Japan’s Prime Minister Resigns

Barely nine months in power, Japan’s prime minister Yukio Hatoyama announced his resignation today. Hatoyama led Japan’s main opposition party, the Democrats, to electoral victory in August 2009, defeating the traditional governing party the Liberal Democrats at the time. He promised tax cuts and a new approach to foreign policy but proved unable to cope with Japan’s lingering economic trouble.

Hatoyama cited his inability to convince the Americans to move a Marine base off the island of Okinawa as reason for his resignation. Some 4,000 US Marines are stationed on the crowded island amid growing discontent from the local population.

Western media were quick to report on the tension that emerged between Japan and the United States in January over the Marine presence. Relations between the two countries have been fairly stable since the end of World War II. Hatoyama repeatedly suggested on the campaign trail that he would push for the relocation of the base but last week gave in and accepted the existing arrangement.

At World Politics Review, David Axe notes that the Okinawa base is “part of a constellation of American bases that buttress Japan — and indeed all of East Asia — against a rising tide of Chinese military power and escalating tensions on the Korean Peninsula.” In spite of Hatoyama’s intention to conduct a foreign policy more independent of the United States, even he may have had to admit that Japan fares well under the protective umbrella of American might. Unfortunately for him, “that meant breaking a campaign promise,” according to Axe, “and ultimately torpedoing his own government.”

There may have been a little more to it though. As Kyle Mizokami writes at Japan Security Watch, the prime minister’s polling rating had plummeted in recent months to an unprecedented low of just 17 percent — “so low in America they would not be allowed to buy alcohol.” His failure to live up to one of his campaign promises was his ultimate undoing, knows Mizokami, “but his indecisiveness, naivete, lack of leadership skills, inability to manage his cabinet, and general incompetence all played a role.”

The prime minister shot himself in the foot right by allowing the Okinawa base issue to dominate his political agenda. “Hatoyama clearly started to grapple with something he did not fully understand, only to realize too late his mistake.”

His awkward political maneuvering did not go unnoticed in his own party. Behind the screens Ichirō Ozawa, secretary general of the Democratic Party of Japan, was pushing the government to abandon another one of its campaign promises: to cut petrol taxes. Just months after the Democrats took office, Ozawa forced the country’s finance minister to step down in favor of his ally Naoto Kan. Hatoyama wasn’t pulling the strings. The discord culminated last week when a minority left-wing party aligned with the Democrats split from the ruling coalition.

For the country’s economy, Hatoyama’s resignation may turn out to be a blessing or a curse. Contrary to the more conservative Liberal Democrats, his party favored reform, greater personal responsibility and a more flexible market. But last December it became obvious that the Democrats intended to distance themselves from the free-market policies of former Prime Minister Junichiro Koizumi. Over Christmas they approved a record trillion dollar budget which, according to The New York Times, “encompasse[d] ambitious welfare outlays to help households cope with the country’s deep economic woes.” The paper warned though that “the scale of new spending could renew investor jitters about the government’s burgeoning debt.” To what extent this was Hatoyama’s policy or that of party leader Ozawa, who also stepped down on Wednesday, we are bound to find out depending on who will displace the former.

Because Japan has a parliamentary system, no elections are called for to elect Hatoyama’s successor. Upper house elections are scheduled to take place in July however. Hatoyama’s resignation may be an attempt on the part of the Democrats to boost their waning popularity. Ozawa-appointee Naoto Kan, currently serving as finance minister, is rumored to succeed him.

Avoiding the Unthinkable

As evidence mounts that the South Korean warship sunk last March was indeed brought down by a North Korean torpedo, tensions in Korea are rising. South Korean President Lee Myung-bak has pronounced economic sanctions on the North which has reportedly begun to ready troops.

The intentional sinking of a foreign naval vessel is certainly cause to go to war. In effect it is a declaration of war. However, we cannot be sure that the sinking was intentional or planned and more importantly, no one wants another war in East Asia.

The United States, already declaring that it will stand with South Korea, maintains strong ties with the country and would probably be dragged into any conflict followed possibly by China on the side of the North. A battle between two world superpowers is precisely what the international community has been avoiding since the end of World War II.

American secretary of state Hillary Clinton has been in Beijing trying to convince China to side with South Korea and support action in the UN Security Council. The word is still out on how successful she will be.

While no one wants a war, it is almost inevitable that North Korea will reach meltdown stage at some point in the near future. It has already lasted as long or longer than other communist countries that were forced to enact fundamental reforms in the face of unsustainable levels of misery and poverty on the part of their people.

The ray of hope in this situation is that it cannot be in the interest of North Korea to go to war again. As it is, the North is left free to abuse and destroy its own people. They cannot hope to take on the South with America funding and militarily supporting it; all the more so because South Korea has gone through an extended period of growth and advancement while the North stagnated. South Korea is much more fit at this stage for a confrontation. Nuclear weapons notwithstanding, North Korea is no match for its counterpart.

The best we can hope for in this situation is that North and South Korea will do nothing more than rattle their sabers across the cease fire line until North Korea implodes on its own. Economic sanctions and slaps on the hand from the UN Security Council will do nothing while the alternative, all out war, is unthinkable.

Trouble in Korea

With American secretary of state Hillary Clinton underway to the East Asia, a crisis is looming in the waters of the Yellow Sea where a South Korean corvette sunk last March, killing 46. South Koreans authorities have ascertained that a North Korean torpedo was responsible for the sinking. The North has denied any involvement, threatening with “all out war” should the South respond militarily. The White House agreed that the sinking constituted an “act of aggression” that is “one more instance of North Korea’s unacceptable behavior and defiance of international law.”

The ROKS Cheonan went down near the disputed inter-Korean maritime border on March 27. Tensions flared between the two Koreas that remain formally at war but the issue faded until this Thursday when international investigators, including experts from Australia, Britain, Sweden and the United States, found that the remains of the torpedo that sunk the Cheonan “perfectly match” those of a CHT-02D torpedo which North Korea sells abroad. What’s more, markings were found similar to those engraved on a previously recovered North Korean torpedo. Read more “Trouble in Korea”

The Geography of Chinese Power

Writing for the International Herald Tribune, Robert D. Kaplan makes good geopolitical sense again. This time, he describes “China’s blessed geography,” so obvious, according to Kaplan, “that it tends to get overlooked.” But it is essential nonetheless. “It means that China will stand at the hub of geopolitics even if the country’s path toward global power is not necessarily linear.”

China’s foreign policy is not inspired by a missionary spirit to spread faith or ideology. Abroad, China only seeks to secure its interests which, oftentimes, take the shape of mineral resources. Read more “The Geography of Chinese Power”

China’s Two Camps

The prospect of penetrating China’s huge and emerging market is still a tantalizing one for many businesses. But as the fates of Google and British-Australian miner Rio Tinto show, foreign companies must tread carefully.

Writing for Newsweek, Melinda Liu explains how China is sending mixed messages.

Premier Wen Jiabao welcomed foreign executives last week, assuring them that, “It’s important to reinforce your confidence in China.” But on the very same day, Internet giant Google shut down its operations in China, refusing to bow to government censorship any longer.

“That controversy,” notes Liu, “has contributed to the growing uneasiness of business leaders operating in China.” Read more “China’s Two Camps”

US Must Be Consistent Toward China

After the Obama Administration announced that it would pursue a policy of “strategic reassurance” toward China last year, recent months saw a string of awkward encounters that left Sino-American relations more strained again.

For Secretary of State Hillary Clinton, who is fully aware of the necessity to maintain strong and peaceful ties across the Pacific, Asia has emerged “as a diplomatic hornet’s nest,” with something of a naval race complicating relations with Japan; traditionally the most gullible of American partners in the region. Although the discord with Japan was happily exaggerated by some media, it is becoming more difficult for the Americans to maneuver in East Asia today.

Add to that the recent arms sale to Taiwan and President Barack Obama meeting with Tibet’s exiled spiritual leader, the Dalai Lama, and it becomes quite apparent why the Chinese aren’t too pleased right now.

The need for consistency is real therefore, notes the Financial Times. The United States may state their disagreements with China frankly and openly but should at the same time “strive for partnership with China in their many areas of common interest.”

The important thing is to keep both elements of the relationship to the fore, rather than fluctuating from one to the other according to circumstances — dismaying first the Chinese leaders and then the human rights activists and victims of China’s abuses.

America doesn’t have the leverage to actually make a stance for Tibetan autonomy. To “pretend that it did would simply be counterproductive,” according to the British newspaper.

At his blog, Thomas Barnett, author of Great Powers: America and the World after Bush (2009), agrees and he adds that this pestering “won’t get us any respect from the Chinese, much less flexibility.”

How this administration went so quickly from “strategic reassurance” to all this tough-guy posturing in about three months was truly stunning. It said, “I chase my tail as circumstances demand it.”

There is ample reason to be more accommodating. While economically, the interdependence of China and the United States remains paramount, in geopolitical terms, the former is turning more inward, whether it be through the Shanghai Cooperation Organization or by establishing a free-trade zone with neighboring ASEAN. This is unfortunate, because the United States can use China’s help, be in containing North Korea or Iran, or in getting Pakistan to pick up the pace in fighting the Taliban within its borders.

It Will Still Be an Asian Century

The economic turndown has cast some doubt on the rise of the so-called BRIC countries: Brazil, Russia, India and China. Especially Russia, in spite of President Dmitri Medvedev’s pledge to modernize, is still in deep trouble while analysts warn that inflation could hamper the recovery of emerging markets in Asia. Others expects cracks to develop within the BRICs. Brazil’s growth, for instance, might be much more sustainable due to sound economic policies and the abundance of resources.

There is reason to be optimistic for East Asia nevertheless. Katie Baker reports for Newsweek that the region far outperforms Europe and the United States, with China leading the rebound. This year, the Middle Kingdom is expected to enjoy a 10 percent growth while India, Taiwan and Vietnam follow with similarly impressive figures.

Driving the East’s recovery are its rapidly bourgeoning domestic markets. “Throughout the slump, household spending has held up well in China,” writes Baker, “thanks to tax breaks and Cash for Clunkers-type schemes.” In India and Indonesia, consumer confidence has already returned to pre-recession levels, “and retail sales growth remains strong thanks to rising incomes, low personal debt, and high household savings.”

Add to that the continued demand for cheap products from Asia and the investments that flow back to the West, and there is ample reason to presume that the twenty-first century will indeed turn out to be an Asian one.

The PLAN and the Rise of China

Just a couple of decades ago the naval forces of China (People’s Liberation Army Navy or PLAN) was a weakling, barely capable of defending the Chinese Coast. Hong-Kong, a British station until 1997, was almost considered secure by naval if not military means even with just a few British warships at the station. Since then the PLAN has received much investment in materiel and research. This makes much sense for the Chinese government which in recent years has presided over a growth of the country’s military and economic potential to new levels, including an expansion in global and regional trade interests. China’s main oil supply is maritime and it is hardly surprising that this resource is of key import to the burgeoning Chinese industry. Chinese political influence has been present in Africa and the Middle East since the Cold War but now it is becoming more concentrated and noticeable. Read more “The PLAN and the Rise of China”

Tension? What Tension?

“Asia has emerged as a diplomatic hornet’s nest,” according to The New York Times, “even beyond the perennial threat of North Korea.” Secretary of State Hillary Clinton is in the midst of it all, trying to defuse “tension” between the United States, China and Japan. What is going on?

American commentators continue to dread a confrontation with China even as both powers are growing more interdependent every day. In spite of China’s economic ties across the region, there is fear moreover that East Asia is becoming something of a powder keg, about to explode any minute now.

There is real tension, of course. Although China and Japan are quickly becoming each other’s most important of trading partners, militarily they compete. The strong American military presence in Japan as well as its reluctance to sell the F-22 fighter airplane to Japan are complicating factors in a triangular relationship that is intricate to begin with.

The new Japanese government meanwhile is delaying the relocation of a American military base on the island of Okinawa despite Clinton’s demand that they “follow through on their commitments.” Three times, the secretary indicated that Washington is not open to compromise on the issue but Prime Minister Yukio Hatoyama campaigned for moving the base off Okinawa or even out of Japan altogether, reasoning that Japan should pursue a foreign policy more independent of the United States — exactly because of its sometimes bellicose language toward China.

Then there’s Taiwan. Its president, Ma Ying-jeou, has been pursuing a more conciliatory policy toward China which still likes to consider the island a renegade province of the mainland. While 1,500 missiles stand aimed and ready to fire across the Strait, Taiwan is a healthy, capitalist democracy which, for the time being, is not stressing the matter of de jure independence. Rather, China and Taiwan are in negotiation to reduce import and travel restrictions between the two countries: a necessary move for Taiwan considering the recent creation of a Southeast Asian free-trade zone that makes the island less attractive as trading partner to China.

The United States is bound by law to arm Taiwan, however, and a recent sale of missiles met with strong Chinese disapproval. Sino-American relations are still shaky but as Clinton said last Tuesday, “America’s future is linked to the future of this region, and the future of this region depends on America.” Obama was even happy to call himself a “Pacific president” and for good reasons: East Asia is fast becoming the new core of the world economy while politically, its integration can be fragile at times. American involvement is able spark discontent but it also helps smooth over differences by providing great power leadership to those nations fearing Chinese domination.

The political discord should not be exaggerated. Today’s tension springs from relatively minor disagreements and will, in the end, be resolved.

Japan’s New Finance Minister

While Japan continues to linger in economic trouble with little hope for imminent recovery, Prime Minister Yukio Hatoyama forced his 77 year-old finance minister Hirohisa Fujii to resign last week and had him replaced with Naoto Kan, a former civic campaigner against government corruption with virtually no experience in economics.

Behind the screens Ichirō Ozawa, secretary general of the Democratic Party of Japan, is manoeuvring the government to abandon some of its campaign promises, a pledge to cut petrol taxes for one thing. That Ozawa is nowadays refered to as “shadow shogun” is telling of the influence he exercises over Hatoyama’s cabinet. The party elder reportedly clashed with former finance chief Fujii who advocated limiting fiscal spending in order to reduce Japan’s gargantuan public debt. Kan apparently favors a more “flexible” approach to solving Japan’s budgetary woes — much to Ozawa’s liking

The appointment of Kan is not only a sign of Ozawa’s seniority however. With his record of fighting red tape, the new finance minister is also likely to be instrumental in this government’s effort to shift power away from career bureaucrats and into the hands of elected officials. Moreover, Kan was a prominent social activist before entering politics and previously served as health minister. As deputy prime minister, he was already tasked with developing a long-term strategy for dealing with Japan’s mounting public debt and in his new job, he is all the more able to turn his plans into a reality.

The Japanese Finance Ministry enjoys a reputation of being something of an impregnable bureaucratic fortress and reforming it to be more answerable to parliament will be quite a challenge for Kan. It successfully resisted past efforts to curtail its budget-making authority although in the late 1990s, the ministry did lose its power to regulate the financial sector to the Bank of Japan.

On taking office, Kan declared that the ministry “will now become a model of how to change Kasumigaseki,” Tokyo’s financial district. He left little room for doubt about his intentions, threatening to replace uncooperative officials and vowing to improve public oversight of the “special accounts,” the vast pools of capital of pension funds and the like that the government has controlled with little disclosure. How his more “flexible” approach to fighting the deficit will work out remains to be seen.