Clearly, Beijing may have to wait for the outcome of the Diet elections on December 16. Should the LDP win, the Chinese government will be smart to send conciliatory signals to the new Japanese government. Of course, Shinzo Abe, the leader of the LDP, has taken a hardline on China during the campaign, but he should be given a chance to show his sensibility and pragmatism. China will not hurt itself by displaying some flexibility and willingness to compromise initially. If Japan rejects such friendly overtures, China will have ample time to play a game of tit-for-tat.
Parallel to its efforts to stabilize Sino-Japanese relations, Beijing’s second policy priority is to defuse its tensions with ASEAN over the South China Sea disputes. Chinese policymakers must first realize that its stance on the maritime disputes in the South China Sea has painted Beijing into a corner. The historical claims are increasingly difficult to defend. The insistence on bilateral negotiations, not multilateral ones, looks too self-serving. The use of a proxy such as Cambodia to undermine ASEAN’s unity on the South China Sea disputes may be a temporary tactical success, but it comes with long-term strategic costs and will ultimately be futile.
A bold move for the new Chinese government to take is to do a U-turn on the South China Sea. It can do so by announcing its willingness to negotiate in a multilateral setting and adhere to existing international laws, not historical claims. This dramatic change of policy will not necessarily produce an outcome totally unfavorable to China. Because most of Vietnam and the Philippines’ claims are equally weak under existing international laws, shifting China’s position will not necessarily strengthen their claims. The practical effect will be prolonged negotiations that can defuse the tensions – and repair China’s tattered image as a bully.
Putting U.S.-China ties on a more solid footing and reversing the dangerous dynamics of strategic competition is more difficult and requires steps that Mr. Xi may not be able to take immediately. The factors driving the U.S. and China toward strategic rivalry are not hard to see: mutual distrust, a shift in relative balance of power, China's military modernization, and a lack of transparency in China's domestic political system. It is impossible to address all these factors, and some of them defy short-term solutions. However, Mr. Xi will find that the immediate key to improving Sino-American relations will not be found in China’s policy toward the United States, but in its policy toward its neighbors. It is the fears China has aroused among its neighbors that have given the United States the strategic leverage to deal with China and to view China from darker lenses. So it will be China’s success in reassuring its neighbors and the United States, not with rhetoric but real policy changes, that will help dig Beijing out of its current geopolitical hole.