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How to Contain Japan-China Tensions

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How to Contain Japan-China Tensions

War is unlikely, but ongoing crises are not. Bold diplomacy is needed.

A recent Economist magazine cover portrays Japanese Prime Minister Shinzo Abe clad in superhero costume, flying through the air flanked by fighter jets under the banner, “Is it a bird? Is it a plane? No… It’s Japan!” This caricature represents a growing sense that Japan has turned a corner toward a more assertive foreign and defense policy.

Despite Abe’s intentions, Tokyo is unlikely to adopt a radically expanded defense posture aimed at containing Beijing in coming years. Rather, a wide range of domestic and external factors will likely place constraints on Japanese defense spending and capabilities and lead Tokyo to continue an overall policy of cooperative engagement with Beijing.

However, there is growing support in Japan for dealing firmly with China’s expanding military capabilities and ambitions, especially in light of the most recent crisis over the Senkaku/Diaoyu Islands. Equally important, Abe and his highly conservative supporters are bent on revising Japan’s constitution and affirming an interpretation of modern Japanese history, moves that are sure to provoke other Asian nations greatly, especially China and South Korea. While it is questionable whether these efforts will succeed, at the very least, the cooperative elements of Tokyo’s stance toward Beijing are likely to be combined with an increasingly hard hedge.

At the same time, although Beijing is unlikely to engage in future efforts at territorial expansion, it is also unlikely to back down from its more assertive stance on current territorial disputes. And it is almost certain to increase its military and paramilitary capabilities and presence near Japan from their currently modest but growing levels. Even if economic growth rates slow, China will be able to sustain significant annual defense spending increases that will enable its military power in the Asia-Pacific region, including areas near Japan, to grow steadily over the coming decades.

Taken together, these trends suggest that Tokyo and Beijing are likely to find themselves engaged in a growing security competition in coming years that could prove destabilizing to the region and deleterious to the interests of both countries. To mitigate this security competition, policymakers in both countries need to prioritize skillful diplomacy and implement stable mutual security reassurances.

In the short term, this should involve efforts to establish rules of engagement, informal understandings, communication channels, and other mechanisms that will facilitate the prevention and management of crises, particularly those that could arise as the result of incidents at air and sea.

In the longer term, the two sides – necessarily through a simultaneous conversation with the United States – will need to grapple with the question of what type of deployment pattern and distribution of military power in the Western Pacific they can accept.

These are some of the conclusions we and our co-authors reach in a recent Carnegie Endowment report, China’s Military and the U.S.-Japan Alliance in 2030: A Strategic Net Assessment (though the views expressed in this article do not necessarily reflect those of the other report authors).

The Outlook for Japan

Despite the recent ascendancy in Japan of those who advocate a move toward military normalization, it is unlikely that Tokyo will make a major breakthrough toward becoming a fully normal military power by 2030. Overall, numerous factors suggest that Japan’s defense response to China is likely to be restrained. Various domestic influences, including constitutional constraints, normative values, political and bureaucratic factors, and budgetary limitations, are likely to limit growth in Japanese military missions and capabilities. Moreover, Japan’s extensive economic interests vis-à-vis China are likely to act as stabilizing ballast for the relationship. Similarly, U.S. interests in encouraging a cooperative Sino-Japanese relationship will continue, as will, in all probability, U.S. preferences against full-fledged Japanese normalization.

However, though Tokyo is unlikely to move toward an overtly competitive strategy toward China, it is quite possible, even likely, that Japan will move in the direction of “cooperative engagement with a hard hedge.” Such a trajectory would involve sustained defense spending at or slightly above a level of 1 percent of GNP, which would mean limited absolute increases in the annual defense budget as the Japanese economy slowly grows. And although outright revision of Article 9 of the constitution – which forbids both the use of force to settle international disputes and the maintenance of regular armed forces – would probably not occur under such a policy orientation, Tokyo will almost certainly reinterpret its understanding of certain applications of Article 9. Such a reinterpretation could permit a modestly expanded role for Japan in the U.S.-Japan alliance and facilitate coordination between the allies.

This hard hedge could become significantly harder, however, if the rightward politics represented and advocated by Abe gain more momentum in coming months and years. According to knowledgeable Japanese observers, he intends to reject past criticisms of Japan’s wartime behavior, respond more aggressively to Chinese assertiveness regarding the disputed Senkaku/Diaoyu Islands, and possibly push for Japan to acquire and deploy (on its southwest islands) the capability to obstruct Chinese naval transit to the ocean beyond the first island chain during a future crisis or conflict.

Finally, it should also be noted that it is not inconceivable that Tokyo might instead adopt a softer hedge toward Beijing. Particularly if China were to adopt a posture that is seen as less assertive and threatening, this development could combine with Japan’s domestic constraints mentioned above to presage a turn to a more accommodating posture toward Beijing. Under such a policy trajectory, defense spending levels could stagnate or even decline in absolute terms, and the defense budget could again fall below 1 percent of GNP. Such a scenario would also be more likely if Japan’s threat perceptions in other areas reduce – for example, if progress is made toward denuclearization of the Korean Peninsula.

The Outlook for China

In a similar manner to Tokyo, Beijing is most likely to continue to pursue an overall “engage and hedge” approach toward Japan, although the degree of emphasis placed on the two planks of this dual strategy could vary under different trajectories. It is unlikely that Beijing will adopt a highly aggressive policy orientation that entirely jettisons efforts at cooperation with Tokyo, barring the occurrence of a particularly destabilizing internal or external crisis that precipitates the emergence of a much more nationalist Chinese Communist Party (CCP) regime. Rather, over the coming two decades, China will most likely pursue either an “assertive strength” or “cautious rise” orientation in its foreign and security policy.

In an assertive strength trajectory, China would adopt a more hawkish stance toward Japan, particularly on territorial and historical issues, although it would couple this stance with continued efforts at economic engagement and political cooperation with Japan. This trajectory would be more likely to occur if China continues to experience robust economic growth and faces relatively stable internal political conditions, which would enable Beijing to have the financial and political capital to pursue an even greater expansion in military and paramilitary capacity and presence within and beyond its contiguous seas. It is also more likely if Tokyo continues to move toward a hard hedge in its policy toward Beijing – particularly if Japan adopts highly provocative policies toward resource and territorial disputes, such as establishing a formal presence on the Senkaku/Diaoyu Islands.

In a cautious rise trajectory, Beijing would emphasize cooperation and accommodation with Tokyo, although it would still be unlikely to make major concessions on disputes such as that over the Senkaku/Diaoyu Islands. Although China’s capacity and willingness to increase its military capabilities and presence would be somewhat diminished under this trajectory, Beijing would nonetheless continue to expand its military capabilities in the region in absolute terms – and perhaps even in some areas, relative terms compared with Japan. This policy orientation is more likely if China’s growth slows or if domestic political turmoil increases. Under this scenario, leaders in Beijing would likely seek to prioritize a stable international environment that is more conducive to economic development and less likely to enflame nationalist public sentiment that could become redirected toward the CCP or ensnare the CCP leadership in unwanted commitment traps. This trajectory would also be more likely if cross-Strait relations remain stable and if Tokyo and Washington eschew policies that Beijing might perceive as threatening or escalatory.

The Role of the U.S.

As indicated in these outlooks for Japan and China, the United States will undoubtedly play a major role in shaping the Sino-Japanese security relationship and the defense policies adopted by each side in the coming two decades. Although leaders in many Asian capitals, including Tokyo, are currently uncertain about the U.S. commitment to the region – fueled in part by worries over the state of the U.S. economy and its capacity to sustain sufficient levels of defense spending and deployments – a major withdrawal or hollowing out of the U.S. presence in the Western Pacific is highly unlikely. Rather, on balance, the U.S. is likely to recover, at least partially, and maintain a position of economic, military, and political strength in the region – though it will almost certainly not be as dominant in these respects as it has been in the past.

Indeed, Washington will continue to place a high strategic priority on the Asia-Pacific region in coming years. In terms of its policy toward Japan and the alliance, America’s principal objectives are and will continue to be (1) to reduce fears in Japan of either entrapment or abandonment by the U.S.; (2) to facilitate the peaceful handling of Sino-Japanese territorial disputes and encourage the development of a more cooperative overall Sino-Japanese relationship; and (3) to maximize the likelihood that Tokyo will acquire the policies and capabilities needed to defend U.S. and allied interests in the face of a likely more assertive, capable Beijing.

These objectives will lead the U.S. to favor some Japanese efforts to enhance its defense capabilities both politically and militarily, especially those measures that will better enable the Japanese Self Defense Forces to provide integrated intelligence, surveillance, and reconnaissance (ISR) and rear-area support. However, they will also lead Washington to discourage Tokyo from adopting provocative measures that could heighten tensions with Beijing surrounding resource and territorial disputes and historical issues. In particular, the Washington is likely to discourage Tokyo from pursuing a jettisoning or fundamental revision of Article 9.

Moving Forward

Given the combination of these trends in Tokyo, Beijing, and Washington, it is unlikely that full-scale war – hot or cold – will break out between China and Japan or the U.S.-Japan alliance by 2030. However, the potential for heightened tensions and more frequent crises between the two sides will likely grow. As a result, over the long term, the two sides need to work together to establish a mutual understanding regarding the balance of power in Northeast Asia that will accommodate Japanese, Chinese, and American security concerns alike.

The most important first steps relate to Chinese and Japanese military and paramilitary presence and resource and territorial claims in the East China Sea. First, the two sides need to work together to establish mechanisms to prevent and manage potential accidents and other incidents at air and sea, including communication channels and understandings about rules of engagement. Second, Japan should in some way recognize the existence of a dispute with China over the Senkaku/Diaoyu Islands, as part of a larger understanding regarding mutual restraint by both Beijing and Tokyo. Most likely, Tokyo will eventually need to tacitly acknowledge some form of shared presence near the islands. However, in the meantime, China should refrain from any unilateral escalation of its military or paramilitary presence in the area. By the same token, Japan should avoid building structures or establishing a physical presence on the islands. Third, each side should reaffirm a commitment to the 2008 agreement on joint development of resources in the East China Sea and take concrete action toward implementing that agreement.

In terms of broader military posture, Japan also needs to take steps to increase its defensive deterrent capacity vis-à-vis China, given the projected increase in PLA capacity and presence near Japan. This should include enhanced ISR capabilities throughout the southwest islands, increased Coast Guard monitoring and patrols in the East China Sea, and an improved rapid reaction capability. The Japan Self-Defense Forces should also work to enhance interoperability with the United States military, particularly in terms of ISR integration and rear-area support. While pursuing these capabilities, however, Japan should avoid developing a more threatening military capacity—for example, an extensive ballistic missile or long-range strike capability with ranges beyond that of North Korea—that would only serve to escalate China’s military efforts or provoke China to pursue capabilities that could prove more directly dangerous to Japan.

In the longer term, Japan and China will also need to reach more fundamental understandings about the level and type of military and paramilitary presence each side is willing to accept from the other, frankly acknowledging each other’s legitimate political and security concerns. In particular, China must not seek to establish the East China Sea as an effective no-go zone for Japanese ships. Similarly, Japan should eschew efforts to establish its chain of islands as a barrier to Chinese naval, paramilitary, or commercial vessels.

Beyond these traditional security concerns, the two sides should accelerate efforts to deepen their economic integration, including through bilateral and multilateral trade agreements. They should also enhance military-to-military contacts and expand collaboration on nontraditional security matters. In addition, Abe (and other leading Japanese politicians) should certainly refrain from undertaking inflammatory actions such as repudiating past apologies for Japanese atrocities during World War II or visiting the Yasukuni Shrine.

Equally important, to facilitate such actions, Washington not only needs to continue pressing Beijing to moderate its behavior toward the Senkaku/Diaoyu Islands dispute, but also should urge Tokyo to find a formulation to approach the imbroglio that will acknowledge the reality of a dispute, while more actively discouraging Abe from taking the kinds of highly provocative foreign policy moves and stances mentioned above.

Admittedly, these steps will require bold political vision and skillful diplomacy in Tokyo and Beijing. Many of them will be difficult to implement and are not guaranteed to succeed in reassuring the two sides in any event. But current strategies are unlikely to remain capable of ensuring a stable security environment in Northeast Asia conducive to both Japanese and Chinese interests over the long term.

Michael D. Swaine is a senior associate at the Carnegie Endowment for International Peace and author of the book America’s Challenge: Engaging a Rising China in the Twenty-First Century. Rachel Esplin Odell is a research analyst at the Carnegie Endowment for International Peace.