China Overreaching Chance for Japan To Make Long-Overdue Amends

 

28 September 2010. By David Caploe PhD, Chief Political Economist, EconomyWatch.com

At this point, only a fool would predict when the latest conflict between China and Japan is going to be over.

Most everyone thought it would be finished last Friday, September 24,

when Japan – as it should have done – returned the captain of the fishing trawler it had taken to China.

But then China decided to escalate, and with such rapidity that

 

28 September 2010. By David Caploe PhD, Chief Political Economist, EconomyWatch.com

At this point, only a fool would predict when the latest conflict between China and Japan is going to be over.

Most everyone thought it would be finished last Friday, September 24,

when Japan – as it should have done – returned the captain of the fishing trawler it had taken to China.

But then China decided to escalate, and with such rapidity that

anyone who thinks they have an idea of what’s going on, and how it’s going to end,

is kidding both you and themselves, so we won’t even try.

As of Monday night East Asia time, Japan said it would ask China to pay for repairs to two coast guard ships damaged by the trawler,

which was effectively a retort to China’s demand that Japan apologize and offer compensation for the episode,

even after Japan had freed the captain on Friday in what was widely seen as a capitulation to China.

On Sunday, Japan’s Democratic Party prime minister, Naoto Kan,

called China’s latest demands “unthinkable,”

a sign of his understandable sensitivity to criticism from the long-time rulers,

the Liberal Democratic Party, that Japan had shown timidity to Chinese bullying.

“Naturally, we will be asking for the boats to be returned to their original condition,”

the chief cabinet secretary, Yoshito Sengoku, told a news conference on Monday.

The Japanese release of the captain seemed aimed at defusing a heated standoff

in which China had imposed economic sanctions and even detained four Japanese.

But the Japanese – and, to be honest, most of the rest of the world –

were clearly surprised when China then said that

Tokyo must offer an apology and unspecified compensation over the arrest,

which took place almost three weeks ago and aroused deep anger in China.

The demands have forced Mr. Kan to decide once again how Tokyo will deal with Beijing,

which in recent years has appeared to be testing Japan’s resolve to back its territorial claims in the East China Sea.

In the days leading up to the captain’s release, the Chinese

·        curtailed tourism to Japan,

·        suspended many political and cultural ties, and, in our view, most disturbing,

·        took unannounced steps to restrict shipments to Japan of rare-earth minerals, which are crucial components for a range of “green high tech” products.

But apparently, that’s just our view of the most problematic aspect of China’s actions.

The move Japan apparently found most alarming was the detention, in the northern city of Shijiazhuang,

 of four Japanese citizens, accused of photographing military sites.

The dispute illustrated the difficulty of overcoming nationalistic sentiments stirred up by the trawler episode,

which is affecting the deeply intertwined ties between the two neighbors,

the world’s second- and third-largest economies, after that of the United States.

It also raised concern across Asia about China’s willingness to use its growing economic clout for political gains, a reprise of the “China threat”,

which we have also discussed in detail and pointed out was a structural factor in the desire of almost all nations in East Asia

that the US retain its – fundamentally stabilizing – military presence in the region.

Japanese leaders had correctly sought to minimize the episode,

saying that the Chinese captain’s release was a decision made by local prosecutors.

Those assertions were apparently and correctly – but also, again, in our view, stupidly –

met with broad skepticism among many sectors of the Japanese public and elite,

with many holding the view that Japan capitulated to aggressive Chinese pressure.

This, of course, is correct, as far as it goes.

The immediate question is, “what choice did Prime Minister Kan actually have ???”

given the general intertwining of the two economies AND, in particular,

its almost total reliance – like the rest of the world – on China

for access to those vital-to-high-technology-in-general-and-clean-energy-in-particular rare earth metals –

a dependence that would confront ANY Japanese leader.

Unfortunately, this has led to growing criticism in Japan that Mr. Kan’s government showed weakness,

indicating once again that the fundamental problem in the world today is the low level of public discourse.

“It looks like Japan caved in,” said Sadakazu Tanigaki, the head of the largest opposition party, the Liberal Democrats.

“That sends the wrong signal to China,” as noted in this article from the New York Times.

And really, Tanigaki-san, what would be the RIGHT signal to send to China –  

given both the particular situation AND Japan’s general economic dependence on China in many ways, but above all,

for access to the rare earth metals that are crucial for, as our piece points out, industrial giants like Toyota ???

So, once again, the general stability of the world finds itself threatened

by a conflict in which BOTH sides have elements of nonsense in their positions,

but from which, nevertheless, a solution must somehow be generated,

no matter how difficult such may seem at any particular moment in the escalating process – Israel / Palestine, anyone ???

In this particular case, there seems little doubt that China is radically over-reacting,

for reasons about which we have no idea, and are in no position to speculate.

Regular readers of this site will probably find this statement a bit surprising coming from us,

as we are regularly accused of being far too “easy” on China,

and too “accepting” of their basic approach to political economic issues.

To make sure there’s no confusion about this, we stand by our GENERAL support of the Chinese approach, with all its admitted problems –

we just think in this particular case, they are both wrong in principle to make such a big deal out of such a small event,

and incredibly short-sighted in escalating a conflict with Japan,

which can obviously lead nowhere good for EITHER side – so what’s the point ???

That said, unless China decides to wisely back off and NOT put Japan in a corner –

which would be both smart in general, and, as we said last week, would give much-needed internal credibility to the Japan Democratic Party,

which represents one of the few potentially plausible alternatives to the sclerotic Liberal Democrats,

who have ruled Japan since its “independence” from the US in the mid-1950s –

the ball is in Japan’s court.

And this actually represents a rare opportunity to create a radical break with the past,

which, frankly, Japan could desperately use,

both because it’s the right thing to do AND because the growing centrality of Asia to the world economy

is going to make good general relations in this region more globally important than ever.

Put bluntly, there is a huge reservoir of hostility in East Asia towards Japan

for the fact of, and crimes committed by it during, World War II.

Until now, Japan has been able to avoid dealing with this,

first as a result of the Cold War, then the Korean war, then Vietnam,

and then its own internal “banks control government” approach to the collapse of the Tokyo real estate market in 1989.

But with the combination of that dysfunctional response having been adopted by both the EU and US,

the consequent rise of Asia as ever more critical to the world political economy,

Japan is now much more under the regional and global microscope

than it has been at any time since the end of the war in 1945.

Again, this is not to justify in any way the – frankly, in our view, incomprehensible – tenacity of the Chinese in keeping this going,

especially when they are benefiting from the general flow of events at the moment,

and can only lose from making trouble where there’s no need for any, as here and now.

Given the new attention being paid to Japan, however uncomfortable it may be at first,

it DOES offer them a rare chance to move in a different direction that will, in the long run, serve their interests as much as anyone else’s.

Put simply, they should follow the example of their fellow giant of the World War II Axis, Germany, and make not just a formal apology –

which neither they nor anyone else in the region has ever taken seriously, as all concerned are well aware –

but use the opportunity to transform the internal societal dynamics that led to the rise of militarism and imperialism,

and which, unfortunately, remain today in the strong conformism that characterizes Japanese society.

Obviously, this is hardly an easy task, one which has taken Germany generations,

and one which they see as an on-going necessity

so that their nation can simply be regarded,

as former Chancellor Schroeder put it, as a “normal country.”

And what better political force to lead this great project than the Democratic Party of Japan,

which lacks the LDP’s long association with the general policy of denial ???

Again, this won’t be easy,

especially as the LDP, and many other sectors of Japan’s political /business ruling elite,

will fight tooth and nail against such a change.

But, as Germany shows in one way, and, in another quite different way, China does as well,

with enough sustained societal commitment, a country CAN change for the better,

and, whether they like it or not, now seems to be the moment

when Japan is going to have to decide if they can continue as they have been –

with not great results in any sphere, including economic, for at least two decades –

or seize an otherwise frightening moment to make a radical transformation,

which, as noted above, is going to benefit THEM more than anyone else,

while simultaneously re-constructing, on a much less emotionally fraught basis,

its relationship with the rest of the former “East Asia Co-Prosperity Sphere,” to use the militarists’ phrase of the 30s and 40s.

In our view, it’s a win-win situation for ALL concerned, even with the predictable difficult moments.

And, as the saying goes, if not now, when ???

In which context, another saying becomes relevant:

some are born great, some achieve greatness, others have greatness thrust upon them.

It seems as if this is the moment when China is thrusting the opportunity for greatness on Japan.

Let’s hope for everyone’s sake, they can rise to the challenge,

and respond in a way that will not just benefit them,

but will also fundamentally change the game

the entire region has been playing since the end of World War II.

It won’t be easy, but few good things ever are.

And it represents one of the few positive scenarios that could come out of

this otherwise deeply frightening, potentially explosive,

and completely unnecessary confrontation.

 

David Caploe PhD

Editor-in-Chief

EconomyWatch.com

President / acalaha.com