It was deja vu all over again on the Korean Peninsula as the absence of bad news, highlighted during our last reporting period, came to an end when Pyongyang again defied the international community (and UNSC sanctions) by conducting another missile launch, this time successfully, in December. Nonetheless, Kim Jong Un’s New Year’s message was seen by some (but not us) as a harbinger of good news in the year ahead. ASEAN leaders at the yearend round of summits in Phnom Penh (including the East Asia Summit attended by President Obama) managed to demonstrate a greater amount of unity than during their July ministerial, but the lingering South China Sea territorial issue showed no signs of being closer to resolution. Meanwhile, hopes for genuine reform in Burma/Myanmar soared as President Obama made an unprecedented visit following his inaugural visit to Cambodia for the EAS, in the context of his administration’s continuing rebalance toward the Asia-Pacific.

It was out with the new and in with the old in Japan, as the Liberal Democratic Party returned to power amidst a nationalistic campaign that promised to strain relations with the new leadership coming to power in South Korea and China, and perhaps with the new leadership team in Washington as well. President Obama won a second term and Park Geun-hye returned to the Blue House, this time as president. In China, a new leadership took command of the communist party, and they face myriad challenges, many of which are economic in nature. The year closed with a flurry of trade meetings and initiatives designed to capture the energy of the world’s most dynamic economies.

The Liberal Democratic Party won a Lower House election in a landslide and Abe Shinzo became prime minister for the second time amid public frustration with poor governance and anemic economic growth.  The United States and Japan continued a pattern of regular consultations across a range of bilateral and regional issues with tensions between Japan and China over the Senkaku Islands and another North Korean missile launch topping the diplomatic agenda.  The US military presence on Okinawa also featured with the deployment of the V-22 Osprey aircraft to Okinawa and the arrest of two US servicemen in the alleged rape of a Japanese woman.  The year came to a close with Prime Minister Abe hoping for a visit to Washington early in 2013 to establish a rapport with President Obama and follow through on his election pledge to revitalize the US-Japan alliance.

The rare convergence of a US presidential election cycle and China’s once-in-a-decade leadership transition caused both countries to focus their energies and attention domestically in the last four months of 2012. The US held its presidential election on Nov. 6 and China held its 18^th Party Congress Nov. 8-14.  The reelection of President Obama was a relief for Beijing.  Although China has plenty of complaints about his policies, it preferred to deal with him for another four year term, both because of the uncertainty that the election of Mitt Romney would have brought to US foreign policy and because the Chinese generally favor the status quo when it comes to US leadership.   Washington was simply glad to get the Chinese leadership transition underway since it appeared that Chinese leaders and the bureaucracy were distracted and many decisions had been put on hold pending announcement of the new leadership lineup.

US-ROK relations saw several significant events as 2012 ended. President Obama won his reelection against Republican contender Mitt Romney and South Korea had a historic election, with Park Geun-hye of the Saenuri Party being elected as the first female president in the country’s (and indeed East Asia’s) history.  Sandwiched between these elections, North Korea conducted a successful rocket launch, putting an object into orbit for the first time and marking a major milestone in its decades-long effort to develop an intercontinental ballistic missile capability. Meanwhile, the US and ROK successfully concluded an agreement extending South Korean missile ranges, but remained deadlocked on the revision of a bilateral agreement on civilian nuclear energy.

The importance of Southeast Asia in the US “rebalance” to Asia was underscored by President Obama’s visit to Thailand, Burma (Myanmar), and Cambodia in November, covering both bilateral relations and the region’s centrality in Asian multilateralism.  Secretaries Clinton and Panetta also spent time in the region, the latter reinvigorating defense ties with Thailand and linking US security interests among Australia, India, and Southeast Asia.  While visiting Jakarta in September, Clinton reinforced US support for the ASEAN plan to negotiate a formal South China Sea code of conduct, endorsing the six-point principles Indonesian Foreign Minister Marty Natalegawa negotiated after the failed ASEAN Ministerial Meeting in July.  At the East Asia Summit, the majority of ASEAN states, Japan, and the US insisted that the South China Sea appear on the agenda despite objections from Cambodia and China.  Obama’s visit to Myanmar occasioned the declaration of a “US-Burma partnership,” though the visit was marred by violence against the Rohingya population in Rakhine (Arakan) state. Washington is also enhancing military ties with the Philippines, Thailand, and Indonesia as part of the “rebalance.”

China’s efforts to maintain recent gains and further strengthen its South China Sea maritime territorial claims dominated China-Southeast Asia relations during the final months of 2012.  Aggressive patrols by maritime security administration and fishing fleets along with diplomatic initiatives and administrative measures were supported by Chinese media commentary that emphasized patriotism and the validity of China’s sovereignty claims.  Diplomatic initiatives included several high-level exchanges that emphasized the promise of increased beneficial relations for those who support or acquiesce to Chinese territorial claims. Meanwhile, ASEAN remained in disarray and the prospect for moving forward on a binding code of conduct in the South China Sea seemed unlikely.

Leadership changes have occurred on both sides of the strait. As predicted, the 18^th Party Congress saw Xi Jinping appointed as general secretary in Beijing. In Taipei, President Ma announced in September a complete reshuffle of his cross-strait and foreign policy team. In both cases, the personnel changes do not foreshadow any policy changes in the coming months. While Ma remains unwilling to address political issues in direct negotiations, some interesting Track 2 dialogues occurred. In October, Beijing gave visiting DPP politician Hsieh Chang-ting unusual high-level attention, and following his return Hsieh has tried, thus far unsuccessfully, to promote change in DPP policy. Against the backdrop of increasing tensions over the Diaoyu Islands, Ma is focused on asserting Taiwan’s interests primarily through his East China Sea Peace Initiative.

Writing as a new year begins it seems apt to look forward as much as back. If the past four months saw little movement on inter-Korean relations, it is hardly surprising. South Korea’s current president (since 2008), Lee Myung-bak, is detested by the North – but he is on the way out. Formally, Lee’s term of office ends on Feb. 25, but the way the electoral cycle works in Seoul – presidents are allowed only a single five-year stint – has rendered him a lame duck for the past year, as attention shifted to the hard-fought race to succeed him. In that contest, despite deep overall ideological rivalries, the one certainty was that Seoul’s policy towards Pyongyang will change going forward. Both major candidates, as well as the independent progressive Ahn Cheol-soo, who made much of the running before eventually withdrawing, had promised to end Lee’s hard line and try to mend fences with the North. With her victory, the task of defining that changed policy falls to Park Geun-hye.

The appointment of Xi Jinping as general secretary of the Chinese Communist Party on Nov. 15 and the election of Park Geun-hye as president of South Korea on Dec. 19 raised hopes for improvement in China-South Korea relations.  Pyongyang’s Dec. 12 rocket launch provides an early challenge at the UN Security Council, where South Korea begins a two-year term alongside permanent members China and the US.  Xi and Park will face a full agenda that includes management of growing economic ties, policy toward North Korea, and a complex regional environment beset by territorial and historical disputes.  Another factor complicating the regional picture is that both leaders face territorial disputes with Japan under returning Liberal Democratic Party (LDP) Prime Minister Abe Shinzo.

The Japanese government’s purchase of three of the Senkaku Islands from their private owner on Sept. 11 and the sovereignty dispute over the maritime space surrounding them dominated Japan-China relations. In short order after the purchase, anti-Japanese riots broke out across China, events scheduled to mark the 40^th anniversary of normalization of relations were canceled, trade and investment plummeted, and political leaders engaged in public disputations.  To underscore Beijing’s claims, Chinese government ships regularized incursions into Japan’s contiguous zone and territorial waters near the islands.  As both governments held fast to their respective national positions, prospects for resolution appeared dim.  Prime Minister-designate Abe Shinzo told a press conference in mid-December that there was “no room for negotiations” on the Senkakus.

Elections dominated the news in both Korea and Japan. South Koreans elected the first female head of state in modern Northeast Asian history and Japanese voters overwhelmingly returned the Liberal Democratic Party (LDP) to power, giving Abe Shinzo a second run at prime minister. Unsurprisingly, both elections focused on domestic economic issues, and both Park and Abe made an effort to downplay Korea-Japan relations during their campaigns. This did not stop observers from speculating about how both would rule and in particular how Korea-Japan relations might evolve. This was particularly salient because 2012 marks a considerable cooling in relations between the ROK and Japan. Surprisingly, North Korea was not a major factor in either case. The DPRK’s December satellite launch failed to disrupt or significantly change the dynamics of either election and was met with a predictable but muted sense of outrage from the US and the countries in the region.

“Russia can pivot to the Pacific, too,” declared Dmitri Trenin, director of the Carnegie Moscow Center, the day the 24^th APEC Leaders Meeting opened in Vladivostok, Russia’s outpost city at the Pacific where it spent $21 billion in five years prior to the APEC meeting. To be sure, investment in this symbol of Russia’s eastward “pivot” was initiated in Putin 2.0 (2004-08) and long before US Secretary of State Hillary Clinton used the word “pivot” in her November 2011 piece “America’s Pacific Century” in Foreign Policy. Never mind the “empty chair” for US President Obama at this coming out party for Russia’s plunge into the world’s most dynamic market. It was anybody’s guess if this was Obama’s payback for Putin’s skipping the G20 at Camp David in May, or something else (fighting for reelection).

One less noticeable “pivot,” however, was by China, Russia’s neighbor less than 100 km south of Vladivostok. Russia was where both President Hu Jintao and Premier Wen Jiabao made the last of their 2012 foreign visits, which might well be the last official visits of their 10 years as China’s top leaders. In early September, Hu joined the APEC meeting in Vladivostok. In early December, Wen Jiabao went to Moscow for the prime ministerial meeting. Wen’s subsequent “long talk” with President Putin in Sochi highlighted the important and sensitive relationship. Meanwhile, Putin’s “pivot” to the Asia-Pacific was not just about China, but part of Russia’s grand strategy with both economic and strategic components to make Russia a truly Eurasian power. As the fourth generation of Chinese leaders was fading away, Russian-Chinese military cooperation gained more traction in the closing months of 2012.

India’s relations with the United States and East Asia during 2012 revolved around notable visits and anniversaries rather than any major policy developments. India’s chief guest at its Republic Day in January was Thailand Prime Minister Yingluck Shinawatra, making her the third consecutive leader from East Asia to be honored by India in this way (preceded in 2010 by South Korea’s President Lee Myung-bak and in 2011 by Indonesia’s President Susilo Bambang Yudhoyono). In March, Prime Minister Singh made the first state visit by an Indian prime minister to South Korea since former Prime Minister P.V. Narasimha Rao, initiator of India’s “Look East” policy, visited there in 1993. In May, Singh became the first Indian prime minister in a quarter century to visit next-door neighbor Myanmar – following up President Thein Sein’s visit the previous October. (Aung San Suu Kyi, chair of Myanmar’s opposition National League of Democracy party, visited India in December for the first time in 40 years.) Australia’s Prime Minister Julia Gillard made her first visit to India as prime minister in October.  In late December, nearly every head of government of ASEAN member countries traveled to New Delhi for the India-ASEAN Commemorative Summit.

The “big anniversary” of the year was India’s relationship with ASEAN – the 20^th anniversary of India’s dialogue partnership with ASEAN and the 10^th anniversary of the India-ASEAN summit-level partnership. Also, India and Thailand marked 65 years of diplomatic relations and India and Vietnam marked 40 years of such relations and the 5^th anniversary of a “strategic partnership.” 2012 is also the 50^th anniversary of India’s defeat in the 1962 Sino-Indian Border War.

These visits and anniversaries should not be dismissed as symbolism without substance. India has achieved a modicum of satisfaction in its relations with the US and East Asia – encompassing greater diplomatic interchange, steadily rising  though far from optimum economic ties, a role in security and military considerations, and inclusion in some if not all key regional multilateral efforts (exceptions being particularly glaring in the economic realm such as APEC and TPP membership). But measured against just two decades ago when India was seen as a potential security threat, economically irrelevant, diplomatically isolated, and reeling from internal crises, India’s current engagement with the US and East Asia should be viewed as an upward if unfulfilled progression. Indeed, many in the US and East Asia are frustrated because they want more, not less Indian engagement.