Japan and China both have new leaders, and thus an opportunity exists to reduce tensions that erupted last summer over disputed islands in the East China Sea. Tensions ratcheted up even further early this year as military forces seemed poised to enter the fray in the waters around the remote, uninhabited islands (called Senkaku by Japanese and Diaoyu by Chinese). Although the two leaders have yet to meet face to face, there are some signs of diplomatic movement.
The main challenge is how to define the new terms for managing the disputed islands. In 2012, both governments changed their strategy for managing this dispute, beginning a complex and potentially dangerous dynamic for the Japan-China relationship that will be difficult to manage. Both are having difficulty reading each other's intentions. When Prime Minister Yoshihiko Noda decided to purchase three of the five islands from their Japanese owner last summer, his aim was to strengthen government control over who has access to the island, effectively barring activists from Japan, China, or Taiwan from attempting to land. Chinese leaders, however, depicted Noda's efforts to restrain citizen activism as a ploy to "nationalize" the islands, thus breaking with long agreed upon efforts to keep the territorial dispute from being a focal point of popular sentiment.
Where once Chinese and Japanese leaders found common interest in setting aside their territorial dispute, they may no longer share this goal. China's rise and its emerging maritime strategy may suggest advantages to a more active claim over the Senkaku/Diaoyu Islands. Furthermore, in the past both governments found it reasonably easy to constrain domestic activism on sovereignty, but today that is increasingly difficult. The Chinese government has sent its own patrol ships to demonstrate its right to administer the islands.
Finally, the two governments have now sought to gain outside support for their respective positions. At the United Nations General Assembly meeting in September 2012, both Japanese Prime Minister Noda and Chinese foreign minister Yang Jiechi raised the island dispute in their addresses. Washington responded by reassuring its treaty ally Japan that its defense commitment would hold should Beijing use force to seize the islands, but also encouraged both countries to de-escalate tensions and return to a peaceful process of dispute resolution.
Japan and China have succeeded in the past in identifying maritime confidence building opportunities. Years ago, the two countries agreed to a plan for joint energy development in the East China Sea. In 2012, Tokyo and Beijing began High Level Consultations on Maritime Affairs and discussed the creation of crisis communications, including a hotline. Moreover, they continue to move forward with preparatory talks for a trilateral Free Trade Agreement with South Korea, despite the political tensions.
For China's new leader, Xi Jinping, the deterioration in relations with Japan could be costly. If Japanese companies find it too difficult to invest in China—creating joint ventures with new Chinese firms and jobs for China's increasingly talented workforce—they will gradually move elsewhere. Japan remains heavily invested in the China market, but political strife and particularly popular antagonism against Japanese corporations and citizens could change that calculus if the two governments cannot put the island dispute behind them. Yet so long as tensions are kept at bay, Japanese firms still see great opportunity for their products with the Chinese consumer.
The U.S. position on the island dispute complicates China's effort to forge closer ties with Washington. Xi seems to want a good relationship with Washington, and thus escalating tensions with Washington's closest Asian ally will get in his way. Likewise, Shinzo Abe, who has long advocated for a more robust defense role for Japan's Self-Defense Force, also wants close alliance relations with Washington, and thus his meeting with President Barack Obama in February included a strong statement of Japanese restraint in the standoff with Chinese ships.
Both Xi and Abe will need to proceed carefully in their diplomatic dance, given the volatility of domestic sentiments over the islands. Early efforts to explore options have included the visits to Beijing of several well-known Japanese political leaders with strong ties to the Chinese leadership. In January, Yamaguchi Natsuo, head of Abe's coalition partner, the New Komei Party, was sent to Beijing, and had a good meeting with Xi. At the time, Xi was reportedly open to considering high-level diplomacy with Japan, but then an incident involving a Chinese ship locking its firing radar on a Japanese frigate created tensions anew. More recently, former Prime Minister Fukuda Yasuo visited Beijing and briefly interacted with Xi at the Boao Forum for Asia. Fukuda later praised Xi's speech there for emphasizing the resolution of disputes through dialogue.
Japan's finance minister and deputy prime minister, Taro Aso, is expected to visit Beijing this month, and next month former foreign minister and deputy leader of the Liberal Democratic Party, Komura Masahiko, would also like to visit. The hope is that these Japanese visits to Beijing can prepare for high level government meetings later in the year. Japan, China, and South Korea were due to have their annual trilateral summit in Seoul this spring, but China asked that it be postponed due to the island dispute with Japan, eliminating an important opportunity for contact between the leaders.
There are some good signs, however, that careful preparation for renewed diplomacy could be afoot. New personalities close to both leaders have deep experience in repairing relations. The new Chinese foreign minister, Wang Yi, is perhaps the most knowledgeable and skillful at guiding Beijing's relations with Tokyo. He was ambassador to Japan during the last effort at reconciliation in 2006-2008, and wrote the speech that China's premier, Wen Jiaobao, gave to the Japanese parliament. Likewise, Abe himself had to craft a new vision for reconciliation when he succeeded Junichiro Koizumi as prime minister in 2006.
But today's China—and today's Chinese leaders—may be less receptive. Only time will tell. A careful script and extended high-level contact to rebuild personal ties could yet again rescue the Japan-China relationship from political strife. The larger question is one that only Xi can begin to address, and that is whether Beijing wants to begin a conversation with its neighbors on itsstrategic ambitions in Asian waters. Japan is not the only country on China's periphery that is worried about the longer terms impact of China's growing military power.
If Xi insists that China's neighbors adjust to its rising influence without offering reassurance and compromise, he will invite hostility rather than cooperation. Mr. Abe's overtures may not yet fully satisfy, but they are the beginning of a dance that might just determine the region's future.
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