Despite the absence of formal dialogue, Beijing and Taipei have been signaling interest in achieving direct trade and travel and probing possibilities for new mechanisms for negotiations. Taiwan President Chen Shui-bian took an important step in moving this process forward when he indicated that the private sector could play a role in negotiating the “three links.” Beijing responded saying it was ready to negotiate with business representatives from Taipei. The challenge is whether mutually acceptable roles for the private and government elements in a new negotiating process can be defined to both sides’ satisfaction.  It is not clear whether this can be done. Economic ties continue to expand; the long-awaited oil exploration joint venture deal has been signed. Even while these and other positive developments occur, Beijing and Taipei continue to confront each other internationally and strengthen their military preparations.

For a second successive quarter, what former British Prime Minister Harold Macmillan once described as his biggest problem – “Events, dear boy. Events” – have conspired to alter at the last moment the inter-Korean prognosis. Last time it was good news, with a renewal of stalled dialogue. But now the Korean People’s Army’s (KPA) June 29 sinking of an ROK patrol boat, killing five, may be a final blow to ROK President Kim Dae-jung’s Sunshine Policy. This wholly unexpected and allegedly unprovoked attack – a spiteful bid to rain on Seoul’s soccer parade? – did not escalate militarily but politically must cast a long shadow. It will weaken those in Seoul or Washington who would give DPRK leader Kim Jong-il the benefit of the doubt, while vindicating the “axis of evil” camp. As such, not for the first time, it is baffling to see what Pyongyang hopes to gain by this own goal; the fuller implications will be clearer next time we report. The bulk of this article was completed before this sad day.

April began promisingly: Kim Dae-jung’s special envoy returned from Pyongyang with commitments to restart stalled dialogue. But only family reunions were held; other meetings did not materialize. Yet in June, de facto official talks on a new topic, telecoms, tentatively agreed that Southern firms will launch mobile service in Pyongyang, perhaps even this year. Unofficial contacts continued, including a boat and two planeloads of civic groups and a tête-à-tête between the offspring of the ROK and DPRK’s erstwhile leaders. Moreover, cooperation is extending into new areas such as teaching, in fields from information technology (IT) to nuclear science. In short, it is a mixed picture: frustrating in many ways, yet not without hope. At the same time, an escalating refugee crisis involving several nations, is a sober reminder of the potential for instability on the peninsula.

The April 15 crash of a China Air flight from Beijing to Pusan in which 129 of 166 passengers died provided a tragic omen for a tumultuous quarter in the relationship between Seoul and Beijing.  World Cup euphoria in Seoul and disappointment for a Chinese team that got shut out in three straight matches during its first World Cup appearance somewhat overshadowed a diplomatic imbroglio in Beijing over a steady flow of North Korean refugees seeking asylum in foreign embassies and consulates.  The diplomatic standoff over the refugees that had arrived in the South Korean compound may mark a turn to a more complex and contentious relationship between Seoul and Beijing as the two countries celebrate the 10th anniversary of diplomatic normalization.

The level of public awareness of both good and bad aspects of the relationship continues to broaden through exports of pop culture, private sector, and citizen-led exchanges and dramatic footage of one North Korean refugee being forcibly dragged from the South Korean compound by Chinese public security officials.  Governments struggle to construct the diplomatic and political infrastructure necessary to bear the weight of increasingly intensive interactions in a wide range of areas: foreign ministers met on the sidelines of the Asian Cooperation Dialogue (ACD) in June to discuss the diplomatic standoff over North Korean refugees in the South Korean compound and coordinated efforts to respond to the spring “yellow dust” syndrome got high-level attention. The two governments continued to support increased economic coordination, including the signing of currency swap agreements worth $2 billion designed to forestall a repeat of the Asian financial crisis.  Despite a more balanced view in recent months of China as a neighbor who may challenge basic South Korean interests, the underlying force in the relationship remains a widespread perception of China as an irresistible business opportunity and of South Korea as an economic model and significant investor in China’s economic growth.

The quarter started well with a series of high-level visits marking the 30^th anniversary of the normalization of Japan-China relations.  National People’s Congress Chairman Li Peng came to Japan and Japanese Prime Minister Koizumi Junichiro met PRC Premier Zhu Rongji on Hainan Island.

But the ever-present force of history resurfaced April 21 when Prime Minister Koizumi visited Yasukuni Shrine to pay homage to Japan’s war dead.  Less than a month later, the Shenyang incident, in which Chinese police entered the Japanese consulate and forcibly removed North Korean asylum-seekers, turned into a diplomatic cause célèbre.  And prominent Japanese political leaders again waded into the debate over the constitutionality of Japan possessing nuclear weapons.

Both governments, conscious of their respective investments in the anniversary year, worked to keep relations on track.  Agreement was reached on the raising of the mystery ship sunk by the Japanese Coast Guard in China’s exclusive economic zone (EEZ).  And, after holding firmly to its position that the actions of the Chinese police at the Shenyang consulate did not violate the Vienna Convention, Beijing offered Japan face-saving talks aimed at developing guidelines to prevent a similar recurrence.  At the same time, Japan’s growing trade with and investments on the mainland served to cushion relations during the rough patches of the quarter.

The story of the quarter was Japan’s re-engagement with the two Koreas on several levels. For Seoul-Tokyo relations, the World Cup soccer matches overshadowed important, but quiet, efforts at resuming bilateral security dialogue. For Tokyo-Pyongyang relations, baby steps toward resuming long-suspended normalization talks appear to have been made.  Finally, the impact of the World Cup and sports diplomacy on Japan-South Korea relations is not to be underestimated.

Though the 2002 Cup did not mark modernity for either already-modern country, the Cup’s success was in no small part a function of the fact that it was hosted by two of the more advanced, market-savvy, globalized, Organization for Economic Cooperation and Development, open-society countries in Asia.  This not only gave the games a luster not easily tarnished, but it also is a lasting image for Japan-South Korea cooperation.   Not bad for a null outcome.

The second quarter of 2002 witnessed major changes in world politics as President Vladimir Putin’s Russia took gigantic, and perhaps final, steps into the West (joining NATO and going beyond the 1972 Anti-Ballistic Missile Treaty, or ABM). Despite the huge impact of Russia’s Westernization, Beijing and Moscow were able to soft-land their cordial, though sensitive, relationship and to institutionalize the Shanghai Cooperation Organization (SCO), a joint venture that has been under severe constraint following the U.S. strategic return to Central Asia after Sept. 11, 2001. While both Moscow and Beijing improved and/or stabilized their relations with Washington, all three faced a post-deterrence world in which nuclear weapons are no longer viewed as weapons of last resort and in which the incentives for nonnuclear states to obtain those weapons were greater than ever.

U.S. President George W. Bush’s February visit to Japan, South Korea, and China and Washington’s decision to send over 600 U.S. troops, including Special Forces, to the southern Philippines for a unique training mission aimed at directly supporting Manila’s efforts to combat terrorism provided some long‑awaited administration focus on East Asia this past quarter.  Bush’s visit was, by all accounts, successful.  He reaffirmed Washington’s commitment to the U.S.‑Japan alliance as the “bedrock” of peace and stability in East Asia as well as his own faith in Japanese Prime Minister Koizumi Junichiro’s economic reform efforts.  His visit to Seoul helped to contain the damage caused in early January by his State of the Union reference to North Korea as a member of the “axis of evil,” a comment that had raised anxiety levels significantly in the South (and elsewhere). His visit to Beijing reaffirmed Washington’s willingness to build a “cooperative, constructive” (albeit “candid”) relationship with China.

Even while continually stressing Asia’s importance, Bush remained very much on message; the war on terrorism took pride of place in his prepared remarks during each leg of the trip. In other terrorism-related activity, the decision to deploy forces on a temporary basis to the Philippines was also generally well received, a few highly publicized but poorly attended protests notwithstanding.  Nonetheless, concerns remain throughout the region about U.S. unilateralist or “cowboy” tendencies, which were reinforced by the leaking of the Pentagon’s Nuclear Posture Review (NPR), which allegedly called for contingency planning for the use of nuclear weapons against North Korea, China, Russia, and others.

The love fest continues.  U.S. President George W. Bush’s visit to Tokyo (Feb. 17-19), the first stop on his three-nation Asia tour, underscored the strength of the U.S.-Japan relationship and the strong personal relationship shared by the president and Japanese Prime Minister Koizumi Junichiro.  Throughout the first quarter of 2002, U.S. officials continued to applaud Japan’s contributions to the war against terrorism and encouraged Tokyo to do more.

The honeymoon might not last, however.  While officials on both sides of the Pacific agree that the security pillar of the relationship is the strongest it may have ever been, there are mounting concerns about Japan’s economy.  U.S. policymakers worry that economic weakness could undermine Japan’s long-term role within the alliance and the region and have been prodding Japan to take action.  But the U.S. must tread carefully. Sharp warnings or a hard line could spark a backlash.  Equally worrisome is the prospect of a loss of popular support in Japan for U.S. policies, a shift that could be triggered by the perception of U.S. unilateralism in its foreign policy.  Japanese support for the U.S.-led war against terrorism is broad, but it is not deep.  The anger unleashed by the inadvertent omission of Japan from the list of contributors to the Afghanistan conflict is a warning: alliance management is more important now than it has ever been.

U.S. President George W. Bush’s visit to Beijing, Feb. 21-22, was the highlight of Sino-U.S. relations in the first quarter of 2002. President Bush and PRC President Jiang Zemin held in-depth discussions on a broad range of international and bilateral issues and both reaffirmed their commitment to a “constructive, cooperative” relationship. They agreed to intensify high-level strategic dialogue and expand bilateral exchanges and cooperation in the areas of economy and trade, energy, science, and technology, environmental protection, the prevention of HIV/AIDS, counterterrorism, and law enforcement.  Differences persisted over nonproliferation, Taiwan, human rights, and religious freedom. In March, following talks in Washington between Chinese and U.S. officials in charge of nonproliferation matters, there were signs that modest progress might be forthcoming later this year in the dispute over Chinese export controls and sales of missile technology.  Improvement in the relationship was to some extent set back by Taiwan’s Defense Minister Tang Yiau-ming’s visit to Florida to attend a unofficial conference that included senior Bush administration officials.  In protest, Beijing canceled a Chinese Navy ship visit to the United States planned for the latter half of 2002.

From President George W. Bush’s highly controversial “axis of evil” speech in January to a surprise announcement in late March that a high-level South Korean envoy would visit Pyongyang, this quarter was the most tumultuous in recent history in U.S.-Korean relations.  At the end of the quarter, there is no more assurance of diplomatic progress toward peace and stability in the region than there was at the beginning.  Much depends on North Korea’s intentions, which at this point are still unknown.