These are no ordinary times in East Asia. With tensions rising from conflicting territorial claims in the East China and South China seas, the region increasingly resembles a 21st-century maritime redux of the Balkans a century ago -- a tinderbox on water. Nationalist sentiment is surging across the region, reducing the domestic political space for less confrontational approaches. Relations between China and Japan have now fallen to their lowest ebb since diplomatic normalization in 1972, significantly reducing bilateral trade and investment volumes and causing regional governments to monitor developments with growing alarm. Relations between China and Vietnam, and between China and the Philippines, have also deteriorated significantly, while key regional institutions such as the Association of Southeast Asian Nations (ASEAN) have become increasingly polarized. In security terms, the region is more brittle than at any time since the fall of Saigon in 1975.
In Beijing, current problems with Tokyo, Hanoi, and Manila are top of mind. They dominate both the official media and the social media, and the latter have become particularly vitriolic. They also dominate discussions between Chinese officials and foreign visitors. The relationship with Japan in particular is front and center in virtually every official conversation as Chinese interlocutors probe what they identify as a profound change in both the tenor of Japanese domestic politics and the centrality of China within the Japanese debate. Beijing does not desire armed conflict with Japan over territorial disputes, but nonetheless makes clear that it has its own red lines that cannot be crossed for its own domestic reasons, and that it is prepared for any contingency.
Like the Balkans a century ago, riven by overlapping alliances, loyalties, and hatreds, the strategic environment in East Asia is complex. At least six states or political entities are engaged in territorial disputes with China, three of which are close strategic partners of the United States. And there are multiple agencies involved from individual states: In China, for example, the International Crisis Group has calculated that eight different agencies are engaged in the South China Sea alone. Furthermore, these territorial claims -- and the minerals, energy, and marine resources at stake -- are vast. And while the United States remains mostly neutral, the intersection between the narrower interests of claimant states and the broader strategic competition between the United States and China is significant and not automatically containable.
Complicating matters, East Asia increasingly finds itself being pulled in radically different directions. On the one hand, the forces of globalization are bringing its peoples, economies, and countries closer together than at any other time in history, as reflected in intraregional trade, which is now approaching 60 percent of total East Asian trade. On the other hand, the forces of primitive, almost atavistic nationalisms are at the same time threatening to pull the region apart. As a result, the idea of armed conflict, which seems contrary to every element of rational self-interest for any nation-state enjoying the benefits of such unprecedented regional economic dynamism, has now become a terrifying, almost normal part of the regional conversation, driven by recent territorial disputes, but animated by deep-rooted cultural and historical resentments. Contemporary East Asia is a tale of these two very different worlds.
The most worrying fault lines run between China and Japan, and between China and Vietnam. In September 2012, the Japanese government purchased from a private owner three islands in the Senkakus, a small chain of islands claimed by both countries (the Chinese call the islands the Diaoyu). This caused China to conclude that Japan, which had exercised de facto administrative control over the islands for most of the last century, was now moving toward a more de jure exercise of sovereignty. In response, Beijing launched a series of what it called "combination punches": economic retaliation, the dispatch of Chinese maritime patrol vessels to the disputed areas, joint combat drills among the branches of its military, and widespread, occasionally violent public protests against Japanese diplomatic and commercial targets across China. As a result, Japanese exports to China contracted rapidly in the fourth quarter of 2012, and because Japan had already become China's largest trading partner, sliding exports alone are likely to be a significant contributive factor in what is projected to be a large contraction in overall Japanese economic growth in the same period.
In mid-December, Japan claimed that Chinese aircraft intruded over Japanese airspace above the disputed islands for the first time since 1958. After a subsequent incident, Japan dispatched eight F-15 fighter planes to the islands. While both sides have avoided deploying naval assets, there is a growing concern of creeping militarization as military capabilities are transferred to coast guard-type vessels.
While the "static" in Japanese military circles regarding China-related contingency planning has become increasingly audible, Prime Minister Shinzo Abe, who took office in mid-December, has sought to moderate his public language on China, apparently to send a diplomatic message that he wishes to restore stability to the relationship. This was reinforced by a conciliatory letter sent from Abe to Xi Jinping, China's new leader, on Jan. 25 during a visit to Beijing by the leader of New Komeito, the ruling Liberal Democratic Party's coalition partner. This has been publicly and privately welcomed in Beijing, as reflected in Xi's public remarks the following day. Beijing's position is that while it wants Japan to formally recognize the existence of a territorial dispute in order to fortify China's political and legal position on the future of the islands, it also wishes to see the Senkaku/Diaoyu dispute managed in a manner that does not threaten regional security, which would undermine the stability necessary to complete its core task of economic reform and growth.