Volume 6, Issue 2

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April - June 2004 · Published: Jul 2004

Six-party talks about North Korea’s nuclear weapons programs dominated the multilateral agenda this quarter. The two working-level and one senior officials meetings in May/June constituted as much movement as had been seen in the entire 21 months since the stand-off began in October 2002.  Whether this movement constituted real progress was still not clear at quarter’s end, however.  Meanwhile, Washington’s efforts to develop a broader global consensus in support of its campaign against weapons of mass destruction (WMD) saw some progress with the passage of a United Nations Security Council (UNSC) resolution and the convening of a first anniversary Proliferation Security Initiative (PSI) plenary session, even as the regional implications of its Global Posture Strategy were beginning to be felt.

Elsewhere in Asia, the democratic process moved forward, albeit unevenly. Taiwan President Chen Shui-bian’s reelection was certified, as was Philippine President Gloria Macapagal-Arroyo’s, and a subsequently unimpeached President Roh Moo-hyun saw his preferred Uri Party win a majority of seats in the ROK National Assembly.  A huge upset took place in India and perhaps in Mongolia as well. Meanwhile, Indonesia’s largely peaceful parliamentary elections set the stage for its first direct presidential election in July, demonstrating that democracy is alive and well in Jakarta. Events in Burma were less encouraging.  Despite promises to the contrary, Aung San Suu Kyi remained under house arrest in Rangoon, making Burma’s constitutional convention an even bigger sham than it otherwise promised to be, and China’s leaders took one step backward regarding the introduction of more representational democracy in Hong Kong.

There was a flurry of other multilateral activity, including an ASEAN Regional Forum (ARF) ministerial at quarter’s end.  Several major track-two events were boycotted by the PRC, demonstrating that its “fourth no” still applies, despite conciliatory gestures from Chen Shui-bian during his May 20 inauguration address.

In economic developments, Asia continues to be the most dynamic area in the world, with a forecast annual growth of 6.8 percent for 2004.  Confidence remains high despite concerns over the regional impact of China’s attempts to curb overheating and the region’s growing thirst for oil.

Finally, in the Middle East, President Bush promised to “stay the course” in Iraq, even as the U.S.-installed governing coalition was replaced at quarter’s end by a UN-arranged new sovereign entity, thus opening the door for broader global participation in the effort to reconstruct and democratize Iraq.  NATO took a small step toward joining the “coalition of the reluctant” but how many, if any, additional Asian nations would be willing to walk through this door remained to be seen.

Relations between the United States and Japan were very good this quarter, even though a number of events threatened to derail the solid ties between the two governments. A hostage crisis in Iraq and the discovery of an alleged al-Qaeda network in Japan brought home to Japanese the reality of the war on terror. No longer could they disassociate themselves from events half a world away. By the end of the quarter, both governments could point to their relationship as an example of how an alliance is supposed to work; Prime Minister Koizumi Junichiro could finally make the case that his close relationship with President Bush paid tangible dividends. Not only was his strategy vindicated, but he could point to an outcome on a key policy that a majority of Japanese could support.

Vice President Dick Cheney made a long-awaited visit to China this quarter and engaged in strategic dialogue with China’s top leaders, who underscored the dangers of Taiwan independence in the aftermath of the re-election of Taiwan’s President Chen Shui-bian.  Despite U.S. efforts to allay Beijing’s fears, Chinese dissatisfaction with U.S. policy toward Taiwan spilled over into other policy arenas, influencing its handling of Iraq and North Korea.  This quarter also saw a host of activity in the economic realm, with the convening of the 15th U.S.-China Joint Commission on Commerce and Trade, June visits to China by U.S. Secretary of Labor Elaine Chao and U.S. Secretary of Commerce Don Evans, and the signing of numerous bilateral economic agreements.

North Korea conducted an impressive diplomatic campaign during this quarter to improve its relations with China, South Korea, and Japan, and thus strengthen its position in the six-party talks.  In late June, under pressure from South Korea and Japan, the Bush administration made its first detailed negotiating proposal on the nuclear issue since taking office. The proposal called for a three-month freeze of North Korea’s nuclear program, accompanied by energy aid from South Korea, China, and Japan, as well as a “provisional security guarantee.” If North Korea readmits inspectors to verify compliance and meets specific deadlines for nuclear dismantlement, the U.S. would agree to continue energy assistance, provide permanent security guarantees, and take a variety of other steps to normalize relations.

The pressure on the U.S. from Japan and South Korea to negotiate seriously with Pyongyang enabled the State Department’s moderates to overcome the internal paralysis that has long marked U.S. policymaking on North Korea.  Whether the neo-conservative hardliners, located mainly in the White House and Defense Department, will now abandon their efforts to torpedo the six-party talks and to seek regime change in North Korea remains to be seen.

North Korea reacted to the U.S. proposal by characteristically demanding more energy assistance, more time for implementation, greater security assurances, and more incentives of other kinds.  But it expressed a willingness to “compromise” and “show flexibility” on the U.S. proposal if the Bush administration increases the incentives and specifically gives energy aid of its own.

The U.S.-South Korea alliance suffered serious strains during this quarter, as the U.S. announced, with little forewarning, that it would send a brigade of 3,600 troops from the Demilitarized Zone to Iraq and withdraw a total of 12,500 troops from South Korea by the end of 2005. The proposed withdrawal represents about one-third of the approximately 37,000 troops that the U.S. now keeps on the Korean Peninsula.  South Korean officials felt blind-sided by the announcement, although they stuck to their plan to send 3,000 South Korean troops to Iraq, at U.S. request, to bolster U.S.-led coalition forces.

Friction continued in U.S.-South Korea trade relations during this quarter over Washington’s efforts to improve Seoul’s enforcement of intellectual property rights (IPR).  South Korea expressed “regret” at the U.S. decision to keep it on the “priority watch list” for countries that do not adequately protect IPR.  Despite this ongoing dispute, the U.S. and South Korea were able to resolve a contentious internet issue and appeared to make progress on the problem of “screen quotas” that has held up completion of a Bilateral Investment Treaty for several years.  After months of resistance, South Korea’s minister of culture said his ministry would re-examine the screen quota system, drawing a harsh response from the South Korean film industry.

As noted in last quarter’s edition of Comparative Connections, “Elections Bring Tensions,” U.S.-Russian relations experienced a trying winter in 2003-2004. This spring seemed to offer some hope that relations could be brought back onto a more conciliatory track. At the G8 Summit on Sea Island, Georgia, both Presidents Bush and Putin expressed a determination to continue the partnership in the war on terror and in non-proliferation efforts.  Prior to the Sea Island summit, Russia endorsed the U.S.-U.K.- sponsored UN Security Council resolution on Iraqi sovereignty. Additionally, Putin seemed to give Bush a shot in the arm with his revelation that Russian intelligence had passed information on Iraqi plans to attack U.S. targets before the March 2003 invasion.  Nevertheless, there are still serious obstacles for the bilateral relationship in the months ahead, particularly as neither nation seems to be able to get a grip on its respective “occupation” duties in Chechnya and Iraq.

A combination of domestic political preoccupations in Southeast Asian countries, the presidential election campaign in the United States, and continuing sensitivities over the U.S.-led intervention in Iraq meant that U.S. relations with Southeast Asia were essentially on hold during the second quarter of 2004.  Nevertheless, ongoing concerns, including terrorism and piracy as well as the increasingly crowded calendar of regular regional meetings, ensured that activity and dialogue continued at a relatively intense pace throughout the quarter.

If 2003 was the year during which Beijing laid the foundation for a new relationship with the nations of Southeast Asia, 2004 may emerge as a period of fine tuning and adjustment. During the second quarter, as during the first, Beijing focused on the details of agreements already in place rather than offering bold new initiatives. China’s quest to achieve increased respectability and influence in Southeast Asia by following a two-pronged strategy that focuses on ASEAN for dealing with the region as a whole while dealing with nation-specific issues on a bilateral basis was readily apparent throughout the quarter. In some ways, the balance may have shifted slightly toward the bilateral arena.

The South China Sea and various areas along the Mekong River drew Chinese and regional attention, as did ever-present issues of trade and finance. However, these do not appear to have slowed the pace of Beijing’s political progress through the region, much less obstructed it. China’s relations with ASEAN remain positive, although Beijing must be disappointed with the lack of progress in such areas as the ASEAN Free Trade Area (AFTA), security discussions, and the effort to establish multilateral mechanisms for securing unhindered passage through the Strait of Malacca.

In his second inaugural address, President Chen Shui-bian explained revised plans for constitutional reform and his desire for cross-Strait dialogue without preconditions.   Beijing, which had predictably reiterated its “one China” precondition for talks, criticized Chen’s speech as disguised separatism and threatened to crush Taiwan independence whatever the price.  Cross-Strait political relations thus will remain deadlocked, but stable, for the rest of the year as Chen’s Democratic Progressive Party (DPP) focuses on winning a majority in the December Legislative Yuan (LY) election and Beijing delays difficult decisions on how to deal with Chen until it can assess that election outcome.

After the relative lull of the previous two quarters, spring brought new growth to inter-Korean relations, with a spate of meetings in many fields. In particular, South Korea finally obtained its long-sought goal of direct North-South military talks at general level, who in turn swiftly agreed to communications steps to prevent naval clashes like those of 1999 and 2002. In a highly symbolic move, on June 15 – the fourth anniversary of the June 2000 Pyongyang summit – each side turned off its propaganda loudspeakers, terminating decades of noise pollution across the Demilitarized Zone (DMZ).

Multilaterally too, Seoul played a key role in the latest, and most hopeful so far, six-party nuclear talks in Beijing. For the first time, the U.S. presented a detailed and phased plan, including incentives for Pyongyang – based on a South Korean draft. Yet many obstacles remain on this front. Bilaterally too, while North-South progress looks encouraging, the exact mix of symbolism and substance in this process remains arguable. Nonetheless Seoul seems set on sticking with Sunshine, whatever might transpire on other fronts.

The wheels of dialogue continue to spin between China and the Korean Peninsula, thanks to Beijing’s generous quarterly hospitality to participants in the six-party talks.  China’s efforts kindly assure that we at Comparative Connections always have something to write. The talks occurred on schedule following assurances of North Korea’s top leader himself during his visit to Beijing that the talks could be a desirable vehicle for addressing the dispute over North Korea’s nuclear weapons program.  Kim Jong-il’s third visit in four years to Beijing breathed new life into the dialogue (combined with his consultations with Prime Minister Koizumi Junichiro in Pyongyang) and provided at least some impetus for another round of talks – and an actual U.S. proposal to settle the crisis – during the last week in June. Beijing’s shuttle diplomacy with Pyongyang and Washington has yielded enough progress to say that diplomacy has not failed yet.  Meanwhile, the protracted nuclear crisis remains the primary focal point of China’s diplomacy toward the Korean Peninsula.

Aside from six-party talks, the stellar growth of the China-South Korean economic relationship has slowed as Beijing tries to rein in its own economy, inducing the first “China shock” in the Korean equity market and underscoring Korea’s dependence on exports to China as the primary driver for the country’s current economic growth.  The usual negative aspects of the relationship – refugees, spoiled food imports, cross-Strait tensions – were also on display this quarter.  There are an increasing number of regional economic and other consultations between China, Japan, and South Korea in various forums – from the Asian Development Bank, to energy security cooperation, to a gathering of foreign ministers.  These contacts – quite aside from South Korea’s own vision of itself as a regional hub in Northeast Asia – suggest potentially significant changes are in the works that may open up new forms of regional cooperation in Northeast Asia.

Issues related to sovereignty dominated the Japan-China political and diplomatic agenda. As the quarter began, politicians and diplomats were involved in the controversy generated by the landings of Chinese activists on Uotsuri Island in the Senkaku/Diaoyu Island chain. The quarter ended with politicians and diplomats dealing with Chinese efforts to test drill for natural gas in the East China Sea bordering the Japan-China demarcation. Tokyo was concerned that extraction could tap resources on the Japanese side of the demarcation line. In the interim, the issue of Chinese maritime research ships operating, without prior notification, in Japan’s Exclusive Economic Zone (EEZ) kept the political-diplomatic spotlight focused on sovereignty claims.

At the same time, issues of history repeatedly surfaced.  In April, the Fukuoka District Court ruled that Prime Minister Koizumi Junichiro’s visits to the Yasukuni Shrine were tantamount to religious activity and violated the constitution. However, in May, the Osaka District Court, while not addressing the constitutional issue, found the visits to be private in nature, not the official action of a government officer.  In either case, the prime minister made clear that he would continue to visit the shrine, and his foreign minister returned from China again without the prime minister’s long-sought invitation for an official visit to China. In northeast China, chemical weapons abandoned by the Imperial Army again affected Chinese construction workers in Qiqihar.

The big news for the quarter was the May summit between Japanese Prime Minister Koizumi Junichiro and North Korean leader Kim Jong-il. Contrary to the pundits’ assessment, the results of this summit were not half-bad (and not fully appreciated until after the six-party talks in June).  They represented moderate successes for a U.S.-Japan strategy of engaging North Korea from a position of strength, not weakness.

The second quarter of 2004 marked the beginning of Russian President Vladimir Putin’s second term and the second year in office for China’s Hu-Wen team. Normal consultations and exchanges remained dynamic at all levels, particularly over the issues of Iraq, Korea, and Central Asia. The meetings included the Putin-Hu mini-summit during the Shanghai Cooperative Organization (SCO) annual meeting in the Uzbek capital of Tashkent in June, the official visit of China’s Parliament leader, Wu Bangguo, to Russia in May, and Russian Defense Minister Sergei Ivanov’s visit to China in April.


Beyond these high-level exchanges, Moscow and Beijing pursued their respective policies and interests in different ways. While Putin maintained his high profile (attending the G8 Summit and the 60th anniversary of the Normandy landing), Beijing leaders seemed to soft-pedal the Russian factor: more attention to problem solving, particularly in economics, less rhetoric about the China-Russia strategic partnership; more attention to nations around Russia, less “major-power” politics of the Jiang-Yeltsin style; and more attention to areas outside Moscow, though not necessarily neglecting Moscow’s central role in Russian politics.

Daily Digest

Reuters – US, Japan, Korea finance leaders agree to consult on foreign exchange, market developments

U.S., Japanese and South Korean finance leaders agreed to consult closely on foreign exchange and market developments in a trilateral meeting on Wednesday, they said in a joint statement issued by the U.S. Treasury Department.

Reuters – China sends fighter jets to shadow US Navy plane over Taiwan Strait

China’s military said on Wednesday it sent fighter jets to monitor and warn a U.S. Navy patrol aircraft that flew over the sensitive Taiwan Strait, a mission that took place just hours after a call between the Chinese and U.S. defence chiefs.

Associated Press – US navy flies aircraft through the Taiwan Strait a day after US-China defense chiefs hold rare talks

The U.S. 7th Fleet said a Navy P-8A Poseidon flew through the Taiwan Strait on Wednesday, a day after U.S. and Chinese defense chiefs held their first talks since November 2022 in an effort to reduce regional tensions.

The Diplomat – What the Revamp of the Japan-US Alliance Structure Means for South Korea

Not many realize that the United States had a Far East Command (FECOM) in the 1950s due to the Korean War and its ramifications.

The Diplomat – Beyond Tariffs: Overcapacity Ignites Fresh Tensions in China-US Trade Relations

Overcapacity, particularly prevalent in technologically advanced sectors such as electric vehicles (EVs), now occupies a central place in the economic discourse between the United States and China.

South China Morning Post – China’s top diplomat Wang Yi to push belt and road during visits to Indonesia, Cambodia and Papua New Guinea

China’s top diplomat Wang Yi will visit Indonesia, Cambodia and Papua New Guinea from Thursday, the Chinese foreign ministry announced on Tuesday.