South Korea and China both welcomed new leaders as Park Geun-hye and Xi Jinping began their presidential terms.  Both leaders sent signals prior to assuming power that they wanted to repair relations that had frayed under their predecessors.  They also faced an early challenge from Kim Jong Un as North Korea defiantly responded to two UN Security Council resolutions condemning Pyongyang’s December 2012 rocket launch and third nuclear test.  Escalating tensions in Korea provided an urgent rationale for Park and Xi to redouble efforts to establish a stable relationship and to respond to North Korean provocations.  China and South Korea must establish a productive relationship and coordinate policies toward North Korea in an increasingly challenging regional political and strategic environment.

The Senkaku/Diaoyu Islands controversy continued to occupy center stage in the Japan-China relationship.  Trying to find political traction and advance a possible summit, Prime Minister Abe, at the end of January, sent Yamaguchi Natsuo, leader of his coalition partner New Komeito Party, to Beijing, where he met Xi Jinping.  The meeting produced agreement on the need for high-level talks, which have yet to materialize.   In response to Beijing’s efforts to have Tokyo admit the existence of a dispute over the islands, the Abe government continued to insist that a dispute does not exist. To demonstrate the contrary and challenge Japan’s administration of the islands, China increased the number and frequency of maritime surveillance ships deployed to the region.  At the end of April, China’s Foreign Ministry for the first time applied the term “core interest” to the islands.

In the movie “Groundhog Day,” Bill Murray is fated to repeat one day of his life over and over – that description is apt for relations between Korea and Japan. North Korea’s histrionics again dominated media headlines and managed to overshadow the inauguration of Park Geun-hye in February 2013, even while South Korea and Japan under-reacted to the bluster. With Park’s inauguration, new leaders have taken office in every country in Northeast Asia, including North Korea and China, over the past 18 months. Despite new leadership, the issues remain very much the same: North Korean threats, increased South Korea-Japan economic interactions despite continued squabbling over historical and territorial issues, and a reminder that the US remains deeply involved in regional issues.

President Xi Jiping kicked off his first round of foreign visits by traveling to Russia and Africa in late March, just five days after he was confirmed as China’s paramount leader by the National People’s Congress. In comparison, it took Hu Jintao two months and Jiang Zemin two years to set foot in Russia after assuming the Chinese presidency. Both sides hailed the Moscow summit as “historical” for the “special nature” of the Sino-Russian strategic partnership. Xi also became the first foreign head of state to visit the Russian Defense Ministry. Three days after their summit, Xi and Russian President Vladimir Putin met again in Durban, South Africa, where they navigated the annual BRICS Summit toward a more integrated economic grouping. Before and after those trips, however, both men had to deal with a host of difficult and dangerous foreign policy challenges in Korea, Afghanistan, and Syria.

Asia-Pacific regionalism has been spurred by increasing economic integration but pulled apart by territorial tensions. These two trends have proceeded on separate paths with only occasional intersection.  However, security dynamics are likely to increasingly influence regionalism as China rises and the US attempts to “pivot” more of its foreign policy to Asia.  ASEAN continues to serve as a base for regional organizations, but in 2012 questions were raised about whether that center could hold.   ASEAN’s goal to complete the blueprint for the ASEAN Free Trade Area in 2015 puts additional pressure on the group.  On a broader regional plane, the Trans-Pacific Partnership has expanded in recent months with the addition of Japan, Mexico, and Canada. Meanwhile, the launch of negotiations for the ASEAN-based Regional Comprehensive Economic Partnership in late 2012 raises fears of a bifurcated landscape for the Asia-Pacific region into US and Chinese economic “spheres of influence.”

It was deja vu all over again on the Korean Peninsula as the absence of bad news, highlighted during our last reporting period, came to an end when Pyongyang again defied the international community (and UNSC sanctions) by conducting another missile launch, this time successfully, in December. Nonetheless, Kim Jong Un’s New Year’s message was seen by some (but not us) as a harbinger of good news in the year ahead. ASEAN leaders at the yearend round of summits in Phnom Penh (including the East Asia Summit attended by President Obama) managed to demonstrate a greater amount of unity than during their July ministerial, but the lingering South China Sea territorial issue showed no signs of being closer to resolution. Meanwhile, hopes for genuine reform in Burma/Myanmar soared as President Obama made an unprecedented visit following his inaugural visit to Cambodia for the EAS, in the context of his administration’s continuing rebalance toward the Asia-Pacific.

It was out with the new and in with the old in Japan, as the Liberal Democratic Party returned to power amidst a nationalistic campaign that promised to strain relations with the new leadership coming to power in South Korea and China, and perhaps with the new leadership team in Washington as well. President Obama won a second term and Park Geun-hye returned to the Blue House, this time as president. In China, a new leadership took command of the communist party, and they face myriad challenges, many of which are economic in nature. The year closed with a flurry of trade meetings and initiatives designed to capture the energy of the world’s most dynamic economies.

The Liberal Democratic Party won a Lower House election in a landslide and Abe Shinzo became prime minister for the second time amid public frustration with poor governance and anemic economic growth.  The United States and Japan continued a pattern of regular consultations across a range of bilateral and regional issues with tensions between Japan and China over the Senkaku Islands and another North Korean missile launch topping the diplomatic agenda.  The US military presence on Okinawa also featured with the deployment of the V-22 Osprey aircraft to Okinawa and the arrest of two US servicemen in the alleged rape of a Japanese woman.  The year came to a close with Prime Minister Abe hoping for a visit to Washington early in 2013 to establish a rapport with President Obama and follow through on his election pledge to revitalize the US-Japan alliance.

The rare convergence of a US presidential election cycle and China’s once-in-a-decade leadership transition caused both countries to focus their energies and attention domestically in the last four months of 2012. The US held its presidential election on Nov. 6 and China held its 18^th Party Congress Nov. 8-14.  The reelection of President Obama was a relief for Beijing.  Although China has plenty of complaints about his policies, it preferred to deal with him for another four year term, both because of the uncertainty that the election of Mitt Romney would have brought to US foreign policy and because the Chinese generally favor the status quo when it comes to US leadership.   Washington was simply glad to get the Chinese leadership transition underway since it appeared that Chinese leaders and the bureaucracy were distracted and many decisions had been put on hold pending announcement of the new leadership lineup.

US-ROK relations saw several significant events as 2012 ended. President Obama won his reelection against Republican contender Mitt Romney and South Korea had a historic election, with Park Geun-hye of the Saenuri Party being elected as the first female president in the country’s (and indeed East Asia’s) history.  Sandwiched between these elections, North Korea conducted a successful rocket launch, putting an object into orbit for the first time and marking a major milestone in its decades-long effort to develop an intercontinental ballistic missile capability. Meanwhile, the US and ROK successfully concluded an agreement extending South Korean missile ranges, but remained deadlocked on the revision of a bilateral agreement on civilian nuclear energy.

The importance of Southeast Asia in the US “rebalance” to Asia was underscored by President Obama’s visit to Thailand, Burma (Myanmar), and Cambodia in November, covering both bilateral relations and the region’s centrality in Asian multilateralism.  Secretaries Clinton and Panetta also spent time in the region, the latter reinvigorating defense ties with Thailand and linking US security interests among Australia, India, and Southeast Asia.  While visiting Jakarta in September, Clinton reinforced US support for the ASEAN plan to negotiate a formal South China Sea code of conduct, endorsing the six-point principles Indonesian Foreign Minister Marty Natalegawa negotiated after the failed ASEAN Ministerial Meeting in July.  At the East Asia Summit, the majority of ASEAN states, Japan, and the US insisted that the South China Sea appear on the agenda despite objections from Cambodia and China.  Obama’s visit to Myanmar occasioned the declaration of a “US-Burma partnership,” though the visit was marred by violence against the Rohingya population in Rakhine (Arakan) state. Washington is also enhancing military ties with the Philippines, Thailand, and Indonesia as part of the “rebalance.”