During the third quarter, China reaffirmed its support for multilateralism by attending a series of meetings held in conjunction with the annual gathering of ASEAN foreign ministers and by hosting a four-nation ministerial conference on drug control. On the bilateral level, Thailand’s prime minister visited China, while Li Peng, chairman of the Standing Committee of China’s National People’s Congress, journeyed to Hanoi. China and ASEAN were still unable to reach agreement on a Code of Conduct for the South China Sea. Officials are now studying a compromise formulation drafted by the Philippines.

The stalemate in cross-Strait political dialogue has continued in large part because Beijing has no incentive to make progress with Taiwan President Chen Shui-bian that would benefit the Democratic Progressive Party (DPP) in Taiwan’s December elections.  Rather, Beijing has continued to indicate its preference for dealing with the opposition – a tactic that may again prove counterproductive. Taiwan’s economy has slid into recession.  Economic problems and pending World Trade Organization (WTO) accession have focused Taipei’s attention on cross-Strait economic relations. In these circumstances, Chen overcame resistance within his own party to closer economic ties with China. The Economic Development Advisory Conference (EDAC), convened by Chen, produced a new political consensus that should mark a watershed in the development of cross-Strait economic relations.  Separately, the prospect of Sino-U.S. cooperation against international terrorism is creating some anxiety in Taiwan.

Inter-Korean relations during the past quarter were marked by two major events.  True to form, each pointed in opposite directions.  In August, a contentious visit to Pyongyang by a group of Southern unification activists brought tensions within the ROK over Northern policy to boiling point, leading to the forced resignation of the unification minister and the collapse of the ruling coalition.  But in September, doubtless under pressure from Moscow and Beijing, Pyongyang suddenly announced its readiness to resume dialogue with the South, having frozen this for most of the year in reaction to the Bush administration’s initial hostility.  Ministerial talks were duly held in Seoul, and a schedule was set to reopen most of the various tranches of dialogue and cooperation that had been in abeyance – as well as some encouraging new ones.

Our last two articles concentrated on business and civilian links, as an important substratum that has continued – and is probably irreversible – even in the absence of official North-South contacts.  This time the focus reverts to the inter-state level and assesses the prospects for real progress.  Minimally, we are back where we were in February in terms of formally picking up the various strands and projects.  That is positive, but it may not be enough.  The past half-year’s freeze plus Northern provocations did real damage to the incipient peace process: they soured the public mood in South Korea and severely weakened South Korean President Kim Dae-jung politically.

Hence to rebuild the initial post-summit optimism and momentum of a year ago will take more than merely formal meetings.  South Koreans will now demand substantial progress and real reciprocity from the North on concrete issues like reconnecting road and rail links.  Absent that, in little over a year they will vote in – as may happen anyway – a new president who will be less generous than Kim Dae-jung.  The window for North Korean Leader Kim Jong-il is thus closing, with much hinging on whether and when he makes his long delayed visit to Seoul.  And over all this now looms the dark shadow of Sept. 11, although so far the fall-out for Korea looks oddly positive.

After almost one year of intensive expansion in the Sino-South Korean economic and political relationship, this quarter there was a breather and old themes re-emerged. ChinesePresident Jiang Zemin visited Pyongyang for the first time in over a decade to re-consolidate relations with the DPRK and to repay two successive visits by North Korean Chairman Kim Jong-il to Beijing in May of 2000 and to Shanghai in January of this year.  Although Jiang’s trip was overshadowed by Chairman Kim’s anachronistic three-week pilgrimage to Moscow in August, the visit re-solidified the DPRK-PRC relationship and re-confirmed Chinese commitments to assist the DPRK economically. It was also an indirect catalyst for renewed inter-Korean dialogue.

On the Sino-South Korean economic front, this quarter provided an important opportunity to assess the long-term future of the economic relationship. South Korean business redoubled its rush to take advantage of its proximity to the only island of sustained growth in the global economy.  However, this quarter also saw the public emergence of second thoughts among South Korean researchers who began to see clouds on the horizon, mainly in the form of China’s rising competitiveness, which threatens to become a force that could eventually overtake South Korean competitiveness in key sectors of the global market.  The dark side of rapid growth in Sino-South Korean ties was evident in the form of increased drug smuggling from China, illegal entries by an increasing number of ethnic Korean Chinese using fake Korean passports, frustrations over perceived unequal treatment of ethnic Korean Chinese when they returned to Korea, and continuing under-the-surface tensions on how to manage North Korean refugees.

The summer provided no respite from the controversies troubling Japan’s relations with China. Japan’s internal debate over history, in this instance the adoption of a history textbook for middle schools, continued to buffet bilateral relations with China.  At the same time, Japanese Prime Minister Koizumi Junichiro’s announced intention to visit the Yasukuni Shrine on Aug. 15, to many the very symbol of Japanese militarism, only further exacerbated relations.  The issue came to dominate bilateral discourse.  As Aug. 15 approached, it was almost all Yasukuni, almost all the time.  In the end, Koizumi yielded to internal and external (read: Chinese) pressures, visiting the shrine on Aug. 13.  Following the visit, Koizumi turned Japanese diplomacy toward a damage limitation strategy.

It was also rough going on the economic front.  The trade dispute over Japan’s imposition of temporary safeguards on Chinese agricultural exports and China’s own retaliation against Japanese automobile and electronic exports remained unresolved. Meanwhile, other Japanese industries were exploring similar relief from Chinese exports.

Security relations continued to be troubled by the appearance of Chinese maritime research vessels in Japan’s exclusive economic zone (EEZ).  Their activity appeared to contravene the protocols of the prior notification agreement negotiated earlier in the year.  At the same time, the release of “Defense of Japan 2001,” Japan’s defense White Paper, gave greater definition to China’s military modernization and the implications for Japanese security.

The quarter’s events were obfuscated by the Sept. 11 terrorist attacks on New York City and Washington, D.C.  Seoul and Tokyo responded to the horrific events with statements of support for America’s anti-terrorism campaign.  On the bilateral fronts, Japan-South Korea relations continued their downward spiral from last quarter because of history-related disputes with little hope of resolution in sight. Japan-North Korea relations remain dead in the water.  Is there any good news?  Not really.  But being the perpetual optimist, this column notes some interesting developments that shed light on an otherwise gloomy quarter.

The third quarter began with the signing of a historic friendship treaty between Russia and China that was inspired, at least partially, because of their difficult relations with Washington in the post-Cold War years. By the quarter’s end, however, both Moscow and Beijing found their foreign policy priorities significantly altered by the tragic terrorist attacks on the United States on Sept. 11. Russia and China are now faced with the possibility of a strategic plunge by the world’s sole superpower into their highly volatile and sensitive “backyard.” Indeed, the Sino-Russian friendship treaty and the Shanghai Cooperative Organization (SCO) – the two pillars of Moscow and Beijing’s regional foreign and security policies – are subject to severe test by a fast changing security environment at both the global and regional levels.

While Europe has long been an important economic power in the Asia Pacific, its political profile until recently has been rather weak. In recent months, however, Europe has taken important steps to strengthen its political involvement in the region, notably on the Korean Peninsula. This more active stance reflects progress in efforts to make European foreign policies more coherent and effective through a strengthening of the European Union’s “Common Foreign and Security Policy,” including the appointment of a high representative for foreign relations. Europe’s increasing influence in the Asia Pacific can also be felt economically, as Europe’s negotiations with Beijing over China’s WTO membership have made clear. Still, in keeping with its peculiar characteristics as a “composite” international actor and its rather modest self-defined role in the Asia Pacific, Europe’s political influence in the region remains that of an important subsidiary player, rather than of a great power. On the whole, Europe’s modest but gradually growing involvement has been constructive and welcome.