China-Japan rivalry is one of the most enduring security dilemmas in East Asia. What began as a dispute over borders and historical grievances has expanded to encompass issues of trade and even Taiwan. The rivalry is beginning to undermine the economic integration of East Asia, is intensifying military tensions in the region and is threatening to undermine the crisis-prevention mechanisms that have so far prevented war from breaking out.
Mutual distrust has become a major factor affecting the relations between China and Japan. Chinese actions in the East China Sea and restrictions on Japanese exports and tourism have been seen as an attempt to exact an economic price from Japan for its opposition to Chinese claims in the area. Japan is meanwhile seeking to strengthen relations with countries such as the Philippines, and to participate more fully in US security arrangements, which has further angered China. In this way, a vicious circle of action and reaction has been established in which neither side can afford to give ground and in which the whole relationship seems to be headed in a more confrontational direction. Unless there is some external intervention to disrupt this pattern of events, the relationship is likely to continue to deteriorate.
The economic damage of the current conflict is already visible and irreversible. The long-standing dispute over the islands is impacting the fast-growing trade between China and Japan. Global supply chains for semiconductors, electronics and automotive parts are all set to be affected. All these are highly globalised value chains and, as such, are highly vulnerable to disruptions. Tourism is a very important sector in many countries of South East Asia, and the decline in tourism caused by travel bans and civil unrest in the region is starting to be felt. The rise in naval and air activity in disputed territories and airspace could lead to repeated incidents between local countries and perhaps even involving external powers. This would serve only to heighten the complex security tensions that currently prevail in the region.
The three major structural risks are as follows: 1. Routine maritime encounters in high traffic sea lanes. The risk of an unintended escalation in maritime encounters in the high-traffic sea lanes of the Asia-Pacific region due to miscommunication or accidents, leading to a crisis. The consequences could develop rapidly and be very difficult to control. 2. Economic shock: The risk of an economic shock to the whole of Asia due to the ongoing US-China trade tensions. If the tensions escalate to a full-blown trade war, it is possible that the Asia-Pacific region, and smaller economies in particular, could be severely hit. 3. Crisis occurring in the absence of a credible emergency consultation mechanism. Should a crisis occur in the Asia-Pacific region, the lack of an emergency consultation mechanism that is viewed as neutral and credible would diminish the chances of diplomats being able to negotiate a peaceful solution to the crisis. If trust is eroded in multilateral mechanisms such as the ASEAN Regional Forum (ARF), the Asia-Pacific Economic Cooperation (APEC) forum, or the Shangri-La Dialogue, then the possibility of averting a crisis through negotiations would significantly decrease.
The time calls for a bridge builder or an objective mediator. There are obviously several actors who can attempt to mediate the current conflict. As members of ASEAN, Indonesia and Singapore enjoy the reputation of being neutral, and as members of the regional organisation, they may play a key role in mediating the dialogue in the region.
Economic powerhouse East Asia needs four new bridge builders: to reduce the risk of military accidents; to stabilise the economy; to reduce increasing income disparities; and to practice more inclusive diplomacy. On the security front, ways to ease current heightened tensions between China and Japan include setting up hotlines for emergencies; agreeing to a code of conduct for encounters at sea and in the air; and refraining from conducting large-scale military drills in disputed waters. These steps will not resolve the underlying issues of the long-standing disputes over the destiny of the former imperial territories of China and Japan. But they might help to decrease the likelihood of maritime and aerial incidents arising from these disputes from becoming a trigger for war.
Mutual concessions to achieve economic stability must consider the principle of stability and predictability. China should ease in a gradual manner the constraints it has imposed, while Japan and the other countries concerned must accelerate the structural reform of their supply networks to reduce their dependence on Chinese exports of resource and energy products, and to increase their stockpiling of strategic products. The promotion of bilateral trade through the development of public-private partnerships could help to mitigate the negative impacts of the current trade tensions and reduce the use of trade as an economic and political tool.
Diplomacy must also change. Track II is good for coming up with low-level policy ideas while at the same time improving unofficial dialogue and personal relations less politically. For instance, ASEAN could be used by Indonesia and Singapore to promote working-level dialogue and discussions of interest between members on issues such as economic recovery, climate change and environmental protection. Such issues carry less political weight and therefore less potential for conflict. Using a less political language and focusing on the practical aspects of the relationship can also serve to reduce political tensions when discussing more contentious issues, such as the Taiwan dispute, and at the same time, start to think ahead of more long-term political solutions to the problem.
Security cooperation in the Asia-Pacific should be about providing common goods. Joint humanitarian assistance and the holding of maritime exercises are good examples of security cooperation that can provide tangible and direct benefits to people across the region, whilst at the same time promoting and demonstrating cooperative behaviour. In an age of transactional security relations, when trust has been eroded, confidence-building measures (CBMs) can make alliances and security partnerships work more effectively, and provide opportunities for leaders to deliver on commitments to mutual restraint and conflict reduction, which they can credibly communicate to domestic audiences.
In principle, outside interference could still have a useful role to play. However, any attempt to recreate the old bipolar world of blocs must be ruled out. The potential of confidence-building measures and economic stabilisation measures, such as technical assistance or Track II dialogue, is likely to be greater than that of containment measures. It remains to be seen whether multilateral bodies such as the ASEAN Regional Forum and the East Asia Summit will still be able to function in the years ahead, as long as the activities they are engaged in remain centred on concrete, functional and non-confrontational issues.The China–Japan dilemma is not an unbridgeable chasm. With timely intervention by impartial mediators and reciprocal steps from the two capitals, the immediate threat to peace can be averted, and a stable framework for the management of the disputes can be established. First and foremost, impartial mediators must ease current tensions and revive dialogue channels on an urgent basis. Provided leaders show restraint, the current standoff can be turned into a lasting factor of stability in the region — a factor that would benefit the countries involved, as well as other states in the Asia–Pacific region
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Simon Hutagalung
Simon Hutagalung is a retired Indonesian Foreign Ministry diplomat and received his Master’s degree in Political Science and Comparative Politics from the City University of New York. He writes opinion pieces for Europeantimes and all opinions expressed in his article are his own.
