China and Japan in the region is a political association of Pacific countries known as the South Pacific Forum (SPF) when it was formed in 1971, but which in 2000, changed its name to the Pacific Islands Forum (PIF), to reflect more accurately the geographical position of its members, some of which are located north of the equator. The PIF consists today of 16 member states located in the Pacific Ocean. They are: Australia, Cook Islands, Federated States of Micronesia (FSM), Fiji, Kiribati, Marshall Islands, Nauru, New Zealand, Niue, Palau, Papua New Guinea (PNG), Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. Apart from Australia and New Zealand, the rest are sometimes referred to collectively as Pacific island countries, or PICs. New Caledonia and French Polynesia, as overseas departments of France, had observer status, until they became associate members of the Forum in 2006. Since natural resources, commercial fishing, starchy food, and tourism are the main economic activities and revenue earners of the PICs, the Forum presents a channel for its membership of small island countries to seek trade, aid and other means for realizing security and development. The Forum also presents potential or current trading partners, investors, aid donors or regional powers with affiliation

128

Contentious Integration

to legitimize their ostensibly disinterested roles in the Pacific. This medium is attracting keen and competing external attention, not least from the two largest powers in Asia that have yet to develop a comfortable relationship with one another. It was first exploited by the Japanese for their purposes, and then later by the Chinese for theirs. With an annual average per capita Gross Domestic Product (GDP) of around US$1,500 in 2012, one common characteristic of the small PICs is their heavy reliance on foreign aid money to finance development programs. Hence, the Forum would usually include organizing meetings with international aid agencies and potential foreign government donors to arrange for monetary and technical assistance to the PICs, where PIF members would hold talks with their dialogue partners at the vice-ministerial level at the end of each annual Forum meeting. The PIF now has 13 dialogue partners, the more economically significant of which include the United States (US), United Kingdom, European Union, China, Japan and South Korea.1 The critical issue of foreign aid or developmental assistance and the institution of dialogue partnerships for the Forum provided a fertile arena for China and Japan to pursue their aid or monetary diplomacy in the Pacific region, that is, until first Japan, and then China, developed more comfortable channels to deal with these PICs directly, in structuring bilateral frameworks of one-to-many relations, without the presence of the stronger regional countries like Australia or New Zealand. Japan and PICs Relations The Pacific Ocean region is obviously of front-yard importance to Japan. Since 1989, Japan has been attending the post-Forum dialogues. In addition, the chairperson of the PIF is invited to Japan each year as a guest of its Ministry of Foreign Affairs for an exchange of views and opinions. In 1997, Japan initiated the first Japan–South Pacific Forum Summit Meeting (later renamed the Japan– Pacific Leaders’ Meeting, or PALM), to be held once every three years at prime ministerial level, to further cooperation with and offer assistance to the PICs, particularly in the areas of fisheries conservation, development of information technology and internet communications for distance-learning, eradication of infectious tropical diseases, providing technical assistance and building school infrastructure. Japan has since held summit meetings with PIF countries in 2000, 2003, 2006, 2009 and 2012, all hosted in Japan. Between 1987 and 1997, Japan gave US$150–200 million annually in Official Development Assistance (ODA) 1 Government of Niue: Forum Task Force Update from the Desk of the Forum Co-Ordinator, http://209.85.175.104/search?q=cache:Y9dPjANz9g4J:39pifniue2008.gov. nu/update.pdf+PIF+dialogue+partners&hl=zh-TW&ct=clnk&cd=31, accessed September 4, 2008.

“One-Upmanship” Diplomacy in the Pacifi

129

to Pacific island countries.2 From 1998 to 2005, due to its persisting economic difficulties, the average yearly amount was reduced to below US$105 million.3 Still, during this period, Japan was the second largest donor country to the region, after Australia. In 2000, Tokyo established a “Good Will Trust Fund” with US$10 million to finance development projects for Forum countries in the “newer” areas of the environment, energy and tourism.4 China and PICs Relations If Japan had counted on its “aid diplomacy” to buy itself influence in the Pacific, it soon found that it was not the only significant player in this game. Two decades of steady and even impressive economic growth since “reform and opening” in the late 1970s has provided the financial muscle and diplomatic influence for China to be more active in the Pacific Ocean region. In 2000, apparently taking a leaf out of Japan’s book, China established a “China–Pacific Islands Forum Cooperation Fund” to encourage bilateral economic cooperation. In 2002, the Fund offered the PIF US$1 million to establish a Trade Office in Beijing. Moreover, China began offering capital to finance construction projects in PICs, which was, in a sense, an announcement of its arrival in the region. China built the sports stadium in Fiji for the 2003 South Pacific Games, paid for the building of government offices and a swimming complex in Samoa, and the parliamentary building of Vanuatu, donated a ferry to Kiribati and cargo boats to Micronesia, provided engineers to pave roads and sent agricultural specialists to help develop the economies of the PICs.5 China is now the only foreign country operating its own television stations in Samoa, Tonga and Vanuatu, broadcasting the official China Central Television (CCTV) Channel 9, in English no less.6 While before 2013, Japan had maintained only one embassy throughout the Pacific islands, in Fiji, China has established embassies in Vanuatu, Tonga, Samoa, Papua New Guinea, Micronesia and Fiji. Uncomfortable with sharing the podium with Taiwan at the post-Forum dialogues as a fellow dialogue partner of the PIF, since China does not recognize 2 Jiji Press English News Service, “Japan to Increase ODA to S. Pacific Nations,” Tokyo (April 21, 2000), 1. 3 Ibid. Figure calculated on the basis of data given in note 6. 4 Department of Foreign Affairs and Trade, Australian Government, “ThirtyFirst Pacific Islands Forum,” http://www.dfat.gov.au/geo/spacific/regional_orgs/pif31_com munique.html, accessed April 9, 2007. 5 Elizabeth Feizkhah, “Dateline—Strategy: Making Friends,” Asiaweek, Hong Kong (June 15, 2001), 1. 6 Ron Crocombe, “The Fourth Wave: Chinese in the Pacific Islands in the TwentyFirst Century,” CSCSD (Center for the Study of the Chinese Southern Diaspora) Occasional Paper Number 1 (May 2007), 30.

130

Contentious Integration

Taiwan as a sovereign entity, Beijing initiated its own forum in April 2006 with the eight PICs with which it has diplomatic recognition and which support its “One China Policy”—Cook Islands, Fiji, Micronesia, Niue, Papua New Guinea, Samoa, Tonga and Vanuatu—and whose leaders have been invited to Beijing at one time or another. Known as the “China–Pacific Island Countries Economic Development and Cooperation Forum,” or CPIC Forum for short, it is to be held alternately in China and a Pacific Island Country at the heads-of-government level. The CPIC Forum is the only regional forum for cooperation and economic development initiated by China that includes itself as a continental state with all other participants being island countries governments. This lopsidedness is what gives China much influence in this collective body. The inaugural CPIC Forum was held in Fiji and attended by then Prime Minister of China, Wen Jiabao. Under an “Action Plan of Economic Development and Cooperation,” China promised to provide a wide-ranging package of economic assistance to the eight Pacific island countries, as Wen pointedly noted, without any political conditions attached.7 To these countries China announced the extension of about US$375 million of preferential loans for four years from 2006 to boost cooperation in natural resources development, agriculture, fisheries construction and tourism.8 Starting from July 1, 2006, China granted zero tariff treatment to 278 tariff lines of products that originated from Samoa and Vanuatu, canceled 170 million Renminbi (RMB) mature debts for the two countries, and also reached agreements with Fiji and PNG on a moratorium on interest-free loans due at the end of 2005.9 Monetary assistance aside, China also agreed at the CPIC Forum to provide free anti-malaria medicine worth 1 million RMB to PNG and other affected countries over the following three years. China gave Approved Destination Status for these eight countries to would-be Chinese tourists.10 It also promised to take in 2,000 government officials and technical staff from these countries to be trained in China over the next three years.11 China would also establish a specific fund to encourage Chinese business investments in the region. Through this whole series of economic measures and sudden strong showing at a Pacific venue, China is obviously aiming to increase her diplomatic standing 7 China Daily, “Aid Package Announced for South Pacific states,” Beijing (April 5, 2006), 1. 8 Ibid. 9 People’s Republic of China, Ministry of Commerce, “Remarks by Chen Deming, Minister of Commerce at the Investment, Trade and Tourism Ministerial Conference of the China-Pacific Island Countries Economic Development and Cooperation Forum,” http://cpic forumenglish.mofcom.gov.cn/aarticle/za/200809/20080905784156.html, accessed January 24, 2009. 10 Leora Moldofsky, “China Vows Aid Package for South Pacific Allies,” Financial Times (London, UK) (April 6, 2006), 5. 11 “China Offers New Aid and Trade Help to Pacific Countries,” China Daily, http:// bbs.chinadaily.com.cn/viewthreat.php?tid=510484, accessed April 5, 2007.

“One-Upmanship” Diplomacy in the Pacifi

131

and political influence in Oceania. If there had been any doubts before, the Fiji CPIC Forum affirmed China as a major player in the region, by making it the third largest aid donor to Pacific island countries overnight. Bilateral trade volume between China and the PICs exceeded US$1.5 billion in 2007, and according to Fang Qiuchen, then Deputy Director of the Department of American and Oceanian Affairs in the PRC Foreign Ministry, reached US$4.5 billion in 2012.12 Since the inaugural 2006 CPIC Forum, Beijing has under the aegis of the China–Pacific Islands Forum Cooperation Fund dispensed an annual amount of US$400,000 to the PIF Secretariat. From 2009 onwards, China has made annual donations of US$150,000 to US$180,000 to the Pacific Regional Environment Program to tackle climate change in the Pacific island countries by assisting them in developing pilot ecological farms and small generators running on solar power, wind power, bio-gas and hydropower.13 By acting as a rising Pacific power, particularly with the establishment of the CPIC Forum, China is in a way challenging Japan’s position as the principal Asian leader and benefactor of the island countries there. China’s inaugural CPIC Forum apparently touched a raw nerve with the Japanese government, so much so that at the fourth Japan–PIF Meeting just one month later in May 2006, Japan promised to increase her ODA to PICs from a budgeted US$279 million to US$357 million,14 to match China’s contribution to the region to some extent. Japan’s Motives for Engaging the PICs Since international relations are seldom if ever founded on an altruistic basis, the PICs obviously have clear political, economic and even security values for Japan and China. Acquiring Fishery Resources Japan is one of the largest fishing nations in the world in terms of catch, and PICs have huge marine resources like tuna and bonito. The tuna industry, in particular, is a major pillar of the economies of the PICs, and as such, the PICs are of paramount importance as major exporters of fresh tuna to Japan, supplying about

12 Ilia L. Likou, “China’s Wants Trade—Not Casinos,” Samoa Observer Online, September 15, 2013, http://www.samoaobserver.ws/other/community/7025-china-wantstrade-not-casinos?format=pdf, accessed October 26, 2013. 13 Xinhua News Agency (Beijing), “China Assists Pacific Island Countries with Clean Energy Projects,” September 6, 2013, http://www.chinadaily.com.cn/bizchina/ greenchina/2013-09/06/content_16949913.htm, accessed October 26, 2013. 14 EIU View Wire, “Pacific Islands Politics: China and Japan Offer Funding,” New York, June 16, 2006.

132

Contentious Integration

one-third of Japan’s domestic market.15 Hence Japan has developed a particular interest in offering technical assistance to foster the fisheries industry in countries such as Kiribati or Samoa. Securing access for its fishing fleets to the region’s tuna stocks was the primary rationale for Japan’s “aid diplomacy” to the Pacific islands,16 which took off after 1975, “to cope with the evolution of the then new international 200-mile exclusive economic zone (EEZ) marine regime.”17 Since the EEZs of countries in the Pacific are spread over 30 million square kilometers and cover 25 percent of the Earth’s sea area,18 their enactment by PICs enclosed Japan’s most productive fishing grounds, affecting an estimated 36 percent of the total Japanese catch. Since the turn of the century, there has been increasingly a Chinese angle to Japan’s worries. Bureaucrats from Japan’s Fisheries Agency increasingly feel that they are facing a growing war for dwindling marine resources with China, arguing in 2007 that, although Japan catches 6 million tons of fish per year, the figure for China is 40 million, even if some Chinese and Taiwanese fishermen help supply the Japanese tuna market.19 Pursuing Influence in the United Nations The Pacific island states are also of diplomatic importance to Japan. Aside from Australia and New Zealand, there are 12 nations of the PIF, except for the Cook Islands and Niue, which while small, are full members of the United Nations (UN) that Japan counts on as it pursues a permanent seat in the UN. Japan has actively campaigned for a permanent seat at the UN Security Council in 1995, at the fiftieth anniversary of the establishment of the world body, and again in 2005, at its sixtieth anniversary, but has met with firm opposition from China, which had continued to accuse the Japanese of being unrepentant about their actions in the Pacific War.

15 Bruce M. Koppel and Robert M. Orr, Jr. Japan’s Foreign Aid: Power and Policy in a New Era (San Francisco: Westview Press, 1993): 232. 16 Sandra Tarte, “Japan’s ODA in the Pacific Island States,” in David Arase, ed., Japan’s Foreign Aid: Old Continuities and New Directions (New York: Routledge): 237–8. 17 Koppel and Orr, 232. 18 Steve Herman, “Japan Struggles to Maintain Pacific Influence as China’s Might Grows,” http://www.bloggernews.net/2006/05/japan-struggles-to-maintain-pacific.html, accessed March 5, 2007. 19 David McNeill, “Japan and the Whaling Ban: Siege Mentality Fuels ‘Sustainability’ Claims,” Japan Focus, February 13, 2007, http://japanfocus.org/products/details/2353, accessed February 19, 2008.

“One-Upmanship” Diplomacy in the Pacifi

133

China’s Motives for Engaging the PICs Since the start of this century, promoting China’s own international status through peaceful means as a “responsible power” has been an important foreign policy aim for the Chinese leadership.20 China considers itself a developing country, and as such a friend and fellow of developing countries in Asia, Africa, the Middle East, Latin America and the Pacific. Although the Chinese government has no doubt considered it good diplomacy and a form of great power responsibility to assist PICs in their economic development, it also has its own clear security and economic agenda in engaging the region. Competing with Taiwan to Secure Diplomatic Recognition Wherever and whenever it could, China has sought to diminish if not eliminate altogether Taiwan’s diplomatic profile, and the Pacific islands region is no exception. The rivalry between China and Taiwan saw some Pacific island nations change diplomatic allegiance between Beijing and Taipei in return for increased aid, until the election in 2008 of Ma Ying-jeou as President of Taiwan, who was friendly towards China, cooled the diplomatic one-upmanship. Taiwan’s aid flows to the Pacific are seen by some Japanese as encouraging fiscal irresponsibility, if not outright corruption, on the part of island governments. However, its effects on Japan are at least minor. The same cannot be said for aid flows from China, which are already contributing to about one-third of the region’s funding,21 and only becoming increasingly more diverse, substantial and tangible. Given the rising appetite of the Chinese for fish, timber, tropical fruits, and most importantly, minerals, commercial advantage will be a major reason pulling PICs closer to China, and if this proves insufficient, Beijing has shown that it is also prepared to whip out its checkbook now and then. Leveraging the Strategic Value of the Pacific Islands The Pacific islands lie astride China’s sea lanes of trade and transportation with Australia, New Zealand and South America. Since unlike Japan, China has no geographical access to the blue waters of the Pacific Ocean or as yet a large enough navy to patrol it effectively, maintaining good relations with PICs are necessary to ensure the safety and security of these sea lanes for Chinese vessels. Moreover, the geographic positions of these countries around the equator have military value for China, since they are located in an ideal zone for launching rockets and parking satellites in orbit. In 1997, China constructed a satellite tracking station on Tarawa 20 Speech by Jiang Zemin, President of the People’s Republic of China, at Sanders Theatre, Harvard University, November 1, 1997. 21 Alan Goodall, “Peddling Influence with Fiji,” Japan Times, August 29, 2008, http://search.japantimes.co.jp/print/eo20080829a1.html, accessed September 9, 2008.

134

Contentious Integration

atoll of Kiribati, which could be used to monitor US missile tests in the nearby Marshall Islands, or assist in the development of a Chinese space warfare program. Unfortunately for China, after Kiribati switched official recognition to Taiwan in 2004, Beijing had to remove the station’s equipment back to China,22 presumably to prevent it from falling into Taiwanese hands. China has ambitions to develop a blue-water navy and since the early 1990s, its military has been developing and acquiring, from Russia and elsewhere, sophisticated weaponry such as mid-air refueling technology, the latest nuclear submarines, more accurate and longer-distance Submarine-Launch Ballistic Missiles and an increasing quantity of land-based anti-ship missiles to compensate for existing Chinese naval weaknesses. China’s official defense budget in 2014 came to RMB 808.2 billion (US$131.6 billion), an increase of 12.2 percent compared to the year before.23 China may acquire a military base in the Pacific Ocean to increase its military influence, particularly in the region west of the Aleutians, down through the Marianas, to the eastern edge of Papua New Guinea, referred to in Chinese military parlance as the “second island chain.”24 To reach this goal, China is also providing military assistance to several Pacific island countries such as Fiji, Papua New Guinea, Vanuatu and Tonga in the form of training and logistic support.25 Any rise in China’s strategic profile in the region will certainly elevate its status as a Pacific power, but it may also unsettle the Pacific regional order characterized as an “American lake,” long dominated by the US and its military allies, Japan and Australia. More than anything else, it is to preserve and help the US co-manage this order, by keeping China out of the blue-ocean Pacific or minimizing its role and influence there as best as possible, that Japan came to an agreement with Australia in March 2007 to promote closer cooperation on military training and exercises, air and maritime security and disaster relief with each other.26 When rioters looted and burned Chinese-owned shops and attacked Chinese persons in the Solomon Islands and Tonga in 2006, a regional police force led by Australia under the Regional Assistance Mission to the Solomon Islands (RAMSI) restored 22 Thom Cookes, “Pawn of the Pacific,” Special Broadcasting Service, February 25, 2004, http://news.sbs.com.au/dateline/pawn_of_the_pacific_130342, accessed September 4, 2008. 23 “China Military Spending Rise Signals Firm Stand on Disputes,” Bloomberg News, March 6, 2014, http://www.bloomberg.com/news/2014-03-05/china-boosts-defensespending-as-xi-pushes-for-stronger-military.html, accessed March 15, 2014. 24 The “first island chain” would refer to the Japanese isles, Taiwan, the Philippines, and the island of Borneo. 25 Bertil Litner, “Growing Chinese Presence in the Pacific Islands Unsettles Locals and Poses Questions for the US,” http://yaleglobal.yale.edu/display.article?id=8751, accessed February 19, 2008. 26 Arthur Bight, “Australia and Japan sign defense pact,” Christian Science Monitor, March 14, 2007, http://www.csmonitor.com/2007/0314/p99s01-duts.html, accessed April 9, 2007.

“One-Upmanship” Diplomacy in the Pacifi

135

order and protected Chinese migrants in the Solomon Islands, although in the case of Tonga, the Chinese government chartered a transport aircraft to evacuate its stranded nationals.27 In response to a similar situation in the future, or if important Chinese interests in the region—mines, timber concessions or fishing fleets—were under threat from mob violence or government confiscation, China may decide that it has enough will and capacity to undertake such a policing operation itself, and make its security presence felt directly in and by the region. Operating Businesses and Acquiring Natural Resources By 2006, over 3,000 state-owned and private Chinese companies have already established themselves in the Pacific, with investments worth more than US$1 billion in hotels, plantations, garment factories, commercial fishing and logging operations.28 The state-owned China Metallurgical Construction Corporation has put US$650 million into Papua New Guinea’s Ramu nickel and cobalt mine,29 and perhaps as much as US$800 million,30 the biggest single Chinese investment in the PICs, to ensure the supply of such metals to feed China’s ravenous economic development. Not surprisingly then, Chinese aid to the largest Pacific island country, PNG, is now second only to Australia’s.31 In Fiji, major Chinese companies are operating a gold mine at Vatukoula, a bauxite mine at Nawaleivu, and an iron sands concession on the mouth of the Ba river in the main island of Viti Levu, with investments from Zhongrun International Mining Company Limited, Xinfa Aurum Exploration, and a “Chinese state-owned entity,” respectively.32 While Japanese aid to PICs focus on grants for fisheries and technological projects and technical cooperation through the dispatch of technical specialists 27 James Jiann Hua To, “The Overseas Chinese in Tonga,” Tokyo Foundation, http:// www.tokyofoundation.org/en/articles/the-overseas-chinese-in-tonga, accessed September 4, 2008. 28 Kalinga Seneviratne, “SOUTH PACIFIC: Chinese Relief from Domineering Australia,” Inter Press Service News Agency, April 17, 2006, http://ipsnews.net/print. asp?idnews=32909, accessed February 19, 2008. 29 Michael Field, “China Behind Paradigm Shift in South Pacific,” http://www. michaelfield.org/regional6.htm, accessed April 4, 2013. 30 This figure was given to the author at the international conference on “Greater China in an Era of Globalization” at the Chinese University of Hong Kong, Shatin, Hong Kong, July 14–15, 2008, by a Chinese scholar who preferred to remain anonymous. 31 Benjamin Reilly, “Dragon in Paradise: China’s Rising Star in Oceania,” National Interest, June 22, 2003, http://www.encyclopedia.com/doc/1G1-105369903.html, accessed February 19, 2008. 32 Kate Hannan and Stewart Firth, “Trading with the Dragon: Chinese Trade, Investment, and Aid in the South Pacific,” Conference on Sino-Pacific Relations: New Spatialization of Order in the Pacific Islands? International Affairs Research Center/Hong Kong Institute of Asia-Pacific Studies, Chinese University of Hong Kong, March 14, 2014, unpublished manuscript.

136

Contentious Integration

and volunteers,33 Chinese aid tend to be tied to the sourcing of material and labor from China itself.34 Riding on the backs of Chinese state-owned and private enterprises, in recent years, the migration of Chinese nationals to Pacific nations through means legal or otherwise has been increasing, leading to a rise in the activities and influence of criminal triads and human smugglers. Paradoxically, this offers both the Chinese and island governments the opportunity to cooperate on intelligence gathering and exchange and training of police personnel, and would augment China’s influence in the region. Furthermore, the spending power of the rising number of Chinese tourists is a major economic attraction for Pacific island countries and diplomatic capital for China. The increasing physical presence of the Chinese all adds up to a relatively reduced visibility for the Japanese. To ensure continuing access to fisheries resources from a nearby patch of the Pacific Ocean, China has disputed Japan’s claim of an estimated 400,000 squarekilometer EEZ around its uninhabited Okinotori coral reefs, located midway between Taiwan and Guam in the north Pacific. Chinese diplomats have since 2004 insisted that the reefs are rocks and not islets, unlike what the Japanese have argued.35 According to the United Nations Convention on the Law of the Sea, of which both Japan and China are signatories, under Part VIII: Regime of Islands, Article 121(3), “rocks which cannot sustain human habitation or economic life of their own shall have no exclusive economic zone.” Gaining Reliable Support in the United Nations Since the UN operates on the principle of “one country, one vote” in the General Assembly, even for China as a permanent member of the UN Security Council, support from the dozen Pacific island countries represented in the world body may be needed if any upcoming vote for a UN motion promises to be close and against the interests of Beijing. This could be a proposal to admit Taiwan to a UNaffiliated agency like the World Health Organization, which, if successful, will greatly raise the island nation’s diplomatic profile, or a plan to change the structure or composition of the UN Security Council to admit Japan as a permanent member. In this sense, these countries are worth China’s courting.36 33 Tarte, 237–41. 34 Lance Polu, “Samoa to get Closer to China and Japan Economic Aid,” Talamua Media and Publications, July 2, 2008, http://talamua.com/index.php?option=com_content &task=view&id=154&Itemid=9, accessed September 4, 2008. 35 Norimitsu Onishi, “2 Rocks in Hard Place for Japan and China,” International Herald Tribune, July 11, 2005, http://www.iht.com/articles/2005/07/10/news/japan.php, accessed June 16, 2008. 36 Corrupting South Pacific island countries with massive infusion of aid for the purpose of getting their votes at the United Nations General Assembly was a charge leveled against China by the Director of the United States Central Intelligence Agency (CIA) Michael V. Hayden. See Bill Gertz, “Hayden takes China to Task,” Washington Times, March

“One-Upmanship” Diplomacy in the Pacifi

137

The Future of Japan’s Pacific Islands Diplomacy The preferences of Japan and China to augment their presence in the Pacific through bilateral “Japan–PIF summit meetings” and “CPIC forums,” rather than joining the PIF, have demonstrated the desire of these two countries to constitute and maintain an asymmetrical power relationship in their favor with respect to the island nations. China, by giving assistance to the PICs that are clearly generous in terms of their per capita population, are engaging in full-scale competition with Japan, its closest Asian rival, for influence in and benefits from the region. China’s emphasis on providing large scale infrastructure aid clearly rubs up against what has been a long tradition in Japan’s ODA. While Japanese aid to PICs averaged around US$100 million per year from 1998 to 2005, it rose unexpectedly to about US$125 million in 2006 alone, due primarily to the first CPIC Forum taking place that year. For their own purposes, both Tokyo and Beijing are eager to gain the diplomatic support and develop better economic relations with these islands. The increase in their interest and involvement contrasts quite keenly with the laissez-faire attitude that the US has adopted towards the region, apart from its military uses for Guam,37 and assistance to its three former trust territories of FSM, Marshall Islands and Palau.38 Given that China has been increasing its presence in the region through economic assistance, Japan cannot overlook its influence in the region. Despite its shrinking population and labor force, and deep reluctance to permit large-scale immigration for fear of weakening the social cohesion of the Japanese nation, Japan fully intends to remain one of the largest dispenser of official development aid and technological assistance to the poorer countries of Asia and the Pacific, and therefore mindful of China playing catch-up in these areas. Intending to warn Pacific island states against what it considers to be China’s expanding maritime activities from the China Seas to the Pacific Ocean, the Japanese government gave notice that it would raise the issue of maritime security in the Pacific at the sixth summit of PALM, to be held on May 25–26, 2012, in Nago, Okinawa. This would be the first time in which maritime security issue in the Pacific would be tabled as 13, 2008, http://www.washingtontimes.com/article/20080313/NATION/330455152/0/FOR EIGN01, accessed March 16, 2008. 37 Over the last few years, the US military has been increasing its presence in Guam, an island located just north of the Federated States of Micronesia and owned by the US, such as moving three nuclear-powered attack submarines to Guam’s Apra Harbor, basing F-15 fighter jets, B-52 bombers, B-2 stealth bombers and Global Hawk unmanned spy planes on Andersen Air Force Base, and relocating soldiers from the Japanese island of Okinawa to Guam. However, the US military build-up seems to be related to preparing for possible tensions over the Taiwan Straits, and not for any contingencies in the Pacific Ocean. See Associated Press, “US military build-up on Guam related to tensions over Taiwan,” South China Morning Post (Hong Kong) (April 16, 2007): p. 4. 38 Tarte, 238.

138

Contentious Integration

a major agenda at a PALM summit.39 Also for first time at a PALM summit, the US was invited to send a representative by Japan to this hitherto exclusive Japanese gathering with Pacific island states because of the need, according to a senior Japanese Foreign Minister official, “for Japan to work with the top naval power in the world to deal with China.”40 Another senior Japanese Foreign Minister official noted that, as China’s influence in the Pacific is becoming “extremely strong,” “Japan has no choice but to involve the US in promoting policy collaboration with Pacific islands in a favorable manner.”41 Beijing is believed by the Japanese to have set a “second island chain” defense perimeter running from Japan’s Ogasawara island group down to Guam,42 distinctively not Chinese territories. The US, which is increasing its involvement in Pacific island states as part of a priority shift in its diplomatic and defense strategies to the Asia-Pacific region under the “Pivot” announced by the US Obama administration, needed little persuasion. In June and July of 2011, Kurt Campbell, US Assistant Secretary for East Asian and Pacific Affairs, and the Commander of the US Pacific Fleet visited nine of the Pacific island states. The US was represented by Dan Clune, Principal Deputy Assistant Secretary of the State Department, at the 2013 PALM meeting. Days before the meeting, Japanese Prime Minister Noda Yoshihiko met with the President of Micronesia, President of Palau and Prime Minister of Samoa, and was profusely thanked by them respectively for a Japanese ODA project to extent the runway at Pohnpei, capital of Micronesia; four generators to boost power supply in Palau; and the establishment of a Japanese embassy in Samoa in January 2013.43 For PNG, Japan has allocated US$100 million to lay out a sewage system under the US$500 million funding committed to PIF states for three years under the sixth PALM, 44 which can be considered generous given the tough economic circumstances that Japan was still very much under in 2012. Apparently mindful of China’s dispute with Japan over the Senkaku/Diaoyu islands in the East China Sea, and China’s other islands dispute with several Southeast Asian countries in the South China Sea, the participants stressed the importance of the role of international law in maintaining peace and security in the Pacific.45 Japan 39 Jiji Press English News Service, “Japan to Raise Maritime Security at Pacific Islands Summit,” February 21, 2012. 40 Jiji Press English News Service, “US to Attend Japan-Pacific Islands Summit for 1st Time,” January 15, 2012. 41 Jiji Press English News Service, “US to Join Japan-Pacific Islands Summit for 1st Time,” April 2, 2012. 42 Jiji Press English News Service, “Pacific Island Summit to open in Okinawa on Friday,” May 24, 2012. 43 Kyodo News Agency, “Japanese PM Meets Leaders of Pacific Islands,” Tokyo, in English, 1411 hours, May 12, 2012. 44 Gorethy Kenneth, “PNG Stands to Benefit from Japan,” PNG Post-Courier (Australia), May 30, 2012. 45 Kyodo News Agency, “Japan, Pacific Islands to Cooperate on Maritime, Disaster Issues,” Tokyo, in English, 1411 hours, May 26, 2012.

“One-Upmanship” Diplomacy in the Pacifi

139

also announced the launch of a new insurance scheme at the meeting, to be set up with the World Bank, to help the governments of Pacific island countries draw upon as a source of short-term liquidity in the event of natural disasters.46 At the end of the meeting, the leaders stressed in a joint statement the need to involve emerging donor countries in the existing cooperation framework for aid provision to PICs, which operates under the aegis of the 29-member Development Assistance Committee (DAC) of the Organization of Economic Cooperation and Development (OECD), of which Japan is a member. With this statement, Japan clearly hopes to put China under pressure to increase the transparency of its aid, as Prime Minister Noda said at the press conference after the meeting.47 The Future of China’s Pacific Islands Diplomacy While Japan holds its bilateral one-to-many meetings with PICs within the rubric of the PIF, China is strengthening the CPIC Forum, an institutional structure of its own making. In a further move to consolidate the CPIC Forum, as well as promote China–PICs exchanges and cooperation in trade, investment, tourism, agriculture, fishery, transportation, finance and human resource development, the first “Investment, Trade and Tourism Ministerial Conference of the China– Pacific Island Countries Economic Development and Cooperation Forum” took place on September 7–10, 2008 in China’s Xiamen. It was attended by the relevant government ministers from China and all the other PICs with which China has diplomatic relations, together with an official representative from New Zealand.48 By September 2011, China has organized two more of these Investment, Trade and Tourism Ministerial Conferences with PICs. Since, aside from Australia and New Zealand, the populations of the PICs are a little more than 8 million, and trade is expected to stay relatively insignificant for these countries, “aid diplomacy,” for the construction of government buildings and infrastructure, will remain of paramount importance for China to buy the goodwill and cooperation of island governments, if not their natural resources as well. Furthermore, China is now Australia’s largest trading partner and the Australian government, although it is Japan’s friend and treaty ally since 2007, would be reluctant to be seen as adopting a foreign policy position that is overtly against Chinese interests. Furthermore, by late 2012, of the amount of US$57.77 billion in Chinese overseas investment allotted to Oceania, US$51 billion was invested in 46 Ibid. 47 Jiji Press English News Service, “Japan, Pacific Islands want China Transparent over Aid,” May 26, 2012. 48 People’s Republic of China, Ministry of Commerce, “Brief Introductions to the Investment, Trade and Tourism Ministerial Conference of the China–Pacific Island Countries Economic Development and Cooperation Forum,” http://cpicforumenglish. mofcom.gov.cn/aarticle/zb/200807/20080705687467.html, accessed January 24, 2009.

140

Contentious Integration

Australia alone.49 Still, as China announced plans to train senior military officers from Fiji, Tonga and Papua New Guinea, Japan became the first non-PIF country to contribute peacekeepers to RAMSI, an offer which was welcomed by the PIF. 50 Given this precedence, it would be difficult for anyone to tell China off should its government decide that Chinese People’s Liberation Army forces ought to offer its services to the Solomon Islands or other PICs for purposes of peacekeeping, should the situation warrant. Former Premier Wen of China has referred to his country’s increased involvement in the Pacific region as a “strategic decision.”51 Indeed, the growing presence of China in the Pacific can only change the circumstances against Japan’s favor. In a remark widely interpreted as a reference to China, a spokesman from the Japanese Ministry of Foreign Affairs recently warned that “Pacific island countries should not be a pawn for any major power at the periphery of the region.”52 The PRC, since it claims Taiwan as a part of China, would of course disagree that it lies at periphery of the Pacific region any more than Japan does. In any case, with the participation of China in this Pacific “Great Game,” countries in the region will have more choices in terms of selecting foreign policy positions, demanding even more generous or untied aid packages, setting the prices of their fish or other exports, or deflecting foreign criticisms of government accountability. This is particularly so since the Chinese government has exhibited scarce concern over issues of democratic accountability or financial irregularities involving aid monies in its conduct of foreign relations. In time, Pacific island governments may learn to play off Japan against China. The growing strength of China’s diplomacy with respect to the Pacific islands for resources and influence will put pressure on traditional aid donors like Japan, Australia, New Zealand and the US to raise the monetary amount that they are prepared to give to recover or maintain their hitherto dominance over the region. These countries may also have to de-emphasize “good governance,” or democratic accountability, respect for human rights, and eradication of corruption, as conditions 49 Kate Hannan and Stewart Firth, “Trading with the Dragon: Chinese Trade, Investment, and Aid in the South Pacific,” Conference on Sino-Pacific Relations: New Spatialization of Order in the Pacific Islands? International Affairs Research Center/Hong Kong Institute of Asia-Pacific Studies, Chinese University of Hong Kong, March 14, 2014, unpublished manuscript. 50 The Weekend Australian, “Australia Encourages Japanese RAMSI Participation,” July 21, 2008, http://www.pacificmagazine.net/news/2008/07/21/australia-encouragesjapanese-ramsi-participation, accessed September 9, 2008; and Benjamin Reilly, “Japan’s Return to Guadalcanal,” August 1, 2008, http://online.wsj.com/article/SB121753980629 502131.html?mod=opinion_main_commentaries, accessed September 9, 2008. 51 Seneviratne, “SOUTH PACIFIC: Chinese Relief from Domineering Australia.” 52 Lin Maoling, “Tegao/Taipingyangdaoguo zhanluediwei yinfa Zhongguo Riben dajiaoliang” (“Special Report/The strategic position of Pacific island countries provokes a tussle between China and Japan”) Singtao Daily (Hong Kong), May 29, 2006, http://www. singtaonet.com:82/world/t20060529_226656.html, accessed April 5, 2007.

“One-Upmanship” Diplomacy in the Pacifi

141

for providing assistance, unless they can win China, and Taiwan, over to their views on aid giving. This would not be easy, given the stakes involved and China’s long-standing and much-touted foreign policy principle of “non-interference in the domestic affairs of states,” which advantages China in dealing with relatively authoritarian regimes in the Pacific and sometimes earns the appreciation of the local public because it appears respectful of national sovereignty. Since 2005, China has pledged more than US$600 million in “soft loans” offering long interest payment periods to Tonga, Samoa and the Cook Islands.53 As a case in point, China committed a new soft loan of US$600 million to Fiji after the country’s military coup in December 2006, as Australia, New Zealand and the US imposed a freeze on aid to the new military regime to promote a return to democracy.54 This loan has been used to finance the construction of a hydroelectric dam, which became operational in 2012, upgrading of rural roads, fixing water supply problems and building of low-cost housing.55 China has made annual donations of 150,000 to 180,000 US dollars to the Pacific Regional Environment Program for climate change programs, provided training courses for PICs to deal with climate change, and donated green and energy-saving products such as small hydro plants, pilot ecological farms, bio-gas projects, small windpower generators and solar-power road maps.56 The second China–Pacific Island Countries Economic Development and Cooperation Forum was held in Guangzhou (Canton) on November 8, 2013 and hosted by PRC Vice-Premier Wang Yang. China took the opportunity to announce a series of measures to support the economic and social development of the PICs, such as providing US$1 billion in preferential loans, setting up a US$1 billion special-purpose loan from the China Development Bank to facilitate infrastructure construction, supporting the development of human resources by offering 2,000 scholarships in the following four years, assisting in the construction of medical facilities and sending medical corps, apparatus, instruments, and pharmaceuticals, supporting the PIC’s efforts in environmental protection and disaster prevention and reduction, and providing aid for the construction of small green energy projects such as hydropower stations, solar energy and methane production57. In light of 53 “China’s Pacific Chequebook Diplomacy ‘A Fact of Life’: Australia,” Straits Times, August 28, 2012. 54 Fergus Hanson, “The Dragon Looks South,” Lowy Institute for International Policy (June 2008): 11–13. 55 Philippa Brant, “China’s Involvement in Fiji and Australia and New Zealand’s Position,” East Asia Forum, December 8, 2009, http://www.eastasiaforum.org/2009/12/08/ chinas-involvement-in-fiji-and-australia-and-new-zealands-position/, accessed October 26, 2013. 56 Xinhuanet, “China Assists Pacific Island Countries with Clean Energy Projects,” September 6, 2013, http://news.xinhuanet.com/english/china/2013-09/06/c_132697626. htm, accessed September 7, 2013. 57 PRC Ministry of Foreign Affairs, Wang Yang Attends and Delivers a Keynote Speech at the China–Pacific Island Countries Economic Development and Cooperation

142

Contentious Integration

the sixth summit of the Japan–PIC (PALM) in May 2012, in which Japan pledged US$500 million funding committed to PIF states for three years, the US$1 billion in preferential loans and US$1 billion infrastructure construction loan offered by China seems like a demonstration of “one-upmanship.” As many as 150 Chinese companies are investing in Pacific islands by 2013, with projects having reached US$5.12 billion, and 3,600 government officials and technicians from certain island countries have received training in China.58 At the second CPIC Forum, the prime minister of Tonga praised China’s support in training Tonga’s navy fleet, and China, the Cook Islands, and New Zealand jointly signed an agreement to create a water supply system for Rarotonga, the most populous island of the Cook Islands, which will be the country’s largest infrastructure project.59 Since the first CPIC Forum was held seven years before, trade between China and PIC states has grown at a robust annual rate of 27 percent on average, topping US$4.5 billion in 2012.60 Although the cohesion of the PIF might have suffered a little with half its membership agreeing to meet regularly with the Chinese premier and his government ministers within the rubric of the CPIC Forum, the PICs as a whole are the clear winners of China’s increasingly active and structured participation in the region’s diplomacy, as well as Japan’s energized response. While the economic and strategic bearing of these countries will only get harder to predict, what is certain is that their foreign policy orientations are moving toward Asia as a whole, and that the comprehensive involvement of both Japan and China in the Pacific region will only deepen in the future. Establishing a New Pacific Trade Group, or Two Amidst the Sino-Japanese rivalry over the Pacific, countries spanning the vast ocean were thinking up a trade group that would spur commerce and investment amongst themselves. Furthermore, with Beijing having been the leader in establishing Asian trade blocs since 1997, and the US having suffered greatly economically from the recession that started in 2008, Washington became concerned that economic integration in East Asia centered on China, coupled with the failure to advance free Forum, November 8, 2013, http://www.fmprc.gov.cn/eng/zxxx/t1098185.shtml, accessed November 9, 2013. 58 Xu Jingxi and Zhao Yanrong, China to lend $1b to Pacific island nations, China Daily, November 8, 2013, http://www.chinadaily.com.cn/business/2013-11/08/ content_17092352.htm, accessed November 9, 2013. 59 Ibid. 60 Address by Wang Yang, Vice Premier of the State Council of the People’s Republic of China, “China and Pacific Island Countries—Our Ship of Friendship and Cooperation will Keep Forging Ahead,” PRC Ministry of Foreign Affairs, November 9, 2013, http:// www.fmprc.gov.cn/eng/zxxx/t1098933.shtml, accessed November 10, 2013.

“One-Upmanship” Diplomacy in the Pacifi

143

trade in APEC or the Doha Round of the World Trade Organization to the degree that the US has desired, might become a threat to the primacy of US economic and other interests in that part of the world. To move free trade forward across both sides of the Pacific Ocean, Singapore, Brunei, New Zealand and Chile had agreed to constitute a four-country FTA in March 2006 called the Trans-Pacific Strategic Partnership Agreement (TPSEP). Article 20(6) of the Agreement states that all APEC member economies are welcomed to join. With the US, Australia, Peru and Vietnam having started membership negotiations by 2009, the grouping was renamed the Trans-Pacific Partnership (TPP) in 2010 when Malaysia was included. Canada and Mexico became parties to TPP negotiations in 2012. Actively promoted by President Obama as a vital piece of his administration’s “pivot” to Asia, the TPP is comprehensive in its coverage, and not only includes extensive liberalization in trade, services, trade rules and government procurements, but also investment and capital flows assurances, intellectual property rights protection, environmental conservation and protection of the rights of labor unions. Talks are progressing slowly on market access, especially with Malaysia and Vietnam, since the US has proposed that all preferential policies for state-owned enterprises discriminatory to foreign enterprises should be abolished, and Australia is concerned about opening up international dispute settlement mechanisms to private investors.61 On international property rights, serious differences also remain among countries as to the appropriate period of protection to be given to pharmaceutical patents and copyrights for movies and entertainment products. China has yet given indications that it knows what this association is all about, given that much of the negotiations are confined to participants and kept secret. In any case, there has been practically no interest on the part of the US to include China in any discussions to join the TPP. The US has said that any moves to include China in any discussions to join the TPP must be preceded by a bilateral investment treaty between the US and China.62 Japan first expressed interest in the TPP with a policy speech by former Prime Minister Kan Naoto on October 1, 2010, weeks after the boat-ramming incident outside Senkaku/Diaoyu in which the Chinese captain of the craft was detained by Japanese authorities. Since the TPP seems to be more than another free-trade organization, but rather one that is fashioned by the US in negotiations to pursue its geopolitical gains by grouping together its friends and allies to restrain the rise of China, Japan feels more comfortable with membership in the TPP than in the APT, which is being led by China, since Japan fears being trapped in an East Asian trade framework dominated by China.63 Still, negotiations with existing members of the 61 Inkyo Cheong, “The TPP and the Quest for East Asian Regionalism: Beyond the Spaghetti Bowl,” Global Asia 8, no. 1(Spring 2013): 62–3. 62 Jason Lange, “United States/China: US Sees Hurdles in China Joining Pacific Trade Pact,” Reuters News agency, January 23, 2014, http://www.reuters.com/article/2014/01/23/ us-usa-china-trade-idUSBREA0M1LV20140123, accessed 21 June 2014. 63 Cheong, 67.

144

Contentious Integration

partnership are not expected to be plain sailing for Japan. In November 2011, when Japanese Prime Minister Yoshihiko Noda announced that the world’s third-largest economy wanted to join the TPP, US Trade Representative Ron Kirk welcomed the move but insisted Japan must be prepared to meet the “high standards” of liberalized trade by reducing barriers to agriculture, services and manufacturing. At least one major US car company, Ford Motor Co., said it opposed letting Japan into the negotiations because it believes Tokyo was not prepared to address barriers to importing American cars.64 Swallowing any qualms which it may have regarding the impacts of market opening on its economy, particularly its highlysubsidized agricultural sector and heavily-cartelized retail distribution networks, Japan joined TPP negotiations in April 2013. However, as of June 2014, there was still no accord on a bilateral trade deal between Japan and the US. In response to the US-backed TPP, which would result in a free trade area covering the entire Pacific if successful, China has pushed for a Regional Comprehensive Economic Partnership (RCEP) to be centered on ASEAN. This RCEP is narrower in scope and does not cover intellectual property rights, reform of state-owned enterprises, or regulatory standards, but allows members to drop trade policies which they disagree with and protect sensitive industries from competition.65 Do such exclusionary provisions make it more attractive for developing nations to join the RCEP, thereby stymieing the development of the TPP? Or could the US push for the TPP lead to a situation in which this trade grouping prospers at the expense of RCEP? Only time will tell. However, China’s vision of the RCEP includes only the members of the original EAS without the participation of the US or Russia, hence it is not expected that Japan, which is keen on the US joining any trade group that it and China are both participating in to dilute Chinese economic influence in the cluster, will express much interest in the RCEP. If the TPP resembles the early efforts of APEC in the American vision to liberalize trade and investment across the Pacific, then with Japanese support this time, TPP may have a better chance than APEC of succeeding as a transPacific free-trade bloc. If China is serious about the RCEP, it could do well to prioritize some areas of negotiations as concessionary “early harvest” provisions for potential members, as it has done with weaker, developing economies during the ASEAN–China Free Trade Area negotiations. It should also try to reach free trade agreements with Japan and South Korea as soon as possible. To hedge against the failure of RCEP, China, as host of the scheduled APEC Economics Leaders’ Meeting in Beijing in November 2014, has pushed member economies for a feasibility study of a Free Trade Area of the Asia Pacific (FTAAP), but this proposed FTAAP did not seem to have attracted the interest of either Japan or the 64 Doug Palmer and Michael Martina, “Free Trade gets Boost at APEC from Japan,” Reuters News Agency, November 11, 2011, http://www.reuters.com/article/2011/11/12/usapec-f-idUSTRE7AB04O20111112, accessed November 9, 2013. 65 Asia News Monitor (Bangkok), “China Plans Asia-Pacific Trading Bloc,” May 21, 2013.

“One-Upmanship” Diplomacy in the Pacifi

145

US thus far.66 What is becoming clear is that, as with the case of the “free-traders” against “managed-marketers” within APEC, the TTP versus RCEP is shaping up to be a contest as to who controls rule-making in trade arrangements across the Pacific, the US or China, and the swing vote will, once again, rest with Japan.

66 Bob Davis, “China Pushes its New Pacific Free-Trade Zone at APEC Meeting,” Wall Street Journal (Online), http://online.wsj.com/news/articles/SB100014240527023044 22704579569691355930008, accessed June 21, 2014.

This page has been left blank intentionally

Chapter 8

Competitive Multilateralism: ASEAN in the Context of China’s Advance, Japan’s Flanking and America’s Pivot Southeast Asia as a Site of Strategic Contestation Since 2010 Aware that powerful countries external to Southeast Asia are increasingly treating the region as a site of strategic competition, ASEAN wants to continue keeping these state actors in a balanced relationship around the group itself, particularly through their participation in ASEAN-centered regional forums (ARF, APT, EAS and ADMM+), to better monitor their behavior and assert pressure on them to account for their actions should such a need arise. Since Japan and the US wish to discuss hard security issues with ASEAN while China would prefer to talk about trade and development matters, ASEAN has discovered that a suitable compromise for the “ASEAN Plus” forums would be to have dialogues and cooperation on soft cross-border security concerns which impact on the economy—transnational crime, NTS challenges, disaster relief, epidemics and climate change—that all parties can more or less agree on with regards to the causes and remedies. Even so, there is no escaping the perception that ASEAN is itself becoming a site for the contestation of influence between Japan and China. The South China Sea issue seems to be the main contradiction dividing ASEAN members, along the lines of those who found themselves in incidents of direct confrontation with China over large areas of claim—Vietnam and the Philippines, those having partially overlapping claims with China—Brunei and Malaysia, those without territorial claims with China but are concerned about its rise— Singapore and Indonesia, and the rest—Laos, Cambodia, Thailand and Burma. As relations between China and the Philippines deteriorated over conflicting claims to the Spratly islands, Japan is considering using its Official Development Assistance (ODA) to provide the Philippines with 10 patrol vessels valued at US$11 million each for its coast guard.1 Japan sees the dispute in the South China Sea as being closely related to the conflict in the East China Sea in terms of China’s growing military ambitions and assertiveness in staking territorial claims. To the Chinese, this offer looks like an attempt by the Japanese to fish in troubled waters. During a visit to China in April 2012, the former Prime Minister of Thailand, Yingluck 1 Zhao Hong, “Japan and China Woo ASEAN,” eai bulletin (Singapore) 15, no. 2 (October 2013): 7.

148

Contentious Integration

Shinawatra, was reported to have said: “Regarding the disputes in the South China Sea, Thailand understands China’s concerns over the issue.”2 Her implicit support for China’s position could not have gone down well with her fellow ASEAN claimants, or for that matter, Japan. Even before the Chinese asserted the South China Sea as their core national interest in 2010, the governments of Vietnam, the Philippines, Indonesia and Singapore have openly called for the US to stay engaged in the region.3 ASEAN welcomes a continuing strategic role for the US, to balance the military and economic rise of China, particularly considering the fact that the Chinese defense budget had been increasing by an average of 12 percent annually since 1989, and was by 2012 the second highest in the world.4 In fact, aside from ASEAN, the diplomatic posture of Japan, the US, India, and practically every country in China’s neighborhood toward China is one of engagement combined with hedging, since no one outside the top Chinese leadership is clear about its long-term strategic intent, particularly with regards to Taiwan,5 but also towards the disputed South China Sea territorial claims. With China beckoning as a vast economic opportunity for regional countries, this foreign policy stance is likely to remain as such for them unless they feel directly threatened by China militarily, in which case containment becomes a distinct possibility, but even then, only if it is led by the US.6 Still, aside from spending on modern conventional weapons such as missile frigates and submarines, the countries of ASEAN were not at all sanguine about leaving the security of their region to the moves of checks and balances made or contemplated by others.

2 Zhou Wa and Zheng Yangpeng, “Talks Could ‘Bring Peace’ to S. China Sea,” China Daily, April 19, 2012, http://www.chinadaily.com.cn/cndy/2012–04/19/content_15085669. htm, accessed October 8, 2013. 3 Interview with Tsunekawa Jun, Senior Research Fellow, National Institute of Defense Studies (NIDS), Ministry of Defense, Tokyo, Japan, on March 10, 2010. 4 Takeshi Yuzawa, “The Roles of Regional Security Institutions in the Era of Power Shift: The Implications for Japan–China Relations,” Tokyo Foundation, August 29, 2012, http://www.tokyofoundation.org/en/topics/japan-china-next-generation-dialogue/roles-ofregional-security-institutions, accessed December 31, 2013. 5 In February 2005, the United States–Japan Security Consultative Committee composed of the foreign and defense ministers of both countries, listed as one of its objectives, “the peaceful resolution of issues concerning the Taiwan Strait.” See Statement of the US–Japan Security Consultative Committee, US Department of State, http://www. state.gov/r/pa/prs/ps/2005/42490.htm, accessed April 30, 2013. 6 Greg Torode, “Region Looks to China for Profit, US for Security,” South China Morning Post (Hong Kong), November 15, 2010.

Competitive Multilateralism

149

ASEAN Defense Ministerial Meeting Plus (ADMM+) Defense ministers of ASEAN member states apart from Myanmar began an annual ASEAN Defense Ministerial Meeting (ADMM) in 2006, Bali, Indonesia, to promote military cooperation. At the first full meeting of the ADMM in Kuala Lumpur in 2007, defense ministers of all 10 ASEAN countries adopted the Concept Paper, which states that the ADMM shall be the highest ministerial defense and security consultative and cooperative mechanism in ASEAN and that it shall report directly to the ASEAN heads of government.7 They then made a decision to set up an “ADMM+” platform to increase security and defense collaboration with ASEAN’s dialogue partners. In response to this resolution, at the eleventh APT summit in November 2007, Chinese Premier Wen Jiabao proposed the establishment of an ‘APT Armed Forces Forum on Non-Traditional Security Cooperation’ to deal with non-traditional security issue.8 As this would, if realized, become essentially an ASEAN + China endeavor, or even one between a powerful China and much weaker individual ASEAN states, ASEAN redoubled its efforts to arrive at the principles, priorities, structure and procedures of the proposed ADMM+ to engage the defense establishments of other powers. The ADMM meeting in Pattaya in 2009 agreed on the use of ASEAN military assets—such as boats and other heavy machineries—in humanitarian assistance and disaster relief, and cooperation between defense agencies and civil society organizations on nontraditional security issues.9 At the fourth ADMM in May 2010, ASEAN defense ministers operationalized the expanded “ADMM+” as a new security process, whereby they would meet with defense ministers from China, Japan, South Korea, Australia, New Zealand, India, the US and Russia, knowing that none of these eight countries could afford to absent itself and leave the field to the others. ADMM+ has exactly the same membership composition as the EAS since 2011, but the defense forum is likely to be more firmly and specifically rooted on the discussion and promotion of conventional security matters rather than non-traditional ones. If so, this would be a new development by ASEAN. With ADMM+, ASEAN seems to be trying to recover and re-center on itself the initiative lost to the 27-member ARF, to make this a collaborative forum for practical action rather than one of general discussion of current security affairs. According to the joint declaration of the first ADMM+ issued in Hanoi on October 12, 2010, ADMM+ is the highest ministerial defense and security consultative and cooperative mechanism for regional security issues amongst 7 Jackson Sawatan, “Asean Defence Ministers Discuss Security Issues, Areas of Cooperation,” Bernama News Agency (Kuala Lumpur), November 14, 2007. 8 Jae Cheol Kim, “Politics of Regionalism in East Asia: The Case of the East Asia Summit,” Asian Perspective 34, no. 3(2010): 128–9, n. 48. 9 Fauziah Ismail, “Deal on Using Military Assets for Relief Work,” New Straits Times (Kuala Lumpur), February 27, 2009.

150

Contentious Integration

the ASEAN member states and the eight “plus” countries. ADMM+ undertook to enhance friendship, mutual trust and confidence through greater dialogue and exchange among the ADMM+ defense establishments; strengthen regional defense and security cooperation through the conduct of concrete and practical cooperation to address defense and security issues; and establish an ASEAN Defense Senior Officials’ Meeting Plus (ADSOM+) to undertake decisions of the ADMM+ and launch specific Expert Working Groups on defense and security issues of mutual interests.10 Delegates to the ADMM+ have come to focus discussions or raise concerns on five prioritized areas of cooperation, including humanitarian aid, disaster relief, maritime security, counter-terrorism and peace-keeping operations. According to Singapore’s then Defense Minister, Ng Eng Hen, ADMM+ members are in time likely to conduct joint military drills, to increase transparency and build up personal ties among the armed forces of the ADMM+ network.11 However, one should be wary of expecting too much from this or any other security offshoot of ASEAN, as ASEAN is premised on the principle of non-interference in the domestic affairs of member states, and these states have traditionally viewed cooperation involving foreign armed forces as particularly intrusive upon national sovereignty.12 At the first ADMM+, US Secretary of Defense Robert Gates reiterated his Secretary of State Hillary Clinton’s offer in the foregoing ARF meeting of US mediation in the South China Sea territorial dispute to achieve a peaceful outcome based on international law. However, failure to ratify the United Nations Convention on the Law of the Sea makes the US stance unconvincing, and keeping to a long-standing position opposite to that of the US and Japan, China is adamant about not involving other parties to help resolve the matter. It was also on the sidelines of this meeting that Japan and ASEAN member states started their annual defense cooperation conference at the deputy ministerial level.13 At the sixth ADMM meeting which took place in Phnom Penh on May 29, 2012, an issue discussed was the Humanitarian Assistance and Disaster Relief (HADR) initiative, under which ASEAN states will offer immediate help to each other in case of calamity, bypassing the usual diplomatic channels if need be.14 An ADSOM+ Expert Working Group on HADR has since the sixth ADMM+ 10 Vietnamese News Agency (VNA), “Hanoi Joint Declaration on the First ADMM+ Issued,” October 12, 2010, http://en.vietnamplus.vn/Home/Hanoi-joint-declaration-on-thefirst-ADMM-issued/201010/12984.vnplus, accessed October 8, 2013. 11 Jermyn Chow, “Cooperate to Build Regional Trust: Eng Hen,” Straits Times (Singapore), June 6, 2011. 12 Jorg Friedrichs, “East Asian Regional Security,” Asian Survey 52, no. 4(July/ August 2012): 771. 13 “ASEAN, Japan Cooperate to Deal with Security Challenges,” Asia News Monitor, March 18, 2013. 14 V. Shuman, “Resolve Stand-Off Over Isle via Talks, Urges Asean,” New Straits Times (Kuala Lumpur), May 29, 2002.

Competitive Multilateralism

151

held two conferences focusing on legal aspects of the use and cooperation of ADMM+ military forces in HADR activities, training of personnel in HADR, and the experiences of armed forces in coping with such natural disasters as storms, floods and landslides.15 It was agreed that a new initiative called the ADMM+ Humanitarian Assistance and Disaster Relief/Military Medicine Exercise would be held in Brunei in 2013,16 and this was conducted from June 17–20, 2013. Furthermore, a counterterrorism exercise in Indonesia, co-sponsored by the US and Indonesia and a maritime security exercise, co-chaired by Malaysia and Australia, have also subsequently taken place in 2013 under the aegis of ADMM+.17 An ASEAN Regional Disaster Emergency Response Exercise (ARDEX) was also held in October 2013 in Vietnam. An important issue agreed upon during the sixth ADMM was to increase the frequency of the ADMM+ meetings from three years to two.18 The existence of the ADMM+, with ADMM as the core through which decisions are first made by ASEAN for subsequent negotiations with the “plus” countries, and reduced intervals of its meetings, risk making the ARF even more of a talk shop than it already is. Still, one future use of the ADMM+, or the ARF, might be for Japan and China to negotiate a protocol to avoid incidents at sea, to reduce the risk of conflict resulting from unpredictable behavior of naval or air force commanders on both sides. ASEAN and the US “Pivot/Rebalance” to Asia Long years of US disengagement with ASEAN, especially during the G.W. Bush administration, with its fixation on fighting wars in Afghanistan and Iraq and combating terrorism everywhere, allowed a rising China to take a leading role in ASEAN-led regional platforms and assert its diplomatic energy in the surrounding region, particularly Southeast Asia. Out of distrust of China and fearing that the US would be squeezed out of Asia and its regional proliferation of FTAs centered on China, the administration of Barack Obama, who proclaimed himself as the first Pacific President of America, began strengthening its existing alliances and striking new partnerships in East Asia with the aim of renewing its leadership in the region and containing China’s rise. Japan, and to a lesser extent, Australia, 15 Voice of Vietnam, “ADMM Expert Working Group Meets in Hanoi,” August 8, 2012, http://english.vov.vn/Politics/ADMM-expert-working-group-meets-in-Hanoi/2350 16.vov, accessed October 8, 2013. 16 Kor Kian Beng, “S’pore, China Seek Wider Defence Ties,” Straits Times (Singapore), June 19, 2002. 17 Xinhua News Agency, “ASEAN-US Defense Chiefs Meet in Cambodia to Strengthen Military Ties,” November 16, 2012, http://www.china.org.cn/world/Off_the_ Wire/2012-11/16/content_27138591.htm, accessed October 8, 2013. 18 William Choong, “Vital to Have More Openness at the Summit,” Straits Times (Singapore), June 4, 2012.

152

Contentious Integration

respectively the “northern and southern anchors” of the US alliance system in Asia, are the states most concerned about any signs of American inattention to Asia, as is tiny Singapore. The reinvigoration or return of American influence is thus something to which the elites of smaller Asian and Australasian states, keen to balance and hedge against China, are quite receptive, particularly the leadership of Japan. The erstwhile US Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell has said that “… institutions like the East Asia Summit, which the United States is joining, and the ASEAN Regional Forum, are going to be playing a more important role in the years ahead.”19 Obama’s Asian pivot is much about dispelling the notion that Washington’s economic clout is shrinking as China continues to boom and that it is lagging behind China as Beijing taps ASEAN’s growth. This is what explains America’s sudden interest in the East Asian Summit (EAS). The US was ASEAN’s biggest trading partner in 2004, with total trade of US$192 billion; by 2010, China has taken America’s place, with two-way China–ASEAN trade amounting to US$293 billion.20 By 2014, China is the biggest trading partner of every state, including Taiwan, in Northeast Asia, Southeast Asia and the Pacific. Initiated by the US, the first US–ASEAN summit was held in July 2009, at the APEC meeting in Singapore. While there, President Barack Obama acceded to the ASEAN Treaty of Amity and Cooperation, which was a necessary step to being invited by ASEAN to join the EAS. Obama then appointed the first ever resident ambassador from the US to ASEAN. At the invitation of the ASEAN states, Secretary of State Hillary Clinton initiated US participation in the EAS by attending its meeting in Hanoi as a guest in October 2010. Obama then attended his country’s first EAS meeting in Jakarta in 2011. The decision to join the EAS capped years of American ambivalence towards “ASEAN plus” forums and the group’s role in constructing a new regional community. Participating in Asian summitry demonstrates Washington’s commitment to multilateralism, a symbolic yet significant metric in a region where process is equally, if not more, important as outcomes. The US is likely to use the EAS to keep reaffirming its interested role in Asia and continue to pursue its Asian strategy on the basis of taking part in “multilateral mechanisms,” advocating values of democracy and human rights, trying to make ASEAN part of its network of friends and allies, and putting pressure on China on the South China Sea disputes. As to the ARF, Vietnam and the Philippines have been looking to Washington to support their case at the forum’s meetings, and the US has proved happy to oblige. Although the Clinton and George W. Bush administrations both perceived 19 Kurt Campbell, “Inaugural US–China Asia-Pacific Consultations,” June 26, 2011, East–West Center, Washington, DC. 20 Jane Perlez, “For Clinton, a New Effort to Rechannel the Rivalry with China,” Taipei Times, July 12, 2012, A9.

Competitive Multilateralism

153

greater needs for a regional security dialogue than during the Cold War era, they still saw the emerging multilateral security dialogues only as a way to supplement US alliances and forward military presence, but not to supplant them. US activism in the ARF could be dated to the “pivot” strategy of the Obama administration to “rebalance” attention and resources back to Asia from elsewhere. The US has realized that the ARF is an arena where it can legitimize and institutionalize its stay and its sway in the Western Pacific. At the ARF Foreign Ministers’ Meeting in July 2010 in Hanoi, US Secretary of State Hillary Clinton said the US has “a national interest in freedom of navigation, and respect for international law in the South China Sea,” and offered to mediate the dispute. The US waded into the dispute again in October 2010 when, on attending the annual meeting of Asian defense ministers in Singapore known as the ShangriLa dialogues, US Secretary of Defense Robert Gates reiterated Clinton’s offer of US mediation in the dispute based on international law to achieve a peaceful outcome, and called on China not to intimidate foreign oil companies drilling in the disputed South China Sea areas. At the ARF meeting in Bali in July 2011, Clinton described incidents sparked by China’s actions in the South China Sea as threats to peace and security in the region. In a meeting between American and ASEAN foreign ministers in Phnom Penh in July 2012, Clinton urged countries to define their territory based on the UN’s Law of the Sea, and also called for an early conclusion of a Code of Conduct that complies with the Law of the Sea.21 Far-reaching moves by Washington and Beijing to court individual ASEAN countries are likely to result in greater investment. However, their competing and conflicting interests may lead to split decisions in ASEAN policy-making that could highlight divisions among its member states and dent the bloc’s credibility as its 10 member states and nearly 600 million residents prepare to integrate into one economic community by 2015.22 Bilateral and multilateral arrangements to tie the US to the region may help maintain American economic interest and security commitment in Southeast Asia, but could potentially make the region an area of contestation between Beijing and Washington.23 The China–Southeast Asian Relations Axle: Pursuing Economic Multilateralism China’s relationship with ASEAN is driven by a strategic logic. It responds to challenges in securing raw materials crucial to China’s economic development, 21 Taipei Times, “China Rebuffs Calls for Talks on S. China Sea,” July 13, 2012, A1. 22 Martin Petty, “Southeast Asia in a Quandary over US–China Rivalry,” Taipei Times, July 12, 2012, A9. 23 Ja Ian Chong, “China–Southeast Asian relations Since the Cold War,” in Andrew T.H. Tan, ed., East and Southeast Asia: International Relations and Security Perspective, London and New York: Routledge, 2013, 94–5.

154

Contentious Integration

cementing growing economic ties with Southeast Asian nations, alleviating their fear of a rising China, and ensuring a peaceful and stable surrounding environment so as to buttress China’s growing influence and counterbalance United States and Japanese power. Since 2010, the first two challenges are dealt with by the ASEAN–China Free Trade Area (ACFTA) and the latter two challenges are handled bilaterally between China and the state concerned, as much as China can have it this way. China would continue to back ASEAN playing a dominant role in regional cooperation, to prevent the appearance of a power vacuum in Southeast Asia that might be exploited by a powerful country aside from China. Coinciding with the rise of China, both economically and militarily, years of US disengagement with ASEAN, particularly during the George W. Bush administration, have left China with an influential role in regional platforms, particularly those led by ASEAN. As much as Japan and the US would not, China would like to see the current situation stay. Regarding ACFTA, the trade entity came into effect on January 1, 2010 and covers a bloc of 1.7 billion people with China and the six founding countries of ASEAN (Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand), while the four newer members of ASEAN (Cambodia, Laos, Myanmar and Vietnam) will join in 2015. Under the free-trade agreement, tariffs will be reduced to zero on 7,881 product categories, or 90 percent of imported goods.24 With ACFTA, low-or-no-tariff deals would quench China’s thirst for raw materials and mineral resources like palm oil, timber, rubber, crude and refined oil, iron ore and coal from ASEAN, with the average tariff rate on ASEAN goods sold in China decreasing from 9.8 percent to 0.1 percent.25 It would also open up Southeast Asian markets for China’s manufactured products, as the average tariff rate of Chinese goods imported into the ASEAN countries has decreased from 12.8 percent to 0.6 percent since 2010.26 However, the ensuing intensified competition from China, particularly among ASEAN’s smaller economies, may entail the displacement of workers and rationalization of industries and firms that may last for years. China’s extremely competitive industrial sectors could drive down wages in Southeast Asia since cheap urban labor in China can be continually replenished by cheaper migrant labor from its countryside. Several days following the implementation of the free trade area, Indonesia announced plans to renegotiate tariffs on 228 product categories, particularly textiles and steel, but China refused to concede. The electronics, furniture, hardware, machinery and textile industries in Indonesia cannot compete with similar cheaper but better quality products from China flooding the local market. Higher steel production costs and capacity shortages in ASEAN countries provide China’s steel exports with broad market 24 China Daily, “Backgrounder: ASEAN–China Free Trade Area,” http://www. chinadaily.com.cn/china/2013-10/08/content_17015528.htm, accessed October 8, 2013. 25 Ibid. 26 Ibid.

Competitive Multilateralism

155

opportunities, but Malaysian steel manufacturers will be seriously affected, as Malaysia exports about 2.5 million tons of steel products annually to ASEAN countries. After the initial process of structural adjustment, ASEAN countries will develop their own niches in economic relations with China. Indonesia and Malaysia have oil and natural gas, Malaysia has rubber and tin, and the Philippines have palm oil and metals. Vietnam and Thailand should be able to hold their own in rice production, Indonesia and Vietnam in coffee, and the Philippines in coconut and coconut products. Yet, while Southeast Asian countries will rely on their existing comparative advantages, China, with a strong industrial and manufacturing base, will be much more able to push its technological frontier outwards through research and development to create improved and new products with better export terms of trade. Already with the establishment of ACFTA, Lang Son, Quang Ninh, Lao Cai and other provinces along the Vietnamese border with China have pushed for the development of transport, warehousing, banking and other border trade so as to facilitate their supporting services for trade with China. Vietnam’s Mong Cai city signed with Dongxing city in China’s southern Guangxi region a framework agreement on establishing cross-border economic cooperation zones. One has to wonder if the relationship with China is not reproducing the old type division of labor between Southeast Asian countries and their colonial masters, only now, low value-added natural resources and agricultural products are shipped to the metropolis while Southeast Asian economies absorb high value-added manufactures from China. Laos, Cambodia and Myanmar, ASEAN’s poorest states, remain in China’s orbit as a result of no-strings-attached loans, desperately needed infrastructure development aid, military support and floods of investments from Chinese firms. Beijing also has strong economic ties with Singapore, where three-quarters of the population is ethnic Chinese; close diplomatic relations with Malaysia; and aggressively wooed Thailand—a major ally of the US since World War II and the launch pad for its war in Vietnam—by offering loans and technology for a high-speed rail network, university scholarships to Thai students, and a supply of 10,000 Chinese language teachers to Bangkok. Traditionally close to Washington, Thailand is now hedging closer to China.27 In Myanmar alone, in 2010, the Chinese invested some US$8 billion in oil, gas and hydropower, and agreed to US$80 billion in investment projects in Cambodia.28 By the end of 2013, China has invested a total of US$13 billion in ASEAN countries.29 Underlying China’s growing economic strength in Southeast Asia, business settlements in the PRC’s currency, the Renminbi, are a growing trend in China– ASEAN trade. With capital liberalization on the part of the PRC government, the Renminbi will become a key currency in the monetary baskets of many Southeast 27 Petty, A9. 28 David Camroux, Routledge Handbook in Asian Regionalism (London: Routledge): 375–83. 29 “Backgrounder: ASEAN–China Free Trade Area,” China Daily.

156

Contentious Integration

Asian countries, but since both Japan and the US have very close trade and investment ties with ASEAN states, it would be unrealistic to expect the Renminbi to replace the yen or the dollar any time soon. Still, with ACFTA, ASEAN will be locked in as part of the world-wide supply chain for China’s booming economy, particularly with the completion of the 3,900-kilometers high-speed railway from Kunming to Singapore scheduled for 2020. China’s Bilateral Military Relations with Southeast Asian States Although Thailand remains a treaty ally of the US, in 2005, the Royal Thai Armed Forces became the first Southeast Asian military to conduct combined exercises with the PRC’s People’s Liberation Army (PLA), in which landmine clearance training was followed by naval maneuvers. In 2010, Thai and Chinese marines participated in a combined exercise in the Gulf of Thailand. Shortly following a visit by Prime Minister Yingluck Shinawatra of Thailand to China, a second combined exercise between Chinese and Thai marines took place, code-named “Blue Commando-2012,” this time in China’s Guangdong province. The exercise, which focused on anti-terrorism training, was conducted over a period of three weeks, from May 9 to May 29, 2012, and involved 372 Chinese and 126 Thai marines. An “Agreement on Defense Exchanges and Security Cooperation” which formalized bilateral activities between the PLA and the Singapore Armed Forces, was signed in January 2008.30 Singapore and China have since conducted joint counter-terrorism exercises dealing with potential chemical, biological and radiological threats. The PLA has also sent officers to Singapore for courses, such as those conducted by the Goh Keng Swee Command and Staff College.31 Yet Singapore remains one of the firmest security partners that the US has in Southeast Asia. Military cooperation with China by Thailand, a formal ally of the US, and Singapore, an informal one, can only mean that, at least in terms of non-traditional security, both these Southeast Asian countries are playing a hedging game between the US and China. This is even though China’s opaque strategic intentions and defense budgeting has prompted arms acquisition and military force modernization programs not only in Southeast Asia, but also Australia and India.

30 Kor Kian Beng, “S’pore, China Seek Wider Defence Ties.” 31 Chua Chin Hon, “US Closest Defence Partner of S’pore,” The Straits Times (Singapore), April 7, 2012.

Competitive Multilateralism

157

China’s South China Sea Entanglement Whether fair or otherwise, as the largest country making the most extensive claim amongst the disputants to the islands and waters of the South China Sea has made China the most obvious target of the other claimants. In the security sphere, Vietnam and the Philippines have accused China of aggressively asserting its claims to the South China Sea, which contains rich hydrocarbon resources in the seabed and straddle vital shipping lanes. In December 2007, China established the city administration of Sansha, which covers the Spratlys, Paracels, and the partially submerged Macclesfield Banks. Tension has been heightened by a plan announced by China in January 2010 to make “active and steady” efforts to open the disputed Paracel (Xisha) Islands to tourists.32 Furthermore, in March 2010, senior Chinese officials told US counterparts that China considered the South China Sea its “core national interest”—a non-negotiable territorial claim on the same level as Taiwan and Tibet.33 China was put on the defensive at the ARF meeting in July 2010 in Hanoi, when numerous delegates brought up the territorial dispute over the Spratly islands. With the Chinese representatives receiving an earful from fellow delegates for the “core national interest” remarks of senior Chinese officials, US Secretary of State Hillary Clinton expressed her country’s “national interest in freedom of navigation, and respect for international law in the South China Sea.”34 Clinton’s comments were “virtually an attack on China,” China’s Foreign Ministry’s statement said, adding there was “no problem” with freedom of navigation in these waters.35 China is adamant about not involving other parties to help resolve the matter. Indeed the US argument may carry more weight with the Chinese if and when it decides to ratify the United Nations Convention on the Law of the Sea. In late May 2011, Vietnam accused a Chinese patrol boat of slashing a submerged cable of an oil and gas survey ship operated by its state-owned energy firm, PetroVietnam. In June a Chinese patrol boat reportedly cut cables from a Vietnamese ship doing seismic surveys off Vietnam’s south-central coast. Beijing maintains that Vietnamese vessels have been illegally surveying in Chinese waters. To hedge against a more assertive China, Vietnam and the Philippines have 32 Kristine Kwok, “Tourism Plan for Disputed Islands,” South China Morning Post, January 6, 2010. 33 Li Hongmei, “Unwise to Elevate ‘South China Sea’ to be Core Interest?” People’s Daily Online, August 27, 2010, http://english.peopledaily.com.cn/90002/96417/7119874. html, accessed October 8, 2013. 34 Voice of America (VOA), “US Seeks Calm in South China Sea Territorial Disputes,” October 4, 2010, http://www.voanews.com/content/us-seeks-calm-in-southchina-sea-104328294/127317.html, accessed April 30, 2012. 35 Voice of America, Tibetan service, “China Put on Defensive at ARF over Spratlys,” July 25, 2010, http://morigin.voatibetanenglish.org/a/china-tells-us-not-to-internationalizesouth-china-sea-territorial-issue-99242409/1275308.html, accessed December 31, 2013.

158

Contentious Integration

held bilateral naval military exercises with the US in the South China Sea. The annual “Cobra Gold” exercises between the US, Thailand and Singapore included Malaysian troops for the first time in 2011, and permanent deployment of US combat ships in Singapore is being considered. China’s actions since 2010 have triggered anxieties in many ASEAN countries about a powerful and nearby China asserting its interests and using economic leverage to achieve its strategic and sovereign goals. Realizing that assertiveness on the South China Sea sovereignty claims was undercutting its national security provision, including maintaining trustful and friendly relations with its neighbors, Beijing has stepped back, at least for the time being, and demonstrated goodwill by agreeing to identify the steps needed to move from the existing non-binding Declaration of Conduct (DOC) to a binding Code of Conduct (COC) with ASEAN in dealing with the South China Sea territorial disputes. At the ARF meeting in Bali in July 2011, Southeast Asian and Chinese officials reached agreement on a set of guidelines that will lead eventually to a COC. The guidelines call for claimants to reach consensus before beginning cooperative projects in the disputed areas. Joint projects are currently limited to scientific research and rescue operations. It was also agreed that COC negotiations would take place under the rubric of the China–ASEAN framework. Notwithstanding the usual rhetorical reassurance of US commitment to Southeast Asia, other than offering itself as a temporary relief for the phobia of Chinese dominance, Washington brought nothing new to 2011 ARF discussions. The much vaunted honest and frank discussions the 10 members of ASEAN had anticipated with China over the Spratlys did not happen. No government in the region, it seems, wished to bell the Chinese cat. China’s stance on its sovereignty claims remains steadfast: stick to a policy of resolving disputes with individual countries separately, in which China has the advantage of applying trade incentives or political pressure, rather than with all claimants together. Chinese Vice-Foreign Minister Fu Ying was quoted on July 11, 2012 as saying that Beijing would start talks on a legally binding COC that is in compliance with the UN’s Law of the Sea “when conditions are ripe.”36 The 11th ASEAN—China Joint Working Group on the DOC was held in Bali, Indonesia, in June 2014, following the 7th ASEAN— China Senior Officials’ Meeting on the Implementation of the DOC, which was held in Chonburi, Thailand, in April 2014. It was over the South China Sea dispute with China that for the first time in ASEAN’s 45-year history, the meeting of its foreign ministers and the attendant ARF on July 13, 2012 concluded without a joint statement. The Philippines had demanded that the joint statement mention a recent standoff between Chinese and Filipino ships at the Scarborough Shoal, which is claimed by both countries. Vietnam, in response to China’s move to offer offshore oil blocks to foreign 36 Ministry of Foreign Affairs of the People’s Republic of China, “Vice Foreign Minister Fu Ying Briefs on the China–ASEAN Foreign Ministers’ Meeting,” July 11, 2013, http://www.fmprc.gov.cn/eng/wjdt/wshd/t950203.htm, accessed December 21, 2013.

Competitive Multilateralism

159

companies for prospecting in an area of the South China Sea within Vietnam’s claimed exclusive economic zone (EEZ), demanded that the declaration include respect for EEZs.37 The ASEAN Chair, Cambodia, a major recipient of Chinese aid, loans and investments, supported China’s position that disputes over the South China Sea are bilateral, and therefore should not appear on an ASEAN joint statement.38 Despite the furious insistence of the President of the Philippines, the Chair’s Statement concluding the ASEAN Summit and related seventh EAS on November 20, 2012 made no mention of the South China Sea dispute either. Since January 2013, Manila has put up a legal challenge for arbitration under the United Nations Convention on the Law of the Sea (UNCLOS) that is proceeding despite Beijing’s refusal to participate. In May 2014, Beijing placed a drilling rig just 150 miles from Vietnam’s coast, as a consequence of which Hanoi surrounded the rig with maritime patrol vessels, and Beijing deployed ships of its own with water cannons to spray on the Vietnamese vessels.39 Differing allegiance among ASEAN countries—in looking towards China, the US or nonalignment—will sabotage attempts to forge a firmer Southeast Asian community. With ACFTA and the COC, critics are suspicious that China may be laying the groundwork for a Pax Sinica. It is principally to forestall this that ASEAN decided, at its sixteenth summit in Hanoi on July 20, 2010, to invite the US and Russia to become members of the East Asia Summit (EAS) at its 2011 meeting in Indonesia. Southeast Asians believe America’s participation in the EAS as part of the US re-engagement with Asia under President Barack Obama will minimize China’s increasing domination of the region. This, of course, depends on how preoccupied the US is with domestic affairs, its massive debt problem, and troubles elsewhere in the world. In any case, a rising China cannot be wished away.

37 “Editorial: Division Serves to Weaken ASEAN,” Japan Times, July 21, 2012, http://www.japantimes.co.jp/text/ed20120721a2.html, accessed July 22, 2012. 38 Nirmal Ghosh, “Row Overshadows Summit,” The Straits Times (Singapore), July 16, 2012. Already between 1994 and 2005, China has become the largest investor in Cambodia, with an accumulated US$720 million of investments that accounted for more than half the total received by the kingdom, although Japan remained the leading aid donor during this period. On visiting Phnom Penh in April 2006, Prime Minister Wen Jiabao promised an equivalence of US$600 million in aid and loans to Cambodia. See David Hoyrup, “Foreign Direct Investments in Southeast Asia and Sino-Japanese Rivalry,” in Guy Faure, ed., New Dynamics between China and Japan in Asia (Singapore: World Scientific, 2010): 113. 39 Michael Auslin, “China Drills for Territory,” Wall Street Journal (Online), 22 May 2014, http://online.wsj.com/news/articles/SB100014240527023034803045795778330970 84154, accessed June 21, 2014.

160

Contentious Integration

Japan Forming Mini-Lateral “Coalitions of the Willing” Economics used to occupy pride of place in Japan’s interactions with Southeast Asian countries, but while from 2000 to 2011, China–ASEAN trade value increased greatly from US$32 billion to US$280 billion, Japan–ASEAN trade value increased only from US$116 billion to US$273 billion.40 Since 2007, ASEAN’s trade value with China has exceeded that with Japan for both exports and imports, greatly so in the case of Laos, Cambodia and Myanmar, the three economically least-developed ASEAN countries, and marginally for the rest of Southeast Asian states.41 Given the significant and growing two-way trade and investment ties of both ASEAN and South Korea with China, ASEAN countries do not wish to openly oppose China on any economic issue, and South Korea often takes China’s position in ASEAN + 3 (APT), with the result that Japan consequently feels isolated in APT.42 At the Japan–ASEAN Summit in December 2013, Japan pledged US$19.4 billion in loans and aid to Southeast Asian countries and tried to get them to denounce China’s enactment of an Air Defense Identification Zone over the East China Sea in the joint communique but without success.43 Facing thus China’s rising economic influence in Southeast Asia and South Korea, as well as in Taiwan, with which China signed an Economic Cooperation Framework Agreement in June 2010 to reduce tariffs and trade barriers between the two places, and also its increasing military assertiveness in the South and East China Seas, Japan has been seeking to “outflank” what it sees as a threatening China by reaching further afield to Australia and India, while relying on cooperating with the US for defense. If successful, Japan’s geopolitical strategy would have China’s sway in Southeast Asia “boxed-in” to the east by Japan, to the south by Australia and to the west by India, with the US playing an active role in the region’s security affairs by conducting regular joint exercises with regional militaries. Since the formation of the EAS, “value diplomacy” (“kachi gaiko”) has become a major pillar of foreign and security policy for Japan. In late 2006, Abe Shinzo as Japanese Prime Minister articulated a vision of increased cooperation among the four big democracies in the Asia-Pacific, namely Australia, Japan,

40 Zhao, 7. 41 Unpublished discussion paper, prepared by the First Southeast Asia Division, Southeast and Southwest Asian Affairs Department, Asian and Oceanian Affairs Bureau, Ministry of Foreign Affairs of Japan (2009): 1–2. 42 Interview with Takagi Seiichiro, Professor, School of International Politics, Economics and Communication, Aoyama Gakuin University, Tokyo, Japan, on March 4, 2010. 43 Elaine Lies and Kiyoshi Takenaka, “Japan–ASEAN Call for Freedom of Air and Seas, With Tensions High over China,” Reuters News Agency, December 14, 2013, http://www.reuters.com/article/2013/12/14/us-japan-asean-idUSBRE9BD01F20131214, accessed December 21, 2013.

Competitive Multilateralism

161

India and the US.44 An annual Trilateral Security Dialogue among Japan, Australia and the US was started that year for the purpose of security policy coordination. With the creation of a Japanese Ministry of Defense in 2007, calls were made in Japan to change the name of its “Self-Defense Force” (Ji-ei-tai) to “Self Defense Army” (Ji-ei-gun). In any case, the Ji-ei-tai is increasingly viewed by Tokyo as a practical instrument of Japanese foreign policy, especially with respect to China’s increasing military presence in the East China Sea. In diplomacy and security, Tokyo is aligning more closely with Washington’s, or specifically President Obama’s, vision of an Asia-Pacific regional order, which includes an invigorated power, purpose and commitment to preserving US interests in East Asia and the Western Pacific. For the US, and consequently Japan as its ally, the search for region-wide security has extended to a conceptual linkage of the South China Sea with the Pacific and Indian Oceans. This US “pivot” strategy, which has included the placing of 2,500 marines at a military facility in Darwin, Australia, Obama telling parliamentarians in India not only to “look east” but to “engage east,” and redeploying 60 percent of US naval strength in the Asia-Pacific region by 2020,45 is in response to the uncertainties surrounding North Korea’s missile tests, its unpredictable behavior and leadership consolidation, territorial disputes involving China over the East China Sea and Diaoyu/Senkaku islands, and completion of China’s first aircraft carrier and fighter aircraft with stealth properties. Although the maintenance or relocation of US military bases is still a controversial issue in Japanese society, two decades of economic recession or no real growth before 2013 has put paid to any dreams that Japan might once have harbored to replace US primacy, and its political elite has reached a consensus to bandwagon with US hegemony. Abe Shinzo, who became prime minster of Japan again in December 2012, has publicly said that his top foreign policy priority was to restore the trust and confidence that has characterized Japan’s relationship with the United States,46 and is looking for support in the Japanese Diet to make changes to the Constitution to remove the ban against Japan engaging in collective defense with other countries. With increasing Chinese naval patrols around the disputed Diaoyu/Senkaku islands, in June 2013, Japanese troops conducted a military exercise with US forces at the coast of southern California to improve the Japanese Self Defense Force’s amphibious attack capabilities.47 The bilateral military alliance with the US thus still forms the “bedrock” of Japanese defense policy, to which the ARF and ADMM+ are supplementary, but Japan has been 44 Yul Sohn, “Japan’s New Regionalism: China Shock, Values and the East Asian Community” Asian Survey 50, no. 3(May/June 2010): 517. 45 S.D. Muni, “Obama Administration’s Pivot to Asia-Pacific and India’s Role,” ISAS Working Paper, no. 159(August 29, 2012): 4–5. 46 Glen S. Fukushima, “Japan’s Role in America’s Asia Pivot,” Washington Post, December 21, 2012. 47 Julie Watson, “Japanese Troops Head to Calif. for Training,” Charleston Gazette (West Virginia), June 10, 2013, B9.

162

Contentious Integration

establishing and strengthening security relations with key US regional allies and partners such as Australia and India. Japan has been seeking to mitigate its dwindling resources available for foreign policy conduct, and the relative decline of its power position and that of the US vis-à-vis China, by increasing coordination between the “spokes” of America’s Asian-Pacific security alliance network, with US blessing. The rise of China has served as a catalyst in Japan–Australia relations. While both countries have benefitted immensely from China’s economic growth, they hold reservations over some aspects of China’s human rights situation, behavior on the international stage—particularly the provision of full diplomatic coverage of North Korea’s conducts, and its continued military buildup.48 In March 2007, Japan and Australia issued a Joint Declaration on Security Cooperation under Prime Ministers Abe Shinzo and John Howard, the first time Japan signed such an agreement with a country other than the US, thus representing a historic shift in Japan’s strategic thinking. The first 2 + 2 meeting of Japanese and Australian foreign and defense ministers was convened later in the same year. By linking the Joint Declaration on Security, in its first sentence, to democratic values, a commitment to human rights, freedom and the rule of law, Japan was deliberately excluding China from similar agreements in the future.49 The Joint Declaration was upgraded to an Acquisitions and Cross Servicing Agreement in May 2010—aimed at increased military and logistical interoperability. Japan and Australia have continued to participate in annual RIMPAC exercises—the largest multinational naval exercises in the world, as well as the Proliferation Security Initiative, both initiated and led by the US. Japan conducted its first joint maritime military exercise with the US and Australia in the South China Sea in July 2011. In April 2014, Japan and Australia reached a bilateral free trade agreement amongst themselves. Since 2004, India has been the largest recipient of foreign aid from Japan, and Japanese foreign direct investment in India has soared as Japanese companies sought to hedge their risks from continuously investing in China given the state of tension in Sino-Japanese relations. As Japan and India both have territorial disputes with China—Japan in the East China Sea and India along its Himalayan frontier with China, and are troubled by China’s defense modernization, it is hardly surprising that they would find ways to engage in defense collaboration. Japan’s Self-Defence Forces Chief-of-Staff and the chiefs of the air-force, navy and army visited India between 2005 and 2006. In April 2007, the first Japan–India–US maritime exercise (Malabar 07–1) took off near the Boso Peninsula of Japan’s main island of Honshu. In September 2007, Japan, India and the US conducted 48 Malcolm Cook and Thomas Wilkins, “The Quiet Achiever: Australia–Japan Security Relations,” Lowy Institute for International Policy (January 2011): 6. 49 Ministry of Foreign Affairs of Japan, “Japan-Australia Joint Declaration on Security Cooperation,” March 13, 2007, http://www.mofa.go.jp/region/asia-paci/australia/ joint0703.html, accessed October 8, 2013.

Competitive Multilateralism

163

their second maritime exercise (Malabar 07–2) in the Bay of Bengal. In October 2008, Japan and India issued a Joint Declaration on Security Cooperation under Prime Ministers Aso Taro and Manmohan Singh, modeled on that between Japan and Australia. In April 2009, Malabar 09 exercises among the same three countries took place on the eastern side of Okinawa. The first Japan–India–US dialogue at the foreign ministry director-level was held in Washington DC in December 2011, and covered issues of counter-terrorism, maritime security, United Nations Security Council Reform, and cooperation within the East Asian Summit process.50 The second such dialogue was held in Tokyo, April 2012. In June 2012, the Japanese Maritime Self-Defence Forces conducted Japan’s first bilateral military exercise with the Indian navy in Sagami Bay, Honshu, Japan.51 In February 2011, the Japan–India Comprehensive Economic Partnership Agreement was signed, to open markets and reduce barriers on goods, services and movement of people between the two countries, increase the value of bilateral trade to $25 billion in 2014 from $10.3 billion at the time of the signing, and eliminate 94 percent of the tariffs in 10 years.52 Since the visit of Prime Minister Koizumi to India in 2005, an annual Heads-of-Government summit has been held between Japan and India alternating at each other’s capital. At the Japan–India Summit, held in New Delhi on December 28, 2011, the sourcing of rare earths from India became a top priority for Japan, considering that supplies from China have become a problematic issue for Japan since their albeit temporary export restriction following Japan’s detention of the captain of a Chinese trawler near the Diaoyu/Senkaku islands in September 2010. A Tokyo which feels more threatened by China may not find it easy to reconcile its approach to Beijing with a more conciliatory Canberra or New Delhi. Australia is very unlikely to pursue security linkages to the extent that its economic relationship with China could be jeopardized, as China has become Australia’s largest trading partner since 2008, and it is widely recognized that Australia’s strong export growth to China in this period was largely what prevented it from falling into recession together with most industrialized countries. Although India is worried about China’s increasing strength and will become more open to cooperation with other powers, India–China trade at US$66.47 billion in 2012

50 P.S. Suryanarayana, “Life at 60 in Japan–India Relationship,” ISAS Insights, no. 151(January 2012): 5. 51 Ishigaki Yasuji, “Strengthening Security Networks between Japan, the United States, Australia and Japan,” The Council on East Asian Community (CEAC) E-Letter 5:5 (September 10, 2012), http://www.ceac.jp/e/index.html, accessed October 8, 2013. 52 Sanjeev Sharma, “India, Japan Sign Free Trade Agreement,” Tribune News Service (New Delhi), http://www.tribuneindia.com/2011/20110217/main4.htm, accessed February 16, 2012.

164

Contentious Integration

was still far higher than that of India–Japan trade.53 Furthermore, India has been insistent that it does not intend to choose sides, and is opposed to sacrificing its freedom of foreign policy action in joining any formal regional defense alliance that might constrain its options.54 If India adopts a more forward naval posture east of the Indian Ocean, China may seek to enlist its long-term friend Pakistan as a security ally to counter Indian moves. Conclusion China and Japan are currently more interested in preventing the other from establishing dominance over Southeast Asia, instead of coming up with a defining regional architecture to promote regional cooperation. Both countries have through their recent actions revealed that they regard participating in regional frameworks as but a foreign policy tool to enhance their own interests and influence. With China and Japan in an uncooperative mood, and their desire to separately establish and promote relations with individual countries both within and outside the “ASEAN+” groupings, ASEAN’s referee/middleman role in these arrangements, and its ability to manage great power relations through them, may be increasingly rendered impotent and superfluous. The larger the “ASEAN+” grouping, the less effectively they can be expected to function, but participating in smaller economic groupings may result in ASEAN being dominated by China, and “functional cooperation” may turn the association into an appendix of China. Likewise, being a member of smaller military groupings may lead to domination of the collective by one or more members of the Australia–Japan–India–US “Quad” and pressure to adopt “universal values.” Yet either move to confront China or bandwagon with it may tear ASEAN apart, along the lines of the political values, economic interests and foreign policy positions of its member states, and create an unstable environment in Southeast Asia that would undermine the interests of every state involved. As ASEAN does not have the capability to arbitrate the hardening competition between China and Japan or the intention to go with the leadership of either within the “ASEAN+” forums, for the foreseeable future, what remains are much of the form and little of the substance of the economic and military groupings. Constructing a community of East Asian countries will be impossible with Sino-Japanese rivalry, and unless reconciliation between China and Japan takes place, regionalism will become a hollow concept devoid of meaning.

53 Lan Jianxue, “Sino-Indian Relations—New Way of Thinking and ‘Rebalancing,’” China Institute of International Studies, http://www.ciis.org.cn/english/2013-08/23/ content_6239926.htm, accessed August 23, 2012. 54 Emma Chanlett-Avery and Bruce Vaughn, “Emerging Trends in the Security Architecture in Asia: Bilateral and Multilateral Ties Among the United States, Japan, Australia, and India,” CRS Report for Congress (January 7, 2008): 16.

Chapter 9

Looking Forward: Japan and China in an East Asian Community The Way Forward: Rivalry or Community? East Asia has reached a crossroad: This is either the time for building community, in working for greater interdependence in East Asian relations or, given the territorial disputes such as those relating to the Diaoyu/Senkaku and South China Sea islands, China’s establishment of an Air Defense identification Zone in November 2013 which partially overlaps that of Japan’s above the Diaoyu/ Senkaku islands, and Japanese Prime Minister Abe’s visit to the Yasukuni Shrine in December 2013, the time for open rivalry. A functional approach to integrating the region economically has already been promoted to some extent, through free trade arrangements, economic partnership agreements, and financial cooperation, but political and security cooperation is still very tentative, and likely to center initially around non-traditional security issues. The author is in agreement with Ito and Tanaka that the chief political objective at the center of a prospective East Asian Community of states is no have “no war,” and that such a “no war” community would require the promotion of realistic functional cooperation at the political and security level, establishment of a framework of trust in the region, and possession of a singular vision of an East Asia with common values.1 But whose values are we talking about? Without a set of values commonly agreed-upon, how do the peoples and nations of East Asia, particularly those of Japan and China as the largest and most powerful countries in the region, create trust and build confidence so indispensable for the realization of an East Asian Community? Without values and trusts that both sides can identify upon with the other, functional approaches on cooperation that flows out of areas of common practical operations or interests will stall, as joint operations end or shared interests changed. In a part of the world where political and historical animosities tend to overshadow or sideline efforts at promoting interaction and integration, where ideologies and nationalisms—particularly with Japan and China—both grip and divide the region, the key to securing community is the identification of shared interests and common norms. As such, institution-building among nations does not as yet equate community-development. In this sense, Prime Minister Koizumi was to the point when, in a speech in Singapore on January 2002, in proposing 1 Kenichi Ito and Akihiko Tanaka, ed., Higashi ajia kyodotai to nihon no shinro [East Asia Community and Japan’s Course] (Tokyo: NHK Shuppankai, 2005), 274–5.

166

Contentious Integration

the creation of “a community that acts and advances together,” he used the term chiiki shakai (regional society of shared means) rather than kyodotai (kinship bond for common ends) for community.2 Initiating a strategic dialogue between Japan and China is the basis for constructing a framework to deal effectively with Sino-Japanese problems. No one would deny that the necessary condition for securing the peace and prosperity of East Asia, indeed that of Asia and the Pacific, essentially rests on two legs—Japan and China. To what extend can either Japan or China take a leading role in formulating an eventual East Asian community? The answer is, respectively, no more and not yet. For the time being at least, the answer is “both.” For the longawaited “Asian renaissance” (pursued at least by some Asians) to take place and take root, Asians, particularly the Japanese and Chinese, must strive to overcome past animosities and create common grounds for future concrete cooperation. If Japan and China can work out a mutually satisfactory power relationship to accommodate each other’s identity and interests, and move to form a political partnership, their combined diplomatic clout and economic strength would enable them to dictate the terms of any regional multilateral arrangement of which both are members. Building an East Asian community, even one of shared means, can be effected only through Sino-Japanese cooperation. If so, China and Japan should engage in functional cooperation firstly on an economic front, through constructing rulesbased free trade agreements (FTAs) or economic partnership agreements (EPAs); secondly on non-traditional challenges such as guaranteeing energy supplies and ensuring energy security such as forming a consumers’ energy cartel; and thirdly on social issues such as promoting environmental conservation and trade in new or “green” energy technologies. Cooperation can then be extended to security matters. In fact Japanese Prime Minister Fukuda Yasuo, whose short tenure witnessed a warming Sino-Japanese relationship trend, in a speech delivered at Peking University on December 28, 2007, called for expanded cooperation on energy and environmental issues.3 In Japanese government circles, there is a converging view that the building of an East Asian community should be a worthy goal, no matter how distant, by focusing on the process of moving toward regionalism rather than building institutions for their own sake, which could come later.4 Indeed, there is no better place to start fostering such a community than Northeast Asia, the home 2 Koizumi Junichiro, “Japan and ASEAN in East Asia: A Sincere and Open Partnership,” speech, Singapore, January 14, 2002, http://www.210.163.22.165/region/ asia-paci/pmv0201/speech.html, accessed May 12, 2013. 3 Fukuda Yasuo, “Forging the Future Together,” speech, Peking University, December 28, 2007, http://www.mofa.go.jp/region/asia-paci/china/speech0712.html, accessed May 12, 2013. 4 Akiko Fukushima, “Japan’s Perspective on Asian Regionalism,” in Michael J. Green and Bates Gill, eds, Asia’s New Multilateralism (New York: Columbia University Press, 2009): 121.

Looking Forward

167

region of China and Japan. Since South Korea is a significant country in Northeast Asia, either as a balancer or a bridge, it should be included in matters pertaining to regional integration, as should North Korea and the Russian Far East, if at all possible, as they are also located in the region. Economics Reaching FTAs or EPAs that exclude politically-sensitive agricultural products with South Korea and then China should be high priorities for Japan’s foreign economic policy, notwithstanding its territorial sovereignty disputes with these two countries. The island dispute over Dokdo/Takeshima between South Korea and Japan, and the China–Japan flare-ups over Diaoyudao/Senkaku put tremendous hesitation and strain on any budding move to create and operationalize a regional body. Yet the momentum toward regional economic enmeshment seems hardly stoppable. The economies of China, Japan and South Korea are being rapidly integrated, with heavy Japanese and Korean investments in China, and China has become the largest trading partner of both Japan and Korea. Intra-Northeast Asian (China–Japan–South Korea) trade occupies about 90 percent of the total trade volume of Asia and Oceania.5 By the end of 2011, Japan had invested US$80.317 billion dollars in China, with a total of over 40,000 projects committed,6 although the rate of new investment made has been decreasing because of the political troubles between the two countries. Trade between the three Northeast Asian countries totaled $690 billion in 2011, an increase of more than five times from 1999, underlining Asia’s growing weight in the world economy after more than two decades of rapid growth in China and the earlier rise of Japan and South Korea as manufacturing powerhouses. Some experts see China’s redoubled efforts to push for a free-trade deal with Japan and South Korea as an attempt to counter the US, which is turning (or pivoting) its foreign and economic policy focus to Asia and pushing the Trans-Pacific Partnership (TPP) under President Obama. Heo Yoon, a professor at South Korea’s Sogang University’s Graduate School of International Studies, says that “China’s intention is to first form a Northeast Asian economic cooperation that excludes the US as Japan cannot sit still while South Korea advances to the Chinese market with Korea–China free trade talks.”7 In any case, China is too big, too powerful, and too important a trading partner to Japan, South Korea and practically every country in Asia and the Pacific to be isolated.

5 Luu Chao, “Zhongguo Queli DongbeiYa anquan huanjing de zhanlue xuanze” [“Strategic Choices in Establishing China’s Northeast Asian Security Environment”], Zhongguo Waijiao [China’s Foreign Affairs], no. 10(2008): 23. 6 Xie Xiaodong, “Japanese Policies towards China: Changeability and Stability,” China International Studies, January/February 2013: 121. 7 Luu, 23.

168

Contentious Integration

All these reasons seem to make good sense to increase the speed of gathering Northeast Asian economic integration. China had since the early 2000s hoped to start negotiations on a China– Japan–Korea (CJK) Free Trade Agreement to eliminate import quotas and tariffs, establish a regular mechanism for trade negotiations,8 and attract Japanese and Korean investments to China’s Northeast (formerly Manchuria) to regenerate this heavy industry and high unemployment “rust belt” of steel plants, iron ore mines, oil refineries and shipbuilding docks. Interdependence may well reduce China’s willingness to use economic and trade measures to pressure Japan, and make major Japanese businesses less likely to intensify their “China + 1” divestment and alternative sourcing strategy, largely adopted in response to the anti-Japanese riots in Chinese cities in 2005. South Korea has been negotiating separate trade deals with China and Japan for years, though progress has been slow. South Korean companies are attracted to China’s relatively low labor costs as manufacturing platforms and the size of the Chinese market. This attraction has only increased as Chinese firms are rapidly closing the technological gap with their South Korean counterparts in capital intensive and high technology industries such as computers, electronics, automobiles and shipbuilding, and China’s exports to the US, Japan and the EU have increased much faster than South Korea’s in comparable export items since 2005, thus greatly eroding South Korea’s market shares in these third markets. Agriculture is a sticking point in free trade negotiations as both South Korea and Japan must contend with powerful farmer lobbies worried that cheap Chinese agricultural products will flood domestic markets, and China is reticent about opening its capital market to South Korean and Japanese interests too quickly. Although the state of Sino-Japanese relations is often regarded as a barometer of cooperation within the ASEAN + 3, leaders of China, Japan and South Korea have been meeting separately and without fanfare at the margins of the ASEAN + 3 summit meetings since 1999. Up until December 2007, there have been eight meetings. China cancelled the trilateral summit in 2005 due to Koizumi’s visit to the Yasakuni Shrine, but since March 2007, the three countries have started negotiations on a trilateral investment agreement. The first separate meeting of the leaders of the three countries was held in Fukuoka, Japan, during December 2008. On May 14, 2012, leaders from China, Japan, and South Korea concluded their fifth annual Trilateral Summit Meeting in Beijing by signing an Agreement for the Promotion, Facilitation and Protection of Investment. The investment agreement, clinched after 13 rounds of negotiations since 2007, includes 27 clauses and one additional protocol covering topics such as investment definition and dispute

8 Liu Zhongli and Sheng Wei, “ZhongRiHan FTA zhanlue bijiao yanjiu” [“A Comparative Study of China–Japan–South Korea FTA Strategies”], DongbeiYa luntan [Northeast Asian Forum], no. 1(2008): 54.

Looking Forward

169

resolution.9 The Agreement was operationalized on May 17, 2014. As the first legal framework for trilateral economic cooperation, the agreement will provide a more stable and transparent investment environment for the three countries and as a stepping stone, pave the way for an eventual three-way free trade deal to counter global economic turbulence and boost economic growth in Asia. Long-awaited negotiations between China, Japan and South Korea on the reduction of barriers to traded goods finally took place in March 2013. The China–Japan–Korea (CJK) FTA, if realized, will benefit all three parties in different ways. China would be able to resist pressure from, and dependence on, Western markets while at the same time undercutting the emerging TPP, which China suspects the US of making it politically impossible for Beijing to join since the budding trade pact contains provisions prohibiting child or prison labor, permitting collective bargaining and requiring tariff elimination, the last item being particularly disadvantageous to China considering its high tariffs on some products such as automobiles (25 percent).10 Japan would gain favored trade status with its two most prominent trading partners in the region. South Korea would be better able to withstand competition from ASEAN and Japan for access to the Chinese market.11 In the 1950s, the European Coal and Steel Community, comprising France, West Germany, Italy, the Netherlands, Belgium, and Luxembourg, pooled its coal and steel resources to create a common market for the production and trade in these products. On a more adventurous note, in the present-day Northeast Asian context, the focus could be on creating a common CJK market for energy resources, such as with oil from Russia’s Eastern Siberia and Far East, and abundant low grade coal from the China–North Korea border region. Seoul and Tokyo can leverage and accelerate their investments and trade on Beijing’s focus on raising income levels in its three northeastern provinces, which are saddled with unproductive State-Owned Enterprises. South Korea under former President Roh Moo-hyun had proposed creating a Northeast Asian Development Bank and forming a buyers’ cartel between the steel industries of China and South Korea for iron ore when the price of the mineral was rising.12 Northeast Asian economic integration should involve not only China, Japan and South Korea, but also eventually North Korea, since it is geographically part of Northeast Asia. As trans-national markets and up-stream linkages developed, low-end manufacturing can take place at North Korea’s Kaesong and Sinuiju with South Korean and Chinese investments for 9 Li Jiabao and Li Xiaokun, “‘Milestone’ Investment Agreement is Signed,” China Daily, May 14, 2012, http://www.chinadaily.com.cn/bizchina/2012-05/14/content _15282436.htm, accessed May 12, 2013. 10 Takashi Terada, “Its China’s Choice to Join In or Stay Out,” Global Asia 8, no. 1 (Spring 2013): 57. 11 Jonathan Berkshire Miller, “Japan’s Adjustment to New Geopolitical Realities in East Asia,” Global Asia 6, no. 1(Spring 2013): 44–5. 12 Ren Xiao, “Korea’s New Administration and Challenges for China’s Relations with the Korean Peninsula,” Asian Perspective 32, no. 2(2008): 175–6.

170

Contentious Integration

their respective proximate markets. So doing would hopefully wean North Korea from its almost total reliance on aid or imports at heavily-discounted “friendship prices” from China in the form of chemical fertilizer, food and heating oil, and therefore Beijing’s need to subsidize Pyongyang’s economy to keep it going. A Northeast Asian Common Market would allow South Korean and Japanese firms to gain production platforms of cheap skilled labor in China and North Korea for the South Korean, Japanese and Chinese markets, and integrate Eastern Siberia and the Russian Far East into the Northeast Asian economic sphere. Environment Environmental and energy conservation are seen as areas for mutually beneficial cooperative projects between China and Japan. Specifically, the focus of bilateral environmental cooperation is on cross-border pollution, since Japan is directly affected by pollution originating from China, and promoting a cleaner environment has become a priority for China’s leaders. Furthermore, cooperation in environmental protection acts like a buffer with Sino-Japanese relations in tense times. For decades, Japan has been helping China reduce greenhouse gas (GHG) emissions as a part of international efforts to combat global warming. Japan and China founded the Sino-Japanese Friendship Centre for Environmental Protection in 1996, with an initial grant aid of 10.5 billion Yen from the Japanese government and expenditure of 66.3 million RMB from the Chinese government, through which Japan dispatched technical experts and equipment to China for scientific research, development of clean energy, information exchange and personnel training.13 In Japan, the available best technologies generally provide a 20–30 percent increase in efficiency compared to the existing stock of energy equipment and apparatus elsewhere.14 China is aiming to reduce its carbon intensity (carbon or carbon equivalent emitted per dollar of output) by 40 to 45 percent by 2020 from 2010.15 As many Chinese enterprises are notoriously energy-draining, a legacy of reckless growth, coal burning, subsidized electricity and lack of welldeveloped environmental and industrial regulations, this has resulted in China requiring five to eight times more energy, depending on the industry, to produce a

13 Sino-Japanese Friendship Centre for Environmental Protection, http://www.chinaepc.cn/gjhjhz/index.html, accessed August 8, 2013. 14 Kanekiyo Kensuke, “Energy outlook of East Asia and energy policy formulation for sustainable development,” in Zha Daojiong, ed., Managing Regional Energy Vulnerabilities in East Asia: Case Studies (London and New York: Routledge, 2013): 33. 15 Victor K. Fung, “How Japan can Profit from a Rising China,” in McKinsey and Company, ed., Reimagining Japan: The Quest for a Future That Works (San Francisco: McKinsey & Co., 2011): 232.

Looking Forward

171

dollar of GDP than does Japan.16 All these mean that, given Japan’s track record in energy efficiency, partnership with China in these areas is logical and desirable. By means of the Clean Development Mechanism of the Kyoto Protocol, enacted in 2005, China gains access to technology from Japan which enables it to continue developing economically at the same time that it is reducing the costs of pollution; and Japan also benefits by offsetting its own emissions while securing a large and growing market in China for Japanese firms exporting environmental technology.17 Through environmental cooperation and coordinating their positions in international conferences, China and Japan also hope to pressure the US into acceding to the demands of the Kyoto Protocol, which it has so far refused to sign. In 2005, China made common cause with Australia, India, Japan and South Korea and the US and established the Asia-Pacific Partnership on Clean Development and Climate, which emphasized energy cooperation and technological cooperation in lieu of setting mandatory emissions-cutting targets.18 As a member of the partnership, China obtains advanced energy-efficient technology from these affluent countries, and improves its international image in green environmental conservation without accepting legally binding targets mandated by the Kyoto Protocol, which was enacted in 2002 and took effect in 2005. For Japan, when the Kyoto Protocol Target Achievement Plan was formulated in 2005, it was anticipated that although Tokyo was to implement the maximum possible energy conservation policies, there would be a shortfall of 1.6 percent from its binding goal of reducing GHG emissions of 6 percent on the base year level of 1990.19 As such, the Kyoto Protocol’s Clean Development Mechanism would be useful device for Japan to buy Certified Emissions Reduction “credits” from China to offset its own emissions. In August 2005, Japan’s JMD Greenhouse Gases Reduction Co. Ltd. and Juhua Co. Ltd. based in China’s Zhejiang province agreed to a joint project whereby JMD would provide all funding and technologies to decompose HFC 23, a hydro fluorocarbon by-product of the production of refrigerant gas discharged by one of Juhua’s chemical plants.20 According to the contract, JMD would purchase Certified Emissions Reduction to offset Japan’s emission reduction obligations under the Kyoto Protocol at a price of at least US$6.5 per ton of carbon dioxide (CO) emission, for a total of US$255.8 million over the seven contractual years

16 Ibid. 17 Tong, Xinhua and Duan, Haiyan, “ZhongRi qingjie fazahnjizhi xiangmu hezuo yanjiu” [“A Study on Sino-Japanese Cooperation through the Clean Development Mechanism”], Xiandai Riben Jingji [Contemporary Economy of Japan], 152, no. 2(2007): 11–14. 18 Chen Gang, China’s Climate Policy (London and New York: Routledge, 2012): 106. 19 Shoichi Itoh, “China’s Surging Energy Demand: Trigger for Conflict or Cooperation with Japan?” East Asia no. 25(2007): 84. 20 Chen, 37.

172

Contentious Integration

based on an expected annual reduction of more than 5.62 million tons of CO.21 This arrangement could be consider a concrete measure of Sino-Japanese cooperation in environmental conservation. China’s Environmental Protection Act was enacted as enforcement law as early as 1979, and established formally in 1989. However, most of these regulations have remained ineffective and environmental problems have worsened because China gave priority to economic growth in the name of economic reform, and set different standards regarding emission standards of polluted substances on national and local levels, which allowed businesses to find loopholes. Airflows from China have impacted on PM 2.5 air pollution problems in Japan, as pollution standards of China are far looser than those of Japan. In Japanese environmental standard, pollutant content of 35 microgram/m3 in the air is considered dangerous, and in the standard of the US embassy in Beijing, the equivalent level is 250 microgram/m3, but pollutant level in Beijing exceeded even this on more than half of the days in January 2013.22 Under an agreement signed with China in December 2006, the Japanese government has been allowed to invest 793 million Yen (US$7.2 million) and set up stations with experts in 50 Chinese cities to monitor the level of acid rain and sandstorm.23 Further agreements signed in December 2007 has allowed for training in energy-saving, cooperation in energy conservation and joint research on emissions of pollutants and greenhouse gases as well as sandstorm control.24 Since the elimination of Official Development Assistance (ODA) to China in 2008, Japanese environmental cooperation with China has been funded through technical assistance, and Japan’s Minister of Economy, Trade and Industry (METI) continues to provide Green Aid for projects on energy conservation and efficiency, and for its own priority areas such as reducing acid rain.25 In recent years, afforestation projects such as tree planting to retard desertification in northern and northwestern China undertaken by volunteers and young people in China have been encouraged and funded in tandem by both China’s State Forest Administration and Japan’s Forestry Agency under the aegis of the non-governmental organization (NGO) Sino-Japanese Folk Green Cooperation 21 Shanghai Securities News 2006: A7. 22 Sakai Nobuhiko, “We Cannot Afford to See PM 2.5 Pollution Indifferently,” GFJ Commentary, April 26, 2013. 23 Xinhua News Agency, “Zhongguo suanyu yu shachenbao jiance wanluo jianshe xiangmu huo Riben wuchang yuanzhu” [“Receiving Japanese Non-Requited Aid in the Construction of a Monitoring Network for China’s Acid Rain And Sandstorm”], http:// news.xinhuanet.com/environment/2006-12/20/content_5512237.htm, accessed August 8, 2013. 24 Elizabeth Wishnick, “Competition and Cooperative Practices in Sino-Japanese Energy and Environmental Relations: Towards an Energy Security ‘Risk Community’?” Pacific Review 22, no. 4(2009): 417. 25 Wishnick, 417.

Looking Forward

173

Council.26 Since yellow dust storms blowing out of China’s Inner Mongolia also affect South Korea, an NGO based in South Korea called Future Forest has organized a “Green Corps” of young Koreans to plant a Great Green Wall of some 6 million willows and poplars in the Kubuqi Desert of Inner Mongolia, with the cooperation of the All-China Youth Federation and the local government, to halt desertification and prevent further soil erosion, both being the main causes of these dust storms.27 Since both the Japanese and South Korean sides are as concerned about this environmental issue as China, an expanded Sino-Japanese–Korean Folk Green Cooperation Council involving a “Green Corps” of young environmentalist volunteers from all three countries to conduct environmental conservation works in China should be considered for the future. In 2011, the PRC’s twelfth Five-Year Plan highlighted the need for environmental conservation by stressing the importance of developing an energy-saving and environmentally-friendly society. Aside from providing ODA to the least developed areas of China for poverty reduction programs, Japan has been proposing and implementing new initiatives in “greening” Asia, such as offering to provide smartgrid power systems, water-purification devices, and energy-saving electronic appliances, or share its technologies in building them.28 China is already receiving and acquiring such technologies from Japan regularly, particularly through the annual Japan–China Energy Conservation Forum, more of which will be described later.29 With the increasing energy use and environmental consciousness in China, environmental cooperation between Japan and China will focus more and more on energy aspects, particularly on the development of “cleaner” alternative energy sources apart from coal and fossil fuels, and renewable energy technologies such as solar power. Solar energy is a fast-growing industry in China, but it is facing challenges such as talent shortage and a lack of core technologies in the

26 Chinese Forestry Industry Association, “Zhong-Ri Minjian Luuhua Weiyuanhui dishierci huiyi zhaokai” [“Opening of the Twelfth Meeting of the Sino-Japanese Folk Green Cooperation Council”], http://www.chinalycy.org/Article/Show.asp?ID=36, accessed September 8, 2013. 27 Future Forest, http://www.futureforest.org/eng/page/ff/greenwall.asp, accessed September 8, 2013. 28 Remarks by Nogami, at the Public Symposium “Building an East Asian Community,” hosted by the Japan Institute of International Affairs (JIIA), with the support of the Ministry of Foreign Affairs, Japan (MOFA), on March 17, 2010, at Conventional Center Goshiki, Grand Prince Hotel, Akasaka, Tokyo. 29 Ministry of Economy, Trade and Industry, Japan, “Cooperation Reached at the Third Japan–China Energy Cooperation Forum,” http://www.meti.go.jp/english/press/data/ nBackIssue20081128_01.html, accessed May 17, 2010; and People’s Daily, “China and Japan Sees Expanding Co-Op. on Energy Conservation,” http://english.peopledaily.com. cn/90001/90776/90883/6803833.html, accessed May 17, 2010. This forum is co-hosted by Japan’s Ministry of Economy, Trade and Industry, China’s Ministry of Commerce, and China’s State Council National Reform and Development Commission.

174

Contentious Integration

development of solar cells. This is expected to be a fruitful area for Sino-Japanese energy cooperation. Energy Like the rest of the world, China and Japan will continue to be heavily dependent on fossil fuels in the coming decades, even with proactive efforts to promote renewable energy. As such, like most Asian countries which have to meet their energy requirements by purchasing oil, gas and coal from foreign sources, they will have to cope with increasing price volatility as a result of competing demands and growing uncertainties in the international market. To facilitate the realization of an eventual East Asian community, energy cooperation is a key. Sea-lane protection of oil and gas routes and joint exploration of hydrocarbon resources will give substance to the recognition of the role played by natural resources in underpinning and developing a regional community based on shared notions of at least this one type of security consciousness. Such a putative shift from seeing resources as a traded commodity to a cognitive embrace of resources as a norm of mutual security interest would parallel that of Australia and Japan since the late 1960s, where it was shared interests in resources trade for Australia and a sense of (in)security in the case of Japan which provided the catalyst for a relationship grounded in more than just trade,30 although to say that Australia and Japan has since constituted a community is to stretch the word to the point of meaninglessness. In 2009, China became the largest energy-consuming country in the world, overtaking the US in that year, and its energy consumption was projected to increase from 2.06 billion toe (tons of oil equivalent) in 2009 to 3.9 billion toe in 2035.31 Energy demand from Japan will remain modest as its economy has reached maturity and the country is in demographic decline. While Japan is fully dependent on imports for oil and almost wholly dependent on imported liquefied natural gas (LNG), China became a net oil importer in 1993 and began importing LNG in 2006, and is both promoting piped natural gas imports from Central Asia and Russia, as well as constructing a number of LNG terminals along its coastal provinces. Japan has learnt valuable lessons from the two oil price hikes in the mid-1970s and early 1980s, and consequently, developed world-class energy conservation technologies. Still, it has a very low energy self-sufficiency rate of 4 percent,

30 Donna Weeks, “An East Asian Security Community: Japan, Australia and Resources as ‘Security,’” Australian Journal of International Affairs 65, no. 1(February 2011): 68. 31 Kensuke, 14–17.

Looking Forward

175

rising to 16 percent if nuclear energy is included.32 It was the 2011 earthquake and tsunami that triggered the greatest energy crisis for Japan since the 1970s’ oil crisis, which reminded it of the need for a safe and reliable energy supply system. According to the Institute of Energy and Economics, Japan (IEEJ), LNG purchases increased by approximately 14 million tons in 2011 from the previous year, and the increase for oil was 4 million tons, as a result of which spot prices of LNG and low-sulfur fuel oil in the Asian market jumped and continued to stay there, affecting all energy-importing countries in Asia.33 Stockpiling of oil, as in the aftermath of the 1973 oil shock in Japan, would keep people calm and stave off market confusion, but the cost of stockpiling inventories, which by 2011 was equivalent to 193 days of oil consumption, is not low.34 As for China, aside from increasing its own strategic oil stockpile, other priorities for its energy security agenda include multiplication of energy supply routes such as a gas pipeline from a port on the coast of Myanmar to Yunnan to lessen the importance of the Malacca Straits for shipping its hydrocarbon resources, diversification of energy resources from the Middle East to Russia or Central Asia and from traditional fossil fuels to new/“green” energy sources, and acceleration of oil and gas exploration in Africa and other countries in the developing world. From China’s perspective, Japan is trying to obstruct its oil cooperation with other states. Japan’s expressed interest in rerouting a planned East Siberian oil pipeline, originally scheduled for construction from Siberia to Daqing in northeastern China, to Russia’s Sea of Japan coast provided a rationale for Russia to increase its price. It was only after China offered Russia a $20–25 billion line of credit that Russian officials finally agreed on February 17, 2009 to build a spur of the East Siberian pipeline to China.35 There are of course also worries within the Russian leadership itself of the possibility of Russia’s conversion into a resource appendage of China, given the expansion of Chinese energy investments in Russia. As energy importers, China and Japan share common risks to their energy security, which despite their many areas of conflict may provide increasing opportunities for both countries to adopt practices of cooperation to address common energy and environmental risks. Both China and Japan would stand to benefit from cooperating in coordinating price negotiations with hydrocarbon suppliers, and understand that competition over resources would be counterproductive, in that it provides supplier states with greater leverage. However, Chinese and Japanese leaders tend to view energy security in zero-sum terms and focus on relative gains instead.36 If issues at stake can be reformulated as ones of common risks, then despite differences and concerns about relative gains, they may have 32 Shoichi Itoh, “China’s Surging Energy Demand: Trigger for Conflict or Cooperation with Japan? East Asia, no. 25(2007): 91. 33 Kensuke, 25. 34 Ibid. 35 Wishnick, 410. 36 Wishnick, 403.

176

Contentious Integration

greater incentives to narrow down and agree on problems of common energy exploration, exploitation and usage. Despite the political sensitivity for Japan and China of conducting exploration and exploitation of hydrocarbon resources in the contested areas of East China Sea, both governments can still come together and form consortiums from their national oil and natural gas companies to prospect for hydrocarbon elsewhere in the world. Of course, any formula for the exploration and production of oil or gas, and the costs and payoffs associated with these activities, must be agreed to and can be altered only by consensual agreement between both governments. Since normalization, Japan had begun importing crude oil from China’s Daqing in 1973, until the resource ran out in 2004.37 Nonetheless, this constituted the first type of Chinese–Japanese energy cooperation. In the fall of 2005, then Japan’s METI, Nikai Toshihiro and China’s Ambassador to Japan, Wang Yi, met and agreed that “energy efficiency and cooperation” is a most suitable subject for bilateral cooperation. To carry out this initiative, the two governments launched a policy dialogue aimed at thrashing out specific projects and goals on energy conservation, which led to a three-day forum of government officials, business leaders and academics from Japan and China held in Tokyo in May 2006 that marked the start of the annual Japan–China Energy Conservation Forum. Japan also agreed to help train Chinese specialists in energy conservation and coalmining. It was during the visit of Akira Amari, Japan’s METI Minister, to Beijing in December 2006 that the principle was decided that the energy ministers of these two big energy consuming countries of Japan and China would start bilateral regular talks once a year.38 In April 2007, the first policy dialogue between Japanese and Chinese energy ministers was held in Tokyo, and Japan’s METI and China’s National Development and Reform Commission (NDRC) announced a joint statement on “Enhancement of Cooperation between Japan and People’s Republic of China in the Energy Field,” which advocated promotion of energy cooperation by private and public bodies in both countries to achieve energy conservation and efficient use of energy.39 Despite tense relations between Japan and China, particularly since the trawler incident of 2010, bilateral energy conservation activities have broadened and deepened continuously. The seventh Japan–China Energy Conservation Forum was held on August 6, 2012, in Tokyo. The Japanese delegation included Mr Yukio Edano, Minister of Economy, Trade and Industry; Mr Goshi Hosono, Minister of the Environment; and Mr Fujio Cho, Chairman of the Japan–China Economic Association (general incorporated foundation). The Chinese delegation included Mr Zhang Ping, Chairman of the NDRC; Mr Gao Hucheng, China International 37 Kensuke, 34. 38 Shoichi Itoh, “China’s Surging Energy Demand: Trigger for Conflict or Cooperation with Japan?” East Asia, no. 25(2007): 86. 39 Itoh, 85.

Looking Forward

177

Trade Representative of the Ministry of Commerce; and Mr Cheng Yonghua, Chinese Ambassador to Japan. With the attendance of about 1,000 representatives from the private and public sectors (about 600 from Japan and about 400 from China) at the forum, 47 cooperation projects were signed. These joint projects were characterized by the establishment of distributed energy and energy management systems, low carbon urban development, and other cooperative schemes, in addition to projects already in operation in the energy conservation and environment protection fields such as water and sludge treatment and recycling. This indicates the steady expansion of Japan–China cooperation in energy conservation and environmental protection on a business basis. At the forum, both sides presented the results of the followups to the cooperation projects which had been signed previously, including: 1) expansion of the cooperation projects to local areas throughout China; 2) provision of a wide variety of cooperation fields, such as renewable energy and distributed energy (biomass, photovoltaic power generation, and other energy generation); 3) advancement from comprehensive cooperation agreements to specific projects; and 4) progression from model projects to the dissemination of technologies. Prior to the meeting, 10 missions separately visited local companies engaged in the energy conservation and environment protection fields, thereby promoting business matching and business-to-business exchange.40 One way of cultivating an East Asian Community would be to develop multilateral energy-environment frameworks for the region. The Chinese actually tend to prefer multilateral cooperation to bilateral ones, for the sake of certitude in cooperation with other energy consuming countries to ensure security of supplies and efficiency of use, developing a regional energy security framework, and participating more broadly in global energy organizations. Regular meetings of energy ministers of China, Japan and South Korea have been held in the context of the annual meetings of the APT since June 2004. At the Track II level, Chinese, Japanese and Korean experts have discuss both obstacles and prospects for multilateral dialogue among energy consuming states, sponsored by the IEEJ.41 They realize that competition for energy supplies will only increase the bargaining power of hydrocarbon supplying states such as Russia and Middle Eastern countries, while a coordinated approach will facilitate the creation of a regional energy market for consumers. Although intergovernmental discussions have begun among oil importing countries in Asia on more narrowly defined issues of energy security, there are still no trilateral intergovernmental mechanism for comprehensive and concrete energy planning dialogues to be conducted among officials from China, Japan and South Korea.

40 Ministry of Economy, Trade and Industry, Japan, “Results of the Seventh Japan-China Energy Conservation Forum, August 2012,” http://www.meti.go.jp/english/ press/2012/0806_02.html, accessed June 6, 2013. 41 Wishnick, 412.

178

Contentious Integration

The EAS may be an appropriate forum to tackle the related issues of safe energy supply and efficient energy use, if only China can be persuaded to take the workings of the mechanism seriously. This is because the EAS represents a good mix of major energy importers for whom competition for fossil fuels will drive up world energy costs—Japan, China, India, and South Korea—and major energy exporters—Australia, Indonesia and Malaysia. At the Second EAS Summit in January 2007, the leaders of the US, Japan, China, South Korea, India, Australia and New Zealand issued the Cebu Declaration on East Asian Energy Security, which set forth five goals for cooperation: 1) improvement in the efficiency and cleanliness of fossil fuel use; 2) reduction of dependence on fossil fuels; 3) encouragement for open and competitive energy markets; 4) mitigation of GHG emissions; and 5) investment in energy resources and infrastructure.42 The issue of energy security has remained the concern of EAS member states since then. Security Although institutionalization is a measure of regionalism, it is the actions of state actors, based on motivations of cooperation and mutual benefits, which matters most when it comes to promoting regional integration, not having more multilateral institutions or architectures. Providing emergency aid to each other is one sure area that Japan and China can cooperate. As neighbors, search and rescue teams and material assistance can be provided quickly to the other party during natural disasters such as earthquakes or tsunamis. To contribute to maritime safety, Japan engages in Coast Guard Diplomacy. In 2010 alone, more than 4,000 Coast Guard personnel from East Asian countries and India were receiving instructions, training and intelligence from the Japanese Coast Guard Academy in Hiroshima.43 Japan is enthusiastic about intelligence exchange, capacity building and hijacking reporting under the “Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia” (ReCaap). Maritime security cooperation can be an effective way of (re)building understanding and trust between Japan and China. To maintain the rule of international maritime law, Japan, South Korea, and China could also consider forming joint patrols or coming to the assistance of one another’s ships in combating Somali pirates in the Indian Ocean, or other acts of piracy in the high seas. Japan is considering dispatching Japan Self-Defence Force (JSDF) personnel for peace-monitoring tasks overseas, particularly in Southeast Asia, after a ceasefire agreement has been put in place, in shouldering its responsibilities for world 42 Japan Ministry of Foreign Affairs (MOFA). Cebu Declaration on East Asian Energy Security, http://www.mofa.go.jp/region/asia-paci/eas/energy0701.html, accessed December 21, 2012. 43 Interview with Tsunekawa Jun, Senior Research Fellow, National Institute of Defense Studies (NIDS), Ministry of Defense, Tokyo, Japan, on March 3, 2010.

Looking Forward

179

peace and security as any normal middle-sized power would. However, to forestall charges of remilitarization, Japan should only execute these operations together with other countries within a multilateral framework. Japan had defense intelligence contact with China down to the level of Deputy Director-General level of the JDF and China’s PLA until the 2010 trawler incident, which was then stopped for a time being, resumed, and then stopped again following the Senkaku/Diaoyu “nationalization” issue in 2012.44 While China saw the “nationalization” effort of the Japanese government as an illicit attempt to retain what it should have given up with Japan’s surrender at the end of the Pacific War, the Japanese have been worried that China’s tough stance towards the Diaoyu/Senkaku issue demonstrates a vengeful desire to right the wrong of the Japanese invasion of China. As a step towards rebuilding trust between the two countries, this form of contact between their defense intelligence agencies should be resumed immediately. There may also be an opportunity for Japan and China to engage in joint effort to promote a peace settlement between Kachin rebels and the central government of Myanmar. Since international sanctions were eased following the holding of internationally-accepted legislative elections in Myanmar in 2012, Japan wrote off a debt from Myanmar of US$3.7 billion in April that year.45 Abe promised to invest in Myanmar’s industrialization during his visit to the country in May 2013, and the Myanmar government has allowed a Japanese company to run its stock exchange in Yangon and welcomed naval cadets from Japan to visit Myanmar.46 The Abe government has also in February 2013 appointed Nippon Foundation Chairman Sasakawa Yohei as the government’s special envoy to facilitate national reconciliation in Myanmar by contacting the Myanmar government, ethnic minorities there, and governments of other countries.47 China also has good relations with the Myanmar government and regular contacts with the rebels, so both Japan and China should be able to work together on this issue. Conclusion A survey of “Affinity towards China” conducted by Japan’s Cabinet on November 26, 2012, indicated that while in 1978, the population of the Japanese public who indicated they were friendly towards China reached a peak of 78 percent, this 44 Conversation with Ishikawa Takeshi, Defense Intelligence Director, Ministry of Defense, Japan, June 5, 2013, National University of Singapore—East Asian Institute, Singapore. 45 Alistair D.B. Cook, “Japan’s ‘Stealth’ Power in Myanmar,” eai bulletin (Singapore) 15, no. 2(October 2013): 11. 46 Conversation with Lam Peng-Er, East Asian Institute, National University of Singapore, Singapore, May 28, 2013. 47 Cook, 11.

180

Contentious Integration

figure then went below 60 percent after 1989, and by the end of 2012, shrank to the lowest level ever at only 18 percent.48 The relationship between Xi Jinping, China’s president and secretary-general of the CCP since November 2012, and Abe Shinzo, Japan’s prime minister since December 2012, if there is one, can be described as one of hardening attitudes and deepening mistrust.49 For the sake of peace and prosperity in Asia and the Pacific, this state of affairs cannot continue. Establishment of the Trilateral Cooperation Secretariat in September 2011 was a most appropriate way of institutionalizing multilateral cooperation among the countries of China, Japan and South Korea. The Secretariat is the first official international organization instituted among the three countries, finally launched 12 years after the three countries began discussions on the matter in 1999. According to Shin Bong-kil of Korea, its first secretary general, the Secretariat will “expand the scope of trilateral cooperation in a wide range of areas, starting with research on disaster relief, including safety of nuclear power reactors, and a trilateral free trade agreement.”50 The Trilateral Cooperation Secretariat may be considered an institutionalization of the annual series of scheduled China–Japan–Korea (CJK) summits involving these three countries’ leaders since 2008. Hopefully, over the next couple of decades, the countries of ASEAN, China, Japan and Korea would succeed in cultivating a sense of identity as core members of an East Asian Community. Levels of interaction in East Asian countries must involve not only inter-governmental exchanges, but also those of the private sectors such as education, media, culture and non-governmental organizations. Scholars and officials from the Network of East Asian Think-tanks (NEAT) and the Council for Security Cooperation in the Asia Pacific (CSCAP), involved in their private capacities as the second track to the APT and ARF respectively, should be allowed by their governments to play larger roles in proposing measures to mediate conflicting interests between Japan and China in the arrangements that they are supplementing. Pursuing these relationships will result in the thickening, deepening and livening of many more overlapping areas of interest than present, in terms of trade, investment, tourism, non-traditional security, economic assistance and sharing of development experiences. As such, something like the Japan–China committee of leading historians from both sides to product a textbook of “parallel history” discussed in the first chapter would be a major step forward toward achieving a better understanding of each other’s sentiments, which forms the basis of how one side interprets the suggestions, decisions and moves of the other side, both bilaterally and in multilateral arrangements. Indeed, the essential conditions 48 Xie Xiaodong, “Japanese Policies towards China: Changeability and Stability,” China International Studies (January/February 2013): 112–13. 49 Kurt Campbell, “Threats to Peace are Lurking in the East China Sea,” Financial Times (London, UK), June 26, 2013: 7. 50 Chosun Ilbo (Seoul), “Korea–China–Japan Cooperation Secretariat Opens in Seoul,” http://english.chosun.com/site/data/html_dir/2011/09/28/2011092801114.html, accessed September 8, 2013.

Looking Forward

181

for any regional community-building effort must be the restraining by both sides of nationalistic posturing that could easily be interpreted as militarily threatening to the other, and achieving a compromise on the outstanding differences between China and Japan, particularly their territorial dispute, which has emerged as the most troublesome aspect of their already unsatisfactory relationship after the end of the Cold War. For that, from the highest political leaders of both sides to the common person, all avenues for exploring and reaching such mutual understanding and reconciliation must be attempted. Peaceful Sino-Japanese relations are crucial for the East Asia region and beyond. Instability would only harm the interests of both countries and that of their neighbors. It would be best for relations between Japan and China to be driven by shared interests, such as in the fields of economic exchanges, and promoting security in neighboring countries as a form of positive-sum cooperation. Nonetheless, experiencing shared risks may also motivate them to expand and deepen collaborative efforts with one another in dealing with problems of environmental degradation and advancing energy efficiency. There are many regional and world issues that cannot be solved by China or Japan alone, for example, nuclear proliferation by North Korea, cross-border crime, environmental problems or global economic recessions. Greater comfort and closer cooperation between China and Japan in all fields can only bring positive results, but for such sentiments and conducts to develop, there has to be recognition and understanding of each other’s needs and fears. Hopefully, out of these interactions driven by both expectations of gains and losses, a habit of adopting a cooperative pattern of behavior towards one another may develop, to reduce or eliminate the current bilateral state of mistrust and suspicion, for the sake of both regional and world peace and prosperity.

This page has been left blank intentionally

Index

Abe Shinzo 11, 23, 70, 77, 101, 111, 123, 160, 161, 179, 180 ACFTA (ASEAN-China Free Trade Area) 53, 54, 69, 89, 112–13, 144, 154, 155–6, 159 ADMM+ (ASEAN Defence Ministerial Meeting Plus) 5, 6, 149–51 Afghanistan 59, 60, 61, 99, 100, 101, 109 APEC (Asia-Pacific Economic Cooperation) 5, 24–8, 32–6, 86–9, 144 China 26, 28–30, 32, 34, 35–6, 86, 87, 88, 89 Japan 2, 23, 24–5, 26–8, 31–2, 33–4, 86, 89, 118 US 24, 26, 27, 29, 30–31, 33, 34, 35, 87 APT (ASEAN Plus 3) 5–6, 28, 36, 45, 49–52, 63, 91–3, 118, 120, 160, 168 ARF (ASEAN Regional Forum) 2, 5, 36–41, 86, 89–91, 151, 158–9 China 4, 6, 37, 38–40, 41, 86, 90, 91, 104, 118, 157, 158 Japan 2, 6, 37, 38, 40, 41, 86, 89, 91, 118 US 152–3, 157, 158 ASEAN (Association of South East Asian Nations) 5, 7, 28, 37, 38, 120, 125, 147, 148, 159, 164 ADMM+ 5, 6, 149–51 APEC 29, 32, 34, 35 China 53–6, 64, 69, 89, 112–13, 116, 153–6, 158, 160 EAS 93, 94, 95 Japan 69, 85–6, 88, 113, 116–17, 160 US 148, 151–3, 154, 159 ASEAN-China Free Trade Area, see ACFTA ASEAN Defence Ministerial Meeting Plus, see ADMM+ ASEAN Plus 3, see APT ASEAN plus China 45, 53–6, 89, 91, 149

ASEAN plus Japan 113 ASEAN Regional Forum, see ARF Asia-Pacific Economic Cooperation, see APEC Asian Monetary Fund 50–51, 52, 124 Association of South East Asian Nations, see ASEAN Australia 24, 28, 32, 33, 37, 52, 123, 125, 141, 143, 160–161 China 134–5, 139–40, 156, 162, 163 Japan 24, 25, 27, 89, 93, 134, 162, 174 US 80, 88 BMD (ballistic missile defense) system 81, 99–100 Bogor summit 32–3, 34 Cambodia 50, 53, 88, 114, 116, 155, 159, 160 CBMs (confidence building measures) 38, 39, 40 Central Asia 43, 46, 61, 100, 124 China 56–7, 60, 61, 62–3, 101–2, 104–5, 108, 174 Japan 6, 100, 104, 105–10 Russia 57, 60, 61 SCO 57–8, 60, 61, 62, 98, 104, 108, 109 ‘Central Asia plus Japan Dialogues’ 6, 100, 105, 108–9 CEPAs (Closer Economic Partnership Agreements) 125 China (PRC) 7, 21, 43–4, 50, 65, 103, 124, 127, 164, 165, 166 ACFTA 53, 54, 69, 89, 112–13, 144, 154, 155–6, 159 APEC 26, 28–30, 32, 34, 35–6, 86, 87, 88, 89 ARF 4, 6, 37, 38–40, 41, 86, 90, 91, 104, 118, 157, 158

184

Contentious Integration

ASEAN 53–6, 64, 69, 89, 112–13, 116, 153–6, 158, 160 ASEAN plus China 45, 53–6, 89, 91, 149 Australia 134–5, 139–40, 156, 162, 163 Central Asia 56–7, 60, 61, 62–3, 101–2, 104–5, 108, 174 Chunxiao gas field 17, 76, 78, 120 CJK Free Trade Agreement 52, 168–9, 180 Diaoyu islands 15, 16, 17, 20, 23, 67, 121, 161, 179 disputed waters 70, 73, 79–80, 136, 157–9 EAS 6, 56, 86, 93, 94, 95, 96–7 energy cooperation 171, 174, 175–7, 178 environmental cooperation 114, 131, 141, 170–71, 172–4 gas fields 76–8, 120, 176 India 79–80, 163–4 Japan 1–5, 8–12, 36–7, 66–9, 70–72, 82–3, 85–6, 118–21, 167, 179–81 Kazakhstan 99, 101–2, 106 Mekong River Basin 54, 114, 115 Myanmar 116, 155, 179 North Korea 47–8, 49, 81, 97–8, 112, 169–70 official apology 8, 12–14, 65, 67 Peace Mission exercises 99, 104 PICs 129–31, 133–6, 137, 139–42 SCO 56, 57, 59, 60, 62–3, 98–9, 100, 101, 104–5, 108, 109 South China Sea 37, 38, 53, 90–91, 138, 147–8, 150, 153, 157–9 South Korea 167, 168, 169, 170, 173 Taiwan 17, 18, 19, 29–30, 39, 45, 67–8, 72, 74, 87, 129–30, 133 TPP 6, 143, 169 trawler incident 68, 78–80, 119, 163 US 3, 44, 49, 118, 169 Yasukuni Shrine 13, 14–15, 52, 65, 67, 69, 76, 82, 86 China-Japan-Korea (CJK) Free Trade Agreement 52 Chunxiao gas field 17, 76, 78, 120

CJK (China-Japan-Korea) Free Trade Agreement 168–9, 180 Clinton, B. 4, 18–19, 30, 31, 34 Clinton, H. 90, 98, 152, 153, 157 CMI (Chiang Mai Initiative) 50, 51, 91–2, 125 CMIM (Chiang Mai Initiative Multilateralization) 91, 92 COC (Code of Conduct) 91, 153, 158, 159 confidence building measures, see CBMs counter-terrorism 49, 57, 59, 60, 61, 62, 87, 99, 156 CPIC (China-Pacific Island Countries Economic Development and Cooperation) Forum 129, 130–31, 137, 139, 141, 142 Diaoyu islands 15–17, 20, 23, 67, 70, 89, 119, 121, 161, 179 disputed waters 65, 67, 70, 73, 76–8, 79–80, 121, 136, 148, 153, 157–9 DOC (Declaration of Conduct) 53, 158 DPJ (Democratic Party of Japan) 70, 75–6, 104, 111, 120 DPRK (Democratic People’s Republic of Korea), see North Korea dumpling incident 71–2 EAC (East Asian Community) 50, 75, 93–4, 95, 120, 121, 165–7, 177, 180 EAEC (East Asian Economic Caucus) 28, 36 EAEG (East Asian Economic Group) 28, 36 Early Voluntary Sectoral Liberalization, see EVSL EAS (East Asia Summit) 5, 92, 93–8, 159, 178 China 6, 56, 86, 93, 94, 95, 96–7 Japan 6, 56, 86, 93, 94–5, 96, 123 Russia 96 US 94, 96, 152, 159 East Asian Community, see EAC East Asian Economic Caucus, see EAEC East Asian Economic Group, see EAEG East Asian regionalism 1–2, 4, 5, 32, 36, 49–50, 64, 95, 118, 123–4

Index East China Sea 52, 79, 82–3, 120, 138, 161, 176 Chunxiao gas field 17, 76, 78, 120 Diaoyu islands 15–17, 20, 23, 67, 70, 89, 119, 121, 161, 179 disputed waters 65, 67, 73, 121 gas fields 17, 76–8, 120, 176 Economic Corridors 114, 115–16 economic integration 1–2, 23–8, 50, 54–5, 86, 142–3, 168–70 ‘Ecotech’ 35, 36 Eminent Persons’ Group, see EPG energy cooperation 61, 100, 106, 171, 174–8 environmental cooperation 114, 116, 131, 141, 170–74, 177 EPG (Eminent Persons’ Group) 30, 32, 34 EVSL (Early Voluntary Sectoral Liberalization) 35 4PT (four party talks) 45, 46 Framework Agreement on Comprehensive Economic Cooperation 53, 89 gas fields, disputed 17, 76–8, 120, 176 HADR (Humanitarian Assistance and Disaster Relief) 150–51 Hatoyama Yukio 76, 114–15, 120, 123 Hu Jintao 15, 55, 62–3, 67, 70, 71, 77, 100 India 52, 61, 103, 123, 125, 148 China 79–80, 163–4 Japan 80, 88, 91, 162–3 Indonesia 44, 94, 117, 148, 151, 154, 155 institutionalization 1, 2, 24, 26, 38, 40, 43–4, 45–6, 51–2, 63–4 integration 1–3, 4, 165 Japan 7, 36, 65–6, 82–3, 88, 103–4, 124–6, 127, 165–7 6PT 110–11, 112 APEC 2, 23, 24–5, 26–8, 31–2, 33–4, 86, 89, 118 ARF 2, 6, 37, 38, 40, 41, 86, 89, 91, 118 ASEAN 69, 85–6, 88, 113, 116–17, 160 Australia 24, 25, 27, 89, 93, 134, 162, 174

185

Central Asia 100, 104, 105–10 China 1–5, 8–12, 36–7, 66–9, 70–72, 82–3, 85–6, 118–21, 167, 179–81 CJK Free Trade Agreement 52, 168–9, 180 Diaoyu islands 15–17, 20, 23, 67, 70, 89, 119, 121, 179 disputed waters 38, 70, 73, 80, 136 DPJ 70, 75–6, 104, 111, 120 dumpling incident 71–2 EAS 6, 56, 86, 93, 94–5, 96, 123 energy cooperation 106, 171, 174–7 environmental cooperation 114, 116, 131, 170–73 gas fields 76–8, 120, 176 India 80, 88, 91, 162–3 maritime security 73–4, 125, 134, 137–8, 150, 178–9 Mekong River Basin 114–15, 116 North Korea 9, 27, 39, 49, 81, 90, 110–12, 124 ODA 36, 100, 106–7, 109, 115–16, 125–6, 128–9, 131, 137, 138, 172 official apology 8, 12–14, 65, 67 PICs 128–9, 131–2, 135–6, 137–9, 142 SDF 16, 21, 49, 80, 81, 89, 117–18, 122, 161, 178–9 South Korea 9, 10, 11, 27, 80, 81, 169 Southeast Asia 117, 160–63, 164 TAC 55–6, 113–14 Taiwan 3, 17–18, 19–20, 67–8, 72–5, 82, 129–30, 133 TPP 6, 143–4 trawler incident 68, 78–80, 119, 163 UN Security Council 21, 132, 136 US 3, 19–20, 21, 26, 27, 52, 75–6, 80, 104, 112, 121–4, 161–2 US Security Alliance 21, 75, 104, 117, 121, 122, 123, 125 Japan-ASEAN Comprehensive Economic Partnership Agreement 54, 85, 113 Jiang Zemin 12, 13, 19, 43, 45 JICA (Japan International Cooperation Agency) 108 Joint Declaration on Cooperation in the Field of Non-Traditional Security Issues 53, 55

186

Contentious Integration

Kazakhstan 57, 99, 101–2, 105, 106, 107 Koizumi Junichiro 10, 21, 65, 66, 70, 72, 85, 93, 113, 165–6 North Korea 110, 111 official apology 14, 65 Yasukuni Shrine 13, 14–15, 52, 65, 86 Korea, Democratic People’s Republic of (DPRK), see North Korea Korean peninsula 37, 46, 48, 63, 80–82, 98 Kyoto Protocol 171 Kyrgyzstan 57, 61, 62, 99, 106

Obama administration 96, 138, 143, 151–2, 153, 159, 161, 167 ODA (Official Development Assistance, Japan) 36, 100, 115–16, 125–6, 172 Central Asia 106–7, 109 PICs 128–9, 131, 137, 138 official apology, Japan China 8, 12–14, 65, 67 South Korea 13, 14 oil reserves 16, 76–7, 102, 105, 106, 174, 175, 176

LDP (Liberal Democratic Party, Japan) 4, 8, 14–15, 16, 18, 72, 75, 111, 120

Pacific Island countries, see PICs Pacific Islands Forum, see PIF PAFTAD (Pacific Free Trade and Development) 24 PALM (Japan-Pacific Leaders’ Meeting) summits 128–9, 137–9, 142 PBEC (Pacific Basin Economic Council) 24 Peace Mission exercises 99, 104 PECC (Pacific Economic Cooperation Council) 24 Philippines 80, 117, 147, 148, 152, 155, 157, 158, 159 PICs (Pacific Island countries) 127–8 China 129–31, 133–6, 137, 139–42 Japan 128–9, 131–2, 135–6, 137–9, 142 US 134, 137, 138, 140–141 PIF (Pacific Islands Forum) 127–8, 129, 131, 132, 137, 139, 142

Malaysia 28, 93, 94–5, 117, 143, 155, 158 maritime security 73–4, 87, 125, 134, 137–8, 150, 178–9 Mekong River Basin 54, 114–15, 116 Memorandum of Understanding on Agricultural Cooperation 53 military exercises 57, 61, 62, 80, 81, 99, 104, 157–8, 161, 162, 163 missile tests 3–4, 19–20, 39, 81, 97, 110 MITI (Ministry of International Trade and Industry, Japan) 24–5, 27, 28 MOFA (Ministry of Foreign Affairs, Japan) 27, 28, 113 Myanmar 116, 155, 179 Nanjing Massacre 9, 10, 12 North Korea (DPRK) 46–9, 63, 80–81, 98, 112, 169 China 47–8, 49, 81, 97–8, 112, 169–70 Japan 9, 27, 39, 49, 81, 90, 110–12, 124 nuclear weapons 46, 47–8, 49, 64, 89–90, 97, 98, 110 US 46, 47, 48–9, 90, 97, 98, 112 Northeast Asian Common Market 112, 167–8, 169–70 NTS (Non-Traditional Security) issues 39–40, 53, 55, 56, 60, 149, 165 nuclear weapons 3–4, 14, 20, 39, 49, 56, 63, 82 North Korea 46, 47–8, 49, 64, 89–90, 97, 98, 110

RATS (Regional Anti-Terrorist Structure) 59, 62 RCEP (Regional Comprehensive Economic Partnership) 6, 144, 145 regional integration 1–5, 32, 44–6, 57, 63–4, 86, 93, 116–17, 118–24, 125, 167, 178 regionalism 1–2, 5, 164, 166–7, 178 ‘relative gains problem’ 6–7 Russia 56, 59–60, 96, 100, 104–5, 106, 175 North Korea 47, 49, 81 Peace Missions 99, 104 SCO 57, 59–60, 61, 63, 98–9, 101, 104, 108

Index SCO (Shanghai Cooperation Organization) 6, 45, 46, 56, 57–63, 64, 98–101, 104–5, 106, 108, 109, 122–3 SDF (Self Defense Force, Japan) 16, 21, 49, 80, 81, 89, 117–18, 122, 161, 178–9 Shanghai-5 4, 46, 56, 57, 60, 64 Shirakaba gas field, see Chunxiao gas field Singapore 28, 30, 44, 88, 94, 113, 125, 148, 155, 156 6PT (Six-Party Talks) 5, 45, 47–9, 63, 81, 86, 97, 98, 110–11, 112 South China Sea 20, 147–8, 150, 153, 159, 161 territorial disputes 37, 38, 53, 90–91, 138, 147, 150, 153, 157–9 South Korea 29, 33, 56, 91, 112, 160, 167, 168–70 China 167, 168, 169, 170, 173 CJK Free Trade Agreement 52, 168–9, 180 Japan 9, 10, 11, 27, 80, 81, 169 North Korea 46, 49, 80–81, 90, 98 official apology 13, 14 US 80, 81, 112 Soviet Union 3, 56, 104, 105 TAC (Treaty of Amity and Cooperation, ASEAN) 55–6, 113–14, 152 Taiwan 15, 17–20, 127, 136 APEC 29–30, 87 China 17, 18, 19, 29–30, 39, 45, 67–8, 72, 74, 87, 129–30, 133 Diaoyu islands 15, 16, 17 Japan 3, 17–18, 19–20, 67–8, 72–5, 82, 129–30, 133 US 18–19, 49, 72 Taiwan Straits 20, 21, 72, 73–4, 122 territorial disputes 15, 67, 138, 167, 181 Diaoyu islands 15–17, 20, 23, 67, 70, 89, 119, 121, 161, 179 disputed waters 65, 67, 70, 73, 76–8, 79–80, 121, 136, 148, 153, 157–9 South China Sea 37, 38, 53, 90–91, 138, 147, 150, 153, 157–9 Thailand 155, 156, 158

187

threat perceptions 5, 6–7, 15, 20–21, 38–9, 65–6, 73–4 TMD (Theatre Missile Defence) system 38–9, 49, 62, 110, 121–2 TPP (Trans-Pacific Partnership) 6, 143–4, 167, 169 trade liberalization 23–5, 26, 27, 30–31, 32–6; see also APEC trawler incident 68, 78–80, 119, 163 Trilateral Cooperation Secretariat 180 Turkey 101 UN (United Nations) Security Council 21, 47, 97, 112, 132, 136 US (United States) 3, 23, 28, 44, 61, 63, 88, 142–3, 144–5, 148, 151–3 Afghanistan 99, 100, 101 APEC 24, 26, 27, 29, 30–31, 33, 34, 35, 87 ARF 152–3, 157, 158 ASEAN 148, 151–3, 154, 159 China 3, 44, 49, 118, 169 EAS 94, 96, 152, 159 Japan 3, 19–20, 21, 26, 27, 52, 75–6, 80, 104, 112, 121–4, 161–2 North Korea 46, 47, 48–9, 90, 97, 98, 112 PICs 134, 137, 138, 140–41 South China Sea 150, 153, 157, 158 South Korea 80, 81, 112 Taiwan 18–19, 49, 72 TPP 143, 144, 167 US-Japan Joint Security Declaration 4, 19, 21, 73 US-Japan Security Alliance 21, 75, 104, 117, 121, 122, 123, 125 Uzbekistan 57, 61, 62, 107–8 Vietnam 50, 53, 80, 114, 116, 148, 152, 155, 157–9 Wen Jiabao 70, 71, 130, 140, 149, 159n38 Yasukuni Shrine 13, 14–15, 52, 65, 67, 69, 76, 82, 86 Yeonpyeong incident 80–81, 82, 112