Bold Gamble
China’s decision to issue a record $411 billion in special treasury bonds in 2025 marks a significant shift in its fiscal strategy, underscoring the urgency of addressing a challenging economic landscape.
Amid geopolitical stress in the Northeast Asian region, some recent developments show signs of some optimism that the faultlines can be plugged if sincere efforts are made by the stakeholders.
Amid geopolitical stress in the Northeast Asian region, some recent developments show signs of some optimism that the faultlines can be plugged if sincere efforts are made by the stakeholders. To justify this statement that might appear sweeping, some recent facts need to be kept on the table. First, there is a thaw in the long troubled Japan-South Korea relations.
Second, while Japan and China are economically and culturally tied, both are committed not to allow their differences to be blown out of proportion despite China’s expansionist designs. Third, Japan, China and South Korea are willing to work together to manage the North Korean weapons problem, though unlikely to prevent it. Fourth, despite the US-China problems, both have kept the dialogue channels open.
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The most significant of all these is the recent meeting in the South Korean city of Busan between the foreign ministers of Japan, South Korea and China on 26 November 2023 to work towards a summit meeting of the top leaders of the three countries soon. This article makes an assessment on what transpired at Busan and the significance of the talks.
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The talks between Japan’s Foreign Minister Yoko Kamikawa, South Korea’s Foreign Minister Park Jin and China’s Foreign Minister Wang Yi were amicable but their success shall be measured by whether the three can resolve sticky issues that have affected relations between the countries.
This was the 10th trilateral foreign ministers’ meeting. Interestingly, the US Secretary of State Antony Blinken was not expected to be physically present as he is not a part of the trilateral, but the US has deep interests in the peace and stability of the region. Therefore, Blinken timed an important call at midnight on 25 November in Washington to speak with Kamikawa and Park Jin. What transpired in Blinken’s talks with Kamikawa and Park remains unknown as nothing was revealed but the call did demonstrate Washington’s keenness on the success of the trilateral talks.
Though Park is a veteran with rich experience in dealing with American diplomats and politicians, Kamikawa is relatively new to the job as she became Japan’s foreign minister in a Cabinet reshuffle in September 2023. But to her credit, she had already met Blinken twice in New York and Tokyo and thus the confidence level was not found wanting.
Both Japan and South Korea are treaty allies of the US and endorse the American position on a free and open Indo-Pacific. Blinken’s call was probably to brief both Kamikawa and Park on how to handle China and offered support to the effort to take diplomacy to the summit level.
As it transpired, the three foreign ministers announced on 26 November that a leaders’ summit involving Chinese President Xi Jinping, Japanese Prime Minister Fumio Kishida and South Korean President Yook Suk-yeol would take place “as soon as mutually convenient.” No date or location was announced, however.
Though the South Korean court ruling on the comfort women, asking Japan to pay compensation for wartime atrocities, threatened to dampen the spirit of the foreign ministers’ talks, Yoon clearly indicated not to interfere in court matters and Kamikawa termed the ruling as “unacceptable”. But there was no clear damage done to the talks. Another promising indication came from Kamikawa’s announcement to seek highlevel talks on the economy with China. This was definitely welcome news for Xi as he is seeking international support at a time of slowing growth. ‘
It may be recalled that after the outbreak of the Covid-19 pandemic in Wuhan, many Japanese, South Korean and even some European companies had either shut down business operations in China or relocated to other overseas destinations.
This had hit the Chinese economy hard. As a result, exports continue to be in decline. Many international companies still continue to fear having business operations despite the fact that the pandemic has ebbed. The news of respiratory problems of many people has created new alarm in China and other countries too.
The experience of combating the Covid-19 pandemic can help in coping with this new challenge. If China expects to reap some economic rent from the return of Japanese businesses, Beijing has to take some corrective steps in its policies. For example, China has detained several Japanese executives on spurious charges relating to allegations of espionage.
Beijing needs to introspect on this serious matter and take corrective measures through appropriate diplomatic channels to stop the issue from blowing over beyond control. Japan is not likely to take this issue lightly and if Beijing does not act fast, the issue may not be any different from the abduction of Japanese nationals by North Korean agents in the 1970s and 1980s, an issue that remains unresolved. Notwithstanding such thorny issues, President Biden met Kishida and Xi separately at the APEC summit in California in mid-November and discussed issues of mutual concerns.
Though Biden expressed satisfaction on the improvement of Sino-US relations following some constructive and productive discussions, only a naïve observer would believe that the talks between Biden and Xi reflected real warmth between the two countries.
Any such suggestions were immediately put to test when Biden warned Beijing that if it contemplates invading Taiwan with a view to integrate with the mainland, that would be extremely costly for China and dangerous for the world. In light of this, the significance of the Biden administration’s decision to deploy a nuclear-powered aircraft carrier, the USS Carl Vinson, to take part in drills alongside the navies of Japan and South Korea must not be lost sight of. Containing the North Korean threat also required coordinated efforts, which the leaders of the three countries discussed.
Kamikawa was candid in observing that North Korea’s unprecedented ballistic missile launches constitute a grave and imminent threat to regional security and pose a serious challenge to the international community.
Wang Yi’s reply to Park Jin’s suggestion in Busan for Beijing to play a constructive role in pressing North Korea to stop additional provocations did not seem reassuring to the rest of Asia as there was no clear commitment on China’s part to rein in Pyongyang. Wang Yi’s suggestion for three-way cooperation between the three countries to resolve the North Korean issue was just an eye wash bereft of sincerity.
(The writer, a leading expert on Japan, is a former Senior Fellow at Pradhanmantri Memorial Museum and Library, New Delhi. He was ICCR Chair Professor at Reitaku University, Japan)
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