As observers struggle to predict the future of East Asia, they face a familiar choice among three schools of thought — realist theorists, who foresee the danger of conflict over the balance of power; liberal theorists, who have argued for economic integration resulting in shared values; and constructivist theorists, who focus on national identities and how they shape perceptions of gaps between countries. Given the way relations between China and Japan have evolved in the past five years, it is easy to conclude that realist theory has bested liberal theory. In May 2008 President Hu Jintao’s visit to Japan led many to exclaim that the thaw begun when Prime Minister Abe Shinzo traveled to China in October 2006 had blossomed into a full flowering of relations. There was talk that “hot economics” is conducive to “warm politics” as the exchange of trust-building summits continued. Looking back, we see that liberal assumptions about the goodwill generated by economic integration have lost credibility. Yet, relying on realist assumptions may lead to erroneous predictions without considering a recent surge in the intensity of national identities, which may support constructivist views.

It has been well understood that “cold culture,” such as the impact of visits by the Japanese prime minister to the Yasukuni Shrine is an independent force in relations between China and Japan. In the exchange of visits by Prime Minister Fukuda Yasuo in December 2007 to China, including the birthplace of Confucius at Qufu, followed by Hu Jintao’s trip to Japan, especially to Nara, where Japanese civilization took shape, much attention was given to narrowing the cultural gap. Yet, with the rise of the territorial dispute over the Senkaku/Diaoyu islands and Japan’s continued caution in 2009-12 in raising sensitive historical issues, the focus shifted to realism as the explanation for deteriorating relations. That argument still commands wide attention even if national identity themes are increasingly difficult to overlook. As these bilateral relations cooled in 2010, went into a deep freeze in 2012, and even threaten to impact Sino-U.S. relations in 2013, we should look more closely at what is driving this clash. Being able to distinguish between realist and identity factors is needed in order to choose appropriate responses to what is now a volatile situation.

The case for realism focuses on China but also covers Japan. Since the 1980s it has been widely assumed that China turned decisively to realism under the leadership of Deng Xiaoping, the supreme pragmatist. Maoist ideology was set aside. Economic growth became an obsession. Deng left a legacy of putting aside thorny problems, among them the territorial dispute with Japan. As comprehensive national power grew, China would have the economic clout and, as its double-digit expansion of the People’s Liberation Army (PLA) budget demonstrated, the military might to alter the status quo. According to this realist argument, the PLA navy has grown to the point it can and does challenge the Japanese military presence in the East China Sea. Gaining control of the waters around the Diaoyu islands and treating them in the same way China treats its claims to disputed islands in the South China Sea would give breathing space to China’s naval power. Eventually, the challenge would extend to the U.S. Pacific Fleet. A rising power is, thus, establishing its sphere of control. It is using the growing economic dependency of other states to pressure them to agree.

The rise of realism in Japan is also unmistakable. Abe Shinzo has capitalized on it, charging that the three-year tenure of the Democratic Party of Japan (DPJ) damaged relations with the United States, and insisting that he deserves credit for rebuilding these ties as the most critical step in resisting military threats from China and North Korea. In his first months as prime minister, Abe appeared to jettison the LDP party platform used in the late 2012 elections to the Lower House of the Diet, recalling his pragmatism toward China in 2006-07 despite beliefs that were expected to take him to Yasukuni. Along with rejuvenating economic growth, Abe’s policies mainly center on national security. Given postwar Japan’s legacy of pacifism and the slowness with which the military budget has grown since Japan’s bubble burst, Abe’s tone is a real departure.

The United States is undeniably a force for realism in the Asia-Pacific. Prioritizing the threat from North Korea and striving to expand military exchanges with China in order to prevent an arms race and destabilization from a lack of transparency, U.S. leaders have encouraged Japan to expand its military and to strengthen the alliance. One step sought by U.S. officials is for Japan and South Korea to cooperate militarily and to exchange intelligence. To make the case against North Korean aggression and also to send a message to China, they highlight the realist nature of responses to threatening behavior. Yet, they have found themselves increasingly forced to take into account statements and actions that defy realist logic. Since he became party secretary, Xi Jinping and China’s media have framed disputes, especially with Japan, in constructivist terms, while Abe has shown his true stripes with comments that hark back to the revisionist thinking for which he is well known. A case can be made for national identities trumping realism in each state, fueling a national identity gap.

A national identity gap arises when one or both countries in a bilateral relationship conceive of the other country as highly significant for what makes their own country distinctive. This normally means blaming the other country for humiliation, while seeking national pride by proving that weakness toward that country is no longer tolerable. Given Japan’s imperialist aggression toward China to 1945, it is an ideal target for widening the national identity gap when China’s leaders decide that this is desirable. Many in Japan’s political elite have long struggled to arouse the Japanese public to take pride in Japan’s history leading to 1945. A wider identity gap with China conveniently serves that purpose, even if it begins as a response to what is being done by China to confront or demonize Japan. The gap is huge and growing.

Ever since the Tokyo Tribunal of 1947, members of Japan’s political elite have been obsessed with the goal of reversing the verdict on the war. On April 24, 2013 Abe apparently denied this was a war of aggression (shinryaku) when he answered a question before the Upper House of the Diet that the concept could be viewed differently depending on which side you are on, repeating a view with which he has long been associated. Whether he uses the term “beautiful Japan” or “normal Japan,” the implication is that only by revisiting the negative judgment that was drawn by “victors’ justice” will Japanese recover their pride. The current dispute with China, it appears, is perceived as an opportunity by Abe to revise the constitution, rethink history, and reconstruct national identity in Japan. Compromising on the territorial dispute, even to the degree of acknowledging a dispute exists, would undermine these goals. Abe’s professed warmth to the United States fits a realist interpretation, but his questioning of the San Francisco Peace Treaty stems from a revisionist worldview. His early caution in arousing South Korea over the “comfort women” issue and “Takeshima Day” suggested that realism was his priority, but in a series of snubs, including sending much of his cabinet to the Yasukuni Shrine, which caused Park Geun-hye to cancel a trip by her foreign minister to Japan, he proved that he views South Korea primarily through the lens of reshaping Japan’s national identity. Under U.S. pressure, however, he shows restraint, as in recent acknowledgment that the Abe cabinet would stick with the 1995 Murayama statement, a genuine apology.

Compromise on the territorial dispute with Japan also is problematic for Xi Jinping’s national identity agenda. Expectations have been raised by a litany of claims about how China must, at last, confront the humiliation it has faced. Since 2009, criticism of Japan has broadened to the point of demonization, leaving little room for finding common ground. Consolidating power from the end of 2012, Xi has made the “China dream” his primary theme, insisting that China’s rejuvenation is under way without any hint of the importance of reassuring neighbors and building trust, as Hu Jintao had stressed with the theme “peaceful development.” Linking today’s Japan to the militaristic Japan that brutally invaded China serves Xi’s agenda. As in the case of Abe, the hidden target is the United States, whose threat is much more serious to the national identity of greatest concern. If Abe’s historical obsession is to reverse the verdict that was reached from 1945, Xi’s obsession, arguably, is to reverse the verdict on the history of communism that was reached around the world in 1989. As Chinese sources in early May were raising new questions about whether Okinawa (the Ryukyu islands) belongs to Japan, the historical case against Japan was intensifying.

Xi Jinping and Abe Shinzo feed off each other. To the extent that each is vilified in the other country, it serves the national identity agenda of both sides. Realist theory has no explanation for what is happening. Indeed, relying on it alone would mislead one into thinking that U.S. policy should simply stand firmly behind Japan. Narrowing the focus to one prominent theme of national identity—Japan’s revisionist approach to history—would also have misleading consequences, as if realism does not matter and China is not driven by a national identity obsession of its own with dangerous potential. On other dimensions of national identity, Japan is a partner in pursuit of the principles for which the United States stands. In contrast, China since 2008 in numerous policy decisions and rhetoric that is splashed across its media and the bulk of academic publications is posing a serious challenge to the values to which most of the international community subscribes. In these circumstances, there is a need for the new Obama administration team to devise a multi-layered response, recognizing China’s challenge as more threatening.

The first priority to impress on both China and Japan is the need for calm, avoiding moves that not only might lead to a military confrontation in the East China Sea but also could arouse emotions on the other side of the sea. Given wariness across East Asia about being forced to choose between the United States and China, Washington should position itself as a calming influence. The second priority is to intensify engagement with China while avoiding moves that might give it a chance to drive a wedge between Japan and the United States. Without any idealism about China’s behavior, its willingness to cooperate in stabilizing the region should be repeatedly tested, notably with North Korea in the forefront, as in May 2013 moves by Chinese banks to suspend business with North Korea. The third priority, which has been rising in urgency when Sino-U.S. talks are not proceeding well and China is showing little regard for calming tensions, is to strengthen the U.S. alliance system while striving to forge an Asia-Pacific community, including the Trans-Pacific Partnership (TPP). This is more than an FTA since it sets standards for business conduct at a time when China is using economic leverage and even commercial cyber war in ways that undermine the security of other states. The fourth priority, given North Korea’s recent threats to use force backed by nuclear weapons and China’s increasing willingness to use military pressure to address territorial disputes, is to prepare more seriously for conflict than the United States has previously.

The lessons to be drawn from the widening Sino-Japanese rift extend beyond policy makers to analysts looking for a theoretical framework. As much as some tinker with realism, seeking to make it fit the developments in East Asia, and others grasp for a revival of liberalism, as if the past several years is just an aberration, there is no way to make sense of what is transpiring without constructivism. Moreover, that general rubric requires specification. National identity studies are making headway in differentiating various dimensions of identity and reassessing bilateral relations in terms of national identity gaps, such as the one between China and Japan that has been widening sharply in recent years. Without appreciating the identity aims of Xi Jinping and Abe Shintaro as well as those governing with them, a realist perspective would be misleading. The Senkaku/Diaoyu dispute is not driven, as some argue, by natural resources, and is much more than a clash over control of critical maritime routes, as many realists conclude. It is a test of two national identities in the process of being reshaped by leaders with far-reaching ambitions. China and Japan stand in the way of the other country’s leader’s national identity obsessions. In the background is the United States, not just as the critical force in the realist struggle between them, but also as the ultimate test for reconstructing the national identity of each country. Given the goodwill that most Japanese have to the United States as opposed to the susceptibility of China’s political elite to demonization of the United States, efforts to calm Abe’s identity quest can be kept low-key, in contrast to the need to challenge Xi’s growing obsession.