Acts of terrorism, arrests of terrorists, and judicial convictions dominated the Southeast Asian political scene this past quarter.  The Jakarta Marriott bombing, the capture of Hambali – Jemaah Islamiyah’s (JI) most notorious fugitive – and the conviction of several of the Bali bombers as well as JI’s spiritual leader, Abu Bakar Bashir, capped a tumultuous three months during which the Philippine government put down an abortive military mutiny, ASEAN and U.S. relations with Burma further deteriorated, and new efforts to improve security collaboration within the region were made.  U.S. intelligence played a significant role in terrorist apprehensions; however, Washington’s unwillingness to give Southeast Asian authorities access to terrorists in U.S. custody somewhat soured relations with regional allies.

China continued to make effective use of multilateral structures in Southeast Asia during the quarter to consolidate the “insider” role it is assuming in the region, and to foster economic and other forms of interdependence with members of the Association of Southeast Asian Nations (ASEAN).  Chinese initiatives are wearing well in most ASEAN capitals, especially proposals designed to protect Asian economic security and promote growth. Figures on China-ASEAN trade during the quarter showed major gains, and China’s non-energy investments in Southeast Asia were on the rise.

On the security front, China called for follow up to last December’s Declaration on Conduct in the South China Sea, and renewed a proposal for joint development of disputed areas there.  Beijing suggested linking counterterrorist efforts in Southeast Asia with those of China and Central Asian members of the Shanghai Cooperation Organization. High-level visits during the quarter advanced China’s particularly close cooperation with Malaysia and Thailand. Burma’s military junta, under heavy international pressure to release imprisoned democracy leader Aung San Suu Kyi and institute political reforms, sought China’s blessings for its unresponsiveness, and got them – at least for the public record.

The initiative on cross-Strait issues this quarter has been centered in Taiwan.  Preoccupied with other issues, Beijing has taken no initiatives and concentrated on countering Taipei’s moves.  Chen Shui-bian’s efforts to arrange referendums, to heighten Taiwan’s national consciousness, and to manipulate the cross-Strait transportation issue have all been shaped with an eye to the coming presidential election campaign.   In these circumstances, there has been no breakthrough on either the political or economic aspects of cross-Strait relations and none is likely in the foreseeable future. While Beijing has been very restrained, Chen’s electioneering could well heighten tensions in the Strait.

Almost a year after charges that North Korea has a second, covert nuclear program plunged the Peninsula into intermittent crisis, inter-Korean ties appear surprisingly unaffected. The past quarter saw sustained and brisk exchanges on many fronts, seemingly regardless of this looming shadow. Although Pyongyang steadfastly refuses to discuss the nuclear issue with Seoul bilaterally, the fact that six-party talks on this topic were held in Beijing in late August – albeit with no tangible progress, nor even any assurance that such dialogue will continue – is perhaps taken (rightly or wrongly) as meaning the issue is now under control. At all events, between North and South Korea it is back to business as usual – or even full steam ahead.

While (at least in this writer’s view) closer inter-Korean relations are in themselves a good thing, one can easily imagine scenarios in which this process may come into conflict with U.S. policy. Should the six-party process fail or break down, or if Pyongyang were to test a bomb or declare itself a nuclear power, then there would be strong pressure from Washington for sanctions in some form. Indeed, alongside the six-way process, the U.S. is already pursuing an interdiction policy with its Proliferation Security Initiative (PSI), which Japan has joined but South Korea, pointedly, has not. Relinking of cross-border roads and railways, or the planned industrial park at Kaesong (with power and water from the South), are examples of initiatives which might founder, were the political weather around the Peninsula to turn seriously chilly.

The quarter started with the first ever meeting between South Korean President Roh Moo-hyun and PRC President Hu Jintao in Beijing, and unfolded with the most assertive Chinese mediating efforts yet to deal with North Korean nuclear tensions, including the hosting of an unprecedented six-party multilateral dialogue that included North Korea, the United States, Russia, Japan, and South Korea in late August.  The PRC utilized its long-standing relationships with Pyongyang to maximum effect in an attempt to get North Korea to come to the negotiating table. Intensive China-South Korean consultations included a visit to South Korea by the head of China’s Supreme People’s Assembly Wu Bangguo and several meetings between the South Korean and Chinese foreign ministers to discuss next steps in capping tensions between North Korea and the United States over the North Korean nuclear development effort.

The only thing more intense than China-Korean political consultations over the North Korean nuclear issue is the continuing boom in China-South Korean trade, which has averaged over 20 percent growth year-on-year.  This quarter may well mark the point at which the PRC emerges as South Korea’s number one trading partner, surpassing the trade volume of the United States for the first time.  South Korean investment and export growth continues apace, but as South Korean industry moves its manufacturing to China, Roh administration’s initiative to turn South Korea into the economic hub of Northeast Asia also appears to be ringing hollow.

In anticipation of the 25^th anniversary of the Japan-China Friendship Treaty, both Tokyo and Beijing worked to normalize political relations. Japan’s chief Cabinet secretary and defense minister traveled to China, while China’s foreign minister and the chairman of China’s National People’s Congress visited Japan.  But, at the end of the comings and goings, Prime Minister Koizumi Junichiro had yet to secure the long-coveted invitation for an official visit to China.

Aug. 15 brought with it the customary end of war remembrances as well as lectures about history and its proper understanding.  History did, however, intrude on 21^st century reality, as the unearthing of chemical weapons abandoned by the Imperial Army in northern China led to the hospitalization of over 30 construction workers and the death of one. The Koizumi government moved quickly to deal with the issue, offering “sympathy” compensation to the families affected.

Meanwhile, economic relations continued to expand.  Two-way trade skyrocketed during the first half of the year, even as the SARS epidemic raged during the second quarter.   By mid-July, most Japanese companies in China were operating on a “business as usual basis.” At the same time, domestic economic pressures were building in Japan to push the Koizumi government to seek a revaluation of China’s currency.

Last September, Japan-DPRK relations looked to have made a major breakthrough with the unprecedented visit of Japanese Prime Minister Koizumi Junichiro to Pyongyang.  Rodong Sinmun marked the anniversary this year by warning about an “unavoidable” war between the DPRK and Japan. The Trilateral Coordination and Oversight Group (TCOG) remained active this quarter prior to and in the aftermath of the six-party talks over the DPRK’s nuclear weapons. Japan played a “starring role” in Proliferation Security Initiative (PSI) exercises in the Coral Sea.

The specter of oil is haunting the world. The battle of oil, however, is not just being waged by oilmen from Texas and done with “shock-and-awe” in the era of preemption. Nor does it have anything to do with the billion-dollar contract awarded to the U.S. firm Halliburton for the reconstruction of postwar Iraq. This time, oil, or lack of it, is clogging the geostrategic pipeline between the world’s second largest oil producer (Russia) and second largest oil importing state (China) as they haggle over the future destination of Siberia’s vast oil reserves.

To be sure, the “oil politik” between Moscow and Beijing is far from a full-blown crisis. Indeed, China-Russia relations during the third quarter were marked by dynamic interactions and close coordination over multilateral issues of postwar Iraq, the Korean nuclear crisis, and institution building for the SCO (Shanghai Cooperation Organization).

Russia’s energy realpolitik, however, has led to such a psychological point that for the first time, a generally linear, decade-long emerging Russian-Chinese strategic partnership, or honeymoon, seems arrested and is being replaced by a routine, boring, or even jolting marriage of necessity in which quarrels and conflicts are part normal.

Washington’s post-Sept. 11, post-post-Cold War military strategy and force posture realignment plans for East Asia began to take shape this quarter, albeit in bits and pieces. While “everything is going to move everywhere,” first up seems to be the Korean Peninsula, at least in terms of planning. The long-term objective appears to be reducing footprints (and ultimately numbers?) and increasing flexibility without reducing commitment or defense/deterrent capabilities or creating too much regional anxiety (or false expectations).  Meanwhile, bad behavior by the region’s twin despots – North Korea’s Kim Jong-il and Burma’s Than Shwe – resulted in increased promotion of multilateral solutions and a willingness, however tentative, by the nations of Southeast Asia and other members of the ASEAN Regional Forum (ARF) to interfere, ever so slightly and gently, in one another’s internal affairs.  Ad hoc multilateralism was also the order of the day down under, as Australia worked to put together a coalition of the willing to intervene, by invitation, in the Solomon Islands.

Some unilateralist U.S. tendencies remain, however, especially when it comes to announced missile defense plans (which were hardly noticed) and nuclear force modernization and research efforts (which were).  Meanwhile, in Iraq, winning the war has given way to the more daunting task of winning the peace while, elsewhere, the world holds its collective breath in hopes that the worst of SARS is now behind us.

I was wrong:  U.S.-Japan relations could get better – and this quarter they did.  Tokyo continued to provide rock solid support for the U.S. in Iraq and North Korea, even though the Japanese public had doubts about the U.S. war on Baghdad. Prime Minister Koizumi Junichiro was rewarded for that backing with a summit at President Bush’s Crawford, Texas ranch, a privilege reserved for only a very few world leaders.  The passage of “emergency legislation” and renewed enthusiasm for missile defense were more proof that Tokyo’s efforts to modernize its national security policies have not slowed.  The prospect of U.S. force redeployments worldwide only confirmed the significance of the alliance and its increasingly sturdy foundations: while much of the region worried about a reduced U.S. presence, alliance officials discussed adding to U.S. forces in Japan.  Even the fallout from crimes by U.S. servicemen on Okinawa was contained.

Some dark spots became apparent at the end of the quarter, but it would be churlish to focus on them.  Economic issues are still a problem, and dollar devaluation adds a new wrinkle.  But those misgivings aren’t new and I’m tired of sounding like Cassandra. So this quarter we celebrate without reservation the U.S.-Japan relationship.