During this quarter, China observed a number of anniversaries in Sino-Japanese relations related to the Japanese military action in Asia. China’s leadership took care that the anniversaries, aimed at strengthening Chinese patriotism and the legitimacy of the Chinese Communist Party (CCP), would not replicate the anti-Japanese sentiment loosed in April. And they were successful.

At the same time in Japan, domestic politics were center stage.  Prime Minister Koizumi Junichiro was absorbed in the passage of his postal reform legislation.  Failure to secure passage led Koizumi to dissolve the Diet in early August and to go to the polls Sept. 11.  The prime minister focused his campaign on the reform issue and avoided discussion of Aug. 15 and his visits to the Yasukuni Shrine. Meanwhile, Japanese diplomacy is absorbed by the Six-Party Talks.

One issue did disturb the political and diplomatic calm – the East China Sea territorial dispute. In July, the Japanese government granted exploration rights to Teikoku Oil Company in the area east of the mid-line boundary, which China has refused to acknowledge. The government later committed to protect Teikoku exploration activities in the event of Chinese challenges.  In mid-September, reports reached Tokyo that China had initiated natural gas production in the Tianwaitian field – on the western Chinese side of the mid-line. Diplomats are scheduled to meet in Tokyo at the end of September to discuss East China Sea issues.

Japan-Korea relations in the past quarter showed no major surprises, and no major changes. Although there was real progress within the larger context of the Six-Party Talks, the agreement in principle by Japan and North Korea to “normalize their relations in accordance with the Pyongyang Declaration, on the basis of the settlement of the unfortunate past and the outstanding issues of concern,” was both a step forward and yet also the mere reiteration of agreements already made between the two sides. The real issues – and the real work – will begin in the future, as the two sides begin discussing details of just exactly how to settle the abductee issue and move toward normalized ties. It is significant, however, that Japan was willing to forego greater pressure on North Korea on the abductee issue in favor of a broader agreement with the six parties.

With the focus on the two meetings of the six parties in Beijing, much of the heat between South Korea and Japan over disputed islands and textbooks faded to the background. Although the issues are still quite prevalent, the surge of emotion over the issues subsided, although most likely this is a temporary respite. Although Japanese Prime Minister Koizumi Junichiro made both a deep bow and public statement of apology in general for Japan’s role in World War II, this apparently did little to assuage South Korean resentment over Japan’s policies on specific issues. However, despite the friction over textbooks and history, Japan and South Korean cooperation continued to increase on matters such as judicial cooperation on international crimes, and the two militaries found ways to cooperate on issues such as high-level officer exchanges and Coast Guard operations. Economic interactions between South Korea and Japan continued to deepen over the quarter. Although much of this was “business as usual,” the most notable move was an alliance by Samsung and Sony to cooperate on various technical matters, marking a further integration of the economies of these two high-tech Asian nations. Finally, in cultural issues, Japanese continued to see Koreans as more friendly than Koreans saw Japanese.

In three “strikes” during the third quarter, Moscow and Beijing pushed their bilateral relations, qualitatively and quantitatively, toward a more proactive and outward-looking posture. It began with the signing of the Sino-Russian Joint Declaration on the International Order in the 21st Century at the Moscow summit July 1. A few days later at the annual Shanghai Cooperative Organization (SCO) summit July 5, a significantly enlarged regional security forum – adding India, Iran, and Pakistan as “observers” – called on the U.S. and its coalition members in Afghanistan to set a deadline for U.S. withdrawal from military bases in the territories of the SCO member states (Kyrgyzstan and Uzbekistan).  In late August, the first-ever Sino-Russian joint exercise, code-named Peace Mission 2005, further elevated the strategic partnership between the two continental powers. In the wake of the exercise, Russian military sales to China, too, apparently entered a new phase with new categories of weaponry being offered as well as technological transfers.

The North Koreans stayed away from the Six-Party Talks again this quarter, citing “mixed” and “confusing” signals from Washington as their main reason for not resuming the dialogue.  Meanwhile, Washington was sending mixed signals to Asia in general and to China in particular.  Deputy Secretary of State Robert Zoellick had a successful trip through Southeast Asia, reassuring the ASEAN states about Washington’s continued commitment to the region, a message somewhat undercut at quarter’s end when it was revealed that his boss, Secretary of State Condoleezza Rice, would likely not make her scheduled first appearance at the ASEAN Regional Forum (ARF) ministerial meeting in Vientiane in late July. Secretary of Defense Donald Rumsfeld also sent mixed signals to China during his second appearance at the Shangri-La Dialogue in Singapore in early June, welcoming an emerging China “committed to peaceful solutions” as “an important new reality” while raising questions about the extent of its military build-up, since “no one threatens China.” There were also mixed signals from within ASEAN as to whether or not Burma/Myanmar would forego its chairmanship of ASEAN in mid-2006, amid mixed predictions as to the impact of Rice’s absence on this decision. Preparations also continued for this December’s first East Asian Summit (EAS) with more attention focused on who will attend than on what is to be accomplished.

Two issues dominated U.S.-Japan relations this quarter. The first, Tokyo’s bid for a permanent seat on the United Nations Security Council (UNSC), is a high-profile diplomatic contest that could strain the alliance even though it is not about the alliance. The second is the continuing effort to transform the U.S. military presence in Asia and how the resulting deployments in Japan will look. There was no resolution to either issue, nor will there be one in the immediate future: the interests and constituencies involved are so large that it will take considerable time to work out a solution acceptable to both countries. Smaller trade issues – beef and apples – were also back on the bilateral agenda.  Dealing with all these items will test the alliance management skills of the new team in the State Department, one that is increasingly depleted of senior Japan hands.

The 60^th anniversary of the end of World War II poses challenges of its own. Many people, in Japan and elsewhere, see the 60^th anniversary as especially significant, signaling the end of an era. Optimists see this as the moment that Japan emerges from its postwar slumber to assume a new role in Asia and the world; pessimists worry that part of the reckoning could focus on the U.S.-Japan alliance, and that the accounting of history that has so roiled Tokyo’s neighbors, will soon engulf the bilateral relationship.

America’s grievances with China mounted this quarter, signaling a likely end to the post-Sept. 11 honeymoon in China-U.S. relations and the beginning of a rocky phase.  On a range of trade and economic issues, the Bush administration adopted a harsher stance, increasing pressure on Beijing to appreciate its currency to fend off criticism from Congress and domestic groups that blame China for stealing U.S. jobs and unfairly creating a massive trade surplus with the United States.  Trade officials began taking action to curtail the flood of Chinese textiles and punish China for widespread violations of intellectual property rights. A takeover bid for Unocal Corporation by the PRC’s state-owned China National Offshore Oil Company (CNOOC) raised cries in some quarters that Beijing’s offer was part of a long-term national plan to gain strategic advantage over the U.S.

Washington leaned harder on Beijing to apply economic and diplomatic pressure on North Korea to rejoin the Six-Party Talks aimed at eliminating its nuclear weapons programs.  U.S. officials openly declared that they hold China largely responsible for reining in the nuclear ambitions of its formerly “close as lips and teeth” ally, North Korea.

China’s military buildup also came under sharper criticism. Defense Secretary Donald Rumsfeld bluntly warned Beijing that its military spending and procurement programs are unjustified by any threat it faces. And China’s human rights abuses and suppression of political dissent and religious freedom figured prominently in U.S. official statements and reports issued this quarter.

Mindful of the benefits to the U.S. of cooperation with China where the two countries’ interests overlap and the dangers of engaging in full-blown strategic competition with China, President Bush and his Cabinet members attempted to keep the bilateral relationship on an even keel, while urging Chinese leaders to modify their policies to make them more compatible with U.S. national interests.

Speculation about a possible North Korean nuclear test spiked tensions on the Korean Peninsula this quarter as Pyongyang continued to refuse to return to the Six-Party Talks.  Pyongyang underscored its status as a nuclear weapons state by removing spent fuel rods from its five-megawatt reactor, and then testing a short-range missile in the direction of Japan.

If North Korea’s purpose was to heighten differences between South Korea and the U.S, and thus weaken the alliance, its efforts proved successful through May. The U.S., as a veiled threat, moved 15 stealth fighters to South Korea, broke off talks on recovering Korean War remains, and considered seeking sanctions against North Korea at the UN.

After Seoul openly rejected seeking UN sanctions, South and North Korean diplomats met for the first time in 10 months on May 15 to discuss “inter-Korean issues.”  Seoul promised North Korea large-scale aid if it returned to the Six-Party Talks, but gained no commitment from Pyongyang on the nuclear issue.

With Washington and Seoul far apart on how best to deal with North Korea, President George W. Bush and President Roh Moo-hyun held a one-day summit June 10.  Rather than resolving their tactical differences, the two leaders emphasized strategic agreement on the importance of the U.S.-Korea alliance and a peaceful settlement of the nuclear issue.

A few days after the summit, South Korea’s Unification Minister Chung Dong-young met with North Korean leader Kim Jong-il who declared his country would rejoin the six-party process in July if the U.S. “recognizes and respects” his regime. Although U.S. officials remained skeptical since North Korea did not provide a firm date for attending the negotiations, it appeared Pyongyang might make a concrete commitment before or during a visit by Chinese President Hu Jintao in July.

The U.S. and South Korea settled a dispute this quarter over OPLAN 5029, a contingency plan laying out responses to cataclysmic events in North Korea, including regime collapse or a refugee crisis. South Korea had objected to putting its forces under U.S. command pursuant to this plan. The two governments agreed to further develop the concept of the contingency plan without deciding its operational components.

Incoming U.S. Trade Representative Rob Portman said this quarter the U.S. would not negotiate a free trade agreement with South Korea until “additional progress” is made on outstanding trade disputes. His position put pressure on Seoul to allow greater access for Hollywood films to the South Korean market and to end its import ban on U.S. beef.

Since the outbreak of the global war on terror in late 2001, leaders in Moscow and Washington have crafted a policy designed to minimize political differences in order to maximize the effectiveness of the “strategic partnership” in its struggle against terrorism.  But by late 2004 and early 2005, the limits of this partnership were becoming apparent.  The series of mini-revolutions or coups in the former Soviet republics along Russia’s border over the past quarter may have marked the beginning of the end of this so-called strategic partnership. Moscow now has serious concerns about the penchant for Washington to “export” revolution to Eurasia. Washington, meanwhile, continues to view political developments in Russia with great displeasure, calling each successive move by President Vladimir Putin to consolidate his power a step backward for Russian democracy. As in Eurasia, U.S.-Russian cooperation in East Asia seems to have reached its limit, as Moscow looks more and more to Beijing as a partner, potentially along with New Delhi.

As the new State Department team settled in, the U.S. attempted to maintain the heightened momentum in relations with Southeast Asia created by the tsunami relief effort earlier this year.  In May, Deputy Secretary of State Robert Zoellick travelled to Singapore, Thailand, the Philippines, Vietnam, Indonesia, and Malaysia, using the trip to proclaim a new policy of greater attention to the region. President George Bush hosted Indonesian President Susilo Bambang Yudhoyono (SBY) in May and Vietnamese Prime Minister Phan Van Khai in June, inaugural visit to Washington for both leaders.  Also in June, Defense Secretary Donald Rumsfeld attended the Shangri-La security meeting in Singapore and used the spotlight to criticize Beijing’s presumed expansionist aims. Rumsfeld’s choice of Singapore as a venue for the remarks, combined with Zoellick’s listening tour, signaled growing interest in Washington in China’s increasing influence in Southeast Asia.

Indonesia was of two minds about the U.S.  A recent Pew survey reported improvement of the U.S. image there because of tsunami aid, but demonstrations in Jakarta over the Newsweek story on Islamic prisoner abuse at Guantanamo Bay showed fresh resentment.  U.S. military cooperation moved incrementally toward a more regional approach, while several rounds of bilateral trade talks were held.  Human rights remained central to U.S. policy in Burma as Washington prepared to renew sanctions and made clear its opposition to Rangoon’s chairmanship of ASEAN in 2006.

Syntax and usage aside, the language of the subtitle of this analysis (paraphrased from an article in People’s Daily) captures fully the thrust and character of Beijing’s relations with Southeast Asia during the second quarter of 2005. Buoyed by a swift international response, a high level of assistance, and the success of their own hard work, the nations of Southeast Asia threw off the torpor induced by the tsunami of December 2004 and returned to business as usual. Beijing seized the opportunity and immediately reenergized plans placed in temporary, forced abeyance in the wake of the disaster. The result was yet another series of apparent Chinese successes in Beijing’s continuing drive to gain acceptance as a good neighbor and further enhance its regional status.