US Secretary of State Clinton’s recent remarks on US foreign policy demonstrate how fortunate the world is, especially here in East Asia, that she is occupying this key global leadership position. As Japan experiences seemingly never ending political instability, and as the Chinese government’s grip on power may be more fragile than many think, we need Secretary Clinton and the US more than ever.
As she said, there was a perception in the Asia-Pacific that America was absent from the region during the Bush Administration. Both Clinton and President Obama have made it clear that the US is back following 8 years of Republican neglect. The US is now taking an interest again in Korea, Japan, Australia, and has deepened its engagement with China and India. The US’s Strategic and Economic Dialogue in China must be the US’s most important process of bilateral cooperation. It has also just been announced that China and the US are likely to resume military contacts before the end of the year.
The Asia-Pacific currently has too few robust institutions to foster effective cooperation and reduce the friction of competition. The US and Japan now have the chance to breath some life into APEC, as Japan is chairing this year’s APEC events, and the US will be doing so next year. APEC was once a good idea, which turned into a overly polite talk-shop. With leadership and dynamism, APEC could achieve a lot. But the US needs to ratify a free trade agreement with Korea which has been sitting on the shelves for too long. If it cannot do this, how can we take seriously US involvement in the Trans-Pacific Partnership.
The US has bolstered its relationship with ASEAN by signing a Treaty of Amity and Cooperation, and will hold an annual U.S.-ASEAN summit. ASEAN has now agreed to invite the US (and Russia) to participate in the East Asia Summit along with the ASEAN Plus Six group (the six are China, Japan, Korea, Australia, India and New Zealand). It hopes that this will encourage its development into a foundational security and political institution.
The US hopes that developing these institutions will establish habits of cooperation that will be vital to stability and prosperity. But there are still many problems in East Asia. The Six-Party process with North Korea is an on-again/off-again affair, especially now that North Korea is undergoing a leadership transition.
Japan’s political instability is also a worry. After the promising election of the Democratic Party of Japan one year ago, domestic politics have been on a downward trend. The hapless Yukio Hatoyama was replaced by Naoto Kan as Prime Minister. Although not as bumbling as Hatoyama, Kan did manage to get a thorough beating in the ensuing Upper House elections.
The upshot is that Ichiro Ozawa is now challenging Kan for DPJ Presidency (and therefore the Prime Minister position) at its forthcoming 14 September party election. The numbers men are pretty confident that Kan will win. But this will not put the leadership question to rest.
The DPJ is now bitterly divided, and could even split. Ozawa will be waiting for Kan to stumble again, which is highly likely as the economy may well falter in the coming months. The high yen is dampening exports, the only source of growth. So Ozawa is likely to strike again, thereby prolonging Japan’s political instability. Only a very strong and competent leader like former Prime Minister Koizumi could stabilize things, but there is no-one on the horizon.
Whilst ever this instability continues, it is difficult to see Japan playing an effective role in the region, especially in its relationship with China. American military presence remains a crucial stabilizing factor.
Japan’s political instability is probably one factor making its relations with China so fragile. It is only a few months ago that then Prime Minister Hatoyama was courting China with his dreams of creating an East Asia Community. Now tensions have flared up again.
The Japanese Navy recently arrested the captain of a Chinese fishing vessel which allegedly strayed into Japanese waters near the disputed Senkaku island, and collided with two Japanese naval vessels. Instead of just letting him go, and keeping the peace, Japanese prosecutors are holding and interrogating him. A Japanese court has just extended the detention of the captain for 10 days.
This could be an act of deliberate muscle-flexing in response to the Chinese Navy’s bullying of Japan’s Navy in the East China Sea. But it is hard to see that it can achieve anything positive. The boat’s captain could face up to three years in prison if found guilty of causing the collision, but he could be released without charge within days if he admitted obstructing coastguard officials. But experience shows that backing down after such a little affair is much more complicated for face-saving Asians than the initial escalation.
Another incident is the Japanese Finance Minister Yishiko Noda’s concerns about China’s recent purchases of Japanese Government Bonds, as China seeks to diversify its foreign exchange holdings. This is mighty curious. The quantities involved a just trivial, especially compared with China’s holdings of US Treasury bills.
Japan was once dreamt of the yen becoming a major international currency. China’s purchases of Japanese Government Bonds will contribute to such internationalization. And looking further ahead, as its population ageing advances, Japan will need more and more foreigners to invest in its mountain of debt. If Japan really does not want foreigners to buy Japanese Government Bonds, it should raise its consumption tax immediately, and start paying off its debt. Concerns that Japan cannot invest in China’s government bonds are just a red herring. China’s currency is not yet convertible, and its financial markets still lack maturity.
Hilary Clinton argued that “the complexities and connections of today’s world have yielded a new American Moment, a moment when our global leadership is essential, even if we must often lead in new ways”.
This is certainly most true in East Asia which desperately needs US leadership. We need the US to engage constructively with all countries, especially big powers like China, while recognizing and accomodating their aspirations to greater international power. We need it to be alert to the massive fragilities of the Chinese system, and the possible risk of implosion.
We also need the US to manage its relations with unstable and insecure Japan like an understanding parent who can tolerate occasional childish nonsense. In a recent speech, Ichiro Ozawa called Americans “simple-minded” and “single-celled organisms”. He also called Christianity “exclusive and self-righteous”.
When the North Korean state one day falls apart, US leadership in managing the inevitable chaos will be key. And last but not least, when major natural disasters occur like the tragic tsunami of a few years back, it is only the US military that has the capacity to move in quickly and provide the necessary humanitarian support.
Dear American friends, welcome back to Asia!
Remarks on United States Foreign Policy, Hillary Rodham Clinton, US Secretary of State
Council on Foreign Relations, Washington, DC, September 8, 2010
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