The first flight of a Taiwan aircraft to China in over 50 years at the time of the Lunar New Year highlighted the growing need for direct travel and the continuing political constraints on accomplishing it. Absorbed in the transition to its fourth generation leadership, Beijing has adhered to the Taiwan policy parameters set forth at the 16^th Party Congress, including the active encouragement of closer economic links with Taiwan. Within Chen Shui-bian’s administration, opinion has now shifted noticeably from the slogan “active opening, effective management” adopted in 2001 to a more cautious approach to policy on economic ties and direct travel to the mainland. Economic concerns and electoral positioning have played a role in this shift.  Meanwhile, Taiwan’s delay of major arms purchases from the U.S. is creating strains in U.S.-Taiwan relations, and these strains have become more public this quarter.

Inter-Korean relations in the first quarter of 2003 were a curious mixture. The now familiar forms of interaction, re-established in the preceding quarter after more than a year of on-off hiatus, continued. Ministerial talks, economic dialogue, family reunions, semi-official civic events, and others were all held. On a non-official level, business and aid contacts went ahead as is now normal. If all this suggests marking time, there was at least one breakthrough: the partial opening of two temporary roads across the demilitarized zone (DMZ), breaching the heavily armed border for the first time in half a century. In happier times this would have made headlines and been an occasion for rejoicing as a further step toward reunification.

But these are not happy times in Korea, and rejoicing was muted. The Peninsula has indeed made headlines – for the escalating North Korean nuclear crisis, as Pyongyang unleashed one provocation after another: quitting the Nuclear Non-Proliferation Treaty (NPT), restarting its nuclear reactor (but not yet the reprocessing plant) at Yongbyon, shadowing a U.S. spy plane, test firing two short-range missiles, and more. Most of that is beyond the scope of this article, if only because North Korea insists that the nuclear issue is no business of Seoul’s – despite the December 1991 joint declaration on denuclearization of the Peninsula, which says otherwise.

Inevitably, nuclear concerns formed a somber backdrop to all inter-Korean intercourse this quarter. The South raised them at every opportunity, but made no headway. Nor was this the only dark cloud, as revelations emerged to cast a pall on past inter-Korean progress. During former President Kim Dae-jung’s final weeks in office, it was admitted that the June 2000 summit with Kim Jong-il, for which Kim Dae-jung won that year’s Nobel Peace Prize, had been preceded by a secret payment of at least $500 million by the Hyundai business group to North Korea. The further investigations now under way pose a delicate challenge for South Korea’s new president, Roh Moo-hyun, who comes from Kim’s Millennium Democratic Party (MDP) and is pledged to continue the Sunshine Policy approach, albeit now renamed as “policy for peace and prosperity.”

But it takes two to engage. North Korea marked Roh’s inauguration with a missile test. As always, it objected to annual joint U.S.-ROK war games. When Roh backed the U.S. on Iraq, and after an erroneous report that South Korea had raised its defense alert status, Pyongyang pulled out of talks due in the last week of March; it went on to cancel Cabinet-level talks set for early April. It was not immediately clear if this was a limited protest, or if it presaged a general suspension of official inter-Korean dialogue, as was the case during most of 2001 and 2002. All this points to a bumpy ride for Roh, and, despite those first tiny holes in the border, no obvious roadmap for a broad highway going forward.

“Regime change” has been the order of the day not only in Iraq, but also (in more orderly form) in China and South Korea this quarter.  “Axis of evil” charter member Kim Jong-il appears as intransigent and entrenched as ever, however.  This is the case despite North Korea’s withdrawal from the Nuclear Non-Proliferation Treaty (NPT) and escalation by Pyongyang of an apparent nuclear “breakout” strategy.  The Chinese “fourth generation” leadership under new President Hu Jintao is committed to perpetuating a stable atmosphere for economic development, and should welcome the vision of economic regional cooperation in Northeast Asia espoused by their counterparts in South Korea under newly-elected President Roh Moo-hyun. Burgeoning bilateral trade and investment anchors the China-South Korea economic relationship and underscores mutual interests in a diplomatic approach to North Korea that peacefully bounds North Korean nuclear threats and introduces gradual economic reforms to the North.

North Korea remains an economic and political drag on Beijing, but Pyongyang’s nuclear escalation means that China can no longer afford to ignore this problem.  U.S. President George W. Bush himself has made numerous calls in the past three months to China’s leadership to discuss North Korea’s escalatory maneuvers on the nuclear front.  Dealing with Pyongyang’s rapid steps toward an unambiguous nuclear weapons capacity was one of the first issues that Bush raised in his congratulatory call to China’s new president, Hu Jintao. Those calls are placing pressure on China to use its leverage to bound North Korea’s nuclear efforts, creating an unprecedented new dilemma (and opportunity?) for Beijing: should it lean toward Washington or Seoul in shaping its policies toward Pyongyang?  This quarter we focus primarily on recent developments in the China-North Korea relationship, and whether the People’s Republic of China can use its leverage to effectively check North Korea’s nuclear weapons.

The new year began with controversy. Territorial issues over the Senkaku/Daoyutai Islands resurfaced at the beginning of January and Japanese Prime Minister Koizumi Junichiro’s visit to the Yasukuni Shrine followed in short order. Political reaction in Beijing to the Yasukuni visit again derailed planning for a Koizumi visit to China and also affected Japan’s diplomacy toward North Korea, complicating efforts to secure Beijing’s cooperation in dealing with Pyongyang’s nuclear program.

Nevertheless, the two governments demonstrated an ability to work through practical problems posed by North Korean refugees in China (some Japanese nationals) seeking asylum in Japan.  At the same time, economic relations continued to broaden and deepen.  For the first time, Japan imported more from China than from the U.S., while Japanese exports to China increased 32 percent in 2002. And, with a new leadership coming to power in Beijing, there were signs of new thinking with respect to Japan and history.

The quarter saw no major bumps in Japan-South Korea relations as the two countries awaited the transition to the new Roh Moo-hyun government in the ROK. North Korean provocations during the quarter had a unifying effect on Seoul-Tokyo ties.  They also raise the question of exactly what Japan would do if the North undertook any of the actions associated with crossing the “red line.” Accordingly, we look at what Japanese sanctions against the North might look like.

For Russia and China, the first quarter of 2003 may well be the last few months before their preferred world – multilateralism for Iraq and bilateralism for the Democratic People’s Republic of Korea (DPRK) – began to fade into one of unilateralism. Amid unprecedented diplomatic activities regarding Iraq and Korea, relations between Moscow and Beijing were quietly entering a new phase as China’s leadership change was taking definitive shape.

Is George W. Bush becoming “Mr. Multilateralism”?  Not exactly!  But, even as his administration was releasing another “unilateralist” report on combating weapons of mass destruction (WMD) and Australian Prime Minister John Howard was keeping the word “preemption” on everyone’s lips, President Bush continued to work through the UN Security Council to disarm and change the nature (if not the composition) of the government of Iraq while less formally working to build an international consensus to pressure North Korea to come into compliance with its international, and bilateral, nuclear disarmament commitments.  Meanwhile, regional multilateral organizations, both with (APEC) and without (ASEAN Plus Three) the U.S., took interesting twists and turns this quarter, blending economics and politics in some unprecedented ways.  As the new year began, the economic forecast for East Asia seemed generally (albeit cautiously) positive, as long as promised or planned restructuring and reform agendas are followed and the region, not to mention the U.S. economy, can weather a potential Iraqi storm.

The alliance optimists should be permitted to gloat. This quarter vindicated their faith in the government of Prime Minister Koizumi Junichiro. Tokyo continued its support for the U.S.-led war against terrorism and even upped the ante by agreeing to send an Aegis-equipped destroyer to the Indian Ocean after a year of sometimes heated debate on the feasibility and legality of such a move. When news of North Korea’s clandestine nuclear weapons development program broke, concern about a possible split between Washington and Tokyo on dealing with Pyongyang proved unfounded. The U.S. and Japan have worked closely to fashion a solution to the crisis. There has been little daylight between the two governments’ positions.

Recent comments about Japanese participation in the missile defense (MD) program also comfort the alliance hawks, but the reaction they prompted reveals that over-reaching is a danger in Japan. Despite the progress of the last quarter, consensus on security issues is still elusive. A similar caution is necessary on the economic front. Japan’s economy has slid again into recession and that will constrain Tokyo’s efforts to share additional international economic burdens.

This quarter opened with summitry as Presidents George W. Bush and Jiang Zemin held their third meeting at Bush’s ranch in Crawford, Texas.  Their discussion and subsequent U.S.-Chinese consultations covered a broad range of issues, but security matters received special attention as North Korea acknowledged a previously unknown uranium-enrichment program and the Bush administration stepped up its efforts to disarm Iraq. Beijing issued new export control regulations for all major categories of weapons of mass destruction (WMD), bringing China into closer adherence with international nonproliferation export control standards.  Bilateral human rights talks took place for the first time in over a year and produced an agreement by China to invite UN investigators into the country to examine allegations that it jails people without due process, restricts freedom of religion, and allows torture in its prisons. High-level military contacts also resumed with the convening of the fifth Defense Consultative Talks and a visit to China by Commander, U.S. Pacific Command Adm. Thomas Fargo.

This quarter will likely go on record as one of the most contentious and troubling in U.S.-Korea (North and South) relations – at least until next quarter, which promises to be even more challenging. Assistant Secretary of State James Kelly’s long-awaited visit to Pyongyang began a steady decline in U.S.-DPRK relations after Pyongyang reportedly responded to Kelly’s allegations of North Korean cheating on its nuclear promises by defiantly acknowledging that it had been “compelled” by Washington to begin a uranium enrichment program to defend itself after being branded a member of the “axis of evil” by President Bush. To make matters worse, Pyongyang threatened to restart its frozen nuclear reactor and began removing monitoring devices and seals from its reprocessing and other nuclear facilities in a blatant attempt to force the Bush administration to the negotiating table.

Meanwhile, growing anti-Americanism in the South, spurred by a tragic military training accident last June that took the lives of two South Korean teenage girls, continued to steam roll as the U.S. military (rightfully) refused to turn the two soldiers involved over to South Korean courts, trying and acquitting both before a military tribunal on charges of negligent homicide.  Ruling party presidential candidate Roh Moo-hyun successfully rode the ensuing anti-American bandwagon to a close victory over opposition party candidate Lee Hoi-Chang, who was widely perceived (and labeled) as Washington’s preferred choice.  By quarter’s end, outgoing President Kim Dae-jung and President-elect Roh were echoing Washington’s call for immediate North Korea compliance with its nuclear obligations, but both were becoming increasingly critical of Washington’s steadfast refusal to enter into negotiations with the North, ensuring a difficult diplomatic road ahead.