During 2012 global security concerns were centered on developments in North Africa and the Middle East as the situation in these regions grew worryingly volatile. Recently, however, the peace and security environment in East Asia has also become increasingly unstable and is causing growing concern—as is evident from the United States’ strategic rebalance toward the region. In East Asia, the two main actors are China and Japan. As for the former, it is already well known that China has territorial disputes with many neighbors: India (over the state of Arunachal Pradesh, which Beijing claims as part of Tibet), Japan, the Philippines, Taiwan (reclaiming it), and Vietnam. The potential geopolitical turmoil in East Asia lies squarely on the outcomes of these tense disputes.

For 2013, the biggest threat to East Asian comity and stability are the Diaoyu/Senkaku islands where China and Japan are at odds. Little more than rocky outcrops in shark-infested waters, Japan won the islands in the Sino-Japanese War in 1895. Much later, the United States took over administration of the islands at the end of World War II. China expected that Japan—after the 1952 San Francisco Treaty—would have to give up the islands, and that they would be returned to China, but the islands were not returned. In 1972, the United States returned the disputed islands to Japan, which has administered them since. When China and Japan restored diplomatic relations in the 1970s, the leaders of the two countries decided to shelve the question of sovereignty of the islands until a future date.i

The Chinese government considers the 1952 San Francisco treaty illegal and void. Additionally, China enacted a Law on the Territorial Sea and the Contiguous Zone in 1992 that treats the Diaoyu/Senkaku Islands as belonging to China, thus trying to unilaterally change the status of the islands as defined by the San Francisco Treaty.ii Japan has accepted the jurisdiction of the International Court of Justice (ICJ) as compulsory. Since China is undertaking various campaigns to promote their assertions in international forums, it seems to make sense for China to seek a solution based on international law. One only has to wonder: Why does China not refer the issue to the ICJ for resolution?

In late 2012 the Japanese government announced it was purchasing several of the islands from a family that has owned them for some years. China denounced the purchase as nationalization of the islands. Because the islands were transferred from one Japanese entity to another, Japan’s government ascertains that the status quo has not changed, and that there is no need to open negotiations with China over the issue. The measure taken by the government of Japan was simply a transfer of title under Japanese domestic law and merely states that the ownership of the islands was returned from a private citizen to the government. The objective was to minimize any adverse impact on the China-Japan relationship. In other words, purchasing the islands was considered the best option available to the government of Japan to protect bilateral relations. Strangely enough, back in 2008, when Sino-Japanese relations were stable, a joint communiqué between China and Japan issued when Chinese President Hu Jintao visited Japan stated that “The Chinese side expressed its positive evaluation of Japan’s consistent pursuit of the path of a peaceful country and Japan’s contribution to the peace and stability of the world through peaceful means over more than 60 years since World War II.”iii

Issues and Options

In many quarters there is a strengthening notion that China is now seriously contesting the Japanese ownership of the Diaoyu/Senkaku Islands because of its newfound economic and military might, and that Beijing is willing to burn diplomatic bridges to make its point that maritime and territorial claims are to be considered thoroughly. A footnote to that notion is that China is testing the reactions of the West to a variety of regional clashes and skirmishes, and that it is also calibrating countermeasures and how much diplomatic amplitude it receives in the international stage. As expected by senior Chinese officials, Washington has criticized Beijing for its rash decision to set up municipalities and military garrisons on remote islands in the East and South China Seas to more aggressively secure its territorial claims. Moreover, American intervention in territorial disputes in the South China Sea—where China has been at odds with another American ally, the Philippines—has been interpreted in some Chinese quarters as a way for the United States to expand its clout and restrain the influence of China. However, Chinese leaders insist in interviews and press releases that China opposes aggrandizement and power politics in all their forms, and will never seek hegemony or engage in expansion.

To be sure, the United States is not a claimant to the Diaoyu/Senkaku islands or the resources in the East and South China Sea, but for decades has had a strategic national interest in the maintenance of peace and security, and the pursuance of prosperity and wellbeing. In fact, since early 2009, the Obama administration has heightened its focus on Asia. Specifically, more attention has been given to East and Southeast Asia since both are economically vibrant areas that have sought deeper ties with the United States—mainly in reaction to China’s rising powers and North Korea’s increasing belligerence. Some argue that, as part of regional strategic planning, the United States is using Japan as a strategic tool in its effort to mount a comeback in Asia, a policy that is said to be heightening tensions between China and Japan. This narrative is not without merit. As a democracy in Asia, Japan has been contributing to peace and prosperity of the entire world, and it has counted on its alliance with the United States to do so. On the other hand, Japan continues to reiterate that China’s peaceful, robust, and stable development is an opportunity for the global community, including Japan and abutting economies.

A good example of geostrategic diplomacy by the U.S. government occurred in early September 2012, when former U.S. Secretary of State Hillary Rodham Clinton flew to Beijing to ask officials of the Chinese Communist Party to aim for a peaceful resolution of the disputes with Southeast Asian neighbors over claims (maritime and territorial) in the South China Sea. Mrs. Clinton, as a preemptive measure, also asked attending Southeast Asian countries to present a strong, cohesive front in dealing with Beijing, and to work towards a steady dissipation of the increasing tensions in the South China Sea. Washington has been urging Beijing and the involved parties to embrace a non-coercive dispute resolution mechanism and abidance to a fair code of conduct.iv In more pluralistic forums, attendees of meetings at the Chinese Ministry of Foreign Affairs have urged senior government officials that ongoing discussions between China and Japan should start on ways to reduce the risk of clashes between Chinese and Japanese patrol vessels that have gotten perilously close off the islands in late 2012. One of those attending these meetings was Indonesia. Indonesia, while not a claimant itself, has been spearheading efforts in Southeast Asia to design and establish, along with China and Japan, a code of conduct for handling claims and disputes. Indeed, many countries in the region realize that a stable Sino-Japanese relationship grants geopolitical certainty.

Strength through Force

In the international arena, the rise of China as a major player in foreign affairs is likely to emerge as a salient feature of the geopolitical landscape of the early 21st century. As China moves steadily into superpower status it will start to assume an increasing number of roles and responsibilities. One of these responsibilities is the reinforcement of international codes, norms, rules, and standards that enhance peace and security in the region and around the world. The international community welcomes a prosperous, robust, strong, and vibrant China, but China has argued that to fulfill its roles and responsibilities it needs to undertake a comprehensive and sequential modernization of its military forces. Indeed, since 2004 the People’s Liberation Army has been mandated by its leadership in Beijing to carry out missions beyond the mainland’s immediate territorial interests. This guidance has propelled the country’s military to engage in surveillance, counter-piracy, disaster relief, humanitarian assistance, and international peacekeeping operations.v However, some regional actors have voiced concerns over Beijing’s accelerated military expansion.vi They argue that a modern military could increase China’s ability to gain diplomatic leverage or favorable dispute resolutions.

The details speak for themselves: China’s total military spending for 2010 was more than $160 billion (for comparison, the Pentagon spends more than $500 billion a year, although the number is closer to $700 billion a year if the wars in Iraq and Afghanistan are included). China is developing its own aircraft carriers, and is already in sea trials with a refitted Soviet-era carrier from Ukraine. It is also developing anti-ship ballistic missiles, potentially capable of attacking American aircraft carriers. Finally, China is working on a new-generation stealth jet fighter, which it boldly tested in Beijing in January 2012 during a visit by former U.S. Defense Secretary Robert Gates. China’s People’s Liberation Army—with some 1.25 million ground troops, the largest in the world—is on track to achieve its goal of building a modern, regionally focused force by 2020. The Pentagon’s annual report to the U.S. Congress titled ‘Military and Security Developments Involving the People’s Republic of China 2011’ revealed that the speed and breadth of China’s military expansion and modernization could augur a wave of destabilization in East Asia and the Pacific. The report provides details on China’s latest acquisitions, such as aerial and combat vehicles, fast-attack submarines, ballistic missiles, jet aircrafts, military tactics, warships, and weaponry.vii

In addition to hardware, numerous intrusions into computer systems around the world in 2010 appeared to have originated in China. The development of capabilities for cyber-warfare is in line with authoritative Chinese military doctrines: that information warfare is integral to achieving information superiority and an effective means for countering a stronger foe. Most importantly, as a source of economic prosperity and national security, Beijing is increasingly looking to the maritime domain. Chinese Communist Party officials emphasize the growing relevance of maritime power to the country’s strategic interests. In 2010, China’s State Oceanic Administration released a report titled ‘China Ocean’s Development’, which stated that the historic task for China in the 21st century is building its maritime power and that the historic stage for realizing this task is from 2010 to 2020.viii Military buildups, however, are highly scrutinized. Pentagon officials have noted that they are concerned about China’s military intentions in the Pacific. In Europe, very real questions have been raised given the overall trends and trajectory in the scope and the scale of China’s military modernization efforts.

Despite criticism and scrutiny, senior Chinese government officials continued to push for a more muscular China in regional and international affairs. Former President Hu Jintao, in a report to the 18th National Congress of the Communist Party, explicitly outlined his country’s policy to resolutely safeguard China’s maritime rights and interests, and build China into a maritime power. These pronouncements have attracted recurrent denunciations in Japan. For example, Japanese Prime Minister Shinzo Abe asserted in early 2013 that Chinese power is increasingly transfiguring the South China Sea into “Lake Beijing.” Japan frets that China will misuse its naval might and that it cannot be trusted to use its nascent military power responsibly.ix

The overarching rationale against power buildup is that China’s drive towards military aggrandizement will push other countries towards anti-China coalitions that reduce rather than enhance China’s diplomatic clout. And because China can effectively deter direct military actions in the region, nations seeking to counteract its rise will be bound to choose a cocktail of containment, deterrence, and preemption strategies that slow, rather than speedup, the economic growth China needs so desperately to maintain internal stability and political legitimacy. For many observers, what is really worrying about the anger-laden actions witnessed in Chinese cities is how they are rooted in nationalism encouraged by the government, radicals, and provocateurs. Clearly, erratic economic growth in 2013 is poised to weaken the government’s legitimacy, and the Chinese government very possibly may become increasingly dependent on nationalism and patriotism to entrench an intrinsic validity with its citizenry. But not everyone in Beijing is bent on belligerence and truculence. Key actors of the Chinese government and state-run media outlets understand the risks to China of an increasingly bellicose stance on the world stage. Over time, as observers expected, there was a spate of calls in state news media for rational patriotism, in an attempt to cool off pugnacious impulses.


China and Japan share strategic interests not only in terms of bilateral relations but in a variety of areas. Both have committed to building win-win ties through cooperation and reciprocity. Despite these commitments and interests, many months have passed after Chinese consumers staged a boycott of Japanese products over the uninhabited islands: sales of Japanese autos in China have yet to recover, Chinese factories continue to favor South Korean component suppliers, and the U.S. has displaced China as Japan’s largest export market—the commercial cost of failing to resolve this dispute keeps rising fast.

Citizens and politicians of both countries could do well in reminding themselves of the tremendous efforts made by former Chinese and Japanese leaders as they devoted themselves to normalizing interstate relations, and decided to establish a mutually beneficial relationship based on common strategic interests, thereby propelling the bilateral relationship to a higher level. Yet, it is illustrative that immediate economic ties have been overshadowed by fact that the Diaoyu/Senkaku islands offer the prospect of rich fishing grounds, potential oil reserves, and a strategic military outpost in the sea for both China and Japan. What is now obviously clear is that these spats have changed the landscape of Sino-Japanese relations, especially since territorial and maritime disputes are prone to spirals of escalation and retaliation. If one looks at it with perspective, it is not difficult to see that both regional economies will, in the end, lose more than gain—Japan can potentially lose a tectonic market for its products, and China will likely not be able to leverage Japan’s technological know-how and capital investments for growth.

In China, there is sincere hope that the new leader of the CCP will bring about the long-delayed economic, political, and social reforms needed to make their country a growth-and-peace-seeking economy, but truly substantive changes in Chinese foreign policy are not likely to follow the selection of a new leadership team in Beijing. Sooner or later China will enter a phased progression into an increasingly open situation, a two-way conversation—one where people with diverse backgrounds have more inputs. And this evolution could very well include a system based on equality, rule of law, and more accountability. Nowadays, as a political custom, plans are crafted under penumbra of secrecy. For instance, we have learned that Chinese authorities are sensitive to media coverage of the wealth amassed by some elements at the highest echelons of power. Those stories provide evidence of the “increasingly corrupt system of interlocking ties between the Communist Party and state-owned banks, industries, and monopolies.” The vast internal assemblage of knots and ties allow top CCP officials and their families to become affluent, and even facilitate the rapid shuttling of monies out of China.x

There are encouraging signs that change is near. Within China, not everyone is tight-lipped. A senior editor at the Beijing-based Study Times argued on a controversial web article that the lack of political reforms is the root cause of public discontent, including stalled economic restructuring, income disparity, and pollution. Also, China’s lack of transparency and its trends in military prowess have been denounced. Chinese commentators have stated that “being nationalist in China is politically correct, and the government has long relied on a muscular nationalism to bolster its legitimacy.”xi Even staunch allies are progressively looking out for options. In November 2012 Myanmar played host to a visit by U.S. President Barack Obama, which marked a dramatic shift in policy for a strategically important neighbor that had long been considered to be aligned reliably with Beijing.

In years to come, the world can only hope that students of international affairs will be expected to learn that China and Japan acted as responsible members of the international community, and that in the end they stood ready to stabilize relations with each other after a realization of how much more was at stake.

i Kimie Hara, “50 Years from San Francisco: Re-Examining the Peace Treaty and Japan's Territorial Problems,” Pacific Affairs, Vol. 74, No. 3, 2001, 361-382.

ii Zhongqi Pan, “Sino-Japanese Dispute Over the Diaoyu/Senkaku Islands: The Pending Controversy from the Chinese Perspective,” Journal of Chinese Political Science, Vol. 12, No. 1, 2007, 71-92.

iii Koichiro Genba, “Japan-China Relations at a Crossroads,” New York Times, 20 November 2012, available at: http://www.nytimes.com/2012/11/21/opinion/koichiro-genba-japan-china-relations-at-a-crossroads.html?_r=0

iv “Clinton seeks Chinese accord on South China Sea,” CBS News, 4 September 2012, available at: http://www.cbsnews.com/8301-501712_162-57505428/clinton-seeks-chinese-accord-on-south-china-sea/

v Andrew Scobell and Andrew J. Nathan, “China’s Overstretched Military,” The Washington Quarterly, Vol. 35, No. 4, 2012, 135-148.

vi The Chinese military remains focused on Taiwan, which it claims as part of its sovereign territory, and reports claim that it has deployed as many as 1,200 short-range missiles aimed in its direction.

vii Office of the Secretary of Defense, “Military and Security Developments Involving the People’s Republic of China 2011,” Annual Report to Congress (Washington, D.C.: Department of Defense, 2012), 94 pages, available at: http://www.defense.gov/pubs/pdfs/2011_cmpr_final.pdf

viii State Oceanic Administration of the People’s Republic of China, Institutional Website, http://www.soa.gov.cn/

ix James R. Holmes, “The South China Sea: Lake Beijing,” The Diplomat, 7 January 2013, available at: http://thediplomat.com/the-naval-diplomat/2013/01/07/the-south-china-sea-lake-beijing/

x Thomas L. Friedman, “The Talk of China,” The New York Times, 15 September 2012, available at: http://www.nytimes.com/2012/09/16/opinion/sunday/friedman-the-talk-of-china.html?src=me&ref=general

xi Didi Kirsten Tatlow, “The Meaning of the China-Japan Island Dispute,” International Herald Tribune, 19 September 2012.