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Since the territorial dispute erupted, there has been limited contact between the leaders of Japan and China. Prime Minister Abe Shinzo and President Xi Jinping have met only once since the initial meeting at the Asia-Pacific Economic Cooperation (APEC) conference in Beijing in November 2014, when they decided to put an end to their standoff. The military risk reduction agreement that they sought remains unfinished, and while the economic interests in both countries remain, they are insufficient to motivate political compromise. It is too early to tell whether we are seeing a slow recovery or a fundamentally altered relationship. Both Tokyo and Beijing, however, have far less interest in a bilateral reconciliation agenda; leaders in both capitals are focused on the far more complicated process of strategic reorientation within the Asia Pacific.

The Japan-China relationship today is far less predictable even as Abe and Xi seek to regain stability in their relationship, and this suggests a new role for the United States. While it would be easy to attribute this tension to the territorial dispute over the Senkaku (Diaoyu) Islands, there is far more at stake for Tokyo and Beijing than the sovereignty of these remote, uninhabited islands in the East China Sea. Broader regional maritime tensions around the rocks, shoals, and reefs of Asia have implications for economic as well as sovereignty claims. The UN law of the sea is a recent maritime regime, ratified by Japan and China in 1996, and offers the potential for peacefully resolving many of these disputes. Yet the basic security dilemma presented by China’s increasing military capability has become increasingly obvious. As a US ally, Japan depends on US military forces for its security, and the island dispute has raised new questions about how best to deter potential aggression in the East China Sea. For the first time, it is conceivable that an incident or miscalculation could lead to military conflict between Japan and China, which would then involve the US military. Not only did the United States need to clarify its intentions to defend the Senkaku Islands, it also had to develop a joint approach with Japan to crisis management coordination that would lessen the risk of escalation to war.

The choices of Japan, China, and the United States are critical to regional confidence in the multilateral management of regional disputes. The interaction between these three major powers has now become infused with uncertainty. The US-Japan alliance now faces the question of how to deter aggression and cope with coercion short of the use of force. Tokyo worries that Washington will compromise its interests with Beijing; and policymakers in Washington for the first time worry that the alliance may embolden Tokyo should there be an incident between Japanese and Chinese forces. And, relations between Washington and Beijing have become increasingly tense as Chinese island reclamation and construction in the South China Sea suggests a far larger Chinese ambition for testing the ability of the United States to protect the open sea lanes that carry at least 30 percent of world trade.¹ Existing regional institutions, largely organized around ASEAN, seem woefully unprepared for the new, major power jostling that characterizes today’s Asia. Recent intrusions by Chinese coast guard vessels into the waters not only of Vietnam and the Philippines but also of Malaysia and Indonesia—champions of the ASEAN Code of Conduct under negotiation with Beijing since 2002—are changing perceptions of Chinese intentions when it comes to maritime boundaries. This complex task of managing China’s growing influence thus far highlights the growing tensions among Asia’s largest powers.

Japan-China Relations Recalibrated

For decades after normalizing relations, leaders in Tokyo and Beijing largely agreed that their priority was building economic interdependence. Political reconciliation proved more difficult. The violence at Tiananmen Square in 1989 created worries about China’s future, but so too did the growing regional tensions in the wake of the Cold War. Japan worried about China’s intentions with Taipei and Pyongyang; China worried about Japan’s increasing military cooperation with Washington and others across Asia. The growing Chinese maritime reach ultimately created a direct clash of interests, and their longstanding differences over the sovereignty of the Senkaku (Diaoyu) Islands in the East China Sea resurfaced, highlighting a new scenario that could bring their militaries into direct contact. By the end of the first decade of the twenty-first century, leaders of both countries could imagine themselves in the military standoff across the East China Sea.

Japan and China have since recalibrated their relationship. Although both countries invested a great deal in trying to redefine their diplomatic ties from 2006 to 2008,² domestic politics in both countries undermined the search for a “reciprocal, mutually beneficial” basis for the future. Instead, the two governments confronted disagreement after disagreement, and rising skepticism within each country about the potential for partnering with the other.³ Political change in both countries amplified contention. By the time Abe and Xi came to power, the deterioration of trust seemed complete and a new approach to restoring bilateral dialogue imperative.

Military Response to Island Clash

The military tensions between Tokyo and Beijing have yet to recede. Around the Senkaku Islands, the coast guards of both countries now regularly patrol the waters. China now sends patrols with dedicated ships to defend its claim to sovereignty over the Diaoyu.⁴ Japan’s coast guard now has a fleet dedicated solely to the protection of its Senkaku waters, stationed at Ishigaki, as well as the legal authority to detain and arrest anyone who lands on Japan’s islands.⁵ Both countries have plans to increase their coast guard capacities. China has reorganized its maritime forces, unifying four forces into a new coast guard under the State Oceanic Administration,⁶ and is expected to deploy larger ships to the East China Sea. Moreover, it is reportedly interested in building a new coast guard base at Wenzhou.⁷ Japan has increased its coast guard budget since a Chinese fishing trawler collided with Japanese coast guard vessels in 2010; this year’s budget request was 12 percent higher than the 2010 budget.⁸

Japan and China must now contend with the far greater possibility that their militaries could clash. The disputed islands may be patrolled by the coast guards, but the East China Sea is also home to Japanese and Chinese air and naval forces. During the tensions of 2012, it became increasingly apparent just how quickly the two militaries would come into contact. Japanese fighters became far more sensitive to the defense of the islands after a small Chinese aircraft violated the islands’ airspace for the first time in December 2012. A month later, the Chinese frigate locked its fire control radar on a Japanese destroyer. China declared a new air defense identification zone across the East China Sea in November 2013. Japan has upgraded the tempo of its intelligence, surveillance, and reconnaissance missions across the sea. By 2015, Tokyo reported its unarmed reconnaissance aircraft were being threatened by dangerously close encounters with Chinese fighter jets.⁹ The possibility of a mistake was high and the consequences of a military incident between Japan and China disastrous. Finally, there has been a steady increase in Chinese fleet activity in and around the East China Sea and the disputed islands since tensions in the South China Sea have emerged.¹⁰ Foreign Ministry spokesman, Lu Kang, has repeatedly warned against Japan’s involvement in the South China Sea that “Japan’s actions of deliberately intervening in the South China Sea issue and playing up regional tensions run counter to regional peace and stability.”¹¹ On January 12, 2016, Chief Cabinet Secretary Yoshihide Suga stated that if necessary the Maritime Self-Defense Force (MSDF) would supplement coast guard capability in and around the Senkaku Islands.¹²

The US-Japan alliance too has adjusted to the increasing risk of military encounters between China and Japan. As tensions over the islands increased from the fall of 2012 through 2013, Washington sought to engage both Tokyo and Beijing in reducing tensions, pointing out the real danger of miscalculation and inadvertent conflict. In the spring of 2014, President Barack Obama in Tokyo made it very clear that the United States would consider coercion against the Senkakus grounds for invoking article five of the bilateral security treaty, the US obligation to assist in the defense of Japan. For Tokyo planners, the scenario of a contingency that arose from a minor incident into a confrontation short of the use of military force was a grave concern. For Washington, greater understanding of Japanese analysis and decision-making was needed. Thus, the alliance, already committed to reviewing and revising the bilateral defense cooperation guidelines, began to focus on this new scenario of a clash in the East China Sea. In April 2015, the US and Japanese governments announced the conclusion of their deliberations, and one of the innovations was an Alliance Coordination Mechanism that would allow Tokyo and Washington to have real-time and constant means of managing a future crisis.¹³ The alliance, therefore, is not only designed to deter and defend against aggression; it is now equipped to prevent if possible the escalation of a crisis into military conflict.

Seventieth Anniversary Diplomacy

Beyond the changing military balance in the East China Sea, Japan and China also had to manage the amplified sensitivities surrounding the seventieth anniversary of the end of World War II. In both countries, political leaders focused on commemorating 2015 in a way that spoke to the changing attitudes within as well as the growing pressures on diplomacy abroad. The diplomatic opportunity for presenting a Chinese perspective and a Japanese perspective on the changes wrought in their countries since 1945 was not to be missed. Abe visited Washington in April, beginning a year of diplomacy designed to counter Chinese efforts to paint Japan as a revisionist power. In his address to a joint session of Congress, Abe spoke to the legacy of war with the United States: “Enemies that had fought each other so fiercely have become friends bonded in spirit.”¹⁴ In May, Xi attended President Putin’s commemoration of the end of World War II in Moscow, lending his support not only to Putin’s effort to reframe Russia’s wartime experience but also standing with Russia as American and European leaders boycotted the gathering due to their objection to Russia’s invasion of Crimea and continued military support of Ukrainian rebels.

In August and September, first Abe and then Xi spoke to their own citizens on the legacies of WWII. Japan’s prime minister had taken issue with the way past prime ministers had apologized for the war in previous national commemorations of the war’s anniversary. There was considerable worry that an Abe statement, issued on August 15, would exacerbate tensions with Japan’s neighbors. Perhaps, to reassure or to build a consensus, Abe appointed a commission to deliberate on what his statement should and should not say. After more than five months of deliberations, the summaries of which were posted on the prime minister’s website, the committee made its recommendations.¹⁵ Not only China was sensitive to the impending statement; South Koreans too were watching Japan’s conversation on its past with great care.

Xi organized the first national “Commemoration of Seventieth Anniversary of Victory of Chinese People’s Resistance against Japanese Aggression and World Anti-Fascist War” on September 3, 2015. Another national holiday was created on December 13, associated with Japanese atrocities in Nanjing. Across Asia, China’s celebration of the end of World War II was anxiously anticipated. While looking back at the war, Beijing also put on parade its increasingly powerful military arsenal. The militaries of some of its neighbors were also encouraged to attend.¹⁶ No state leaders from Western Europe or the United States or Japan attended.¹⁷ Putin and President Park Geun-hye along with heads of states from Central Asia, Vietnam, Myanmar, and Cambodia joined Xi on the dais at Tiananmen Square to celebrate the defeat of the Imperial Japanese Army by the Chinese Communist Party.¹⁸

The contrast in the messaging between Japan’s prime minister and China’s president is instructive.¹⁹ No longer seeking quiet reconciliation with each other, Abe and Xi sought a global audience for their narrative on the war. While the Abe statement did not satisfy those who felt Japan needed to continue to express remorse for its behavior in China, South Korea, and across Asia and to apologize for the suffering it caused during its attempt to dominate the region, the prime minister clearly had moved away from his prior conviction that Japan need not apologize. The statement was a complex rendering of contrition and reflection, while showing that Abe placed priority on considering how his message would affect Japan’s diplomacy in the region. Xi tied his seventieth anniversary message to his vision of the “Chinese Dream,” and to the aspirations of his domestic audience. Both leaders, in fact, spoke to the changing perspective of younger Japanese and Chinese. Abe claimed it was his generation’s responsibility to ensure that future generations would not “be predestined to apologize.”²⁰ Xi spoke to Chinese aspirations to break free from the humiliations of colonialism and war in the twentieth century, pointing out that China’s victory against Japanese aggression “opened up bright prospects for the great renewal of the Chinese nation.”²¹

Abe, Xi, and Obama in Asia

Without a doubt, the dissonance between Tokyo and Beijing has had an impact on the region. Increasingly, Washington and Beijing are also encountering their differences in the Asia-Pacific region. While some argue that Beijing is intent on regional hegemony,²² others see a China with legitimate interests at stake. Nonetheless, most American experts now agree that US interests and Chinese interests may be at odds. Japan and China began to compete for regional influence long before Abe and Xi came to power, but the intensity of that contest today is greater. Both Abe and Xi have made no secret of their ambition for regional influence. Since becoming prime minister, Abe has traveled to Southeast Asia three times, and made many smaller trips to visit bilateral partners in the region. Southeast Asian leaders have also made a point of visiting Tokyo. Xi too has traveled to Southeast Asia to promote the concept of “One Belt, One Road,” proposed by China in 2013 as a trade and infrastructure network, linking Chinese commerce along the old silk road through Asia to Europe.²³

Beyond his immediate neighbors, Japan’s prime minister has also sought out other major regional players, first and foremost Japan’s ally, the United States. Not only did revising their defense guidelines in April 2015 after 18 months of deliberations upgrade the agenda for military cooperation to include deterrence and defense of Japan, but it also extended that mission to new domains such as space and cyber. The 24/7 Alliance Coordination Mechanism designed specifically for crisis management and prompted by the island tensions between Japan and China allows the two governments to communicate not only between militaries but also between the highest levels of government.

Abe has also sought out the leaders of India and Russia, an effort at strategic balancing calculated to highlight shared concerns about China’s rising influence in Asia. In Modi in particular Abe has found an enthusiastic partner. During his five-day visit to Japan, it was apparent that both leaders share not only personal chemistry but also the goals of bolstering their national economies and contending with China’s growing influence, leading Abe to call the bilateral relationship a “special strategic and global partnership.”²⁴ With Putin, however, Abe has found it more difficult to find common cause. The Russian invasion of Crimea, of course, constrained his diplomacy with Russia. Japan joined the United States and the European nations in sanctioning Russia for its invasion of Crimea and military activities in the Ukraine. Abe had already promised Putin a state visit to Tokyo but that had to be postponed. Nonetheless, Abe continued to meet with Putin on the sidelines of major multilateral gatherings, keeping alive bilateral discussions on their territorial dispute and shared strategic interests in the region.

In the last several years, China has raised regional suspicions and prompted diplomatic counterbalancing. China and Japan once shared an interest in building regional institutions. Chinese diplomacy in the region was quite successful as Beijing found common cause with the countries of ASEAN in the principles of multilateralism and consensus-building that were so central to ASEAN’s vision of regional governance. Japan, as a strong advocate for and supporter of greater regionalism, especially the nascent ASEAN regional forum, saw Chinese engagement with ASEAN-centered multilateralism as evidence of its success. The reassuring days of China’s peaceful rise strategy are long gone, and this too has affected Japan’s perception of China’s role in regional institutions. While not all of this is related to the Japan-China relationship, it is clear that the two find themselves on opposite sides on issues such as maritime security, development and infrastructure financing, and the role of the United States in Asia.

Asia’s Maritime Challenges

Worries about maritime security now separate China from other maritime powers in the Asia-Pacific. Japan and China’s island dispute clearly rattled the smaller nations of Asia, some of which were also experiencing maritime challenges by China. The Philippines began its confrontation with China over the Scarborough shoal in 2012, an encounter between maritime forces that ended badly for Manila, and continues today. The inability to peacefully resolve the dispute with Beijing has led it to seek arbitration of the maritime dispute in an UN law of the sea tribunal. Beyond the question of territorial sovereignty lies the much more difficult question of whether Beijing’s expansive and historically based claim to maritime rights across the South China Sea is justified under international law.

The quiet effort by the United States to mediate the confrontation between China and the Philippines over Scarborough proved unsuccessful. Obama in a visit there in 2015 expanded defense cooperation with Manila, and a year later the two governments concluded an agreement to add five new bases open to US military forces in order to give the US Navy better access to the South China Sea.²⁵ Japan’s dispute with China over the Senkaku Islands, therefore, was even more keenly watched in the region. Would China challenge Asia’s most modern nation, and if so, how would its ally in Washington react? China’s deployment of coast guard vessels in the waters around the disputed islands tested Japan’s territorial defenses. For many in Asia, with lingering memories of an aggressive Japanese military, it also tested Japan’s postwar commitment to resolving its disputes peacefully. Moreover, the dangers inherent in the rising nationalisms in both Japan and China were clear to the neighboring nations; and, so too were the consequences of this clash between Asia’s two largest powers. The United States became the destination for many of Asia’s diplomats, and Washington was asked not only to assist in individual disputes with Beijing but also to help mitigate the escalating tensions between Japan and China and prevent an outbreak of war.

The future of maritime Asia has now become the focus of US-China relations. Maritime tensions in the East China Sea began to recede after Obama’s visit to Japan in 2014, but Chinese behavior in the South China Sea had begun to worry its neighbors even more, putting this at the top of the agenda when Xi visited Washington in September 2015. The accelerated buildup on contested islands in the Spratley’s, as well as more overt Chinese efforts to access Vietnam’s exclusive economic zone (EEZ) and territorial waters, compounded regional worry about China’s ultimate intentions. The United States and Japan consulted openly about maritime stability in Asia, as did other maritime states such as Australia, India, Vietnam, and the Philippines.

In parallel, Tokyo too sought to assist maritime partners in Southeast Asia in their effort to build coastal defense capacities. An agreement with the Philippines to provide equipment was announced on February 29, 2016,²⁶ exercises between the MSDF and the Philippine Navy were held off Palawan Island in 2015, and MSDF destroyers and a training submarine visited Subic Bay to observe the annual US-Philippine Balikatan exercises.²⁷ Abe endorsed a higher-level dialogue with Vietnam on Asia’s maritime concerns when Communist Party Secretary Nguyen Phu Trong visited Tokyo in September 2015.²⁸ For the first time in April 2016, two Japanese destroyers called at an international port on Cam Ranh Bay in Vietnam, which faces the South China Sea.²⁹ Finally, Japan joined the United States and India in the Malabar exercises, formalizing trilateral naval coordination for the first time.³⁰

The United States in Asia

This year marks the final year of the Obama administration and its rebalance to Asia. Evaluations of this rebalance are mixed,³² but the last eight years have produced some significant progress as well as some learning by US policymakers as regional tensions have emerged. Already the election-year debate on foreign policy, including trade policy, especially among Republican candidates, is disturbing to many in Asia. Events in the region will also shape American choices, as will the alliance relationships that support the US presence in the Asia-Pacific. Three areas of US Asia policy will be of particular importance as the next president takes office.

First, the tensions between China and its neighbors in the East and South China seas, where territorial disputes abound and maritime boundaries are contested, will continue to force the United States to devise a strategy for managing China’s increasing maritime activism. Few nations in Southeast Asia have maritime forces capable of contending with China’s growing fleet, and many sought Washington’s support. In addition, Asian waters are largely unmonitored, and many states cannot fully police their own territorial waters much less be aware of maritime activity in their EEZs. The disappearance of Malaysian airline flight MH370 laid bare the lack of satellite and surface monitoring of the vast waters of the Pacific. In 2014, the ASEAN defense ministers for the first time met with a US secretary of defense to discuss the need for greater maritime situational awareness across the Pacific. Providing transparency in the activities in the South China Sea was in large part an effort to gain regional awareness of Chinese activities there.³³ After a series of bilateral consultations across the region, the United States announced its Southeast Asian Maritime Security Initiative in May 2015 at the Shangri-La Dialogue.³⁴ As part of this initiative, the United States will help fund the Philippines and other partners in Southeast Asia up to USD 425 million for maritime capacity-building efforts.

Second, the US ability to effectively compete in the economic governance of Asia remains unclear. Trading partners such as Australia, Singapore, and Japan have openly advocated for rapid US ratification of the TPP. After long and difficult negotiations on the rules of TPP, as well as the provisions for market access across the partnership, the United States is poised to complete this multilateral initiative. Yet, at home the politics of trade remain a barrier to completion; and across the region the political capital required for ratification in each of the other 11 signatories should not be underestimated. For many the TPP is not solely a new economic partnership with the United States, it is a litmus test of the US ability to lead in a rapidly changing Asia. Beijing has successfully launched, the Asian Infrastructure Investment Bank (AIIB), and its One Belt, One Road vision suggests that it is getting ready for a far more comprehensive economic strategy that will enhance the economic interdependence of the Asian continent. Neither of these initiatives should be viewed as detrimental to either US or Japanese interests. In fact, once they are more fully established, the United States should consider how best to take advantage of the commercial opportunities they present. 

Finally, the next administration must move beyond the rhetoric of the presidential campaign to reassure allies and partners in Asia of the continued commitment to the peaceful resolution of disputes and the continued effort at confidence building and risk reduction across Asia.The Korean Peninsula remains divided, and North Korea, led by Kim Jong-un, presents today the greatest danger to regional peace. Acting in concert with Seoul, Tokyo, and Beijing, Washington must raise the costs to Pyongyang for its proliferation and its provocations. Continuing to work collectively across the region on ensuring free and opens seas will also require dedicated US leadership. Increasing transparency across the maritime domain will provide greater predictability, as will increasing the multilateral cooperation currently being developed to ensure that maritime boundaries are respected under international law. The UN law of the sea must be developed and strengthened so as to provide a venue for dispute resolution. The United States must take seriously its responsibility not only for deterring aggression but also for building norms and capacities for maritime security. The United States must continue to organize collective action among its allies and partners in solving Asia’s challenges.