Power Shifts and Policy Dilemmas in Northeast Asia

At the beginning of a new year it should be useful to take a fresh look at the power posture of each of the major powers active in Northeast Asia, considering the impact of their different approaches. A year ago I gave a shorthand description of the power posture of each of them in an oral presentation to the China Forum organized by the Asan Institute for Policy Studies. This article drawn from remarks in November 2013 at the Asan Beijing Forum, updates that overview, and assesses dilemmas that are being posed for policy decisions in the region. It points, as many well recognize, to deterioration that has occurred over the course of the past year.

In the earlier overview I said rising China is beginning to flex its muscles, normalizing Japan is clinging to the United States, a rebalancing United States is beginning to retrench, a rejuvenated Russia is trying to return as a major power, South Korea is venturing to rely on “trustpolitik,” and North Korea is attempting tandem development of its economy and nuclear weapons. The shifting power relations, I asserted, were causing increased friction and preventing countries in the region from working together to resolve serious problems. A year later the situation has worsened. As incidents over the last year have demonstrated, it is nearly impossible to make progress in Northeast Asia without adequately addressing the accumulated legacies of the past. New leadership in late 2012 and early 2013 gave observers some cause for optimism, but the past weighs more heavily on them than on prior leaders.

From time to time, we are reminded that there are much larger emerging problems—global warming, the use and proliferation of WMD, growing resource scarcity—that can only be tackled through cooperation and coordination among the countries in this region (and throughout the world). Getting beyond the legacy issues would allow us to keep our attention on the challenges critical to the region and world’s future. That is not happening in East Asia.

National interests, perceived external threats, and domestic politics have caused the countries of the region to turn further inwards over the last year. As they have done so; they also have been growing more suspicious of each other. These concerns should not be lightly dismissed; the overall trend towards more conflict and less trust and cooperation is extremely worrisome. Despite the very difficult nature of the problems we face, we are all better off when we engage in more cooperation not less. Solutions come more readily when we share a greater amount of trust not distrust. This article reviews where we are today and where we seem to be heading, focusing on the challenges and dilemmas of the major regional actors: the United States, China, Japan, Russia, and North Korea, and it ends with specific attention to the South Korean perspective, put in the context of the changing context of how the major powers are behaving.

The United States

Several signs suggest that the global power of the United States could be waning, fueling debate about the decline of the American empire. In August 2012, the US government narrowly avoided bankruptcy over the issue of increasing its debt ceiling, and the country’s sovereign credit rating was downgraded for the first time. In October 2013, the deadlock in Congress forced a temporary shutdown of much of the federal government and also meant nearly defaulting on the national debt. This fall, President Obama’s decision to pursue military action against Syria as he tried to rally congressional and public support in response to the Bashar al-Assad government’s use of chemical weapons proved to be a major foreign policy blunder, one that not only undermined his leadership but also American credibility abroad. The recent NSA scandal, including the bugging of European leaders, has strained US relations with its European allies. These have all been viewed as signs of a declining power.

Nonetheless, America’s GDP is still more than two times larger than China’s, whose economy is the world’s second largest. Militarily, the United States is second to none when it comes to its “projection capability” of gathering global intelligence and delivering battleships, troops, and precision weapons to any part of the world. Also, it still boasts the best environment in the world for promoting creativity and individualism. As a result, it is still No. 1 in the areas of science and technology as well as research and development. The policy dilemma for the United States is the fact that, despite its avowed policy of “rebalancing to Asia,” it has to pay the lion’s share of its attention to the Middle East, which has fallen into turmoil, while also keeping its eyes on Europe. At a minimum, it has to balance its policy weight towards Asia with the other key regions of the world. Furthermore, the United States will continue to face its budget squeeze and the double deficit in the balance of payments, which could mean that its military strength and continued presence in Asia will face strain. Another factor that may cause increased pressure is the discussion of cost-sharing agreements between the United States and its allies to readjust the burden of the US military presence in Asia. These points do not mean a rapid change in the power balance, but they point to the need for adjustments.

The territorial disputes that plague East Asia have put the United States in a difficult situation. The problem is that the dispute between its allies, Japan and Korea, has the potential to weaken the alliance system of which the United States serves as the lynchpin. And there is also the additional possibility that the United States might be dragged into a clash between its ally Japan and a non-ally China. For strategic and geopolitical reasons, the San Francisco Peace Treaty of 1951 that officially concluded World War II failed to settle the regional territorial issues. The historical and territorial issues that were swept under the rug in the interest of US–Japan cooperation against the Soviet expansionist threat in the post-World War II years have not been resolved and have instead perpetuated the reasons and bases for today’s claims and counterclaims. In any event, the United States has maintained a strict neutrality and non-involvement in the Korea–Japan territorial dispute, supporting Japan in its “normal state” drive, and supporting Korea, if obliquely, on the “history” issue. This balance is becoming increasingly difficult to maintain as Japan’s view of a “normal state” turns in a more assertive direction and Korea’s frustration over the “history” issue keeps intensifying.

On the North Korean nuclear issue, the United States is fatigued by the problem and is disappointed that the North Korean regime has not demonstrated a genuine desire to come back to the Six-Party Talks nor shown a clear sign of sincerity and commitment to denuclearize itself. The United States would also like to see the major burden of dealing with the North Korean nuclear weapons be taken on by the countries most directly threatened by them, i.e., China and South Korea. But North Korean nuclear weapons and missile technology and capability are advancing fast enough to directly threaten US territories, and in the absence of a viable alternative, the United States may seriously need to reconsider its conditions for returning to the Six-Party Talks. In fact, some former senior officials such as Robert Gallucci and Stephen Bosworth have recently urged the United States to do just that.


In Asia, “the Rise of Asia” is understood as synonymous with “the Rise of China,” although it is true that other countries in Asia such as India, Indonesia, and South Korea are on the rise as well. China overtook Japan in GDP three years ago—and is likely to pass the United States in less than 20 years’ time. There is debate about whether China’s rise poses more of a threat or an opportunity to other countries in Asia and the rest of the world, whether China is a revisionist or status quo power, and whether China’s rise is constructive or destructive for the regional and global order. This debate overshadows the debate on US retreat or rebalancing.

On the question of China being a revisionist power or a status quo power, track records and assessments vary. Some regard it as a revisionist power pointing to its disagreements with the United States and Western Europe in the IMF and G20 and actions that show dissatisfaction with territorial dispositions from the post-World War II era. Others regard it as a status quo stakeholder pointing out that China is interdependent with the United States in financial and trade matters. China seems to have as much stake in the economic system and configuration as one would expect from a rising power. This would make China more of a status quo power than a revisionist power. This was the mainstream view in recent decades, if less so of late.


On the question of whether China’s rise is disruptive or constructive to the regional and global order, I think there are elements of both. Clearly, China’s rise cannot happen without changing the existing order. The question is whether the change that takes place is a rather smooth, peaceful, and constructive process or not. It will depend on how the other countries (the “status quo powers” in particular) respond to China’s rise, and how China manages and handles its rising power. In 2013 there were signs of joint management, as in the Xi Jinping-Obama Sunnylands summit, and of deepening tension, especially in Sino-Japanese relations.

There are two issue areas where China has an important role to play to assure peace and stability in the region. One is the North Korean nuclear issue and the other the rise of nationalism and territorial disputes. Since the North Korean nuclear issue was widely discussed at the November forum and also in this issue of The Asan Forum, I only touch on the subject briefly. China has taken up the dual role of shielding North Korea from international condemnation and restraining North Korea from further provocations. But clearly, a North Korea armed with nuclear weapons is not in China’s own interest. China has to make a decision as to whether it wishes to tolerate North Korea continuing to develop, possess, and expand its nuclear arsenal and for how long. Even though China seems to have in recent months increased its pressure on North Korea to resume the Six-Party Talks, there is no indication that China has made a decision to go all out to put a lid on North Korea’s nuclear weapons development much less completely denuclearize North Korea. It makes other countries wonder what China’s game plan is regarding North Korea’s nuclear weapons.

China has a crucial role to play in this regard as it is the only country that can make a material difference in North Korea’s behavior and policy. In coordination with the rest of the Six-Party Talks countries, China should do its utmost to denuclearize North Korea, as a North Korea with nuclear weapons is a direct threat to China itself and could lead to an arms race in the region, including further proliferation of nuclear weapons. The failure to devise a policy and formula that will lead to North Korea’s complete denuclearization would likely prove to be a serious loss and danger to China in the years to come. This logic has been the focus of the discussions with China about North Korea for two decades, but it is rarely acknowledged in Chinese commentaries and still appears to be secondary to other Chinese considerations.

Regarding nationalism and territorial disputes, China’s major policy dilemma is when to start flexing its muscles. Deng Xiaoping’s 20-character strategy says: “善于守拙, 決不當頭, 韜光養晦, 抓住時機, 有所作爲” (Be good at maintaining a low profile; never claim leadership; hide our capacities and bide our time; choose the right time; actively do it if something must be done). China has to decide when is the right time and what is the “something” that must be done. At the moment, from one perspective China seems to be having difficulty in finding the right mix between hiding its capacities and biding its time, and from the other perspective it is actively displaying and exercising its newly won power. A related dilemma for China is to choose between nationalism and a revisionist stance on the one hand and internationalism and a status quo stance on the other. During the past decade, China has been urged, particularly by the United States, to act as a “responsible stakeholder.” In fact, China has benefited greatly from the existing international economic and trade system. China holds an enormous amount of US treasury bills, for example. Being dependent on the world market and particularly interdependent with the United States in financial matters, China can ill afford to seek a radical change in the global economic order or do anything that would wreak havoc on the global economy. It is assumed that China concurs.

China must decide how to peacefully manage, if not resolve, its territorial disputes with surrounding countries while being extremely careful and cognizant of the US presence in the region. This includes not only US military power but also the ongoing development of “comprehensive, future-oriented” alliance relationships. There is reason to doubt that China shares this logic, given its increasing criticism of the US alliances and defense partnerships.


In recent years, Japan seems to be increasingly reverting to retrogressive ways. Many leading Japanese politicians are exploiting the public’s sense of anxiety and insecurity to further their nationalistic agenda. Public sentiment is rising in Japan that the deal it made after the Second World War as a defeated power, including the Peace Constitution and the renunciation of military forces, is an anomaly that should be corrected. Japan, this argument goes, must again become a “normal state” with the right to a military and to the exercise of collective self-defense. The slowdown of the Japanese economy for more than two decades has caused the Japanese people to develop a sense of relative decline vis-a-vis the other Northeast Asian countries, a sense that seemed to have been given further impetus as a result of the great tsunami-related disasters of March 2011. Such sentiments can easily stimulate a more nationalistic and assertive posture. Prime Minister Abe’s visit to the Yasukuni Shrine at the end of the year was widely interpreted as proof of Japan’s intensified move in this direction.

The sense that Japan’s neighbors are attempting to take advantage of its relative decline and beginning to look down on it is felt not only among ultranationalists but also the larger population, especially younger people. They question why those generations of Japanese who had nothing to do with Japan’s pre-1945 imperialist and militarist behavior should feel responsible for things that happened more than 70 years ago. They also ask: Why should Japan continue to maintain a constitution that hinders, if not prohibits, it from maintaining regular defense forces and exercising normal collective self-defense? These attitudes provide the backdrop for leaders to manipulate public opinion in pursuit of more assertive ambitions.

Japan has found a useful way of appealing for entry into “normal state” status through its policy of restoring Japan’s right of “collective self-defense.” It is a concept endorsed by the United Nations Charter and a policy supported by the United States. A factor that both facilitates and complicates Japan’s move to restore its “normalcy” is the territorial disputes in which it is involved with China, Korea, and Russia. Even as Japan pushes back against the territorial challenges from China, its government recognizes that there are limits to what it can do. Russia is still a military superpower, and China is becoming an economic superpower.

Japan’s immediate neighbors, which were victims of Japanese imperialism and militarism, believe that despite expressions of regret and apology, expressions they see as superficial and lacking in sincerity, Japan has not fully accounted for its misdeeds and the damage it caused. Koreans are particularly upset by Japan’s refusal to acknowledge officially its wartime sex slavery and to apologize to and compensate the victims, who are euphemistically called “comfort women.” Japan has to choose between “breaking free from the postwar regime” and treading more gingerly and constructively with the rest of the world by making a complete apology or alienating completely its Asian neighbors and isolate itself from the international community. This is even in spite of or despite the current Abe government’s brave talk about Japan’s return to a “normal state,” changing the “peace Constitution” and revising Japan’s two standing apologies to other Asian nations, the 1993 Kono Statement and 1995 Murayama Statement, which relate to World War II and the “comfort women” war brothel system. In short, it will have to choose between the past, the present, or the future.

For now, as in the past, Japan has decided to cling to the United States as an ally and a protector of its interests. Japan is trying to bring the United States closer still by emphasizing the rising threat of China and the need to contain it militarily if not economically. However, there are limits to how far the alliance with the United States can compensate for Japan’s lost standing in the eyes of its neighbors. The United States is concerned lest the worsening friction between its key allies—Japan and South Korea—should weaken the alliance system for which it is serving as the lynchpin if not the kingpin. It was pressing for Japan to find a way to re-launch diplomacy with South Korea before being disappointed by Abe’s Yasukuni visit.


Russia intends to return to Northeast Asia as a major power, not so much as a rival to the United States or China but as a balancer between these two de facto G2 powers. While it has cooperated with China on a selected basis in issue areas such as Syria and Iran, and through international groups like the Shanghai Cooperation Organization or BRICs, Russia remains wary of the rapid rise and growing military power of China. It welcomes the US “rebalancing to Asia” as it helps to check China’s power and diverts some of the US development of strategic weapons capabilities, above all missile defense, from Europe to Asia.

On the Korean Peninsula, Russia’s interest is predominantly economic, trying to sell energy, to develop the Russian Far East, and to build infrastructure including railroads, a gas pipeline, and ports. President Vladimir Putin visited South Korea in November for a summit with President Park Geun-hye, where they discussed such practical issues as reinvigorating FTA negotiations, the Trans-Siberian Railroad and its linkage to the Korean Peninsula, modernization of the Najin Port in the northeastern part of North Korea, development of North Pole routes and ports in the Russian Far East, and construction of gas pipelines from Siberia to the Korean Peninsula and beyond. On the North Korean nuclear issue, Russia generally has played a useful role, trying to induce denuclearization of the entire Korean Peninsula and joining the sanctions resolutions of the UN Security Council when North Korean violations occur. But it also wishes to maintain a degree of leverage on North Korea and thus keeps some distance from the US-Japan-South Korea trio on how much pressure to apply.

Russia’s policy dilemma is partly economic and partly geopolitical. The falling price and demand for energy is straining Russia’s plan to lift up its economy. Additionally, a series of domestic obstacles, including corruption and the poor state of the rule of law, have presented other problems. With regard to China, Russia has to maintain the appearance of camaraderie while working with the United States and others in checking and balancing China. This and other diplomatic objectives will require a careful strategy and the ability to balance what appear to be conflicting interests. So far, Russia has not found a suitable regional strategy.

North Korea

Since the death of Kim Jong-il on December 17, 2011, North Korea has exhibited a zigzag policy, oscillating between hard-line and soft-line stances. Is this the result of a carefully considered strategic plan or loss of direction by the leadership? The indications are that, rather than a carefully thought-out strategy, it probably reflects the unsettled power structure under Kim Jong-un who has to rely on a coalition of more economic-focused and pragmatically minded, party-oriented, and family-based civilian supporters on the one hand and more hard-line, military-oriented, and xenophobic military leaders on the other. For example, North Korea’s bellicose stance of early 2013, with nuclear threats to the United States and provocations to South Korea, and the closing of the Kaesong Industrial Complex, was probably attributable to the influence of the hard-line military leaders. The mellower stance taken since August 2013 could be attributable to reassertion of the influence of the more pragmatic cohort of Kim Jong-un. In addition, the restraining influence of China has probably played a critical role. With the fall of Jang Song-Thaek at year-end, the military side appears to have gained, but in his 2014 New Year’s message Kim Jong-un stressed improved ties with South Korea. Ties with China have been set back without a clear policy alternative.

North Korea should be made to understand, and will most likely realize eventually, that its avowed goal of tandem development of the economy and nuclear weapons is not achievable. If, as a young man, Kim Jong-un is able to gain a long-range perspective, he will probably realize the need to do something about the economy and make a decision in its favor. For this, he will need a sense of security that only two countries, the United States and China, can provide. Even after that, of course, making the “stark choices” will require that he realize its necessity and possess the capability to persuade his own supporters to make the required reforms, particularly in the military. The two major powers, together with other concerned countries, particularly in the Six-Party Talks, will have to help Kim Jong-un with these tasks.

South Korea

South Korea has important relationships with nearly all the countries in the region but is increasingly finding it difficult to balance good relations with all of them. The inward turn towards nationalism and dominance of domestic politics, and rise in mistrust among the countries, has caused many difficulties. In particular, South Korea has several key dilemmas related to its relations with Japan. It has to placate the general public, the media, and even the courts, which demand that the government take a super hard-line stance. They tend to construe any move toward “normalizing” the state and breaking free from the postwar regime, as a dangerous revival of the militarist, imperialist past. Hence, the government has no leeway in dealing with the “collective security” issue even when key states such as the United States, Australia, the United Kingdom, and even Russia give the nod to Japan on the issue.

The rightward movement of the Abe administration has made it difficult if not impossible for the Korean government to reconcile and embrace Japan. Whoever is more at fault, the ill feelings between the leadership of the two countries are having a spillover effect on the population at large, making Japanese people increasingly wary of Korea and Korean people increasingly resentful of Japan. The United States laments that there is little appreciation in South Korea that proposed changes in Japan’s defense posture are occurring strictly in the context of the US-Japan alliance, or that this alliance plays an essential role in the defense of the ROK. South Korea is concerned that, by being perceived as intolerant and suspicious of any move toward normalcy on the part of Japan, it is also forfeiting its own freedom of action because it could be seen as intolerant, narrow-minded, and self-defeating. But the Korean leader’s rejection of bilateral summits that might be suggested by the Japanese side curries favor with younger students, hot-tempered journalists, and ordinary “netizens” who have strong views against foreign governments. After Abe visited Yasukuni, a summit was out of the question.

To make things even more difficult for the government to reconcile with Japan, the independently minded South Korean courts have handed down decisions, the execution of which would provide an additional burden for improving Japan-Korea relations and make it difficult to repair the relationship. These court decisions, regardless of their merit, have the effect of tying the government’s hands in dealing with issues related to Japan while galvanizing negative feelings in Japan toward Korea and Koreans. How much deeper and how much longer will this unfortunate strain between the two inevitable neighbors continue? What will turn the tide and bring the two countries and peoples closer together again? These are questions that sensible people in both countries are asking with no answers in sight.

On the history issue, Korea generally is on the same side as China on Japanese handling of its past misdeeds, but there is a dilemma of how much it should collaborate with China in pressuring Japan to account for, show remorse toward, and apologize for its past of some 70 years ago. It has many reasons to work with Japan, as with China, on a wide range of issues, including the economy, security, and diplomacy. Also, the appearance of overt and excessive collusion with China vis-a-vis Japan would result in further negative reaction from Japan and the consternation of other allied and friendly countries such as the United States. The choice for South Korea is to be circumspect in forming a united front with China vis-a-vis Japan.

South Korea’s other policy dilemma relates to its position between China, the rising power, and the United States, the status quo power. It has a formal alliance with the United States, dating from 1953, and it has a “strategic cooperative partnership” with China, presumably meaning that the two would cooperate on strategic matters, including on third countries and regional relationships. With the United States, South Korea is trying to make the alliance more comprehensive, which means reaching beyond defense to include the economy, values, culture, and diplomacy. But for South Korea, China is also the largest trading partner (with a trade volume that is by far larger than that with the United States and Japan combined). Chinese cooperation is indispensable in dealing with the North Korean nuclear issue. While maintaining the closest cooperation with the United States, South Korea can ill afford to infringe on what China considers its “core interests.” The result is on some major issues, e.g., missile defense, TPP, and human rights, South Korea has to take the Chinese position and interests into consideration. South Korea is often in a delicate situation having to deal with the two superpowers, which have both common and conflicting interests.

As it is being pulled in many different directions, South Korea faces mounting pressure to balance among all three major powers—the United States, China, and Japan—but that is proving increasingly difficult. It is also facing a major dilemma in how to balance between the past, present, and future. Given the limits of its geopolitical position as a middle power, in the end it may find that the only real choice it has is cooperation, balancing, and peaceful resolution of disputes through trust-building and compromise.


The description of policy choices and dilemmas of the major actors in Northeast Asia as we enter 2014 has not been optimistic. Over the last year the outlook in Northeast Asia has grown bleaker. However, that does not leave us without any hope. There is uncertainty in US–China relations and concerning the North Korean nuclear problem—the one issue that can only be resolved through the involvement of all stakeholders. However troubled relations with Japan may remain and whatever tensions persist in the East China Sea, we need to keep the primary focus on North Korea. It offers the best reason for strategic coordination and the most alarming consequences of a breakdown in achieving this. While the past matters, this is the foremost issue of the present, which will have telling consequences for the future. South Korea has the daunting task of striving to keep the other states on message in the face of sudden and unpredictable moves by North Korea. If we fail, the consequences will be disastrous not just for our generation but for generations to come.