The issue of contaminated frozen gyoza moved to the bilateral front burner during the quarter.  In his meeting with President Hu Jintao on the sidelines of the G8 summit at Lake Toya, Hokkaido and again during the opening ceremonies of the Beijing Olympics, Prime Minster Fukuda Yasuo emphasized the importance of making progress on the six-month old case.  Hu promised to accelerate efforts to identify the source of the problem and in mid-September, Japanese media reported that Chinese authorities had detained nine suspects at the Tianyang factory. The commemoration of the end of World War II on Aug. 15 passed quietly with only three Cabinet ministers visiting the Yasukuni Shrine.  Meanwhile, joint Japanese and Chinese public opinion polling data revealed markedly different perceptions on the state and future course of the bilateral relationship. In early September, Japan’s Ministry of Defense released its Defense White Paper 2008, which again expressed concerns about China’s military modernization and its lack of transparency.  Later in the month, the Maritime Self-Defense Force sighted what was believed to be an unidentified submarine in Japanese territorial waters.  Reacting to Japanese media speculation, China’s Foreign Ministry denied that the submarine belonged to China’s Navy.

Although there was little movement in Japan’s relations with North Korea, this quarter was dominated by the news leaking out of North Korea in early September that Kim Jong-il was potentially very sick. Questions about Kim’s health, the status of his leadership in North Korea, and the future of North Korea’s leadership quickly dominated discussion. Coupled with Japanese Prime Minister Fukuda’s surprise resignation and the quick choice of Aso Taro as prime minister, Japanese foreign policy was on a brief hiatus while the new leader set his own agenda. Known as a conservative, it is expected that Aso will take a harder line toward the North – and the region more generally – than did Fukuda. But his official appointment, coming on Sept. 24, was so recent that it is too early to see how Aso plans to proceed. Thus, there was actually little substantive change in Japan’s relations with North Korea, and the quarter ended basically where it began.

In contrast, Japan-South Korean relations plunged to new lows after a promising spring in which both Fukuda and President Lee Myung-bak had pledged to move the relationship forward. The question of who owns the Dokdo/Takeshima islets once again reared its ugly head, and both sides dug in their heels, choosing to be as provocative as possible. In what was at best a tone-deaf decision in July, Tokyo released a new set of guidelines for its middle-school teachers claiming that Takeshima was irrefutably Japanese. Seeming to contradict the spirit of the just completed and highly successful summit meeting between Japan and Korea during the spring, the decision left President Lee with little choice but to respond strongly, and relations quickly cooled between the two countries.

Although it appeared at first that there was some potential for progress on the two enduring issues on the agenda of Japan-North Korea relations – the abduction issue and Pyongyang’s nuclear development program – by the end of the quarter both issues remained essentially in the same place as they had been before. The abduction issue continued to define the tone of bilateral relations, as Japan tried to ensure that progress in the Six-Party Talks was tied to its resolution. The Tokyo-Pyongyang working-level talks in mid-August, following last quarter’s agreement that Pyongyang would reinvestigate the fate of the Japanese abductees in exchange for partial lifting of the sanctions on the North, concluded with an agreement on the terms of the investigation to be completed as swiftly as the fall of 2008. But Fukuda’s resignation as prime minister led Pyongyang to notify Japan that it would wait and see how the Aso administration approaches bilateral issues before starting the reinvestigation. Despite taking a step closer toward normalizing their diplomatic relations, there was no substantive policy change in Japan toward Pyongyang and by the end of the quarter, the new Aso administration decided to extend economic sanctions against North Korea for another six months.

The third quarter of 2008 was quite eventful for Russia and China as well as their bilateral relationship. The 29^th Summer Olympics in Beijing opened and concluded with extravaganza and a record 51 gold medals for China. Shortly before the opening ceremony on Aug. 8, Georgia’s attacks against South Ossetia – a separatist region of Georgia – led to Russia’s massive military response, a five-day war, and Russia’s recognition of their independence.  Thus, the August guns and games brought the two strategic partners back to the world stage. One consequence of the Georgian-Russian war is that China’s “neutrality” is widely seen as a crisis in China’s strategic partnership with Russia.

Beyond the Olympics, Ossetia, and chaos in world financial markets, Moscow and Beijing were able to move their relationship forward: an additional border agreement was signed to end the border disputes of the previous 400 years, bilateral energy talks at the deputy ministerial level were launched, long-stalled military sales started to show some sign of life as the two sides resumed discussions for the 38 Il-76 and Il-78 military cargo planes, the Shanghai Cooperation Organization (SCO) managed to keep a delicate balance for both internal and external politicking while elevating its observers’ status by creating so-called “Dialogue Partners,” and 1,000 Chinese children from the earthquake-devastated areas – many more than the original proposed number of 50 by Medvedev when he visited China in late May – spent several weeks in Russia’s resort areas.

With the presidential elections in the U.S. scheduled for Nov. 4, the candidates’ views of relations with Asia are of great interest to the foreign policy community in the U.S. and throughout Asia. In an effort to provide some insight into the policies of Sen. John McCain and Sen. Barack Obama, we have surveyed both campaigns’ statements to answer a series of questions regarding their Asia policy stances as the basis of this quarter’s Occasional Analysis.

After eight months of inaction, there was a flurry of six-party action at quarter’s end. As Pyongyang produced its long-awaited declaration of its nuclear activities, President Bush announced his intention to remove North Korea from the U.S. listing of state sponsors of terrorism and Trading with the Enemy Act (TWEA) restrictions. Pyongyang responded with a made-for-TV demolition of the cooling tower at its Yongbyon nuclear facility.  Elsewhere, respective reactions to natural disasters showed how far China has come and Myanmar/Burma still has to go in dealing with the outside world. There was a generally positive reaction to Secretary Gates’ Shangri-La statements on U.S. East Asia policy and toward the two U.S. presidential candidates (or their surrogates) early pronouncements about Asia as well. In contrast, there has been almost no reaction at all to Australian Prime Minister Kevin Rudd’s call for a more inclusive Asia-Pacific community.

Democracy seemed to be struggling in Thailand and in Mongolia, even as a reshuffling of coalition partners in India promised to resurrect the India-U.S. nuclear deal from the near-dead, just as Indian Prime Minister Singh prepared to meet President Bush along the sidelines of the upcoming G8 meeting in Japan. With this year’s Asia-Pacific Economic Cooperation (APEC) Leaders Meeting scheduled for Peru in November, and with leaders from China, South Korea, and India among the invited guests to the July 6-8 summit at Lake Toyako, the G8 meeting will likely serve as President Bush’s last opportunity for East Asia multilateral summitry. Finally, a word to our readers in Korea: Get the facts! American beef is safe. Period. End of sentence.

The debate in the Japanese Diet remained contentious this quarter as opposition parties challenged the Fukuda government on several legislative issues including the gasoline tax, a new health insurance program for the elderly, and host nation support for U.S. forces.  Fukuda’s approval rating fell suddenly due to public dissatisfaction with his domestic policy agenda but later rebounded enough to quell rumors of a Cabinet reshuffle prior to the Hokkaido G8 Summit in July.  The arrest in early April of a U.S. serviceman charged with murdering a taxi driver in Yokosuka brought negative publicity for U.S. forces.

Japanese anxieties also continued to mount as the U.S. prepared to lift terrorism-related sanctions on North Korea as part of the Six-Party Talks, despite earlier pledges that this would not be done without progress on the abductee issue.  President Bush did announce his intention to lift those sanctions on June 26, but his strong reaffirmation of support for Japan on the abductee issue helped to assuage some of the concerns in Tokyo.  It also helped that Secretary of State Condoleezza Rice stressed during the G8 foreign ministers meeting in Kyoto that the U.S. actions would be reversed if North Korea’s claims could not be verified; a message of reassurance Bush would likely echo and broaden during his visit to Japan in July.  All of this took place as the Japanese public paid close attention to the U.S. presidential race and as the candidates took their debate into the pages of Japanese newspapers.  Speculation also persisted about possible dissolution of the Diet and new elections in Japan sometime in the next year.

Major developments in Sino-U.S. relations took place on the economic, military, and political fronts this quarter.  The fourth U.S.-China Strategic Economic Dialogue was held in Annapolis, Maryland, June 17-18, yielding a 10-year energy and environment cooperation framework.  A telephone link was installed between the U.S. Department of Defense and China’s Ministry of Defense and talks were launched on nuclear policy and strategy.  The U.S. and China held a round of their bilateral dialogue on human rights after a hiatus of six years and vice-foreign minister level talks on security issues were held for the first time in four years.  The U.S. provided assistance to China to ensure the security of the 2008 Olympic Games in Beijing. A massive 7.9 magnitude earthquake rocked China’s southwestern Sichuan Province and the U.S., along with the rest of the international community, provided aid.  Secretary of State Rice visited the quake-hit area and held talks in Beijing focused on North Korea.

The quarter started off well with the first meeting of Presidents George W. Bush and Lee Myung-bak at Camp David in April.   The two leaders emphasized common values and the global scope of the alliance.  They reached an agreement to maintain current U.S. troop levels on the Peninsula, which appeared to be an attempt by conservatives in Seoul to reverse the unfortunate trend they saw during the Roh-Rumsfeld era where each side was perceived as whittling away at the foundations of the alliance for disparate reasons.  An important but understated accomplishment was Bush’s public support of Lee’s request to upgrade the ROK’s foreign military sales status.  Should this request be approved by the Congress, it would amount to a substantial upgrading of the bilateral alliance relationship as it would give Seoul access to a wider range of U.S. military technologies similar to what NATO and other allies like Australia enjoy.  Finally, the two governments inked a memorandum of understanding on security improvements necessary to enable the ROK’s entry to the U.S. visa waiver program.

At the conclusion of the final summit meeting between Presidents George Bush and Vladimir Putin at the Russian resort of Sochi in early April, relations between Moscow and Washington appeared to have righted themselves.  The cordial meeting between the outgoing presidents left a sense of optimism in both Moscow and in the West that U.S.-Russia relations would improve until at least the fall presidential elections in the United States.  Things have quieted down between the two nations over the last quarter, as the leadership of both countries has gone about business at home and has lessened (though not ceased) the often-negative rhetoric.  But when the summer concludes, Russia will again loom large in U.S. political debates, and the big questions of U.S. foreign policy – whether they revolve around Iran, Iraq, Afghanistan, Northeast Asia, or even Venezuela – will necessarily include Russia policy.  And as President Dmitry Medvedev unveils his own version of “sovereign democracy,” U.S. foreign policymakers will be forced to address the fundamental question of whether U.S. policy toward Moscow is centered on its strategic interests, or on democratic values.

Cyclone Nargis, which devastated Burma’s Irrawaddy delta in early May killing tens of thousand and leaving 1.5 million homeless, was met with international concern and the offer of large-scale U.S. assistance via navy ships in the vicinity for the annual Cobra Gold exercise.  Burma’s junta, however, obstructed international humanitarian assistance, fearing that Western powers would use the opportunity to overthrow the generals.  So, in contrast to the massive aid effort for Indonesia in the December 2004 tsunami aftermath, assistance has only trickled into Burma, and mostly controlled by the Burmese military.  ASEAN, in collaboration with the UN, appealed to Burmese authorities to open the country to aid providers, but the most it has been able to accomplish is to insert 250 assessment teams into some of the hardest hit areas to survey the population’s needs. U.S. aid has been limited to more than 100 C-130 flights out of Thailand whose cargos are delivered into the hands of the Burmese military.