Not so great expectations

What will be the impact of the trilateral meeting between China, South Korea and Japan?

Stephen R Nagy

Economics and finance, Trade and industry, International relations, National security | Asia, East Asia

4 November 2015

The trilateral and bilateral meetings between the three countries focused on economics, rather than the more difficult and divisive issues between the nations, writes Stephen R Nagy.

The trilateral and bilateral meetings between China, South Korea and Japan focused on functional cooperation in areas of mutual agreement rather than reconciliation, rapprochement or a return to more amicable relations.

Economics was at the centre of the trilateral talks. Prime Minister Shinzo Abe, President Park Guen-hye and Premier Li Keqiang are heavily economically inter-dependent; if the Chinese economy falters, both Japan and South Korea will be heavily impacted. Similarly, the success or failure of Abenomics has implications for the Chinese economy as well.  Japanese and South Korean businesses remain important actors in terms of Foreign Direct Investment (FDI), employers of Chinese citizens, consumers of Chinese products and, crucially, the transmission of new technologies that contribute to China’s socio-economic development.

The slowing of the Chinese economy to what Chinese leaders call a “new normal” means that both South Korea and Japan need to find ways to boost growth at home and in the region.

On the Japanese side, Abe’s pivot back to focusing on the economy after the passing of the contentious Collective Security Bill is part of his longer term strategy of consolidating the gains accrued up to now through Abenomics and the passing of the Trans-Pacific Partnership (TPP). Movement towards a free trade agreement (FTA) between East Asia’s three largest economies would cement economic interdependency and help Abe and his Liberal Democratic Party (LDP) regain much of the political capital likely to be lost in next summer’s Upper House elections.

China, as South Korea’s largest trading partner, also has much to gain from a FTA between China, South Korea and Japan. Boosting access to China’s burgeoning middle class means big profits for Korean businesses and thus economic gain for Koreans. It also means a besieged President Park regaining some political capital that she has lost through several political missteps in both domestic and foreign policy.

While economics were at the centre of the discussions, cooperation in non-traditional security areas will remain the topics most easily tackled, but the least tangible in many ways. Environmental cooperation, disaster cooperation such as that after the 3/11 earthquake and the North Korean security threat will be at the forefront of ongoing discussions as they require the least political compromise for each leader and they are seen as public goods that are not only good for the region but domestic audiences as well.

This functional approach to cooperation between the three Northeast Asian neighbours is illustrative of not only the capacity and ability to find areas of commonality and mutual interest, but also reflects the deep divisions that exist.

At the bilateral level, the Abe – Park meeting will move Japan-South Korean relations back to their less politicized past. Under Park, South Korea – Japan relations have been harmed by the focus on reconciling the Comfort Women issue as a prerequisite for deepening relations. With so many shared interests, norms and a shared commitment to democracy and peaceful development, neither country has benefitted from the recent deterioration.

Abe’s deliberate use of the words human trafficking (far beyond his predecessors) and specific mention of the indignities against Asian women under Imperial Japan, while still insufficient, represented a positive shift and paved the way for a return to a more amicable relationship. Informal pressure from the US has been integral to this meeting and a return to more normal relations.

In contrast to a warming of relations between Japan and South Korea, expectations for a political warming between China-Japan are much more unlikely. Political legitimacy in both cases is partly based on either anti-Japanese or anti-China stances. Japan’s expansion of cooperation with the Philippines, Australia, Vietnam and the US under the umbrella of Proactive Pacifism, and conclusion of a China-excluding TPP has strengthened concerns in Beijing that Japan in cooperation with the US is incrementally moving to contain China.

On the China side, incursions into territory claimed by Japan in the East China Sea, island building in the South China Sea and double digit increases in military budgets has not instilled confidence in the Japanese defense establishment.

These traditional security concerns cannot be allayed in one meeting. They require sustained, high level and backdoor dialogue to build trust and to reduce mutual suspicions.

For both China and Japan, optics mattered immensely in their bilateral talks. Both leaders emerged from the meetings wanting to give the appearance of being firm with their counterparts and uncompromising in what they see as their core interests. But they also want to be seen as statesman-like and giving the impression that they are building bridges. With this in mind, Li may have been at an optical disadvantage for his domestic audience considering the relentless anti-Japanese messages in the media in China. Internationally and in particular regionally, he needed to alleviate concerns about an emerging Chinese hegemony in the region through commitments to multilateralism.

In a similar vein, Abe had to play to regional and domestic audiences. Abe needed to emerge as a less nationalistic leader who recognises more forthrightly the concerns of his neighbours for his international audience. At the same time, he must demonstrate to his domestic audience that his leadership is nimble enough to both find ways to work and be firm with China.

With these limitations in mind, leaders needed to stress their shared responsibility for peace and prosperity in the region. From here, they will need to make commitments to economic and environmental cooperation as they are tangible, win-win issues for both leaders that don’t require them to confront the significant political differences between them.

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