During the last quarter of 2009 relations between the two Koreas maintained the slight improvement seen since late August, when two senior Northern figures visited Seoul and met the hitherto excoriated President Lee Myung-bak. This easing is a relief compared to the first year and a half of Lee’s presidency, during which North-South ties went from bad to worse. Yet it is premature to suggest any substantial improvement – much less a return to the engagement of the “Sunshine” decade (1998-2007), which must now be consigned to history.  Rather, what we see is mixed signals from Pyongyang, and to some extent also from Seoul. Having got past initial hostilities, the two governments are now testing and sounding each other out. This is not happening in a vacuum, but in the context of two wider imponderables: whether Kim Jong-il will return to nuclear dialogue in any shape or form, plus the opaque and delicate process of installing his third son Kim Jong-eun as his anointed successor. A surprise currency redenomination in early December, rendering most North Koreans’ savings worthless and reportedly provoking protests, is a reminder that the North’s internal stability cannot be taken for granted – and a blow to those who still aver that the DPRK is at some level trying to change for the better.

The last quarter of 2009 raised hopes for developments in China’s relations with both Koreas.  Chinese Vice President Xi Jinping received head-of-state treatment during his mid-December visit to South Korea. In Seoul, Xi presented a series of proposals to further the China-ROK strategic cooperative partnership, including pressing for a free trade agreement.  President Lee Myung-bak and Premier Wen Jiabao held bilateral talks on Oct. 10 in Beijing on the sidelines of the China-ROK-Japan trilateral summit, which Lee used to promote his “grand bargain” on North Korean denuclearization.

There were also several exchanges between China and the DPRK. In early October, Premier Wen led a large delegation to Pyongyang and proposed a comprehensive set of deals with North Korea. As the first Chinese premier to visit Pyongyang in 18 years, Wen was warmly hosted by Kim Jong-il. Following Wen’s visit, the director of the United Front Department of the Workers’ Party of Korea (WPK) and Pyongyang’s official in charge of inter-Korean relations, Kim Yang-gon, made a five-day trip to China. President Hu Jintao reportedly extended a formal invitation to Kim Jong-il to visit China “at a convenient time” at his meeting with Choe Thae-bok, secretary of the WPK Central Committee and one of Kim’s closest aides, who led a WPK delegation to Beijing in late October.

A flurry of high-level political and diplomatic contacts marked the quarter.  The engagement culminated in the December visit of DPJ Secretary General Ozawa Ichiro to China and his meeting with President Hu Jintao followed by the visit of Vice President Xi Jinping to Japan and his audience with Emperor Akihito.  Both Japanese and Chinese political leaders repeatedly made clear their intentions to advance the bilateral relationship. While progress on issues related to joint development of resources in the East China Sea and resolution of the adulterated gyoza case remained noticeably lacking, public opinion polls suggested an upward trend in the way both Japanese and Chinese viewed each other and the bilateral relationship.

Relations between Japan and the two Koreas were relatively uneventful in the final quarter of 2009. The new Hatoyama government quickly began to show more attention to its relations with its East Asian neighbors and hinted at a small change in priorities with respect to North Korea. South Korea and Japan said mostly all the right things, even while substantively it seemed fairly clear that they continued to have very different opinions about territorial and historical disputes. However, no real movement or dramatic changes came about during the quarter, setting the stage for 2010 – the 100^th “anniversary” of Japan’s annexation of Korea.

The last month of 2009 was significant for petro-politics on the Eurasian continent. In mid-December, the 1,800 km Turkmenistan-Uzbekistan-Kazakhstan-China natural gas pipeline went into operation. It connects with the 4,500 km West-East trunk line inside China and has an annual capacity of 40 billion cubic meters. Two weeks later, Prime Minister Putin officially commissioned the first section (about 2,700 km from Taishet in eastern Siberia to Skovorodino in the Amur region) of the nearly 5,000 km Eastern Siberia-Pacific-Ocean (ESPO) oil pipeline to the newly built Kozmino oil port near Vladivostok, where the first batch of Siberian crude was being loaded on the 100,000-ton oil tanker Moscow University bound for Hong Kong. Thus, Moscow and Beijing significantly elevated their postures in the global game of energy diversification for both buyers and sellers. Both pipelines were built during the tenure of President-turned-Prime-Minister Putin. His October visit to China resulted in a dozen high-value commercial deals, but also reflected his 10-year legacy in shaping Russian-Chinese relations and their mutual perceptions.

India-US relations were characterized by a degree of ennui while India-East Asia relations were overshadowed by public tensions between China and India throughout much of the year. The Obama administration, preoccupied by multiple high-stakes domestic and foreign policy priorities, offered up two high-profile visits for New Delhi with Secretary of State Hillary Clinton going to India in July and Prime Minister Manmohan Singh coming to Washington in November as the first head of state visit. But the newly strengthened Congress-led government, which returned to power after the April-May national elections, remained wary of the Obama administration’s priorities and approaches toward a range of issues including its Afghanistan-Pakistan (AfPak) strategy, nuclear nonproliferation, and climate change, as it felt some nostalgia for the primacy of place and purpose offered to India by the bygone Bush administration. Meanwhile, in India’s ties with East Asia, even though New Delhi made diplomatic forays ranging from Mongolia to Papua New Guinea to the Pacific Islands Forum to Australia while sustaining its traditional relationships with Japan and ASEAN, the tense Beijing-New Delhi interaction over the decades-old border dispute was the focus of attention for most observers.

The twain did (and did not) meet between India-US and India-East Asia relations. Of particular note during the year was the joint US-China communiqué following President Obama’s visit to Beijing that referred to US-China cooperation on South Asia. To the Indians this had echoes of the Clinton administration when similar language was used after India’s nuclear tests and was highly objectionable then and even more so today given the progress in US-India relations and the absence of nuclear tests. For the US, thinking of South Asia in broader terms including AfPak, and cooperating with China accordingly is entirely reasonable – and not directed at India. Indians also noted that Secretary Clinton did not refer to India in her major speech on Asia before traveling to the region in February; a sign of the continuing US ambivalence (not to mention India’s) about New Delhi’s role in Asia.

U.S. Secretary of State Hillary Clinton kept her promise and showed up at the first ASEAN Regional Forum (ARF) Ministerial Meeting to take place on her watch and, also as promised, signed ASEAN’s Treaty of Amity and Cooperation (TAC) on behalf of the United States. Unfortunately, North Korean “Dear Leader” Kim Jong-il also kept his promises: to ignore all UN Security Council resolutions, to shoot more missiles, and to never, ever (or at least not this past quarter) return to the Six-Party Talks. In response, Washington pledged to continue its full-court press on enforcing UN-imposed sanctions despite a few “good-will gestures” from Pyongyang. U.S. President Barack Obama also kept his promise to take significant steps toward global disarmament, chairing a UN Security Council session to underscore his commitment to this ideal. Meanwhile signs of the promised recovery of the global economy were in evidence this past quarter, with Asia leading the way.

Hatoyama Yukio led the Democratic Party of Japan (DPJ) to a landslide victory in the Aug. 30 Lower House election and was elected prime minister after a spirited campaign for change both in the form and substance of policymaking.  Exit polls showed that the public had grown weary of the Liberal Democratic Party (LDP) but had not necessarily embraced the agenda of the coalition government Hatoyama would subsequently form with an eye toward consolidating power in an Upper House election next summer.  Though the election centered primarily on domestic policy, Hatoyama began his tenure by outlining foreign policy priorities during visits to the UN in New York and the G20 summit in Pittsburgh less than a week after he took office.

The Obama administration emphasized respect and patience as Japan experienced a transition to a non-LDP government for only the second time since 1955.  Senior U.S. officials visited Tokyo for consultations soon after the election and prepared for the first meeting between President Obama and Prime Minister Hatoyama in New York on Sept. 23.  The leaders reaffirmed the importance of the U.S.-Japan alliance and set the stage for a visit to Japan by Obama in November.  The quarter ended with good atmospherics but also questions about the extent to which Hatoyama would try to implement several campaign pledges – such as renegotiating the realignment plan for U.S. forces on Okinawa – with the potential to strain bilateral ties.

The inaugural session of the Strategic and Economic Dialogue was held in Washington in July, combining pomp with substantive discussions on issues of great consequence for the two countries and the world.  High-level exchanges continued with the visit to the U.S. by Wu Bangguo, the head of the National People’s Congress – the first visit by China’s top legislator in two decades.  A special meeting of the Military Maritime Consultative Agreement was held in Beijing to discuss the confrontations inside China’s exclusive economic zone between U.S. Navy surveillance ships and Chinese vessels that took place earlier this year.  The U.S. imposed tariffs on tire imports from China, prompting Beijing to file a formal complaint against the U.S. at the WTO and launch an investigation into U.S. exports of chicken meat and auto parts.  Presidents Barack Obama and Hu Jintao met in New York and both attended the G20 in Pittsburgh.  They will meet again in November when Hu hosts Obama for his first visit to China.

The quarter saw a good deal of U.S.-Korea activity, largely the result of several trips by high-level U.S. officials to the region.  While extended deterrence was a major topic of conversation between the allies, Washington and Seoul also coordinated policy on North Korea with some indication that groundwork for reengagement in nuclear negotiations may be in the offing.  Former President Bill Clinton’s surprise visit to the North was successful in achieving the return of detained U.S. journalists Laura Ling and Euna Lee.