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Keep ties steady in a time of change

Publication Date : 29-10-2012

 

China, the United States and, quite likely Japan, face leadership changes at a moment of rising tension in the East China Sea.

Even in the best of times, the transitional coincidence would make it challenging for them to manage their strategic relations smoothly. With the dispute between China and Japan over the Diaoyu/Senkaku islands touching off confrontations at sea and protests on land, the risk of miscalculation is higher - with potentially dangerous consequences for the region and beyond.

Even though shots have not been fired, the crisis has taken a toll on the two countries' US$340billion trade partnership: Japanese exports to China shrank 14.1 per cent last month from a year earlier.

If the slide continues, neither country would be a winner. China is a bigger market to Japan than Japan to China, but Chinese manufacturing depends on Japanese machinery and component supply chains. Disruption would hit Chinese factories at a time when China's economy is slowing.

Asean countries especially would be affected adversely if the Chinese economy loses more steam. China is the only economic locomotive that is chugging along, while Europe is down and the US is still struggling.

Chinese leaders and their successors cannot afford to ignore rising middle- class expectations of an even better life than what impressive economic growth in recent years has brought. As in the US, it is still the economy that matters most. Yet, the authorities have not resisted the urge to whip nationalistic feelings into a frenzy as a convenient but perilous attempt at shoring up political legitimacy.

Japan, too, should have known better than to provoke such sentiments in nationalising the rocky islands. Having done so, the governing Democratic Party has set itself up for outbidding the opposition Liberal Democrats in similar nationalistic fervour when an election is held. This will further deteriorate ties with China.

Another complication is that the US has foreclosed the option of mediating the dispute. Although it reaffirmed recently that it has not taken a position, it has also said the islands come within the scope of its 1960 security treaty with Japan. It is only a small consolation that President Barack Obama and his Republican challenger Mitt Romney are not competing on the issue in their current election campaign. Obama would continue with the US pivot to Asia, and Romney wants to stand strong against China. So the next US administration could become embroiled in regional quarrels.

Hopefully, cooler heads will prevail in all three countries to prevent political troubles from morphing into full-blown crises, which could get out of hand. All should accord the highest importance to stable, if not friendly, security and trade relations.

 

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