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Sep 18, 2012 | 20:06 GMT

3 mins read

China-Japan Islands Dispute and U.S. Neutrality (Dispatch)

Video Transcript:

U.S. Secretary of Defense Leon Panetta is currently in China after meeting with Japanese defense officials in Tokyo earlier this week. Panetta’s visit to both countries underscores the United States’ desire to maintain the status quo regarding ownership of the Diaoyu/Senkaku islands while eschewing any move that could let what is ultimately a political issue spiral into something worse.

While in Japan on Sept. 17, Defense Secretary Panetta said the United States will not take a stand regarding the disputed Diaoyu/Senkaku island chain, but he did affirm that the islands fall under the scope of the U.S.-Japan treaty. But against a backdrop of anti-Japanese protests in dozens of Chinese cities, as well as Beijing’s decision to send six surveillance vessels to the disputed islands over the weekend, Panetta reaffirmed the need for “calm and restraint.”

On Tuesday, in a meeting with the Chinese defense minister in Beijing, Panetta called for deeper military ties between the two countries and invited China to participate in the 2014 Rim of the Pacific (RIMPAC) exercises.

Panetta’s visit comes at an extremely sensitive moment, politically and economically, for both China and Japan. China is in crisis. Its economy is slowing more rapidly than expected, unemployment is on the rise in coastal manufacturing centers, and the Communist Party’s facade of unity is appearing increasingly fragile as the generational leadership transition approaches. Meanwhile, its increasingly aggressive moves in the East and South China Seas threaten its diplomatic relations with regional partners.

Even the anti-Japanese protests that swept over Chinese cities over the weekend are making Beijing uneasy. Anecdotal evidence suggests that many of the protesters are unemployed young men, and in at least a few cases calls to bring down Japan were interspersed with expressions of anger against the Chinese government, or even calls to bring back Bo Xilai.

Japan may be in a more stable position than China, but not by much. Japanese Prime Minister Yoshihiko Noda’s decision to allow the Japanese central government to buy three of the Diaoyu/Senkaku islands appears to have boosted his popularity and may just help him stay in office for the time being. But it has also added fuel to some of his potential political opponents, such as the rising political firebrand and mayor of Osaka, Toru Hashimoto, or members of the opposition Liberal Democratic Party.

Another concern for both China and Japan — not to mention the United States — is the potential for rising political tensions to affect the two countries’ economic ties. In an article on Sept. 17, the Communist Party mouthpiece People’s Daily suggested that if Japan does not back down from its stance on the islands, China may bring economic sanctions against it. This would undoubtedly hurt Japanese businesses, whose exports to China were worth $140 billion last year. But it would also hurt the millions of Chinese workers employed by Japanese businesses.

The dispute over the Diaoyu/Senkaku islands, like tension in the South China Sea, is irresolvable. China, Japan and the United States all know that neither country will back down. As such, the dispute’s purpose is to give governments a bit of breathing room by shifting attention away from the many problems they face at home. The question is what happens after politics force one side or the other into a corner.

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