The quarter began on a high note when along the sidelines of the region’s foremost institutionalized multilateral security dialogue – the ASEAN Regional Forum (ARF) – a meeting between Secretary of State Colin Powell and his DPRK counterpart, Foreign Minister Paek Nam Sun, raised hopes of progress at the region’s most critical ad hoc multilateral gathering, the six-party talks. Alas, the “agreement in principle” reached at last quarter’s end – to engage in serious dialogue – this quarter deteriorated into name calling amid “complicating” revelations about earlier ROK nuclear experimentation, providing Pyongyang with yet another excuse to boycott the talks, presumably (goes the conventional wisdom) in hopes that regime change in Washington will work to its advantage.  The first U.S. presidential debate, while focused on foreign policy (read: Iraq), did little to disabuse Pyongyang of this notion as neither candidate seemed fully conversant with his own policy statements on the Korean nuclear crisis, even while agreeing that the threat posed by nuclear weapons proliferation represented the greatest future threat to U.S. security.

The Korean Peninsula also fits prominently in the Pentagon’s force realignment plans, although the greatest impact will be felt in Europe. President Bush, in a campaign speech before an influential veterans’ group, revealed that, worldwide, some 60-70,000 U.S. forces currently based overseas would be brought home over the next decade as part of his administration’s Global Posture Review (GPR). While few new details were released, it seemed clear that South Korea would bear the brunt of the changes in Asia (with no reduction in capabilities or commitment, the Pentagon was quick to add). Other Asian changes were forecast to be “not very dramatic,” regional headlines (“Marching Out Of Asia”) and Japanese anxieties (and, in some instances, high expectations) notwithstanding.

Elsewhere in Asia, democracy continued to march on, especially in Indonesia where the run-off election between incumbent President Megawati Sukarnoputri and challenger Gen. Susilo Bambang Yudhoyono resulted in another peaceful transition of power in the world’s largest Muslim country.  Meanwhile, the assembled ARF ministers confirmed their intentions to further institutionalize the ARF process, while repeating pledges to fight terrorism and the proliferation of weapons of mass destruction (WMD). In the
economic arena, preparations continued for this November’s Asia-Pacific Economic Cooperation (APEC) Leaders’ Meeting in Santiago, Chile.

It has been another relatively calm quarter for U.S.-Japan relations. There was one potential calamity (the crash of a U.S. helicopter in Okinawa) and a few controversies, but, in the main, the alliance was on cruise control. The issues of note had Japanese domestic political consequences: the Upper House election, comments from U.S. officials about the Japanese constitution and, related to that, the Bush-Koizumi meeting at the United Nations that addressed, among other things, Tokyo’s bid for a permanent seat on the UN Security Council.

In short, the alliance is functioning well and absorbing rather smoothly whatever complications arise: in addition to the helicopter crash, chessmaster and hatemeister Bobby Fischer’s arrest and subsequent asylum request and the return from North Korea of alleged U.S. Army defector Charles Robert Jenkins are the two most significant this quarter. The best indication of the state of the relationship may be the fact that Japan has not come up in this year’s election campaign. The solidity and stability of the alliance have allowed it to recede into the background.

After years of entreaties by China to make a solo trip to the Middle Kingdom, National Security Adviser Condoleezza Rice unexpectedly decided to visit Beijing as well as Tokyo and Seoul in early July.  Chinese leaders failed in their efforts to extract a commitment to reduce U.S. arms sales to Taiwan and intensify pressure on Taiwan President Chen Shui-bian to refrain from taking provocative steps toward the establishment of a legally independent state.  The third visit to China by Chief of the U.S. Pacific Command Adm. Thomas Fargo was also dominated by discussions about the Taiwan Strait.  The U.S. and China faced off in the United Nations Security Council twice this quarter over how to respond to the escalating violence in Sudan.  China’s foreign minister personally complained about the alleged beating of a Chinese citizen by officers of the U.S. Customs and Border Protection in Niagara Falls near the U.S.-Canadian border in late July.  Finally, Beijing awaits the U.S. presidential elections with trepidation and ambivalence.

The six-party talks on North Korea’s nuclear program remained in a holding pattern this quarter as Pyongyang evaded a new round before the U.S. presidential elections in November.  Although Bush administration officials stressed the benefits North Korea would receive from accepting the current U.S. proposal, Pyongyang was uncooperative and denounced the “hostile policy” of the United States.

In September, North Korea gave as a new pretext for delaying the next round of talks the need for South Korea to disclose more details of the nuclear experiments it conducted in 2000 and the early 1980s.  Pyongyang seemed to be betting that a defeat of President George W. Bush in the upcoming U.S. elections would lead to a more accommodating U.S. policy toward North Korea.

The U.S. and South Korea reached agreement during this quarter on the relocation of the U.S. command headquarters from Yongsan base in central Seoul to the Pyongtaek region, approximately 70 kilometers south of the capital.  But they were unable to resolve the issue of how many troops the U.S. would withdraw from the South by the end of 2005 as part of the planned global realignment of U.S. forces.  South Korea is seeking at least a two-year delay in this redeployment and the allies are likely to announce an agreement at their ministerial-level defense consultation in late October.

On economic and trade issues, the U.S. and South Korea conducted discussions, at both working and senior policy levels, on whether U.S. export control laws should ban the export of computers and other dual-use high technologies to the Kaesong industrial complex in North Korea.  South Korea hopes to locate 15 companies at this site by the end of 2004.  Originally announced at the June 2000 South-North summit meeting, the planned Kaesong complex symbolizes the extensive economic development that could arise from détente on the Korean Peninsula.

The events of the past few months in both the United States and Russia highlight just how deeply embroiled each nation is in their respective national struggles against terrorism and against “insurgents” in Iraq and in Chechnya.  Whereas the terror attacks perpetrated in triplicate in Russia garnered tremendous international attention, the quiet passing of a milestone in the U.S. campaign in Iraq drew much less notice.  Just this past month, the 1,000^th U.S. soldier died in Iraq.  Whether the tragedies of the summer months will steel the strategic partnership or sow discord will be played out in the run-up to the U.S. presidential election and afterward.

The early withdrawal of the Philippines’ small armed forces contingent from Iraq in response to a militant group’s threat to murder a Filipino hostage disappointed the United States but has not damaged Washington-Manila counterterror cooperation.  U.S. forces continue to train Philippine soldiers in counter-insurgency.  The early September Jakarta truck bomb attack on the Australian Embassy has reinforced U.S. and Australian police and intelligence collaboration with their Indonesian counterparts.  Washington hopes that the election of S.B. Yudhoyono as Indonesia’s next president will strengthen joint efforts against the Indonesia-based Jemaah Islamiyah – Southeast Asia’s al-Qaeda-linked and most lethal terror organization.  Washington is also offering technical assistance to Southeast Asian navies patrolling the Malacca Strait just as China proposes to raise its maritime profile in the region.

Beijing’s relations with the nations of Southeast Asia during the third quarter of 2004 remained basically positive and progressive. Contacts with the region as a whole through ASEAN followed a generally positive trajectory, as did China’s relations with individual Southeast Asian nations. Trade and overall economic relations developed according to the announced objectives of all the parties involved; several new infrastructure development projects designed to facilitate Chinese contacts with its neighbors were announced and/or begun; Beijing made major progress in its self-defined role as bridge between Asia and Europe as the Asia-Europe Meeting (ASEM) convened; and, the Chinese announced a broad-gauge plan for integrating ties among political parties into the overall strategy for developing positive, broad relations with the sub-region.

Only two events emerged to contrast with this overwhelmingly positive pattern and, although neither threatens to challenge, much less undermine, the generally positive course of Beijing’s interactions with Southeast Asia, they merit mention here. The more puzzling of the two involved Beijing’s unusually harsh and unprecedented public reaction to the unofficial visit to Taiwan by Singapore’s then Deputy Prime Minister and now Prime Minister Lee Hsien Loong. The second comprised region-wide speculation over the potential implications of Jiang Zimin’s retirement as chairman of the Central Military Commission (CMC) of the Chinese Communist Party (CCP) and the assumption of those duties by Hu Jintao, which occurred at the Fourth Plenum of the 16^th Central Committee of the CCP. The passing of control of the gun to Hu marks the completion of the transition of China’s leadership to the so-called Fourth Generation.

This quarter much attention was focused on unproductive military posturing. While some saw an increase in military tension, it is more accurate to say that both sides were using military exercises to signal the political resolve behind their declared policies.  One real issue – whether Taiwan will invest more in its own defense – was hotly debated in Taipei, but the Legislative Yuan (LY) took no action on the proposal. The months leading up to Beijing’s Central Committee Plenum in September saw considerable speculation about policy differences between Jiang Zemin and Hu Jintao, including over Taiwan.  Although Jiang completed his retirement at the Plenum, it remains to be seen whether Hu will make significant adjustments in Taiwan policy next year.  In Taipei, the LY passed proposed constitutional amendments including provisions to use referendums to ratify future amendments. Despite its past allergy to Taiwan referendums, Beijing reacted calmly. With the December LY elections in the offing, the standard dichotomy between rapidly expanding cross-Strait economic ties and deadlocked political dialogue continued to hold true this quarter.

North Korea’s capacity to wrongfoot the analyst should never be underestimated. Three months ago, extrapolating from recent trends, it seemed reasonable to conclude that inter-Korean talks are now institutionalized. In the longer term that remains true, but in July, Pyongyang reverted to its old bad habit of boycotting most major formal channels of North-South dialogue and, by late September, had not relented. It acted, as ever, out of anger – especially at a mass airlift of DPRK refugees to Seoul from Vietnam, plus assorted other gripes. While some contacts continued, this hiatus, along with North Korea’s virtual refusal to allow the six-party talks on the nuclear issue to reconvene, made this a summer during which the Korean question in all its manifold complexities mostly marked time.

None of this was apparent when the quarter began. A third round of six-party talks, held in Beijing in late June, committed to meet again by end-September, preceded by working meetings in August. With the U.S. for the first time offering a detailed proposal, the DPRK Foreign Ministry noted “common elements helpful to making progress.” Bilaterally, after the second quarter’s major breakthroughs – the first ever high-level military talks, setting up a naval hotline (albeit with teething problems) and starting to dismantle propaganda displays and speakers at the Demilitarized Zone (DMZ) – the last week of June alone saw a density of contacts that seemed the new norm. In quick succession: both Koreas agreed to march together at the Athens Olympics; their central bank chiefs met in Basel, Switzerland, while at home, foreign trade banks agreed to payment clearance mechanisms; 350 dignitaries came to a ground-breaking ceremony for the first phase of the Kaesong Industrial Zone (KIZ); and working-level talks on road and rail links began at Mt. Kumgang. It all looked good.

The debate over the history of the relationship between Korea and China dramatically took center stage this quarter – not as part of the official commemoration of the 12^th anniversary of normalization between the Republic of Korea and the People’s Republic of China in August – but as part of an escalating dispute between Seoul and Beijing over the origins and legacy of the Goguryeo kingdom (37 B.C. to 668 A.D.).  PRC claims that Goguryeo is part of China’s history and a decision by the PRC Ministry of Foreign Affairs to excise all references to the history of Korea prior to 1948 engendered a caustic public reaction in Seoul.  The first major political dispute to arise between Seoul and Beijing since the decision to normalize in 1992 (aside from the “garlic wars” trade dispute of 2002; see Comparative Connections, October 2002) led to a number of high-level exchanges designed to calm the situation while continuing to coordinate efforts to keep alive six-party talks.

Despite continued benefits from the “Korean Wave” in China in various sectors, the sensitive South Korean reaction to the Goguryeo history dispute also reflects increasing worries in Seoul on the economic front:  twelve years of dramatic double-digit growth in trade and investment between the two countries has resulted in increasing South Korean dependence on exports to China both through trade and as a destination for South Korean investment.  However, Chinese firms are rapidly closing the technological gap with South Korea not only in low-end manufacturing but also in sectors such as IT, automobiles, and high-tech sectors that represent the core of South Korea’s export trade earnings.

Both Tokyo and Beijing looked for ways to advance cooperation this quarter. The ASEAN Plus Three framework provided one venue.  North Korea provided another.  Commercial and economic relations provided a third: two-way trade in the first six months of 2004, for the fifth consecutive year, hit a new high.

But a series of events, such as resource exploration in disputed areas in the East China Sea, Chinese maritime research activities in Japan’s claimed Exclusive Economic Zone (EEZ), significant anniversaries – the Marco Polo Bridge Incident (July 7), Aug. 15 visits by Japan’s political leaders to the Yasukuni Shrine, the Mukden Incident, (Sept. 18) –combined with Japan’s 3-1 victory over China in the China-hosted Asia Cup soccer tournament to keep nationalist emotions at a high state in both countries.  Other issues of history, munitions abandoned by the Imperial Army in China, court decisions on compensation claims for wartime forced labor, and Taiwan also played into the relationship. It was not the best of times.

Tokyo joined the ranks of cities (including Los Angeles and Seoul) bestowed with the dubious distinction of being threatened with being turned into a nuclear sea of fire by the DPRK.  This rhetoric, often chalked up to harmless bluster, reflected real tension this quarter over a possible DPRK missile test and continued stalemates on the abductee dispute.  Tokyo’s relations with Seoul were capped this quarter by a summit.  Good relations at the highest levels, however, still could not overcome history issues and potentially tectonic shifts in the character of relations.

The third quarter turned out to be a period of mixed record for China-Russia relations: military relations moved ahead, high-level exchanges were busy as usual, while economics continued to cloud China’s “pipeline dream.” The 10 years of talk of an oil pipeline from Russia’s Siberia to northeastern China came close to an end in this quarter as Russia was finalizing a multibillion-dollar deal with Japan, a latecomer to Russia’s oil feast. Even an official visit to Russia by China’s “gung-ho” Premier Wen Jiabao in late September failed to reverse the tide.

While Moscow and Beijing were trying to find a way out of this pipeline scramble, internal dynamics affected both nations, though in different ways. In Russia, terrorist attacks shocked the nation. In China, Russian-educated strongman Jiang Zemin finally released his hold of the 2.5-million person People’s Liberation Army (PLA).