The Second Armitage-Nye Report

Published by the Center for Strategic and International Studies, the report can be downloaded here. The event launching the report can be viewed or listened to at the same site.

I have only scanned the report, but compared to the initial 2000 report, it is much more focused on shaping the region (hence the subtitle, "Getting Asia Right through 2020").

More soon...

Chinese Siberia

This piece in today's Japan Times by Cambridge's own David Wall spells out in detail the silent, slow-motion annexation of Pacific Russia by China.

Russia is in quite a bind as far as the Russian Far East is concerned. As Wall points out, the region is being depopulated of Russians, and millions of Chinese are migrating -- whether temporarily or permanently remains to be seen -- into Russia to work. Even if the Russian population remained static, however, Russia would still be facing demographic defeat in the territories it took from China in the 1860s.

Were Pacific Russia to return to China sometime during the twenty-first century, the consequences would not necessarily be dire, particularly if China exercises de facto rule before formalizing the transition.

This process shows, however, that alarms about Russia may be overblown. Yes, Russia is an increasingly substantial player in global energy markets. And yes, Vladimir Putin's government has taken a frightening turn in the direction of outright autocracy. But increasingly Russia is imploding, so that even as super-wealthy Russians make splashes internationally and Putin's government taunts and threatens, they are the shiny facade hiding a country in terminal decline. Russia's inability to control its territory adjacent to China is just one example of how powerless it has become in the face of high mortality rates and a pervasive spiritual gloom.

Asia changes -- will Japan change with it?

Chinese President Hu Jintao's visit to India this week supposedly signifies a shift in Asia, as Hu's visit indicates that the region's two emerging giants are drawing closer to one another. This conventional wisdom perhaps contains not a small amount of wishful thinking, because, as this article in the FT suggests, major differences remain between the two powers.

The visit nevertheless contains an important lesson for Japan.

Experts are quick to point out that this is the first time that China and Japan have been strong at the same time, but that won't be the case for long unless Japan remains a top-tier economic and political power.

Continuing economic and administrative reforms initiated under Prime Minister Koizumi are important, but the government needs to develop a comprehensive aim for reform. Why is Japan reforming? Is it simply to revive the manufacturing powerhouse that looked like it would overtake the US in the early 1980s? If so, Japan will find that the manufacturing field is more crowded than in the 1980s -- and China is leading the way as the workshop of the world. With a declining, aging population Japan will eventually be completely out-classed (although China is due to age rapidly in coming decades).

The task for Japan? Make the same leap to a post-industrial, service-based economy, just as the US and European economies are in the midst of doing. Shirakawa Hiromichi, chief economist at Credit Suisse, made this argument in an op-ed in the English version of the Asahi Shimbun.

His main point:

A rise in the share of the service sector in the overall economy can stoke job and wage growth, which in turn can bolster consumer spending, leading back to yet more job and wage growth. This virtuous cycle would make companies more willing to distribute accumulated profits to their employees.

This shift would have massive implications for Japanese society, beginning, perhaps, with education, because a service economy has to educate its children to be flexible, creative, and enterprising -- very different than the education provided to students in an industrial society.

The Abe Cabinet does not appear to be thinking in this terms; Finance Minister Omi Koji has, in fact, insisted that Japan will remain focused on industrial production. In a time of change in the region and the world, the government -- and all of Japan's governing class -- has to be more imaginative in thinking about how Japan can retain its international position in a rapidly changing region. The first step should be conceiving of broad renovation of Japanese institutions.

Summiting in Hanoi

So President Bush and Prime Minister Abe have had their first meeting, in the wake of the APEC summit in Hanoi.

As the recap provided by the White House indicates, the agenda of their conversation was not particularly surprising and the meeting provided no major changes in US-Japan alliance policy. (Although, as this Yomiuri summary indicates, the two leaders spoke of a Free Trade Area of the Asia Pacific, which, if it could be achieved, would be a significant development.)

What is interesting in the recap is that it is Prime Minister Abe who spoke of the importance of the alliance's fundamental values of "freedom, democracy, basic human rights and the rule of law." This is the continuation of a trend, noted by Michael Green, that began under Koizumi; Japan has begun to speak more of the alliance's values and of Japan's commitment to spread freedom and democracy as a way to contrast itself with China, which may be an important market but is still governed by a one-party dictatorship and has yet to become a responsible stakeholder in Asia and the world. Also interesting in Mr. Abe's remarks is that he suggested that the "globalization" of the alliance, which intensified under Mr. Koizumi, will continue.

There is no indication, however, as to whether the strong personal rapport that characterized the Bush-Koizumi relationship will also characterize the Bush-Abe relationship. We may have to wait until this week's issue of the Prime Minister's email magazine to learn more.

Setting the record straight

On the sidelines of the APEC summit in Hanoi, Japanese Foreign Minister Aso Taro and Chinese Foreign Minister Li Zhao Xing discussed plans to convene a joint Sino-Japanese committee to review Sino-Japanese history. The committee is expected to meet before the end of the year, consist of ten members, and have subcommittees that discuss both ancient and recent history. The committee will present its findings by 2008.

This committee could have value -- but I'm doubtful, because, as an op-ed in the IHT (not online, so far as I can tell) by Brookings visiting fellow Masahiro Matsumura notes, nationalism has proven politically useful to both governments. In particular, he writes about China, "The Chinese do not have a deeply entrenched sense of national identity. Instead China is divided by competing regional, ethnic and class identities The Japan history question is an issue on which all Chinese can reach consensus and on which a temporary and precarious sense of unity can be fabricated."

In other words, Chinese nationalism -- which has become more virulent as the country has developed -- may be a necessary and unpleasant evil preferable to the alternative, namely a China on the brink of splintering due to intense internal pressures, some of which have been exasperated by China's rapid growth. Beijing criticizes Japan for historical misdeeds for which Tokyo has apologized repeatedly because it is too politically useful for it to refrain from doing so.

The CCP's mounting of the tiger of nationalism may ultimately result, however, in dire consequences for the CCP itself and for surrounding nations. Should the CCP be perceived as failing to protect the Chinese nation's (where do the minorities fit in this China), will the party's standing be diminished, perhaps fatally so? Will it drive more adventurous forays abroad, whether in the Taiwan Strait or in the waters surrounding Japan?

Perhaps a joint committee could be useful as a tool for helping Beijing dismount from its nationalist mount, but if that is the case, Beijing has a lot of work to do in the next two years to dampen nationalist sentiment among its people.

Hey CCP, good luck walking that tightrope. Better find a new raison d'etre.

Asia's hotel lobby

With Vietnam set to host the Asia-Pacific Economic Cooperation (APEC) summit next weekend, a recent spate of news suggests that it will be a busy weekend...but not necessarily because of what's on the official agenda.

While this year's formal agenda will consist of the usual calls for greater openness among APEC members and a push to restart the World Trade Organization's Doha round -- not to mention the always hilarious picture of heads of state and government in the host nation's national costume (click here for last year's, held in South Korea) -- the talks on the sidelines of the summit will be much more interesting, and will likely provide the lion's share of headlines:

The FT reports that the US and Russia will ink a deal in Hanoi on Russia's joining the WTO.

The Yomiuri Shimbun reports that President Bush will meet Prime Minister Abe for the first time, with Secretary of Rice and Foreign Minister Aso also in attendance. The agenda will, of course, focus on the response to North Korea's nuclear test. Both leaders and their subordinates will meet with their Chinese, Russia, and South Korean counterparts during the week to continue preparations for the forthcoming reopening of the six party talks (see here).

The Korean Herald reports that the US might even hold lower-level talks with North Korea, which, for the record, is not an APEC member.

This confirms what I've always felt about APEC: it is far too broad to be the source of any kind of groundbreaking agreement that could lead to the creation of some kind of deeply integrated Asia-Pacific politico-economic space. APEC members come from five continents (if you count Russia as European, and you should), have a variety of political system and cultures, and a vastly disparate range of interests. This is not a forum designed to produce a highly detailed, comprehensive program for integration.

At the same time, however -- and hence the title of this post -- it is incredibly useful in providing a space for leaders to talk face to face, and yes, wear clothes that make them look downright silly. (Seriously though, look at pictures from recent years: I personally find Bush, Mexico's Vincente Fox, and Russia's Vladimir Putin to be the most humorous year after year.) APEC might provide some steps in the direction of more open trade among members, but it's at its best when it acts as a vast hotel lobby in which the region's leaders can tuck off to the side and discuss what's most important to them. It is an overwhelming enough event that quiet talks could slip under the radar screen (i.e., between the US and North Korea).

It's hard to complain about APEC. It keeps the region's leaders talking face to face and it reminds the world of the inevitable shift to the Pacific already underway in the global economy.

Pulling the rug from under Chen

Forty-eight hours after Chen Shui-bian, Taiwan's embattled president, spoke of drafting a new constitution, he finds his presidency in danger of being cut short by a vote in parliament in light of corruption charges that have implicated his wife and further tarnished his damaged reputation.

It seems that Taiwan's constitution won't be frozen and replaced after all.

If Mr. Chen were removed from office, it may be for the best. His election in 2000, which made him the first non-Kuomintang president in Taiwan's history as the Republic of China, was an encouraging sign of the maturation of Taiwan's democracy and democracy in region on the whole. But his administration has been unsteady, and threats to move towards formal independence made the situation in the Taiwan Straits ever more unstable.

One would expect that Mr. Chen will be succeeded by a Kuomintang candidate, which would make a return to more stable cross-straits relations, because the Kuomintang -- China's last non-communist ruling party -- has little interest in renouncing the Republic of China's claim to govern all of China and not just a handful of islands off the coast, which would necessarily result from a formal Taiwanese declaration of independence.

Beijing is surely watching the developments in Taipei with great interest (and, no doubt, considerable glee). But China won't breathe easy until Mr. Chen is gone, whether in the weeks to come or after the March 2008 elections.