For China, Energy Demands Supercede Politics

Just yesterday, Tom Barnett wrote a post at his blog titled "China, the unprincipled SysAdmin, willing to invest anywhere, actually helps our strategic interests." The thrust of the post can be found a few lines down where Tom puts forth:

"People don't want to hear this, but China's investment presence inside the Gap limits our liability there. The Chinese "unilaterally" engage in SysAdmin just like we unilaterally engage in Leviathan work. Each side limits the other's liability. We just don't recognize yet the symbiotic nature of this relationship.

"China brags that it doesn't "foist" its models on anyone, but of course it does. By taking such a mercantilist approach to the Gap, it fosters pale versions of itself--bread before circuses, or economics before politics. But it does this so narrowly that the legacy of Chinese trade is wealth, but not development. Notice the two booms at work in Sudan: oil and real estate. Which of those two lasts? Which empowers Sudanese to any appreciable degree?"

With this post fresh on my mind, my eyes zeroed in on the following news item via the China Economic Review's daily update:

China, Iraq revive oil deal

A US$1.2 billion oil deal between China and Iraq may be coming back to life. Officials plan to met in November to renegotiate an agreement over the al-Ahdab field first discussed with Saddam Hussein's government in 1997, AP reported, quoting Iraqi Oil Minister Hussain al-Shahristani. China National Petroleum Corp signed the deal with Hussein in the midst of US sanctions that barred direct dealings with Iraq's oil industry and Beijing was waiting for them to end when the US invaded in 2003. Although western companies were widely touted as being favoured for deals under the new regime, the country's instability is putting many of them off.

This is a very interesting development indeed. Depending on how the dealings develop, this could indicate a few interesting signs:

1) China, in looking for energy development opportunities, feels comfortable working with the Iraqis again, and parallel its interests in Iran. Potential Impact: Economic ties to both Iraq and Iran could provide China more leverage in diffusing any future conflict between the two countries.

2) China is more optimistic than pessimistic on Iraq's ability to stabilize into the future, perhaps because of US involvement. Potential Impact: Recently President Bush mentioned how President Hu stated his #1 concern was creating 25 million new jobs per year. With the US in Iraq and Iran having relatively friendly business relations with China, it seems worth investigating the restarting of the old Iraqi dealings. China economic involvement itself could act as another stabilizing force in Iraq in the long-term.

3) China is aware of Japanese investment in Iraq and seeks to ensure that it also is able to capture part of the energy pie in the country. Potential Impact: Look for more potential opportunities for joint Japan-China investment and energy development--as they could eventually do in the seas between the two countries. Relative to its energy demand, Japan is one of the most efficient energy users in the world and its energy-saving technologies will be in high demand across China into the future.

Northeast_asia_oil_interests_in_iraq
As can be seen in the picture to the left, China's Ahdab interest is in the Southern part of Iraq, as are all of the other interests targeted in the past or still targeted by Japan and South Korea. For the PowerPoint document with this map, please download the following file:

Download northeast_asia_oil_interests_in_iraq.ppt

In terms of intelligence--economic, political and security intelligence, it makes sense for China to be on the ground in Iraq and since it is willing to extend its hand economically in other troubled regions, that is logically the first hand it will extend in Iraq--especially with economic interests across the way in Iran. However, with just discussions occurring at this point, China doesn't yet have to risk assets on the ground but has a seat at the table to more closely observe developments in Iraq's oil industry. Of course, with many Western companies refraining from investment, Iraq will have no problems with talking to the Chinese.

Yet, it will be interesting how China addresses potential threats to its security in "the Gap", as Tom touches on in his post:

"Last week I told the Chinese in Beijing: soon they will come looking to kill and torture and drive off the Chinese in order to drive off globalization. The backlash is just beginning. There ain't no such thing as a free lunch."

I look forward to reading Tom's following of events into the future and I will be sure to comment where I feel some value can be added.

Visiting Yasukuni--Here we go again... (UPDATED)

Ah, how fast a year goes by these days. Today is the anniversary of the end of Japan's WWII ambitions and the morning was full of commotion as Prime Minister Koizumi made a 7:40am visit to Yasukuni Shrine where Japan's war dead are honored, including the convicted set of war criminals. I was getting ready for work and preparing to leave as everything was filmed on TV live. South Korea and China were on cue with their statements denouncing the visit.

All last week and through today the TV has been filled with war-centered TV dramas and programs exploring the meaning of war, Japan's relations with its Asian neighbors, and the atomic bombings of Hiroshima and Nagasaki. I made my feelings on this issue known last year, and they haven't changed. Even as I write this right now, there is a program on TV focused on the Yasukuni topic with a variety of Japanese citizens and Japan's Foreign Minister. Will update this tomorrow...

UPDATE: The program I mentioned above is called "日本のこれから" and can be loosely translated as "The Way Ahead for Japan," and as I also mentioned, Japan's Foreign Minister, Mr. Aso, attended dressed in business casual and sitting among the guest "experts." It was interesting in simply observing the atmosphere of the gathering, and the majority of the discussion revolved around Japan's standing in relation to China in particular. Questions asked included:

1. Do you consider China a rival or partner in relation to East Asia?

2. Should Japan move ahead aligned more with America or Asia?

The phone poll on #1 showed most see China as a "rival," which is pretty vague and wide in definition. On #2, an alignment towards America was slightly favored over Asia. On stage, I would say most of the crowd perceived China as a partner, while answers varied evenly between Asia, America and "other" regarding which axis Japan should align its policies. Foreign Minister Aso generally took a stronger line on China and North Korea, saying that the word "rival" should not necessarily be construed as a negative thing, mentioning that competition should be cultivated between countries in Asia. There were some foreigners on stage as well, but they didn't have the opportunity to speak much and when they did, their Japanese ability hindered a clear delivery of their points or message.

A perfect example of how isolated Japanese are at home, or of how much they isolate themselves while at home, was when a college student explained her experience with fellow Chinese students in an overseas exchange program. They had confronted her on how she felt about issues between Japan and China, and were clearly aggressive in their beliefs regarding Japan's wrongdoings. The girl, from my impression, wasn't able to articulate her thoughts on the subject and took the exchange as threatening. On stage, she wondered out loud whether she could ever make friends with Chinese if they hate her from the beginning.

I think she has a point, but the problem also lies in her inexperience and lack of knowledge regarding national and regional issues. Japanese who haven't educated themselves in advance will find conversations with the more passionate Chinese and South Koreans fairly intimidating. At the same time, Chinese and South Koreans need to take different tactics in conversations with the many naive Japanese peers they meet overseas--while challenging Japanese assumptions they should be willing to educate Japanese about their respective countries without intimidation. This is a lot to ask, but necessary. Of course, this not to say that many Chinese and South Koreans aren't isolated, or don't isolate themselves.

Anyway, I recorded the program and plan to go back and watch another day and see if I can pull any more insights from the conversations regarding Japanese perceptions.

UPDATE II: For additional perspectives, follow the links below:

Big Lizards: Japanese Prime Minister Defies Asian Pressure

The Korea Liberator: Yasukuni? Here are some North Korean Dokdo Stamps!

George Will: Japan's Ever-Present Past

Japan Times: Time to Discuss Shrine's Fate and A Time to Learn from the Past

Japan FDI in China Hits Record

The Financial Times reports today that Japan's investment in China has hit a new record. This comes in the face of political posturing that has damaged relations signficantly the past couple of years. The article does a good job at articulating this context:

"Anti-Japanese riots erupted across China in April 2005 during which Japanese businesses were attacked and a virulent internet-based campaign to boycott Japanese goods undermined sales of well-known Japanese products.

"The riots were triggered by a number of factors including Japan’s bid to join the United Nations Security Council, ongoing disputes over maritime territory and energy resources, and long-held antipathy over Japan’s wartime history."

Just how big was Japan's investment? Oh, just a cool $6.5 billion:

"The Beijing office of the Japan External Trade Organisation said on Monday Japanese foreign direct investment into China rose 19.8 per cent to $6.5bn last year, driven by car manufacturers and electronics companies. Total global FDI into China during the year was around $60bn."

And leaders at JETRO, the Japan External Trade Organization, are still bullish:

"...the latest Jetro figures indicate the economic relationship between Japan and China is now sufficiently compelling and mature to overcome occasional political flare ups, according to Koji Sako, assistant director of the group’s China and North Asia division.

"Mr Sako said despite the current problems Japanese FDI into China should continue to grow this year as investments by banks and the service sector rise. “The Japanese market is flat and the population is declining. China is therefore very important,” he said.

"He said Chinese consumers were making decisions based on price and quality and added that he believed they were less politicised than the internet campaign against Japan may have led others to believe.

"Japanese companies are turning to China as a manufacturing base to benefit from low labour costs, but are also relying increasingly on the burgeoning Chinese consumer market as a destination for exports as well as goods produced in China.

"Japan’s economic recovery is still largely export-based and continued Chinese buying is acknowledged by policy-makers as a key component in ensuring the recovery is sustainable, despite occasional political tensions."

The big stickler in China's view is PM Koizumi's continued intention on visiting the Yasukuni Shrine, where Japan's war dead, including war criminals, are memorialized:

"Hu Jintao, China’s president, said late last week he would only meet with Junichiro Koizumi, Japan’s prime minister, if he stopped visiting the Yasukuni shrine in Tokyo, which commemorates Japan’s war dead."

I vented my personal frustration regarding the visits last year.

As the business networks of Japanese businesses, and those of the businesses that support those businesses, become more and more rooted in the Chinese economy, it will take a very extreme case of political disorder to undue such momentum. Although there is stubborness on both sides politically, I am most incensed at Japan's leadership for not grasping the bigger picture in regards to Northeast Asia. The American leadership should do its part in leveraging diplomatic channels with Japan to convince PM Koizumi of the right choice. To lubricate these talks, take him to his favorite hot spring, get him drunk on his favorite sake, promise him his own "Field of Dreams" in the US, and bury the hatchett on this one.

Asian Themes for 2006

Well, it has been a few days since my last post, but I've been collecting articles and opinion pieces that I really want to write or comment on. The first one is another opinion piece by Mr. Pesek, Jr. at Bloomberg. He touches on what he believes will be "six Asian themes to keep an eye on" for 2006.

1. Slow and small Chinese revaluations: Basically, expect Beijing to remain conservative on yuan revaluations despite high economic growth.

2. Higher interest rates: Rate raising the past 30 days in Hong Kong, Indonesia, Malaysia, New Zealand, Sri Lanka, Taiwan and Thailand suggests fears of stifling economic growth is over. Expect more adjustments in the face of higher oil prices and rising demand.

3. Debt may be a big story: Mr. Pesek, Jr. states "once central banks get short- term rates to more appropriate levels, bond yields may stabilize and begin drifting lower. That could offer capital gains for investors as bond prices creep higher."

4. Geopolitics may trump economics: Mr. Pesek, Jr. correlates most of the big market movements and changes the past couple years in Asia on political developments versus economy-oriented developments. My belief is that they are inexplicably tied although Japanese business seems to be doing quite well in the face of Chinese disillusionment at the political level. There's a great amount of truth to the saying "money talks and bullshit walks" in this dynamic.

5. Yen is set to rise: The logic is "Japan is recovering and foreign capital won't be far behind." I say "Go yen, go!!!" Although I am quite biased as this would make my US debt even cheaper.

6. Chinese deflation: "Lower interest rates -- which normally help avoid deflation -- may only intensify downward pressure on prices in China. That's because easy money may encourage capacity growth regardless of corporate profitability or GDP gains."

This year will definitely be interesting, and I'm looking forward to watching especially the Chinese banking sector as it complies with WTO deregulation. Foreign banks are already making moves and I believe this is going to impact China even more so than the removal of the quota regime on textiles. Having done some mid-level consulting for the Chinese banking sector on strategic management tools originating in the US, there will be organizational pain felt that will be interesting to observe and see handled by the Chinese government and private sector.

Japan as US Rival?

There have been some interesting articles and/or commentary at the start of the New Year regarding Asia and in particular Japan. William Pesek, Jr., of Bloomberg, posits in his opinion column that Japan is more rival than ally relative to the USA for 2006, and should replace China's status as rival, a designation that was never universally accepted itself.

The reasons for Japan replacing China:

  • One, more competition for global capital. At a time when stock markets are playing unprecedented roles in economies, attracting foreign capital has never been more important.
  • Two, demand for U.S. Treasuries. Japanese hold roughly $690 billion, making them the biggest investors in U.S. public debt by far. The question is whether the (Japanese) recovery encourages normally conservative Japanese investors -- that includes the central bank -- to take greater risks abroad.
  • Three, Japanese inflation. It's a classic be-careful-what- you-wish-for situation: Japan wants inflation, but what happens when it gets it?
  • Four, geopolitical tensions in Asia. Japan's return to economic health is emboldening politicians who have no intention of deferring to China. Many watched uneasily in recent years as China became the Asian growth engine Japan was once. Now, officials in Tokyo are anxious to flex their muscles, a phenomenon that may revive old animosities in Asia.

Although Japan's stock market grew 40% in 2005, it is still too early to say that the Nikkei will attract investors away from the USA to the degree it could be considered a rival. The capital markets are quite fluid and it could be argued that competition for capital from Japan is healthy for other markets in that it forces US capital seekers to get better. In addition, China's attractiveness hasn't necessarily subsided.

The second reason is nothing new and with the US economy one of the fastest growing in the Western world, it is a reasonable investment. Even if Japanese investors look elsewhere for greater gains, would it happen to the degree that Japan could be considered a rival? My opinion is that this is unlikely for 2006.

The author suggests rising inflation in Japan for 2006 could increase global volatility in capital markets, but I think markets are much more sophisticated now to reverberate dramatically in the face of Japan's "drop-in-the-bucket" inflation. Again, 2006 doesn't seem particularly capable of producing globally destabilizing inflation pressures.

The fourth reason is where I think the author may be onto something. But here one has to first establish that Japan would be a rival to what? The US's relationship with South Korea and China is complex beyond its alliance with Japan, but that alliance is accentuated when Japan rears its stubborn head in regards to easily adjustable actions such as visits to the Yasukuni Shrine in Tokyo. Although the author doesn't mention it, the US has put some pressure on Japan in the background in regards to these visits. Obviously, the US can see how ridiculous they are versus the animosity they bring upon Japan. I discuss this in a previous post.

The US is trying (emphasis on trying) to make a nice soup of relations with China, South Korea, Russia and Japan to reduce the craziness of North Korea so things go smoothly for business and other interests in the region. If Japan decides to keep pissing in the soup with trivial side issues, it could become a political rival to US interests. Eventhough China's hands aren't exactly clean, engagement is working much better these days than confrontation in getting Beijing to gradually relax its stronghold on its population and police its own mistakes.

I think what is missing on the US side is a really strong arbitrator that can really navigate the complex relationships and issues in Northeast Asia. It is impossible to take each country one-by-one, make relations better with the US, and then expect everything to work when everyone is in the same room. The Chinese know they have to work with Japanese, even if they don't like Japanese, to get up to speed business-wise, but that won't last forever. Let's hope Japan develops some more tactful ambassadors...

So in the end, I don't believe Japan will be as much as a rival as it might become a liability via its foreign relations mis-steps.

Koizumi and Yasukuni: Stuck on Stupid?

On Monday, October 17, Japanese Prime Minister Junichiro Koizumi made his annual visit to the Yasukuni Shrine, which commemorates Japanese war dead and political leaders of particularly the WWII period. Almost immediately following his action, China criticized the move in an abruptly held press conference and postponed a visit by Japan's foreign minister. South Korea joined the criticism and reiterated its opposition to the Yasukuni visits.

In my previous post on the Japan election of September 11, I mentioned that the Yasukuni visits were one area that Koizumi could address easily in improving political engagements with China and South Korea. Although Koizumi insists his visits are a private action and out of simple respect and an aspiration for regional peace, China and South Korea could care less about how Koizumi prays--they just don't want it done at Yasukuni.

With cameras anxiously covering the visits, what Koizumi states as a private matter is never so private. As a result, my opinion is Koizumi is really "stuck on stupid" in regards to this issue. There are far more critical issues to resolve with Japan's NEA neighbors than to let shrine visits disrupt any diplomatic progress. Koizumi should truly make his prayers private by finding an alternative to the Yasukuni visits, although I don't think building a whole new facility is necessary. Why not pray for peace by holding an official event commemorating Japan's Self-Defense Force and its non-offensive mission? This would be much more forward looking and in speech the Prime Minister could pay respects to the war dead of past conflicts.

Although China in particular has its own "skeletons in the closet" to deal with--past domestic abuses in regards to human rights--the best way to discuss these issues is through dialogue and the Yasukuni issue is impeding such dialogue unnecessarily.

NEA Troop Deployment to Iraq

With most press outlets focused on the U.S. military presence in Iraq, little is mentioned about the activities of other coalition forces in the region. Of these forces, the U.K. perhaps receives the most attention. But Japan and South Korea have a total of 4,100 military or defense personnel in the region of which 3,900 are specifically in Iraq.

As seen in my post on the Japan election, the fact that the Japanese Parliament allowed the Iraq deployment is an important topic for the NEA region:

"In addition to internal political opposition to the Iraq deployment -- which was agreed to only after a ferocious fight in the parliament that included a no-confidence vote against Mr. Koizumi and a filibuster -- there is the attitude of the other nations of Asia toward Japanese rearmament. The Chinese have declared themselves four-square against the Japanese Iraq deployment, for example.

Bitter memories of Japanese military occupation linger across the region. And there is no denying that the idea of a strong, vigorous, technologically advanced Japanese economy harnessed to military force could inspire fear among the neighbors."

In addition, South Korea’s deployment also occurred in the face of domestic hesitance, and in some cases, clear opposition:

The sensitive US request for South Korean troops came in September, splitting public opinion and triggering demonstrations both for and against the dispatch.

The Madrid bombings claimed by Al-Qaeda which killed more than 200 last week prompted South Korean Prime Minister Goh Kun, the acting president, to put the country on high alert against possible terror attacks.

He said countries with troops in Iraq were "main targets" for terrorist attacks.

Foreign Minster Ban said the troop deployment was not to be affected by the threat and said South Korea "stands firm and committed to fighting international terrorism."

A closer look at both deployment decisions reveals that they were quite conditional. In regards to Japan:

The advance team will set up camp in the relatively peaceful southern town of Samawah, in anticipation of the arrival of the main force of up to 600 soldiers. The full contingent, expected to arrive by March (2004), will carry out reconstruction tasks.

And for South Korea:

South Korea originally had planned to send troops to the northern Iraqi town of Kirkuk as early as April (2004). The plan was canceled amid concerns it would involve combat operations, in violation of a parliamentary mandate for peacekeeping duties only.

"In the early days, when we decided to send troops, there was a burden that our troops had to assist security directly or indirectly and take defensive actions, though the troops were only for reconstruction," Roh told Uri party members on Wednesday. "But the safety of the troops has increased as the destination changed to Irbil from Kirkuk," Roh said. He was quoted by South Korea's national news agency, Yonhap.

Seoul has portrayed the deployment as a way of strengthening South Korea's alliance with the United States and winning more support from Washington for a peaceful end to the North Korean nuclear crisis. Washington has a large troop presence in South Korea. South Korea already has 600 military medics and engineers in the southern Iraqi city of Nasiriyah.

Since those decisions, at least parts of the Japanese defense personnel have been in Iraq since January 19, 2004, and at least parts of the South Korean contingent since Summer 2003. This is a considerable amount of time and the results of each deployment reflect the level of investment made and risks taken.

Japan Self-Defense Forces

Japan_iraq

In Chrenkoff’s "Good News from Iraq" series, a couple news pieces on Japan:

"Japanese Self-Defence Forces, in conjunction with the official Japanese aid agency, will be repairing a sports stadium in Samawah, where the Japanese troops are based. "The 40 million yen [$0.35 million] project is expected to generate a large number of jobs for local people in the southern Iraqi city during the about four months it lasts.""

"And here are more details about the new power station that the Japanese government has committed itself to construct in Samawah city. It will add another 60 MW to the national power grid and more than double the electricity supply in the Al-Muthanna province."

"The Japanese Cabinet has made the decision to continue the activities of the Self Defense Forces (SDF) centering on humanitarian and reconstruction assistance by revising the Basic Plan on the measures based on the Special Measures Law on Humanitarian and Reconstruction Assistance in Iraq. Activities of the SDF such as water supply, medical services, as well as rehabilitation and maintenance of schools and other public facilities, have restored and enhanced the basic infrastructure for the life of local residents and also contributed to their job creation."

However, some have highlighted in the past suspicions about the Japanese presence:

The World Socialist Web Site has previously explained that one of the main reasons behind Japan’s decision to deploy troops to Iraq was to secure access to the country’s oil supplies. Japanese corporations are seeking rights to develop the one-billion-barrel Al Gharaf oilfield in southern Iraq. Interest in the oil field dates back to the late 1980s, when Iraq was one of Japan’s main suppliers of oil and Japan was one of Iraq’s largest trading partners.

As the Stratfor article noted, the oil field, which is estimated to produce 130,000 barrels a day, is located just 40 miles due east of Samawa. The military base is thus very conveniently located to look after Japanese corporate interests. And the 10 billion yen has been placed "in just the right hands" to ensure that local tribes will look after Japan’s oil investment in the long term, as well as Japanese troops in the short term.

While Koizumi claims that the troop deployment will be reconsidered in the event of fighting in the Samawa area, exactly the opposite is the case. The soldiers have been sent to Iraq to defend the interests of Japanese imperialism both immediately in the Al Gharaf oilfield and more broadly by establishing a precedent for dispatching troops elsewhere.

A recent Japan Times editorial from September 30 is more tempered:

The government has opted to extend by one year the Maritime Self-Defense Force mission to supply fuel in the Indian Ocean to ships of the U.S. Navy and allied nations engaged in antiterrorist activities related to security in Afghanistan. A law specifying a duration of two years—enacted after the Sept. 11, 2001, terrorist attacks in the United States—has enabled the MSDF mission so far. That law will expire Nov. 1. The legislation raised a constitutional question, and should not be extended offhandedly.

International cooperation is important for thwarting terrorism. Afghanistan took a landmark step in its march toward peace and democracy by holding elections Sept. 18 for the National Assembly and Provincial Councils, the first such elections under its new Constitution. The fact that the elections occurred with relatively little confusion was a sign of progress that strengthens the case for ending the MSDF's mission.

Regrettably, this issue was not publicly debated during the recent election campaign as Prime Minister Junichiro Koizumi chose to focus on one issue essentially -- the postal service privatization bills. The government is scheduled to submit a revision bill that would extend the MSDF mission by one year to the current special session of the Diet. Thorough discussion is demanded of legislators.
The LDP's landslide victory in the Lower House election Sept. 11 may have led Mr. Koizumi to think that a revision to the law will easily pass the Diet. The government is also most likely to choose to extend the GSDF unit's mission in Samawa, which is due to expire in mid-December.

It is impossible to contain terrorism by military means alone. Japan should expand its activities that concentrate on eliminating the social and economic causes of terrorism in cooperation with other nations under the leadership of the United Nations.

Actually, the Australian troop contingent is currently providing the Japanese contingent armed protection as Australia's Prime Minister John Howard stated in an announcement in February:

"A task force of about 450 troops is to be sent to Iraq, increasing Australia's military contingent there by some 50 per cent... The task force, which will have infantry and cavalry units as well as some 40 armored vehicles, will be assisting the roles of Japanese troops currently serving in southern Iraq...

”Their primary task will be providing security for the Japanese engineering and support forces doing humanitarian work in the Al Mutthanna province. The first (task) will be to provide a secure environment for the Japanese engineering and support forces which are making a valuable humanitarian contribution to the rebuilding process,” Mr Howard said.

South Korean Military

South_korea_iraq

The South Korean military has its own website established for the Zaytun unit in Iraq.The most recent headlines highlight the first anniversary of the unit’s deployment to Iraq:

The Republic of Korea's Zaytun Division, which is performing peacekeeping and reconstruction missions in Irbil, northern Iraq, marked the first anniversary of its deployment to the war-torn country on Aug. 3.  The division was created in February 2004 and its advance force left for Kuwait on Aug. 3 last year. In the following month, about 3,000 soldiers arrived in Irbil in several phases, after undergoing adaptation training in the desert at Camp Virginia.

Once the soldiers completed building barracks in the sprawled wilderness and installation of security equipment, they were immediately engaged in civil affairs operations for local residents and the Kurdistan Regional Government (KRG).

So far, the Zaytun Division has been mainly involved in supporting the provision of various equipment and relief materials. It has also operated a technical training center where Iraqi people were educated on various skills including computer and bakery and a class for illiterate people in an effort to give substantive support.

They have been also involved in rehabilitating infrastructure facilities for residents such as water supply/sewerage, road pavements, school renovations, and constructing town halls.

Over the past year, Zaytun troops dedicated themselves to the peacekeeping and reconstruction missions, overcoming various barriers. As a result, they managed to succeed in winning over the minds and hearts of local residents.

One of the most popular projects has been a moving clinic and technical training center:

Among the division's multi-functioning civil-affairs operations, drawing the most enthusiastic receptions among local people are moving clinics and repairs of home appliances, the division officers say. The technical training center where a total of 127 locals were educated is also among popular programs.

The division spent a total of 17.1 billion won on carrying out those missions last year and has secured 18.3 billion won of budget this year.

Based on local sensitivities, Korean forces operate as troops committed to humanitarian causes.They have succeeded in being perceived as an exemplary force in support of peace and reconstruction. The 1,115 km-long journey from Kuwait to Irbil, not to mention the massive sea-borne transportation of Korean arms and equipment to Kuwait, has opened a new chapter in Korean troops' expeditionary history abroad.

The division officers say also that they feel most gratified in that it has succeeded in creating an image as a "model troop for peace and reconstruction" as a result of concentrating efforts on providing humanitarian aids. The division is soon supposed to provide security service for the Irbil regional office of the UN Assistance Mission for Iraq (UNAMI), in addition to its civil affairs operations.

In June of 2004, an editorial in the People’s Daily of China commented on the South Korean commitments:

After the news about the beheading of Kim Soong Il was confirmed, ROK President Roh Moo-hyun made a brief TV speech on June 23, in which he apologized to ROK nationals for the matter, meanwhile he reiterated that the ROK would not change its plan to send troops to Iraq. Roh Moo-hyun said, "Although all nationals and the government longed and prayed for a safe return of Kim Soong Il, yet the tragedy still occurred, I feel very sad and deeply sorry for this."

Seoul did not yield to terrorists and continued to carry out its commitment to dispatch additional troops to Iraq in August. That was expectable. If the ROK declared troop withdrawal because of its national being kidnapped, the ROK government's reputation in the international community would obviously be greatly impaired. Particularly after the United States declared in early June that it would pull 12,500 troops out of the ROK, Chong Wa Dae came out hurriedly to mend the rift in ROK-US alliance relations. So from whatever angle, President Roh Moo-hyun was left with no room for openly making concession on the question of the kidnapping of Kim Soong Il.

However, Chong Wa Dae is incapable of protecting its people. To maintain ROK-US military alliance at the expense of the life of Kim Soong Il will, under all circumstances, cause the Roh administration to leave a moral defect in the minds of the S. Korean people. Presently, the ROK is deeply grieved over the death of the innocent citizen, and indignant at terrorists' rampancy. And the world will inevitably feel distressed over the cruel scene. Kim Soong Il's event will definitely bring a new shock to the ROK political circle. But for the Roh administration, there are not many optional opportunities. The political force opposing the dispatch of troops may find it hard to get enough votes from the National Assembly to veto the proposal on sending additional troops to Iraq, which is soon to be put to vote.

The North Korean KCNA was predictably not so charitable about the South Korean deployment:

Pyongyang, June 27, 2004—The Reunification Solidarity of south Korea reportedly made public a statement on June 19 denouncing the government and the Uri Party for reconfirming the decision to send troops to Iraq at a time when the movement against the troop dispatch to Iraq is under way worldwide. At last the government and the ruling party have opted for joining in the war of aggression in defiance of the people's demand, the statement said.

It demanded the present political camp immediately stop deceiving the people aspiring after independence, peace and reunification and withdraw the decision to send troops to Iraq.

Labor organizations and students' organizations of south Korea also published statements on June 21 rapping at the government's decision to send additional troops to Iraq. The south Korean Confederation of Trade Unions in a statement noted that the decision of the government to send additional troops to Iraq without any justification and benefit is an unjustifiable and disgraceful action.

The General Students Council of Yonsei University issued a statement declaring that the real criminal that is driving the south Koreans to death was none other than the U.S. that started the Iraqi war of aggression and the government that decided to send troops there toeing the U.S. line.

And most recently:

Pyongyang, September 22—Yun Kwang Ung, minister of National Defence of south Korea, at a symposium held at the "National Assembly" on Sept. 15 said that he would keep Jaitun unit stationed in Arbil, Iraq, next year, too, according to south Korean MBC. All the fellow countrymen are now strongly demanding the immediate withdrawal of the south Korean troops from Iraq, bitterly denouncing the south Korean military authorities for their criminal acts of serving as a shock brigade of the U.S. imperialists' war of aggression.
   
However, the south Korean military authorities' balderdash is not only an open challenge to the public demand at home and abroad but also a reckless act betraying their bellicose character again.

Openly asserting that experience of actual war in Iraq will become hard core in pressurizing the north, the bellicose elements of south Korea have conducted all military operations there under the simulated conditions of "emergency" in the Korean Peninsula.

The south Korean military authorities' assertion is no more than an open revelation of their ulterior intention to accumulate more combat experience in Iraq to provide for a war of aggression against the north.

*********************************************************************************************************************

In looking at both Japan and South Korea’s deployments, the common theme is a domestic hesitance to tackle Iraq as an independent, assertive move. Rather, American influence, whether overt or not, is the common and primary factor for deployment decisions, with Japan deploying from a point of historical passivity following WWII and South Korea deploying from a sense of obligation in face of Korean Peninsula security issues.

As seen in the news as reported from Iraq, however, distinct differences appear. The South Korean contingent has its own PR operation, including the above cited website. Japan on the other hand has reported little in terms of specific details about the interaction between Japanese SDF personnel and Iraqis, or about humanitarian and construction projects. Koizumi was known to pressure media from covering the contingent—a move some saw as a way to avoid image problems if a Japanese soldier was killed while in Iraq. However, it also fails to show the public any true good the contingent is doing as an ambassador of Japan in Iraq.

Ironically, the country where most anti-U.S. sentiment occurs, South Korea, is the most engaging in Iraq possessing one of the largest coalition contingents. At the same time, South Korea has compulsory military training for men, of which some are selected to train with U.S. forces. I’ve had the chance to meet some of these trainees and have rarely heard negative impressions in regards to the American forces. With this training in mind, and after some reported hesitance to be proactive in Iraq initially, I can imagine the South Korean forces over time would interact more with the local population and this can be seen in the above anniversary press release. The fact that there even is an "anniversary" celebration indicates the government’s effort to shine a positive light on its participation in Iraq and not bury it in the way of Japan.

With both Japan and South Korea extending the force deployments in Iraq into 2006, it will be interesting to see how their roles develop assuming Iraq develops into an increasingly stable democratic country. There will be plenty of opportunities for both countries to transfer the knowledge and technology they’ve acquired since their own experience with war, tragedy, and democracy. The Iraq experience will also be brought back with the soldiers and lessons learned will likely lead directly into related discussions of the role of the military in Japan and of the combined role of US/SK forces in ensuring Korean Peninsula stability.

Hopefully, Japan and South Korea might also use this as one area in which some common ground could be sought towards a broader NEA security agreement, including China, in the vein that Thomas Barnett often touches upon. By doing so, it would place tremendous pressure on North Korea to cave into demands for reform. Wishful thinking indeed; however, I believe it is worth pondering. An obvious sticking point would be Taiwan, but if North Korea were to succumb to the right combination of incentives and pressure, more resources and efforts could be focused on finding solutions to the Taiwan issue. In the end, it will require NEA nations to ask "What do we all seek in common?" rather than "What is it that so strongly divides us?"

Japan Election

It has been almost three weeks since the Japanese election that saw the Koizumi coalition make impressive gains against the opposition parties. Since the election there have been several articles and opinion pieces discussing the results and ramifications for the future. In particular, The Financial Times has been the best at providing the most comprehensive coverage in one location (although a subscription is required). Shortly after the election, the paper touched briefly on the response of NEA neighbors to Koizumi’s victory.

China and South Korea have both shared similar grievances that seem to remain, according to FT:

China and South Korea are still furious about the Japanese government’s approval of nationalist school books that exclude wartime atrocities by Japan’s military against their citizens. They are also angry about visits by Mr. Koizumi to the Yasakuni Shrine, which includes convicted war criminals among the dead it honours.

China in particular states:

“We would like to emphasise that the Chinese government’s guidelines for developing friendly Sino-Japanese relations has not changed at all,” China’s foreign ministry said on Tuesday. “We will continue to respect the three important Sino-Japan principles as outlined in political documents, according to the spirit of learning lessons from history while looking ahead to the future.”

Zhang Sheng, a history professor at Nanjing University, said Japanese apologies appear to be contradicted by actions such as Mr. Koizumi’s controversial visits to the Yasakuni shrine. “Verbal admissions need to be reflected in action,” Mr. Zhang said. “It makes Chinese people very unhappy. They must admit previous crimes are indeed a reality.”

But beyond the political rhetoric by some Chinese government leaders, a more thorough analysis from the Chinese perspective was provided in the People’s Daily:

It is expected that Koizumi will try to ease Japan's strained ties with China and the Republic of Korea (ROK) at the East Asian Summit to be held in November and through various other multilateral events.

But outlook for relations between Tokyo and Beijing is not optimistic, and a deterioration in bilateral ties remains a possibility.

At a meeting between heads of the country's parties held in late August, Koizumi said he would make an appropriate judgment about his Yasukuni pilgrimage and that China should understand this. He also said Sino-Japanese relations were not certain to improve even if he stops visit to the shrine.

At the meeting, Koizumi also tried to dodge taking responsibility for the years-long pause in high-level visits between the two nations.

Koizumi's habit of regularly paying his respects to the Yasukuni Shrine is widely seen by the Chinese people as being unreasonable and has caused great offence. A veteran Japanese diplomat pointed out that this is the main reason for the breakdown in high-level exchanges between the two countries.

Even as the country was going to the polls, the head of New Komeito persuaded Koizumi to take a cautious attitude on the issue.

If Koizumi becomes excessively self-confident following his victory, misunderstands public opinion and takes a tougher stance on international affairs, there is no way Japan can fundamentally improve ties with its Asian neighbours.

Evidence also shows that the country's tactics to separate its economic ties with China from bilateral political ties are doomed to failure.

The chill in political relations between the two countries has led to coldness in bilateral economic ties.

According to statistics released by China's Ministry of Commerce, between January and July 2005 the rise in Sino-Japanese trade volume slowed to 9.2 per cent on the same period of last year, compared to an increase of 28.2 per cent between January-July 2004 over the same period in 2003.

China's exports increased by 19.3 per cent and its imports by 1.9 per cent between January and July 2005, compared to figures of 23.5 per cent and 31.8 per cent respectively for the same period of last year.

For Japanese enterprises, the strong demand from China in recent years seems to have ended.

During this period, the European Union's share in China's foreign trade volume expanded to 15.5 per cent, the United States' 15 per cent, while Japan's decreased to 13.3 per cent.

In terms of its direct investment in China, Japan's position has been usurped by the ROK. In 2004, its contracted direct investment in China was US$9.2 billion, far behind the US$13 billion from the ROK.

The country's market shares in China are expected to further decline in the coming years if Sino-Japanese political ties do not make a turn for the better, and its status as a leading trading partner of China is likely to be marginalized.

We hope the new Japanese Cabinet will take insightful actions towards rehabilitating and developing ties with China.

We hope the Japanese Government and leaders, in the spirit of maintaining Sino-Japanese friendship as well as Asian stability and development, can take a serious look at the history issue and make sure its past apologies and words of self-examination to Asian victims can become concrete actions, just as Chinese President Hu Jintao called for on September 3.

And from The Financial Times on South Korea:

South Korea’s Uri party congratulated Mr. Koizumi but said he “should pay attention to voices that express worries about rising nationalism in Japan”.

The main opposition Grand National party said the victory by Mr. Koizumi “should not be the reason for him to continue his arrogant policies toward Japan’s neighbours”. One of the nationalistic Japanese school books asserts Japan’s claim to a group of rocky islets under Korea’s jurisdiction.

The Korea Times expands on these feelings through an editorial on September 12:

Many factors might have worked toward the landslide victory of Japan's ruling Liberal Democratic Party (LDP) in Sunday's parliamentary elections. Chief among them were Japanese voters' repugnance of old politics and Prime Minister Junichiro Koizumi's political sense to capitalize on that sentiment in his reform gamble. The media-savvy premier's image politics also played a decisive role. What matters more to neighboring countries, however, is how the popular politician will funnel his people's desire for changes in shaping foreign policy…

It continues by touching on the influential power and its staying power:

It is not easy for foreigners to know if Koizumi is a genuine reformist or a demagogic populist, or both. This has become all the more important, as there are reports on extending his tenure until 2007. Even if he steps down next year as scheduled, he will likely remain a ``kingmaker'' with enormous influence on his party's decision-making, given the role he will be playing in elections. Koizumi's LDP can even revise Japan's constitution almost single-handedly…

Finally, they begin to pinpoint the key issues that matter to Koreans:

Most worrisome is that Koizumi might harden Japanese nationalism and cause diplomatic friction with Korea and China. But he should see the survey that 63 percent of the Japanese people were for his staying away from Yasukuni this year, compared with only 18 percent who were for his visit. The Japanese people may want more regional and global influence, but without unnecessarily provoking neighboring countries. Peaceful coexistence with other countries can be possible only by building mutual trust.

Seoul for its part needs to enhance diplomatic efforts with increasingly right-leaning Tokyo. It is up to Koizumi how he will use his strengthened political status in his foreign policy. A major cause of concern in this regard is how President Roh Moo-hyun, who increasingly looks like _ or offers to be _ a lame duck, can deal with Koizumi, already called a president-like prime minister.

These concerns are summarized best by the Digital Chosunilbo 

With their ballot, the Japanese voters have made a clear choice for Japan's path of survival. Koizumi earned the people’s confidence because his reforms produced concrete results. Of course, his government is not without its problems. A foreign policy that dismisses Asia and places supreme importance on the United States, an implacable line on visits to the controversial Yasukuni Shrine, a zeal to amend Japan’s pacifist postwar Constitution -- all these have earned it the distrust of its neighbors. But leaving the problems for Asia's future aside, Korea's politicians and voters would be well advised to ponder the message inherent in Koizumi’s landslide victory.

What of opinion in the rest of the NEA? North Korea’s KCNA hasn’t commented directly on the election, but had this to report on September 14:

The Japan Defence Agency recently included 150 billion yen in the defence budget for 2006 for the purpose of stepping up the U.S.-Japan joint development of the missile defence system (MD). It is now actively cooperating with the U.S. in the realignment of its forces in Japan. Rodong Sinmun today in a signed commentary carried in this connection observes that Japan does such great favor for the U.S. in a foolish bid to establish military supremacy in the region with its help.    

Japan wishes to behave like the U.S. which, styling itself "the world's only superpower," is perpetrating aggression and war, military intervention and state terrorism against other countries in wanton violation of international law and order depending on its military superiority, the commentary notes, and goes on: Japan, however, is not in a position to behave like that right now. It is registered as an "enemy state" in the UN Charter as it was a defeated one. It has not yet shaken off this disgrace.

Yet, Japan calculates that it can act like the U.S. after emerging a military power, backed and patronized by it, and holding military supremacy in the region. That is why Japan is so gracious in its military service to the U.S. and stints no money for arms build-up.    

Japan is posing ever-increasing military threat to the Asia-Pacific region. No one can vouch that the destructive war started by Japan in the first half of the 20th century would not reoccur in this century.    

Now is the time to heighten vigilance against Japan. It is an anachronistic delusion and a strategic error of Japan to work hard to establish military supremacy in the region and realize its ambition for reinvasion with the U.S. help.

In Taiwan, Li Ming-Juinn of National Chengchi University had the following to say in an editorial translated for the Taipei Times:

Koizumi is one of a small number of strong post-war prime ministers, and his victory indicates a longing for a leader to push through reforms. Japanese society now suffers from a lack of focus, which could arise from public dissatisfaction with Japan's economy and political corruption. It could also be caused in part by anxieties over the pressure from the economic book in neighboring nations, which has underlined their own loss of national status and lack of direction. But another result of Koizumi's tough stance could be a more aggressive foreign policy, and this is something that should also concern us.

Although there hasn’t been much specific election reaction from Russia, often associated more frequently with Europe than NEA these days, in August the Asian Times provided some background on the Japan-Russia relationship:

As Russia has failed to secure any significant economic commitments from Tokyo, notably on a Japan-bound Pacific oil pipeline, the Kremlin has lost all interest in resolving its long-standing territorial dispute with Tokyo any time soon. Indeed, Russia has removed Japan from its Asian diplomacy priority list.

A top official has bluntly told Tokyo to forget about the disputed Kuril Islands. President Vladimir Putin's special envoy in the Far East, Konstantin Pulikovsky, said this month that "Russia does not have any problem of Kuril Islands", meaning it is happy with the status quo.

The "so-called territorial dispute" is a sort of publicity platform for Japanese politicians, Pulikovsky claimed. "It is absolutely their internal affair, we have nothing to do with it," he said. In the meantime, the Kuril Islands will become "a beautiful corner of prosperous Russia", Pulikovsky said.

Pulikovsky also said that Russia and Japan had good relations, particularly in the economic and tourist spheres, without a peace treaty. Japan has made the return of the Iturup, Kunashir, Shikotan and Habomai islands, which it calls the Northern Territories, a condition of concluding a peace treaty with Russia. These islands passed to the Soviet Union after World War II.

Furthermore, this has nudged Russia to continue strengthening investment ties with China:

On August 10 Pulikovsky approved a blueprint for developing the Kuril Islands. On August 11, Russian Defense Minister Sergei Ivanov suggested to raise funds to develop the islands. The hardening of the Russian stance follows a softening just last spring. At that time, Japanese sources floated the possibility of a compromise over the disputed islands, arguing that better relations with Moscow were essential at a time when Japan's relations with China and South Korea were worsening.

Unlike ties with Japan, Russia's investment cooperation with China has been booming. Just within the past three months, Russia and China have signed investment agreements totaling more than $2 billion. On the other hand, by the end of 2004 Japanese total direct investment in Russia amounted to less than $200 million.

As Moscow becomes more disenchanted with what it perceives as Tokyo's obduracy, China could replace Japan as the main beneficiary of a trans-Siberian oil pipeline.

Before drawing any conclusions from the various perspectives above, it’s important to compare, from a foreign policy perspective, the winning manifesto of Koizumi’s political party, the LDP, and the losing manifesto of the opposition party, the DPJ:

LDP Manifesto

·         Upgrade Defense Agency to ministry

·         Amend Self-Defense Forces Law to enable SDF to play role in multinational operations

·         Focus on resolving outstanding issues with North Korea, with possibility of economic sanctions

DPJ Manifesto

·         Rebuild trusting relationship with China

·         Sign FTA with South Korea

·         Establish national secular memorial dedicated to war dead and people who died performing diplomatic duties overseas

·         Pull SDF out of Iraq city of Samawah by end of December

·         Consider economic sanctions against North Korea

The primary difference between the above two manifestos is that the DPJ would have preferred to “ramp down” some of the trends toward a more assertive Japan—raising the profile of the Japanese Self-Defense Force through changing the status of the Defense Agency and deploying troops to zones of conflict. In fact, it could be considered to favor a more “sensitive” foreign policy by validating the claims against Japan made by China and South Korea on the subjects of historical textbooks, Yasukuni shrine visits, and military-related constitutional amendments. 

In Japan, newspaper opinion focused on domestic issues first and foreign policy issues second. The following is from The Daily Yomiuri on September 13:

How will the Koizumi administration move to resolve important issues, such as reform of the social security, fiscal, and tax systems? And how will the administration deal with diplomatic issues confronting Japan? Koizumi should display strong leadership and make full use of the gigantic ruling coalition.

He should ensure the postal privatization bills are passed in the special Diet session as quickly as possible and do his best to get on with solving more important issues.

There are many pending issues on which the Koizumi administration needs to make decisions to expedite the compilation of the budget for next fiscal year, including the triple reform of local government finances, plans for a new medical system for the elderly, and personnel costs for government employees.

Looking at the long-term social and economic effects the issue will have on the nation, the highest priority for the government is to tackle the revamping of the social security system.

Social security expenses, including those related to medical services and pensions, are ballooning year after year. With the rapidly aging society and declining birthrate leading to a decline in total population, it would be difficult to maintain the social security system as it stands today.

If the government sits idle and leaves the system unchanged, "universal social security coverage" and "universal medical insurance coverage" may collapse.

The Daily Yomiuri also had this to say on foreign policy in the same editorial:

Japan's diplomatic and security situations are uncertain and unstable.

Improving bilateral ties with China, which is rapidly emerging as an economic and military power, is vital.

North Korea's nuclear development program poses a serious threat to the nation's safety. The six-way talks aimed at persuading North Korea to abandon its nuclear ambitions will resume Tuesday. Japan should deal with the issue tenaciously, in cooperation with the United States.

The Antiterrorism Law, drafted to empower the Self-Defense Forces to refuel other countries' naval vessels in the Indian Ocean, will expire on Nov. 1. The government also needs to make a decision soon on whether to extend the deployment of Ground Self-Defense Force troops in Iraq or to pull them out of the country when their current commitment expires on Dec. 14.

In making these decisions, the Koizumi administration needs to carefully consider the current situations in the areas concerned, Japan's role on the world stage and its bilateral relationship with Washington.

***************************************************************************

In essence, and as other commentators have noted, Koizumi’s political victory displays a degree of decisiveness not previously seen in the make-up of Japanese leaders. Although, for this election, much of this decisiveness has been displayed in response to domestic issues, the decisions Koizumi has led in terms of engaging North Korea and raising the profile of the Self-Defense Force through its Iraq deployment have also been unwavering. It is exactly this decisiveness that concerns China and the Korean Peninsula in particular because it harks back to an era when Japan was just as decisive in following a dangerous and destructive ideology towards trying to establish the Greater East Asia Co-Prosperity Sphere, which led to its defeat in WWII.

Having spent time exploring the opinions of acquaintances in both China and South Korea, their populations have gained confidence through the visibly growing economic strengths that have resulted in increased respect by the outside world. Thus, national pride is visibly on the rise in both China and South Korea and it is only natural that a similar rise in Japanese nationalism would create regional friction.

Although Japan should not, in my opinion, suppress itself from world engagement because of its grievous mistakes leading up to and during WWII, I believe the current leadership must display decisiveness in addressing the condition of the populations that are its neighbors. This condition is very easy to explain. The significant story in the lives of the grandparents of today’s young people in Northeast Asia is the Japanese occupation of the early 20th Century. The significant story in the lives of the parents of today’s young people in Northeast Asia is the liberation from Japanese occupation and subsequent struggles of establishing sovereign governments. Thus, in China and South Korea especially, having grown up with the stories most predominantly full of hardship and pain, it is no wonder that today’s young people can feel negatively toward Japan.

How can this feeling of negativity be overcome? It is my opinion that the young people of Northeast Asia not from Japan require such a significantly positive experience interacting with Japan that it could begin to cultivate a more understanding view. Friends of mine in South Korea and China who have studied overseas in Japan can sometimes claim such an experience and subsequent change in perspective. Thus, Japan should decisively begin to develop some programs that ensure its young people are out interacting with the younger generation of Chinese and South Koreans, providing that generation with a more positive story of Japan to pass down to their children and their children’s children into the future. Japan cannot wait for the governments of China or South Korea to dictate to its people the positives of Japan—they are lead by politicians who are still too touched by Japan’s past, negative exploits. It should not even blame China or South Korea for stoking the fires of nationalism and anti-Japanese sentiment. Rather, it should take the high-road and establish genuine, NEA exchange programs for the political, social and business leaders of tomorrow. In addition, this new attitude would shape decisions made on history textbooks and the Yasukuni visits, probably the two issues easiest to address quickly and without domestic repercussions.

:

My Photo

LinkedIn


  • View my profile on LinkedIn

Google Search

  • Google

    World Web
    Asia Logistics Wrap