After the showdown

Japanese Prime Minister Kan Naoto and Wen Jiabao, his Chinese counterpart, have met briefly in Brussels on the sideline of the ASEM summit, marking an end to the bilateral standoff following the collision between a Chinese trawler and Japanese Coast Guard vessels in the vicinity of the disputed Senkakus.

As expected, Japan and China reiterated the importance of the strategic, reciprocal partnership initiative. High-level talks and cultural exchanges will resume. All in all, it is difficult to say what has changed strategically as a result of the dispute. That China will fiercely resist any perceived change to the status quo in its maritime disputes? That China has greater leverage at its disposal? That countries — not just China — don't like having their nationals held by other countries, particularly when, Sourabh Gupta argues, there may have been little basis for Japan's holding the Chinese fishermen in the first place? 

Meanwhile, the conventional wisdom that the US is the biggest winner from the dispute is probably overstated. The allies will not find it any easier to resolve the Okinawa dispute, which continues to loom over the alliance. More importantly, however, the dispute appears to have merely reinforced the DPJ government's basic approach to China: having little choice but to forge a working political relationship with its neighbor, Japan will redouble its commitment to building constructive relations with China. In short, the dispute, rather than signaling that Japan must change course entirely, may simply lead the Kan government to try harder. 

The basic idea that has animated foreign policy under the DPJ from the day it took office — that Japan, living in a region dominated by a rising China and a declining but still powerful US, needs to find a way to navigate between and live with both power — remains intact.

That being said, the dispute with China has obviously had consequences within Japan, not least for the Kan government's public approval ratings. Despite having received a remarkable bump in his support after defeating Ozawa — nearly twenty percent in some polls — Kan's numbers are back to around fifty percent thanks to his government's perceived mishandling of the dispute. Peter Ennis makes a strong case that the Kan government actually handled the issue well, getting the assurances it needed out of the US while resisting Chinese pressure long enough for the government to claim that the captain's release was the result of a decision by the prosecutor's office in Naha and not the central government. But the Japanese people apparently do not see it the same way. In Yomiuri's poll, for example, eighty-three percent of respondents were not convinced by the prime minister's claim that there was not political intervention. The same poll found a ten-percent increase in the number of respondents who said foreign and security policy should be a top priority for the Kan government; in early August only four percent said it should be a top priority. Whether this change in the public mood is more than temporary remains to be seen, but the drop in the government's approval ratings give Kan that much less room to maneuver as the prime minister tries to coax the opposition parties to cooperate with the government.

Indeed, the LDP has rushed this issue to the top of the agenda as the autumn extraordinary session of the Diet begins. The party has declared that the "abrupt" release of the captain was the worst foreign policy failure in postwar history. The LDP is sure to build its response to the Kan government around this issue, together with the latest Ozawa indictment, meaning that the largest opposition party has two tangential issues with which to attack the government — with the sanction of the public, thanks to the public opinion polls showing that these issues matter — and put off talk of cooperation on an economic agenda. The LDP will of course get an assist from the Japanese media, particularly its more conservative precincts, which appear to have found their voice again after a dismal couple of years during which their issues vanished from the agenda as the global financial crisis unfolded and then the LDP was unseated by the DPJ.

The dispute with China not only has given ammunition to an LDP desperate to obstruct the Kan government and force an early election — it has also provided an opening for dissent within the DPJ, stirrings of which could be found in the petition signed by forty-three DPJ members, including Nagashima Akihisa, and submitted to Sengoku. The petition goes out of its way to soften its criticism of the government, but it does suggest that China policy could create some space between the government and the ruling party. However, since Kan's cabinet has been united on the issue, grumbling within the DPJ can be safely ignored for now.

So did Kan lose? I cannot agree with Ennis entirely that the government handled the dispute well. The government's biggest mistake was stressing that it was a matter for the Japanese legal system to handle. This stance may well have contributed to China's raising the stakes on the issue (because it could not accept this stance without tacitly acknowledging Japanese sovereignty) but it also ensured that the rule of law would be tarnished in the event of a Japanese climb down. If the Japanese government was indeed prepared to allow the legal process to run its course I suppose this position would have been acceptable, but I doubt that Tokyo really was prepared to wait that long (unless the Kan government was actually caught off guard by Beijing's response). The Kan government should have treated the issue like the diplomatic dispute it was from the very beginning instead of staking the credibility of Japanese institutions on the outcome. That it did so at least partially explains the public's opposition to the government's handling of the issue.

By holding out for as long as it did Japan may well have forced China to think twice about how hard it will push Japan in the future, perhaps won Japan more support from other countries locked in disputes with China, and provided an opportunity for Japan and other countries to take steps to mitigate China's economic leverage (as in the case of rare earth elements), but these gains may have come at the expense of Kan's credibility at home. Without public support, the prime minister, already the head of a de facto minority government, will find it that much more difficult to move an agenda centered on fixing Japan's economy, which in turn is critical to maintaining Japan's influence in the region (as argued by Maehara Seiji, Kan's foreign minister, at the Foreign Correspondents' Club of Japan Tuesday). Whatever the medium-term benefits to Japan from the dispute, it may not have been worth the short-term costs for Kan.

The end of the "strategic, reciprocal" relationship?

Since Abe Shinzō succeeded Koizumi Junichirō in 2006, the focus of Japan's China policy has been the promotion of what has been called in official documents as a "strategic, reciprocal relationship" between Japan and China. Acknowledging the importance of the bilateral relationship for peace and stability in East Asia, the two countries agreed to build a political relationship based on mutual trust, increase cultural and educational exchange, bolster economic cooperation, and collaborate to build an East Asian order founded on openness, transparency, and inclusiveness.

As the showdown between Japan and China over the fate of the Chinese fisherman now in Japanese custody intensifies, it is worth asking what the process of "unfreezing" the Sino-Japanese relationship since 2006 has accomplished, and whether that process will survive this dispute — or whether this standoff marks the beginning of a new, uncertain period in the relationship.

With each passing day it becomes clearer that the answer to the first question is "not much." The two countries' leaders have talked more frequently and exchanged state visits. Japanese leaders have avoided the deliberately provocative actions regarding wartime history that led to the deep freeze in the first place. Chinese leaders have at various times acknowledged and praised Japan for its peaceful development during the postwar period. But arguably no progress has been made to defuse the truly potent issues in the relationship, starting with the Senkakus.

This dispute was a hard test for the "new" Sino-Japanese relationship, as it concerns important symbolic issues — sovereignty over the Senkakus and the incarceration by Japan of a Chinese national, an "abduction" of sorts in Chinese eyes — and is therefore precisely the kind of issue that appeals to Chinese insecurity about its regional and international status, making unlikely to be resolved by Tokyo's appeals to handle the issue calmly and without resorting to nationalistic posturing. Of course the strategic, reciprocal relationship failed the test. China has steadily applied pressure on Japan, canceling cultural and political exchanges and possibly banning the export of rare earth elements (although for the record, the Japanese government has not confirmed whether there is in fact an export ban and the Chinese government has denied that there is any such ban).

As important as the resumption of normal relations between Tokyo and Beijing has been, it is worth asking whether the "strategic, reciprocal" relationship agenda will ever result in the kind of bilateral relationship rooted in trust that would limit the ability of this kind of issue from escalating into a more serious crisis. As long as anti-Japanese sentiment remains widespread, making a hard line towards Japan in disputes politically expedient, as China's policymaking process remains opaque, making it difficult to know how or why decisions are made, and as China remains acutely sensitive to insults to its national pride, it seems unlikely that the underlying dynamics of the political relationship will change. The economic relationship will undoubtedly remain important, but it is unlikely that economic interdependence will spill over into the political relationship — in either country. While Bruce Einhorn argues at Business Week that Japan "can't afford" a fight with China, Daniel Drezner suggests that attempts by China to use economic links to exert pressure on Japan could very well backfire and lead Tokyo to dig in its heels. Contrary to Einhorn's presumption, the impact of economic interdependence on Sino-Japanese political ties is arguably negligible. If anything the impact has been negative, leading China to believe that it has more leverage over Japan than it might otherwise have.

What about the Kan government's response to this dispute? Peter Ennis notes that there has been no sign of disagreement between Kan, Chief Cabinet Secretary Sengoku Yoshito, and the new Foreign Minister Maehara Seiji, all of whom have not responded to Chinese pressure by upping the rhetorical ante or responding in kind. This stance suggests that far from hearing the "wake-up call" that Dan Twining believes China is sending to Japan, the Kan government remains committed to the "strategic, reciprocal" program, persisting in the belief that forbearance by Japan will bear fruit over the long term if it leads China to learn to trust its neighbors.

In other words, in the aftermath of this dispute the Kan government will likely recommit to the pursuit of constructive cooperation with China, however unlikely it is that this approach will produce tangible results in the short run. The DPJ will be criticized by people like Abe for being "not understanding international politics," but it is unlikely that it will change course in foreign policy, and certainly not in the direction favored by hawks in Washington. When considering Japan's approach to China it is necessary to note that while the Japanese public wants their government to stand up for Japan in disputes with China, Japanese citizens are not clamoring for defense spending increases to match China's military modernization program or more assertive diplomacy to contain China's growing influence. As such, the Kan government's response to China's posturing may not be herald a "new realism" in the DPJ's foreign policy thinking but is instead perfectly consistent with its approach since taking power last year. (I've argued repeatedly that, Hatoyama's woolly-headed rhetoric notwithstanding, the DPJ has been remarkably realist in its diplomatic maneuverings since the beginning of its tenure.)

In doing so, the Kan government will be gambling that over the long term engagement will work. Given how little has been accomplished since 2006, it is an unappealing gamble — but the alternatives are worse. Economic interdependence may not make political cooperation inevitable, but it means that the Japanese government has an interest in talking with China regularly. The approach pursued by Japanese governments since 2006 essentially means keeping the Sino-Japanese relationship in a holding pattern, finding areas to cooperate while maintaining the status quo over issues like the East China Sea, perhaps in the hope that over time China will become more satisfied and less predisposed to forcing changes in the status quo. It may be a foolish gamble, but the alternative, the creation of a de facto Asian NATO, would be far worse, providing hardliners in Beijing with signs of encirclement and virtually guaranteeing that China will not limit itself to small maritime "provocations." It would be a fine example of what Bismarck said of preventive war, "committing suicide for fear of death."

Despite being an unsatisfactory option, the "strategic, reciprocal" relationship may well here to stay.

The "losing Japan" narrative

In different ways, two articles published in Western media outlets this week suggest the emergence of a new narrative concerning Japan in elite circles in the United States. One might call that narrative the "losing Japan" narrative, reminiscent of the idea — propagated by newsman Henry Luce — that the United States, or rather, the Democratic Party "lost" China when the Communists won the Chinese Civil War. This narrative suggests that the United States is "losing" Japan to China, raising a call to arms that unless the US government acts expeditiously it could let the DPJ-led government lead Japan into China's embrace.

The first is the now infamous editorial in the Washington Post on Fujita Yukihisa, the DPJ upper house member best known for his doubts about the 9/11 terrorist attacks. (Michael Cucek and Paul Jackson have the controversy well-covered.) However egregious Fujita's views, Washington Post's editorial is revealing of the "losing Japan" narrative in a number of ways. Start with the editorial's treatment of the subject. Despite his impressive-sounding titles, Fujita has little or no role in Japanese foreign policymaking under the Hatoyama government. The international department is not a policy shop, and Diet committees are meaningless. Either the Post was ignorant of these facts — in which case the editorial writer, Lee Hockstader according to Fujita, did a poor job — or the Post was aware but wrote a misleading editorial anyway in which Fujita is ludicrously described as a "Brahmin in the foreign policy establishment." It is possible that the Washington Post made an honest mistake, but then one gets to the inferences Hockstader draws from Fujita's thoughts about 9/11:

The only thing novel about Mr. Fujita is that a man so susceptible to the imaginings of the lunatic fringe happens to occupy a notable position in the governing apparatus of a nation that boasts the world's second-largest economy.

We have no reason to believe that Mr. Fujita's views are widely shared in Japan; we suspect that they are not and that many Japanese would be embarrassed by them. His proposal two years ago that Tokyo undertake an independent investigation into the Sept. 11 attacks, in which 24 Japanese citizens died, went nowhere. Nonetheless, his views, rooted as they are in profound distrust of the United States, seem to reflect a strain of anti-American thought that runs through the DPJ and the government of Prime Minister Yukio Hatoyama.

Mr. Hatoyama, elected last summer, has called for a more "mature" relationship with Washington and closer ties between Japan and China. Although he has reaffirmed longstanding doctrine that Japan's alliance with the United States remains the cornerstone of its security, his actions and those of the DPJ-led government, raise questions about that commitment. It's a cliche but nonetheless true that the U.S.-Japan alliance has been a critical force for stability in East Asia for decades. That relationship, and its benefits for the region, will be severely tested if Mr. Hatoyama tolerates elements of his own party as reckless and fact-averse as Mr. Fujita.

Again, one can debate whether Fujita can be properly described as having a "notable position in the governing apparatus," but the leaps Hockstader takes from Fujita's position are unjustifiable, leaps that can be detected in the slippery language Hockstader uses. "Fujita's views seem to reflect a strain of anti-American thought that runs through the DPJ and the government of Prime Minister Yukio Hatoyama." Hockstader makes this outrageous charge without providing a shred of evidence beyond Fujita's views. Meanwhile, in the subsequent paragraph he casually dismisses the Hatoyama government's rhetorical commitment to the alliance (and, for that matter, its sizable financial commitment to the reconstruction of Afghanistan) to speak of "actions" that "raise questions." I assume here he means Futenma, although who knows. This phrasing is precisely the kind of attitude that has produced the DPJ's approach to the alliance in the first place, the idea that there is only one way to be in favor of the alliance. Finally, Hockstader basically threatens the Hatoyama government, suggesting that if Fujita is not dispensed with, his government will suffer accordingly in the eyes of official Washington.

Note, finally, that while Hockstader questions the sincerity of the Hatoyama government's commitment to the alliance, he says nothing more about the Hatoyama government's approach to China. The silence is deafening. Note also the scare quotes around mature, as if the DPJ's position that the alliance as it was conducted under the LDP is in need of changes is an absurd idea. The DPJ, he seems to be saying, has a critical approach to the alliance and an uncritical approach to the Sino-Japanese relationship. (This comparison is hardly valid: the US-Japan relationship is complex and has the thorny question of US forces in Japan at the heart of it, while the Sino-Japanese relationship is not nearly as complex and is still progressing by baby steps from the deep freeze it experienced under Koizumi.)

As I read it, the editorial can be summarized as "Hatoyama's party harbors a 9/11 denier, clearly does not take the relationship with the US seriously, and is moving Japan closer to China."

A more serious version of this argument can be found in the Financial Times, where columnist Gideon Rachman argues that the DPJ gives the impression of drifting in China's direction.

He writes:

When Mr Hatoyama’s Democratic Party of Japan took power last August, it broke more than 50 years of almost continuous administration by the Liberal Democratic Party. The DPJ is keen to differentiate itself from the LDP in almost every respect, and foreign policy is no exception. In an interview last week, Katsuya Okada, Japan’s foreign minister, said that the LDP followed US foreign policy “too closely”. “From now onwards,” says Mr Okada, “this will be the age of Asia.” The foreign minister adds that talk of Japan choosing between China and the US is meaningless, and that Japan’s friendship with America will remain “qualitatively different” from its relations with China. But some DPJ party members have called for a policy of “equidistance” between China and the US.

Several things are notable about this paragraph. First, is the DPJ really acting out of a desire to differentiate itself from the LDP? Given that foreign policy plays so little a role in the calculus of voters, I have a hard time believing that the DPJ-led government's foreign policy initiatives are driven by electoral considerations. Second, why do unnamed DPJ party members get equal billing in this paragraph with Okada, who seems to be firmly in control of foreign policy making? Okada provides a decent summary of the government's foreign policy approach, suggesting that the DPJ is not drifting from America, but instead shifting the emphasis of Japan's foreign policy, from a foreign policy in which Asia policy was tailored around the alliance to a foreign policy in which the alliance is tailored to fit Japan's Asia policy. And yet the paragraph ends with unnamed backbenchers and their unspecified equidistant "policy."

Rachman continues by citing Hatoyama's controversial essay in the International Herald Tribune, and Ozawa's grand tour in Beijing and intervention to arrange an audience with the Emperor for Xi Jinping. Rachman is at least careful to admit that "it is probably overdoing it to suggest that Japan is definitively shifting away from its postwar special relationship with the US." But the article conveys the impression that Japan is a prize in the struggle for influence between the US and China — and that the battle for Japan has begun.

There are several problems with this narrative, in both its belligerent Washington Post form and its more circumspect Rachmanite form. The fallacy both articles share is the idea that Asia is sure to be zero-sum, that a country like Japan can only be in the US camp or the China camp. Joining the former camp, Rachman concludes, would entail "[cultivating] warmer relations with other democratic nations in the region, such as India and Australia, in what would be an undeclared policy of 'soft containment' of Chinese power." And yet that is precisely what the Hatoyama government wants to do. Rachman might respond that the time for choosing has not yet arrived, which is true, but it also raises the possibility that another future is possible in which countries like Japan, Australia, and India maintain security ties with the US in order to keep the US engaged even while maintaining constructive political and economic relationships with China, navigating between the two superpowers in order to avoid unmitigated dependence on either one.

The Washington Post is even more unabashed in its embrace of an approach to Asia that does not allow for nuance, which it aired in another editorial on Japan published earlier this year.

The problem with this approach to the region and Japan on the op-ed pages of newspapers well read by policymakers in Washington is that this way of thinking could easily become self-fulfilling prophecy. Rachman may be warning of a possible future, but many in positions of power — with the help of the Washington Post — could come to take what he describes as a given.

A major flaw with the "losing Japan" narrative is that there is remarkably little data upon which to reach firm conclusions, a point acknowledged by Rachman. Think of how little we know about the Hatoyama government's approach to China. Interestingly, both the examples he cites as cases confirming the tilt towards China involve the activities of Ozawa Ichiro, i.e. a figure outside of the government who may not be long for politics. What data points do we have concerning Hatoyama and members of his cabinet? Not many. Hatoyama has made clear that he will not provoke China on historical issues. Beyond that? Unmentioned in both articles is that the Hatoyama government is building upon the "strategic, constructive partnership" concept developed by the Abe government, right down to the continued use of the term. That doesn't sound like a government doing whatever it can do differentiate itself from the LDP.

I'm willing to cut Rachman some slack, because his piece contains numerous caveats and notes of caution. But the Washington Post editorial is another story entirely. By picking a DPJ member whose views would obviously draw opprobrium in the US and then implying that his views represent a "strain" in the DPJ, this editorial is little more than a hatchet job against Japan's ruling party. How this editorial will help reverse what the Post believes is Japan's drift towards China is beyond me.

After all, the last time Japan was a political battleground for a cold war in Asia, the US had  considerably more invasive means at its disposal than sharply worded editorials.  Accordingly, this narrative may in fact be a product of insecurity about declining US influence, much as insecure Japanese elites fretted that the transition from Bush to Obama would mean the return of Japan passing. The reality, however, is that in the unlikely event that Japan were to reorient itself from the US to China, there would be little the US could do to stop it.

Returning to Asia

To a certain extent, Japan’s political year ended in August when the Democratic Party of Japan defeated the Liberal Democratic Party in a landslide. From the vantage point of December, 100 days into the Hatoyama government, the Aso government and LDP rule already seem distant.

But from another perspective, it is not so easy to draw a line in Japan’s political history.

The DPJ’s victory represents not so much a break as an experiment. Beset with difficulties at home and abroad — naiyu gaikan, in the Japanese — the Japanese public opted to change captains after giving the LDP opportunity after opportunity to right the ship of state. This is not to say that the LDP and the DPJ are interchangeable. The DPJ’s new model of government does mark a departure from the LDP system. Discussion about turmoil within the Hatoyama cabinet or the role of DPJ secretary-general Ozawa Ichiro in the government ignores the obvious conclusion that disagreements within the cabinet actually matter under the DPJ — and that it is the influence of one party official that is being debated and not the veritable army of subcommittee chairmen who wielded influence under the LDP. The bureaucracy, far from sabotaging the Hatoyama government, has largely acquiesced to “political leadership.” The transformation of Japanese governance that is well underway is significant and overdue.

The question, however, is what the DPJ-led government is doing with its newfound capabilities. When it comes to policy, the evidence of change is mixed. It is far too early in the new government’s tenure to draw definitive conclusions about its successes and failures, but in both economic and foreign policy it is possible to sketch the Hatoyama government’s achievements and consider the extent to which the new government has parted ways with the LDP.

Foreign policy: I will start with foreign policy because it is foreign policy that has grabbed the headlines for most of the past three months.

In foreign policy, it certainly looks like the DPJ is taking Japan in a new direction. Washington certainly thinks that the Hatoyama government is doing so — an recent article in the Washington Post by John Pomfret says that U.S. officials see Hatoyama Yukio as “mercurial,” “befuddling” analysts, who wonder whether the prime minister is engineering a “significant policy shift” away from the U.S.

There are two questions to consider here. First, is the DPJ shifting from the U.S., and if so, how (and how is its foreign policy approach different from the LDP’s)?

I would answer the first question with a “yes, but.” Talk of a shift implies that there are but two choices for Japan in Asia: siding with the U.S. or siding with China. The reality, however, is that Japan is choosing both (or neither). The DPJ’s foreign policy approach, which will continue to evolve in the New Year, is grounded in the recognition that Japan cannot afford to be overly dependent on either the U.S. or China. Japan is hedging, against the U.S. by ensuring that the country enjoys a constructive political relationship with China, against China by continuing to stress that the U.S.-Japan alliance is, in the words of Kan Naoto, the deputy prime minister, “the most important relationship” for stability in the region and the world. The Futenma question is entangled with this shift. As power within Japan shifts from bureaucrats to politicians — and as Japan shifts from a US-centered foreign policy to a more flexible foreign policy — it is hardly surprising that the new government has raised objections to an agreement foisted on the public by alliance managers. It is unclear to me why Washington is so surprised that the Hatoyama government is doing precisely what the DPJ said it would do: push for a revision of the 2006 agreement. (It is also unclear to me why the DPJ should be more concerned about breaking promises to Washington — if that it is indeed what the Hatoyama government is doing — than about breaking promises made to the Japanese people) The DPJ is showing that its new realism means that it will make decisions on the basis of Japan’s national interests. It will not simply accept decisions made by previous governments or embrace the U.S. line, no matter how strenuously US government officials, senior military officers, and former government officials bemoan the “befuddling” actions of the new government.

“New realism”: perhaps the “new” is not necessary, because the DPJ is following in the footsteps of Meiji oligarchs and Yoshida Shigeru in trying to maximize Japan’s foreign policy options and limit the degree to which it is dependent on others. It is also, incidentally, following in the footsteps of the LDP prime ministers who succeeded Koizumi Junichiro. After Koizumi attempted to center Japan’s foreign policy on the US-Japan alliance, even conservative successors like Abe Shinzo and Aso Taro recognized that they could not afford to alienate China in the way that Koizumi did for the duration of his premiership. Fukuda Yasuo went further than both his predecessor and his successor to acknowledge that in the evolving Asian order Japan could do treat the US-Japan alliance and Japanese foreign policy as interchangeable, but the three prime ministers were consistent in recognizing that Japan needs to expand its freedom of actions in the region.

In this sense, the Hatoyama government is building upon the work of its predecessors. Hatoyama, with his talk of an East Asian Community, may be more enthusiastic in this pursuit than LDP prime ministers, but the thrust is the same: Japan needs to build new relationships and modify its relationship with the US, making it less about security cooperation and more about other forms of cooperation. Regarding the former, while most observers view the Hatoyama government has focused on forging a closer relationship with China, I think we should see its actions as driven by a desire to avoid having to choose between the US and China. Much like other countries in the region that have strong ties with both great powers, the Hatoyama government is trying to develop a “third way” composed of multilateral cooperation among all countries and bilateral ties with countries in the region other than the US and China.

Hatoyama’s recent trip to India is particularly revealing in this regard. Building upon initiatives developed by Abe and Aso, Hatoyama met with Indian Prime Minister Manmohan Singh to discuss developing the Indo-Japanese global partnership, deepening cooperation on security, and promoting Japanese investment in India. The difference between Hatoyama and Abe, for example, who in 2007 visited India to promote security cooperation with India in the context of a quadrilateral that included the US and Australia, is that Hatoyama is promoting a strictly bilateral relationship. Unlike the Abe government, the Hatoyama government’s approach does not look like the encirclement of China by a “league of democracies.” It is not robed with the rhetoric of “universal values” but rather appears to be driven by the Hatoyama government’s desire to expand its freedom of action. By the same token, the agreement to create an Indo-Japanese two-plus-two by which Indian and Japanese foreign and defense sub-cabinet officials can meet regularly looks different when it is not accompanied by rhetorical volleys aimed at China and is not linked to a wider network of security cooperation among democracies.

The same desire to forge relationships independent of the US and China drives the new government’s approaches to South Korea, ASEAN, Russia, Australia, and others.

Of course, the Hatoyama government — or the DPJ, considering Ozawa’s giant mission to China in December and Ozawa’s leaning on the Imperial Household Agency to arrange an audience with the Emperor for Chinese President Hu Jintao’s likely successor — has symbolically focused attention on the relationship with China that contrasts with the friction in the relationship with the US. But it is worth noting that the Hatoyama government has not moved beyond symbolic gestures in the Sino-Japanese relationship, while focusing on concrete cooperation with other countries in Asia. And as for the US, if US officials were not so short sighted they might recognize that there will likely be benefits for US-Japanese cooperation in the medium and long runs from the Futenma dispute. The DPJ is airing grievances about the alliance that had been muffled around the LDP: that while the US will bear the lion’s share of the burden in the (unlikely) event of war, the Japanese people bear the more immediate costs of hosting US forces in peacetime and that the central government in Tokyo has in turn shifted an unreasonable share of the burden of hosting US forces onto Okinawa. Meanwhile, given that the Hatoyama government is even more determined than the Obama administration to forge a realignment agreement that balances security concerns with the environmental and social concerns of the citizens of Okinawa and Japan more broadly, as well as the DPJ and its coalition partners, it may be worth waiting the extra five months that the Hatoyama government will spend devising an alternative. Furthermore, by saying no to the US, the Hatoyama government may have done more to force a discussion on the form and functions of the alliance than years of LDP rule.

The Japanese people seem to prefer some sort of “Goldilocks consensus” in Japan’s foreign policy. Unease with the Hatoyama government’s handling of US-Japan relations suggests that citizens do not want the government to go too far in saying no to the US, but growing satisfaction with the state of Sino-Japanese relations also suggests that citizens do not want the government to antagonize China. In this year’s Cabinet survey of foreign policy attitudes, the proportion of respondents who view the Sino-Japanese relationship as “satisfactory” rose to 38.5% from 23.7%, while the proportion of respondents who view the relationship as unsatisfactory fell to 55.2% from 71.9%. I think there is value in looking at this improvement in light of a poll conducted by the Ministry of Foreign Affairs in the waning months of the Koizumi government, in which 77.9% of respondents desired improvement in the relationship. 47.7% of respondents said that cooperation should focus on forging a generally cordial relationship with an eye on the big picture, compared with 20% who thought it should focus on regional and global matters and only 10% who felt it should focus on Japanese sovereign rights. There is little desire to return to the ice age of the Koizumi years.

Despite the impression of US officials, the DPJ-led government, far from being radically out of line with the Japanese public, is virtually at the center of the Japanese political spectrum on foreign policy. That could be a problem for those who believe in a security-centered US-Japan relationship rooted in shared values and implicitly directed at a rising China, but it need not be a problem for US-Japan cooperation as a whole.

Incidentally, the reason we can have this discussion about the DPJ’s foreign policy changes is due to the nature of foreign policy, which is largely interpretive and rooted in symbols and language. Doctrines and declarations, the stuff of foreign policy, can signify change without actually changing anything in reality — which should serve as a note of caution that for all the doctrinal changes associated with the Hatoyama government, the US and Japan still enjoy a close partnership with a durable foundation and very much unlike the relationships between the US and China and Japan and China. Japan’s foreign policy may change perceptibly under the DPJ, but it would be wise for the US to not overreact to change that is in any event driven by forces larger than who governs in Tokyo — and it would behoove the Hatoyama government to be more insistent about reminding the Obama administration about the ways the relationship is not changing (even if the Obama administration is reluctant to listen).

Economic policy: Unlike foreign policy, however, in which a speech or a summit can serve as evidence of change, economic policy is more complicated. For starters, economic policy failures are more immediately felt by citizens — and have more immediate consequences for governments. The costs for getting economic policy wrong are (usually) much more noticeable for citizens than the costs of foreign policy blunders. Inheriting an economy in recession, the Hatoyama government has been particularly sensitive to the need to get economic policy right. After all, as of November Japan’s unemployment rate was 5.2%, only a slight improvement over July’s record 5.7% unemployment.

While it is far too soon to grade the Hatoyama government on its macroeconomic record, the government has provided the latest guide to its economic policy approach in a new economic strategy approved by the cabinet on Wednesday. Readers will recall that during the campaign that DPJ struggled with economic strategy: given the weakness of its proposals in its manifesto, the party was compelled to issue a clarification that attempted to outline the DPJ’s growth strategy.

The basis of the DPJ’s campaign rhetoric — repeated in the introduction to the latest strategy — is that Japan has to shift from a producer-centered economic growth model to a consumer-centered growth model. In other words, it is essential for the government to stimulate consumer spending on foreign and domestic goods and services, providing a better quality of life for Japanese citizens.

The new strategy states that the goal is to create a “problem-solving-style state” that will tackle climate change and the problem of Japan’s aging, shrinking society by promoting “green innovation” and “life innovation,” in the process making Japan into a “model country.” While there are a number of laudable proposals in this strategy — the focus on trade and investment within the Asia-Pacific is particularly noteworthy — the document reads like so many LDP economic strategies before it, flighty rhetoric and ambitious goals without clear proposals for how to achieve them (and like the Abe government, a clear penchant for katakana buzzwords). Similarly, the very idea of a growth strategy suggests that the government can plan the transition from producer-centered to consumer- and innovation-centered growth. I do not see how, with the return of deflation, the government will convince households to spend the cash they have been hoarding, or how the government will promote greater risk-taking and entrepreneurship among young Japanese, in the process remaking the labor market so that workers who fail to secure regular employment upon finishing school are not forever condemned to irregular employment. For that matter, there is little sense of the tradeoffs facing the Hatoyama government. How will it balance the goal of restoring fiscal normalcy with the goal of building a social safety net with the goal of promoting green innovation and other measures to promote economic growth?

The DPJ-led government will have to surmount these challenges in large part because its predecessors failed to do so. It will clearly take time, which, again, is not the DPJ’s fault seeing as how the LDP did little to shift Japan’s economic model after the bubble burst.

Perhaps the one saving grace of the new growth strategy is its focus on Asia. In this sense the division between foreign and economic policy is artificial: like Japan’s governments at other critical turning points, the Hatoyama government recognizes the centrality of economic policy for achieving the country’s foreign policy goals. Without being more open to trade and investment within the region, there is no way that Japan will be able to expand its influence in the region as China continues to grow. That competition need not be zero-sum — but even to reap positive-sum gains Japan will actually have to enter the competition for influence. Bilateral EPAs concluded within the region in recent years are a start, but Japan has more work to do.

As we look ahead to 2010, we should see how this process of reorienting Japan to an Asia that is increasingly the center of the international system. In doing so, the DPJ will not necessarily be forging a new path but will instead be taking bigger steps along a path that the LDP had already started down, a path laid by the changing regional order. The US will remain an important player in Asia, but no longer will it be the region’s indispensable nation. Indeed, the Hatoyama government’s policies should put pressure on the Obama administration to follow through on President Obama’s claim that his is the first “Asia-Pacific” presidency. In 2010 the two allies will have to consider the meaning of their alliance even as they celebrate its fiftieth anniversary. They should not shrink from this task.

There are big changes afoot. While the DPJ and its leader are responsible for some of the content of Japan’s new policies, it is likely that similar debates would have occurred even had the LDP been able to retain power.

There is no guarantee that the DPJ will succeed in either smoothly transitioning to a more independent foreign policy without alienating the US, China, or both, or build a new economic growth model without bankrupting the country or simply failing to promote new industries. But by the end of 2010 we should have a better sense of whether the Hatoyama government will succeed in its bid to return Japan to Asia.

The emergence of Middle Power Asia

Over the past week, we have seen more signs of the shape that international relations in East Asia will take over the coming decades.

I've written before about the role that middle powers — most notably Japan, Australia, South Korea, ASEAN acting as a bloc, and to a lesser extent India — will play in the East Asia balance, maneuvering between the US and China, the region's two giants as they attempt to enmesh China in regional institutions and profit economically from its rise while cooperating with the US to hedge against a violent turn in China's rise and to ensure that they have strategic flexibility more generally.

Prime Minister Aso Taro visited China to meet Chinese President Hu Jintao and Premier Wen Jiabao, renewing their commitment to building a "strategic, reciprocal relationship" and discussing a number of urgent problems, most notably the global spread of swine flu, the ongoing global economic crisis, and North Korea's latest turn to intransigence. The deep freeze of the Koizumi years is increasingly distant, and these Sino-Japanese summits are becoming so routine in their agendas as to be boring. But in this relationship, boring is positive. Despite Chinese anxiety about the gift sent by Aso to Yasukuni Shrine for the Spring Festival prior to his trip to China (and the expected Chinese netizen protests about welcoming Aso to China after his gift), Wen and Hu mentioned the history problem but did not harp on it, just as Aso expressed his hope for Chinese participation in nuclear disarmament. Both sides seem content to accentuate the positive in their meetings, and — aside from Wen's cautionary note — the Basil Fawlty line remains in effect: don't mention the war.

In fact, looking at the post in which I first mentioned the Basil Fawlty line, Aso has proved me wrong. Last May I wrote, "Mr. Aso and his comrades will most likely not embrace the Fawlty line." However, it appears that the structural factors that draw Japan and China to one another have tamed another Japanese conservative politician. In fact, in a speech in Beijing Thursday, Aso alluded to the possibility of an economic partnership agreement between Japan and China; the obstacles to such an agreement are high, certainly as high or higher than the obstacles facing an EPA or trade agreement between Japan and the US, but as symbolism goes it is significant that Aso mentioned the possibility of institutionalizing the Sino-Japanese economic relationship. In the meantime, Japan and China outlined the three pillars of their relationship going forward: economic cooperation (Japan will host a senior-level economic dialogue in June); environmental and technology cooperation; and cultural and educational exchanges. The beginnings of perpetual peace? Hardly: there is still much work to do, whether on the Senkakus, North Korea, the history problem (how sustainable is the Fawlty line after all?), or Chinese military transparency. But by acknowledging that there are areas on which they can cooperate and that there is value to meeting even without perfect harmony in their positions, Japan and China are making Northeast Asia ever so slightly more stable.

At the same time, even as Aso parlayed with China's senior leaders in Beijing, Hamada Yasukazu, his defense minister, prepared for a Golden Week visit to Washington where he would be meeting with Robert Gates, his US counterpart. Gates and Hamada met Friday morning, and central to the discussion was Hamada's practically begging Gates for the right to purchase F-22s from the US as Japan considers its next-generation fighter. "Even just a few," Hamada said. Of course, it is not in Gates's power to permit Japan to buy the F-22; as mentioned in this post, its sale abroad is prohibited by the Obey Amendment, meaning that the Japanese government should be making its case to Congress. (I am certain that if it isn't doing so already, the Japanese government will be lobbying representatives and senators from the forty-four states involved in the production of the F-22. Sakurai Yoshiko tellingly included this detail in the articles mentioned in this post.) No word on how Gates received Hamada's petition, but the Gates-Hamada meeting reveals the other side of Middle Power Asia. With one hand, Japan is reaching out to China, with the other it is balancing by constantly working to strengthen the US-Japan alliance. Gates and Hamada discussed coordinating as the US prepares its next Quadrennial Defense Review (QDR) and Japan prepares its next National Defense Program Outline for later this year. They also talked about further strengthening missile defense cooperation and devoting sufficient attention to the realignment of US forces in Japan.

Australia, as I've written before, faces the same strategic imperatives, a fact thrown into relief by events this week. As it was characterized in the Economist's Banyan column this week, "On the one hand, Australia’s crackerjack fit with the Chinese economy is reshaping Australia’s trade and investment flows, drawing the country into a China-centred Asian orbit. On the other, Australia’s security hangs on America’s continued presence in the western Pacific." One can easily substitute Japan for Australia without skipping a beat. This week Australia has been feeling the tension growing out of its economic relationship, due to an investment bid by Chinalco in Rio Tinto. In a speech at the Lowy Institute, Malcolm Turnbull, leader of the opposition, called on the government to reject the bid, which, regardless of the outcome of the bid, has brought concerns about the Sino-Australian relationship to the fore — anticipating, in a sense, the Rudd government's defense white paper.

Much as Japan is looking to hedge against China, so too is Australia: reports suggest that the white paper will lavish Australia's navy with new resources.

Rory Medcalf at the Interpreter writes that Japanese and South Korean analysts look favorably upon Australia's plans, although he suggests that the Rudd government's plans could spark a spate of middle power arms building. But regardless of what other middle powers do, the Rudd program and Japan's desperate pursuit of the F-22 suggest that the middle powers will not feel secure simply by pursuing external balancing (tighter alliances with the US and other countries in the region). Particularly as the US looks to deepen its cooperation with China across a range of issues — whether or not it is appropriate to refer to Sino-US cooperation as a G2 — the middle powers will likely rely more on internal balancing, concluding that while their alliances with the US are fine, perhaps an additional guarantee of security is worth the investment. They may look to each other for security too, although as I argued when Australia and Japan issued a joint security declaration, it is unclear what Japan and Australia can do for each other.

In any case, there are limits to how far the middle powers can and will go in their hedging against China. They will continue to work on their economic relationships with China, they will continue to look for opportunities to bind China through regional institutions, and, especially in the case of Japan, they will face fiscal constraints in maintaining capabilities adequate to defend themselves without the US. Despite concerns about the Gates defense budget, the US is not going anywhere — and it is as imperative for the middle powers to ensure that that remains the case as it is for them to ensure that the US does not go overboard with containing China. For the foreseeable future, this is the delicate balance facing the middle powers.

The conservatives humbled

Perhaps one of the positive consequences of Japan's economic crisis is that it has silenced Japan's conservatives.

By silenced I do not mean literally silenced — they're still fulminating. What I mean is that they have been rendered irrelevant by events. Despite their media power, their ability to churn out a seemingly infinite amount of books, magazine articles, and op-eds, it turns out that they have remarkably little to say about Japan's economic problems. Former Prime Minister Abe Shinzo is indeed the conservative poster child in this respect: eager to flaunt a rising Japan and its newfound powers, he was almost completely indifferent to the hard work of remaking the Japanese system.

But it is not just the economic crisis that has silenced the conservatives. It is the marriage of the LDP and Aso Taro, one of their own, that has been responsible for quieting the conservatives. The conservatives, with Mr. Aso as prime minister, Nakagawa Shoichi as finance minister, Amari Akira as administrative reform minister, and Hatoyama Kunio as general affairs minister, are now responsible for what happens to Japan in the coming months and years. The fate of the modern conservative movement — which has enjoyed a meteoric rise over the past two decades — is now tied to the LDP and the Aso government. Of course, it is for this reason that Hiranuma Takeo's quixotic quest to create a new conservative party (yes, he's still at it, although now the plan is to create a party after the general election) is so foolish. Japan already has a conservative party, and it is drowning as (in Mr. Aso's words) the "tsunami" of the global financial crisis washes over Japan.

What I am not saying is that the conservatives are vanquished evermore. They still have considerable power and their ideas appeal to a sizable minority. What I'm saying is simply that events have rendered the conservative movement irrelevant to the policy debate. It is little surprise that Mr. Abe has attempted to carve out a middle ground in the LDP's tax debate — Mr. Abe and his compatriots barely have a position on the issue to advance.

All of this is a way to introduce this stemwinder by Sakurai Yoshiko.

Published in the January 15th issue of Shukan Shincho, the title says it all: "In the Sino-Japanese War, China had more fighting spirit than Japan."

The essay is the latest attempt to rewrite the history of World War II along terms that exculpate Japan and pin blame for the war on China (and communism). Actually, not only does she pin the second Sino-Japanese war on the Cominform, she finds a new, somewhat surprisingly culprit in the widening war: the Nazi Party, which she blames for providing military assistance to Chiang Kai-shek during the 1930s. In other words, Ms. Sakurai blames any outside power that enhanced the ability of Chinese forces to resist Japan for widening the Sino-Japanese war, instead of blaming the military that was invading China, as if the Chinese people were just supposed to accept the advance of the Imperial Military passively.

I don't want to get bogged down in the history, because the conservative obsession with history is precisely the problem. The conservatives are so obsessed with making the case for the Pacific/Great East Asian War as a just war that they have nothing relevant to say about the many problems facing the Japanese people today.

As such, the more the conservatives are ignored, the better. Japan and the world have too many problems to be consumed with fighting old wars and nursing old hatreds, while looking to stir up new ones. This is, to some extent, the message of President Obama's inaugural address: "...an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics." He was talking about American politics, but he might as well have been talking about the history problem in East Asia.

The lessons of 2008

I have already written one retrospective essay on 2008 in Japanese politics, but I wanted to look back in more detail at this year's events and crystallize the year into a handful of lessons.

As 2008 enters its final days, what have we learned about the state of the Japanese political system?

First, and most importantly, the LDP cannot govern itself, let alone Japan. The dominant theme in Japanese politics since the 2007 upper house election was been Japan's "twisted" Diet, with the LDP-Komeito coalition's controlling the lower house (and therefore the government) and the opposition DPJ's controlling the upper house. The DPJ has not hesitated in using its control of the upper chamber to stymie, delay, or complicate the coalition government's agenda — the signature battle being the fight over Fukui Toshihiko's successor as president of the Bank of Japan during the 2008 ordinary session of the Diet — but Prime Ministers Fukuda Yasuo and Aso Taro may have been more hampered by divisions within the LDP and between the LDP and Komeito. Thanks to the government's supermajority in the lower house, the government has the ability to get its way on any issue but for matters like appointments requiring the approval of both houses (hence the BOJ fight). While the coalition government has been reluctant to use the supermajority for fear of public disapproval, would the government have to fear public backlash if the DPJ stood in the way of a government proposal that had broad public approval?

The problem has been that the governing parties have been unable to draft proposals that have broad public approval.

Not for want of good intentions: at least under Mr. Fukuda, Japan had a prime minister who was acutely aware of the colossal challenge facing his country — and that was before the global financial crisis consumed Japan. (See this post on Mr. Fukuda's speech opening the ordinary session.) Mr. Fukuda, however, sat at the head of a party at war with itself, bitterly divided over its identity. Selected as LDP leader on the basis of a "grand coalition" of factions, throughout his tenure Mr. Fukuda resorted to a balancing act among the party's factions and ideological tendencies, which resulted in Mr. Fukuda's gaining a reputation for having no policy agenda to speak of — and in plummeting public approval figures throughout 2008 until Mr. Fukuda resigned the premiership in September.

And when Mr. Fukuda did decide to take a stand on an issue, he suffered for it. Central to the 2008 ordinary session of the Diet were the related questions of the extension of the "temporary" gasoline tax and the dedicated use of gasoline tax revenue for road construction. The DPJ refused to approve the extension in the first half of the Diet session, meaning that in April 2008, the start of the new fiscal year, the Japanese public received a gasoline tax cut (I didn't hear too many complaints about that). Certain members of the LDP did not want to see the special account for road construction take a hit, so they fought hard for the reinstatement of the tax via the lower house supermajority. With petrol prices high, the Fukuda government courted a public backlash if it were to reinstate the tax. Therefore, to make the case for an extension, the government decided to argue that the tax revenue was needed, but not necessarily for road construction; Mr. Fukuda instead decided that he would push a plan to shift gasoline tax revenue earmarked for road construction into the general budget. This plan, floated as the prime minister was trying to win the DPJ's support for extending the temporary gasoline tax, immediately threw the LDP into chaos, pitting young reformers, who backed Mr. Fukuda, against the LDP's "road tribe," which fought against a clear and present danger to their privileges and had broad sympathy within the LDP. Mr. Fukuda had to struggle against the party establishment, and arguably lost the battle — the road construction budget was passed as presented, and the question of the special fund postponed to the extraordinary session, at which time Mr. Fukuda was no longer even premier.

Mr. Fukuda's preferred issues fared little better. Remember that Mr. Fukuda began the year talking about the importance of consumer affairs and "listening to the voices of the people?" 2008 in consumer affairs will be remembered mostly for further instances of tainted products. And as for listening to the public? As 2008 ends, the 2007 pensions scandal remains unresolved and the LDP has created a new mess after rolling out a controversial health care system for citizens over 75 that involves automatic deductions from pensions.

The situation has, if anything, worsened under Mr. Aso's stewardship. In part Mr. Aso has been hindered by what he and his advisers have repeatedly called a once in a century financial crisis, as if that somehow relieves the LDP of culpability for the disastrous turn for the worse in Japan's economic fortunes. The government is no closer to solving Japan's fiscal crisis; the LDP is still mired in a debate over whether and when to raise the consumption tax. And as Nakagawa Shoichi, Mr. Aso's finance minister, recently told the Financial Times, fiscal consolidation is on hold as long as Japan's economy falters.

As the year comes to a close, it is difficult to recall what the LDP was actually able to agree on and implement. Even a new fiscal stimulus package has proven controversial within the LDP and the coalition government, and as a result has been postponed until the new year.

As 2008 ends, divisions within the LDP are more pronounced, the party's ability to govern more questionable, and, as a result, Japan's future grows ever darker.

Accordingly, the Koizumi revolution is a distant memory. It is hard to believe that little over two years ago the foreign press could write of a confident new Japan under the leadership of its youngest postwar prime minister, booming thanks to the efforts of outgoing Prime Minister Koizumi Junichiro.

What changed?

What became clear over the course of 2008 is that Mr. Koizumi achieved less than it seemed at the time. Corporate Japan boomed, but all too little progress was made in strengthening stagnant regions (despite the "Trinity" reforms), wages failed to rise along with economic growth, and the government made little headway in figuring out how to pay for the social safety net desired by the bulk of the aging Japanese public. Mr. Koizumi was much more effective in destroying the old LDP — see above — than in remaking the Japanese economy. As has become clear in midst of the global financial crisis, Japan remained all too dependent on trade with the US and China. Far from revolutionizing the Japanese economy, under Mr. Koizumi Japan's economy may have become even more of a "dual" economy, divided between efficient, global exporters and stagnant domestic sectors still dependent on government protection. At the same time, microeconomic reforms led to more use of temporary and part-time workers who do not receive the same benefits as regular workers — saving money in good times and, as we're seeing today, provided a stock of laborers who can be laid off in bad times.

Whether or not this makes for good economics is one question; whether it makes for good politics (for the LDP) is another. The LDP has been tarred with neglecting the wellbeing of the Japanese people: of the elderly, who fear for their economic security in retirement; of the young, many of whom are now relegated to the pool of irregular laborers, perhaps for life; and of rural citizens, who wonder how they will make their livings. At the same time, the LDP has also been criticized for abandoning Koizumi-ism. Its young reformists, concentrated largely in urban districts, fear that they will pay the price for the party's having shuffled off the legacy of Mr. Koizumi.

The former prime minister's followers are now a marginalized group within the LDP, and their continued future within the party is increasingly in doubt. In 2008 it became clear just how powerless the Koizumians are. They failed in their battle against the "road tribe," succeeded in passing some form of administrative reform over the objections of LDP reactionaries thanks only to a compromise with the DPJ and the work of crusading adminstrative reform minister Watanabe Yoshimi. Little wonder that by the end of 2008 Mr. Watanabe was speaking openly about overthrowing the Aso government, going so far as to vote with the DPJ when it proposed a resolution calling for an immediate dissolution of the lower house and general election.

Mr. Koizumi's legacy, it seems, was reducing the LDP to warring camps, bringing the party to the verge of collapse.

At the same time, the DPJ, while still a relatively unknown quantity, is far from being the rabble the LDP insists it is.

2008 showed that a DPJ-led government is increasingly conceivable, a finding confirmed in recent public opinion polls. For example, a Yomiuri poll taken in early December found that sixty-five percent of respondents are willing to give the DPJ a chance to govern. Despite the LDP's efforts to paint the DPJ as dangerously irresponsible, too divided, and led by the too dictatorial Ozawa Ichiro, the public is increasingly receptive to the leading opposition party and its mercurial leader.

The DPJ has been remarkably disciplined over the course of 2008. In part the DPJ's task has been simple. The party has had to stay reasonably united while the LDP struggled to find a consensus on issue after issue. On policy questions, it has been opportunistic, but what opposition party in a democracy isn't opportunistic? It largely succeeded in being trapped by the government on any given policy issue, adjusting its tactics as the political situation changed.

In the meantime, the party bolstered its policy credentials — see Mr. Ozawa's rebuttal to Mr. Aso's maiden policy address — and continued its work at the grassroots level, the pet project of Mr. Ozawa.

In fact, the unreported political story of 2008 may be how remarkably competent the DPJ was. It could have gone differently: the party came under fire from the LDP and big media for the uncontested reelection of Mr. Ozawa as party leader in September, and in the months leading up to the election, Mr. Ozawa's leadership was criticized by various DPJ young turks, but Mr. Ozawa emerged unscathed from the leadership fight and is now amazingly polling higher than Mr. Aso. If the LDP hoped to run the next general election campaign as a personal campaign against Mr. Ozawa as opposed to a campaign against the DPJ's ideas, that option may now be futile (if it ever stood a chance of success in the first place). Meanwhile, the DPJ set the policy agenda for 2008. From the beginning of the year, the LDP has been forced to battle the DPJ on the opposition party's terms, the issues that won the DPJ the 2007 upper house election. The discussion has focused on pensions, health care, budgetary waste, the gasoline tax and road construction, and administrative reform, issues which for the most part the public sees as DPJ strengths (see this recent Yomiuri poll). While at times DPJ members have grumbled about Mr. Ozawa's tactics, he has ably kept the DPJ's ideological divisions from undermining the party at critical moments in its battles with the LDP.

In short, while the party has certainly benefited from the LDP's disarray, Mr. Ozawa and the other DPJ leaders deserve credit for their grace under pressure and the deftness with which they have checked the DPJ's tendency towards disarray of its own.

None of this is to say that a DPJ government would be a panacea for an ailing country. If the DPJ manages to win the 2009 general election and form a government, it will be no less hampered by events than its LDP-Komeito predecessors. It will still have to balance reforms that ease the insecurities of citizens left behind by Mr. Koizumi's reforms, while forging ahead with the structural transformation of the Japanese economy and solving the fiscal crisis — all in the midst of an economic crisis that shows no signs of abating in the coming year. Nevertheless, a DPJ-led government would be a welcome change from the decrepit LDP-led governments that have ruled in recent years. Regime change would contain the possibility of a genuine break with the recent past; whether the DPJ fulfills the potential of regime change would depend on the abilities of its leaders and the response of the public to the new government.

Finally, 2008 had lessons for Japanese foreign policy, namely the US and Japan cannot live with or without each other. As Japan prepares for the Obama administration, it is clear that the US-Japan alliance is not healthy. The biggest change in 2008 was that the Bush administration provided Japanese elites with a new reason to be unhappy with Washington when it removed North Korea from the state sponsors of terrorism list. The Japanese establishment reacted with "shock" when the decision to delist was announced in June. Combined with the impact of the global financial crisis, as 2008 ends Japanese leaders are left wondering whether they can continue to rely on the US as an ally. They will be watching the Obama administration's every move for clues.

At the same time, however, Japan has little choice but to continue to work as a loyal ally of the US. Japan will grumble about Washington — and grumble louder if the DPJ takes power — but it is not prepared to break with the US in any significant way. Japan has no alternative in the near term to the alliance. Japan may have inched closer to China over the course of 2008, sending an MSDF vessel on a port visit, holding an upbeat summit when Hu Jintao visited Japan in May, and concluding a minor agreement concerning the East China Sea EEZ, Japan's leaders still face a tightrope walk in Japan's relations with China. In my first post of 2008, I insisted that the China hawks are "bankrupt," and I remain no less convinced today that this is the case. Developments in 2008 illustrated that there is little public support for a more belligerent approach to China. What we learned in 2008, however, is that the Japanese people want their government to be more assertive in negotiations with China (see this post). But a desire for greater assertiveness does not translate a support for remilitarization, constitution revision, and the rest of the conservative agenda.

The public is not ready to break with the US and is not prepared to bandwagon with China. The government is left trying to find a middle path between the region's two superpowers, not unlike other countries in East Asia.

All of which suggests that Japan's global presence is diminishing. Despite presiding over the G8 in 2008, despite launching a successful bid for one of the rotating Security Council seats, despite the ambitions of its prime ministers, Japan's voice is fading internationally. Given Japan's economic woes, this trend is unlikely to reverse itself in 2009. While Japan's leaders had plenty to say about their country's role in 2009 — for my part I was impressed with Mr. Fukuda's foreign policy vision — they had fewer ideas about how to act on their ideas. Japan still does not know how it can act as a regional and global leader in the coming decades as its power wanes relative to China (provided China weathers the economic crisis with minimal domestic disorder). Its economy faltering, its people insecure, its armed forces constrained by law, budgets, and values, it is unclear what basis Japan will have for claiming a leadership role in the region. Mr. Aso has tried to make the case for a soft power basis for Japanese leadership, but Mr. Aso and other advocates of soft power have failed to explain how the popularity of manga, anime, and J-Pop will translate into political affinity for Japan and will enable the Japanese government to achieve its goals.

In short, 2008 was a hard year for Japan, a year of uncertainty for its leaders and hardship for many of its people. Japan's ancien regime is exhausted — we clearly are witnessing a second bakumatsu — but it is unclear whether a restoration waits in the wings, or whether this will be a bakumatsu without end.

The Fukuda government's China tightrope walk

The gyoza scandal reopened just as the Beijing Olympics opened, with the Fukuda government on the defensive in light of revelations that it acceded to the Chinese government's request that Tokyo not release information about the presence of poisoned dumplings within China.

Part of the problem is a statement by newly appointed MAFF minister Ota Seiichi, who reportedly described Japanese consumers as "noisy."

As Jun Okumura notes, reading Mr. Ota's remarks in the proper context suggests that Mr. Ota's remarks as perfectly banal and inoffensive: Japan is a democracy, and when consumers complain the government must listen; China is an autocracy, and the CCP can hide information and ignore the public. Mr. Ota's remarks would be controversial only if he was speaking longingly about the CCP's ability to ignore the "noisy" public. I don't think he was. (Although I'm sure that some LDP officials — perhaps even Abe Shinzo, despite his professed love of democracy — envy the Chinese communists for their freedom from oversight, public accountability, press scrutiny, and the other "encumberances" of democracy.)

Nevertheless, members of the LDP and Komeito will continue to fret about the consequences of the backlash, and the DPJ will continue to exploit the "gaffe" as best as it can.

But this whole affair suggests something important about the Japanese public's attitudes towards China. Obviously the biggest story in Yomiuri's recent poll surveying Japanese attitudes about China and Chinese attitudes about Japan was that Chinese respondents were more positive about Japan than Japanese respondents were about China, but there is more to it than that. While Japanese respondents are undoubtedly concerned about Chinese military power — when asked how they think of China, 57.4% of 1828 respondents said they see it as a country strengthening its military — they are also not implacably hostile to China. Respondents were almost overwhelmingly positive about Hu Jintao's visit to Japan in May and Japan's assistance to China following the Sichuan earthquake, suggesting that there are steps both governments can take to build a sound foundation for Sino-Japanese relations. And given tepid support among the Japanese people for full-fledged remilitarization, fears of the growing strength of the PLA do not necessarily translate into support for a policy line that wouild see Japan try to compete with China in an East Asian cold war. Recall that in the Cabinet Office's latest poll on defense issues — now two years old, so possibly dated, although given the margins I would imagine the change over two years isn't too great (although isn't it high time for a new one?)— only 16.5% of respondents wanted to see the JSDF's strength enhanced, while 65.7% said it was fine as is (the latter nearly four percentage points above the previous survey result).

But what the gyoza scandal tells us is that while the Japanese people do not want to militarize Japan's relationship with China, they do want their government to show more backbone in bilateral negotiations, a desire that surely applies to Japan's relations with countries other than China. That naturally puts the Japanese government in a tough position. In the gyoza scandal, what would the Fukuda government have gained by denying China's request and immediately revealing the new information to the public? Less of a public uproar, perhaps, but an even less conciliatory China. More importantly, the Japanese public is probably going to be less forgiving of their government's weakness in dealings with China when the bilateral issues impact Japanese households directly (i.e., tainted produts). Seikatsu remains dai-ichi, even in the Sino-Japanese relationship.

And so the Fukuda government is left trying to appease the Japanese public — hence the prime minister's rebuke to Mr. Ota — while trying to accentuate the positive in relations with China — hence the dispatch of Foreign Minister Komura during the Olympics. But outside observers should not mistake a public agitated over relations with China with a public eager to see Japan compete toe-to-toe with China in military affairs.

Kato steps up

Kato Koichi has been chosen as the head of the Japan-China Friendship Association, an influential and venerable organization advocating closer relations between Japan and China. (A history of the organization can be read here.)

Mr. Kato has seen his influence vanish since his failed rebellion against Mori Yoshiro in 2000, which was followed soon thereafter by the arrest of his secretary and his (temporary) resignation from the Diet. He subsequently became LDP's leading liberal, criticizing both his onetime comrade Koizumi Junichiro and Abe Shinzo for their revisionism before declaring his support for Fukuda Yasuo. A retired diplomat who was in MOFA's China School, Mr. Kato has been a relentless critic of historical revisionism and a tireless advocate of cooperation in Asia. Indeed, as seen as in this 2004 speech at Johns Hopkins University, Mr. Kato, like Mr. Fukuda, has a vision for a peaceful, integrated Asia.

Not surprisingly, Mr. Kato is not particularly popular with the Japanese right — and his home was the target of arson on the auspicious date of August 15, 2006.

But now with a perch at the top of an influential organization that spans party lines, perhaps Mr. Kato may yet have an important role to play in Japanese policy making. The prime minister needs all the help he can get in making a case for a constructive relationship with China and a more cooperative approach to Asia more broadly. Few prominent, popular figures seem to be willing to make the case publicly and persistently for a more cooperative Asia-centered foreign policy, meaning that the conservatives have effectively won the propaganda war. Mr. Kato, however, still commands respect when he speaks, even as an outcast within the LDP.

Mr. Kato may now be prepared to reconnect with Yamasaki Taku, the other member of the YKK, to fight back on North Korea policy and Japan's Asia policy more broadly.

On Friday morning, Mr. Kato appeared on a TV program to join Mr. Yamasaki in his feud with Abe Shinzo, emphasizing the failure of the Koizumi-Abe line on North Korea. Arguing that Japan may be finally having a debate on North Korea, three years late, he said about Mr. Abe, "If Mr. Abe was a person who understood a little more about the international situation, the Six-Party talks on the North Korean nuclear problem would have been held in Tokyo." In other words, if Japan had remained engaged in finding a solution to the problem instead of going down the abductions rabbit hole, Japan would be enjoying greater influence in the region today, instead of wondering how Japan became so isolated, estranged even from the United States. (He also urged Mr. Fukuda to reshuffle his cabinet and distance himself from the Koizumi line, advice that runs contrary to Mr. Koizumi's, and is unlikely to be embraced by the prime minister, who, I think, is less concerned about embracing a "line" than balancing the various elements of the LDP and keeping his opponents off balance.)

Perhaps this is the beginning of pushback by the liberals against conservative-revisionist control of the LDP. It is unlikely that the pushback will get very far, resting as it does on Messrs. Kato and Yamasaki, politicians on the downhill side of their careers, unless they manage to encourage their compatriots to speak up (one of Mr. Kato's greatest strengths seems to be courage and fearlessness in the face of great opposition) and challenge the conservatives. However, it matters less what they do within the LDP than what they do in the public at large. If Mr. Kato can combat public skepticism towards China and challenge an abductions-centered North Korea policy in public, he will have accomplished something great — and something necessary for the future of a peaceful Asia.

Progress in the East China Sea

The big story of the day is that the Japanese and Chinese governments released the details of their agreement on contested gas fields in the East China Sea, over which the two governments have feuded for more than five years.

Under the terms of the deal — which the Chinese government has publicly accepted — Japanese companies will invest in the development of two of the four contested gas fields. The agreement does not settle the question of where China's EEZ stops and where Japan's begins, which is probably for the best.

The current deal, according to Yomiuri, applies only to the Shirakaba and Asunaro fields; the two governments will continue to negotiate over the status of the two remaining fields.

It's important to note that as Okumura Jun wrote Tuesday, "it’s the legal framework for the joint development activities including jurisdiction that matters, not the economics of the deal" — the amount of energy and money involved is relatively miniscule. Okumura-san's earlier post on the negotiations is also essential reading. (And they keep coming: this post on the aftermath of the agreement is also excellent.)

Meanwhile, as MTC argued today, Japan has little choice but to develop the fields jointly with the Chinese because "it is impossible to send even one cubic meter of the natural gas under the East China Sea to Japan (there is a trough in the way) without sending the gas first to the coast of China via a seabed pipeline."

I don't have much to add to MTC's and Okumura-san's analysis of the agreement.

The agreement is undoubtedly positive, but its impact should not be overstated. There will be significant sectors of the population in both China and Japan that will be unhappy with the agreement. Japanese conservatives will undoubtedly be displeased by the decision to shelve the sovereignty question and focus on how to best to divide the energy supplies. Chinese nationalists will be displeased that the Chinese government gave in to Japan.

Ultimately Prime Minister Fukuda probably needed an agreement more than Beijing did. The Chinese government has the luxury of ignoring the public's desires — to a certain extent, anyway. Mr. Fukuda, however, has to make the case for why Japan should pursue deeper cooperation with China. To do that, he needs China's help. He needs to be able to show the Japanese people that his efforts to build a constructive relationship are yielding tangible, positive results. Judging by the tone of Chinese President Hu Jintao's visit to Japan last month, it is clear that the Chinese government recognizes that Mr. Fukuda cannot sell the new relationship without Beijing's help. And so this agreement should at least help the prime minister make a public case for his China policy.

Now if only he had more help from the Japanese media and academia...

The Sazanami sets sail

In the latest blow to the Japanese right's ambitions to scold and isolate China, the Sazanami, a Takanami class destroyer, departed today for China, where it will visit Zhanjiang, a port in China's Guangzhou province from June 24-28. The visit will reciprocate last year's visit to Japan by the Chinese destroyer Shenzen.

The visit will of course by the first visit to China by a Japanese warship since the end of World War II.

The Chinese media is now reporting (according to Sankei) that not only will the Sazanami's crew be participating in Sino-Japanese friendship events in Zhanjiang, but the Sazanami will be delivering relief supplies for Sichuan.

The visit in and of itself is not particularly significant, other than its being the first since the war. But the more these exchanges become routine (the less news agencies feel the need to report on them), the better it will be for the relationship and for the region. And the harder it will be for the Japanese right to paint China simply as Japan's enemy in an emerging cold war. Bilateral problems will persist, but at least Tokyo and Beijing are learning to deal with them constructively, and learning that even if there are policy disagreements, cooperation, communication, and exchange is necessary.

Australia and Japan in the same boat

After being criticized at home (and, supposedly, in Tokyo) for failing to visit Japan on a swing through Asia in March, Australian Prime Minister Kevin Rudd will be in Tokyo this week for meetings with Prime Minister Fukuda.

Andrew Shearer, a fellow at Australia's Lowy Institute for International Policy, has an excellent op-ed in The Australian (H/T to JG) putting Mr. Rudd's visit in perspective and proposing a framework for Australian foreign policy that balances relations with China and Japan.

Without denying the importance of the Sino-Australian relationship, Shearer argues that a strong relationship with Japan — Australia's largest export market — is an indispensable asset for Australian foreign policy. He gets at the important point that Australia and Japan share concerns. Both have deepening economic ties with China, but at the same time they fear China's growing heft and want the US — each country's most important ally — to remain engaged in the region. But "engaged" is not a code word for containing China. As Shearer argues, "It doesn't mean Australia and the US should not pursue realistic, constructive relations with China. Calm dealings between Washington and Beijing, in particular, are important for Japan's deep relationship with China and for vital Australian strategic and economic interests."

The challenge for not only Japan and Australia but for India, South Korea, and China's neighbors in Southeast Asia is balancing their ever more important economic relationships with China with their security relationships with the US, a US that is unfortunately prone to militarized overreaction that could undermine economic relationships with China. (To be fair, US bluster is matched by a China that is rapidly modernizing its military and looking to bolster its power projection capabilities). The countries on China's periphery, especially Australia and Japan, clearly value the US hedge against a belligerent China. The challenge for all of these countries clustered between the US and China is to moderate the behavior of both powers; these mid-sized players must ensure that the US is around and engaged but not overly aggressive or prone to crusading, and that China is a "responsible stakeholder" and force for stability in the region.

Accordingly, the value of cooperation between India, Australia, and Japan is not as a democratic ring around China but as a force for restraint acting on both China and the US.

In light of Mr. Fukuda's recent remarks on Japanese foreign policy, I think that the prime minister would be sympathetic to this vision of the region. Is Mr. Rudd capable of achieving this balance in Australian foreign policy?

I'm optimistic that he will. The need to balance the economic relationship with China and the security relationship with the US is bound to push Canberra in the direction of closer relations with other countries in the region that share this predicament.