Spared a War: Abe’s Victory and Japan’s Rearmament

I made my genuine Thanksgiving on October 27. The occasion was Mr. Abe’s crushing victory in the Japanese election; the reason was a genuine, though perhaps erroneous, sense that we had been spared a potentially ghastly war in Asia, by the rebalancing of regional power that victory brought.

Japan will now start deliberately rearming and aiding her neighbors, with the pace determined by China’s aggressiveness. If China does not abandon her current expansionist territorial policy, but rather attempts nuclear blackmail against her neighbors, at the end of the day, Japan will match that too, with her own nuclear force, checkmating China. This will bring an armed peace.

Since at least 1995 when she occupied the Philippine Mischief Reef, China has been attempting to expand her territory to include Arunachal Pradesh (“South Tibet” in Beijing’s terminology) in India and islands held by South Korea, Japan, the Philippines, and others, as well as to take control of the entire South China Sea, half again bigger than the Mediterranean.

China calculated that no one would react seriously. She was emerging as the hegemon of Asia; others would recognize this fact (which may not be one) and doff their caps, no more. Certainly, the United States would continue to do nothing. The Obama administration had done effectively nothing while this attempt to transform the Indo-Pacific region was being carried out.

China is also actively seeking bases in Africa and elsewhere, with a view to controlling the key choke points in the international maritime transport network. This is Griff nach der Weltmacht, with Chinese characteristics. A continuation of such aggressive behavior will almost certainly lead to conflict, escalation, and perhaps general war.

In 2010, sparks flew at the Association of Southeast Asian Nations summit, as Hillary Clinton delivered a strong verbal condemnation. Then, in 2014, the Philippines filed suit in The Hague, under The Law of the Sea, the authority of which China has ratified and accepted. In 2016, the International Court of Arbitration found that all of China’s actions were illegal. China, however, ignored the decision completely, continuing her expansive policy, assuming that she could divide her opponents, intimidating them above all with her immense military and nuclear capabilities.

This seemed to work. Rodrigo Duterte, an erratic man, became president of the Philippines, and he began to come to terms with China. It became bad form to mention The Hague’s decision. Having torn up the international court’s decision, China looked set to create a fait accompli by flouting the law to use military intimidation instead.

The United States began to take serious action with the new administration in office. When President Trump made his highly successful visit to Asia, he did not need to mention security, as an almost unprecedented three Carrier Strike Groups were exercising in the seas nearby, message enough.

The United States is far away, though, and not trusted by anyone to use nuclear weapons to defend them. That is why the United Kingdom and France, both allies, maintain at great expense their own independent nuclear deterrents. But Japan? She foreswore war in her Constitution. Not only that, the United States presented herself as the “cork in the bottle” that would prevent Japanese armament. The drastic changes that China started unilaterally, assuming Japan would dither, in fact focused that country’s attention.

With Abe’s victory, we may expect Japan to become normal, which is to say possess a self-sufficient military capability including, if so pressed, nuclear weapons that will deter China and freeze her current policy. A democracy, Japan can move only with the support of her people. China’s threats to her territory, as well as the firing of two North Korean ballistic missiles over the islands, contributed to Abe’s victory. Now, we can expect a carefully calibrated Japanese response that will match China at every stage.

What does Japan have now? Her self-defense force numbers at about 250,000. At present, she lacks any but defensive armaments. Even so, her advanced technological capabilities mean that she can develop herself any weapon she needs, as good or better as the American systems on which she now largely relies. Japan does not steal technologies. She already has her technologies.

The jewel in her crown is her small (19) submarine force. The Sōryū is a conventional submarine so stealthy that the highly skilled Japanese anti-submarine forces can find only 5% of them when under way. They regularly sink American carrier escorts (using lasers) in war games. More importantly, as retired Chinese General Liu Yazhou 劉亞洲, an adamant Japanophobe, has warned, in case of naval conflict today, the Japanese submarines could sink the entire Chinese East Sea fleet in four or so hours.[1] (Liu is also an outspoken advocate of democracy). As the Japanese ambassador remarked to this author, “We are a shadow nuclear power.” In other words, it might take them a week to create an arsenal.

Otherwise, Japan has a slightly obsolescent air force to which U.S. F-35s are being added. More importantly, she has a prototype sixth generation stealth fighter the X-2 “Shinshin.” Cynics say she is building this to force American prices down. That may have been correct in the past, but today she is building it so as to be self-sufficient in aircraft. I believe this will be a superb jet: remember, not until 1943 did the United States field a fighter that could down the Japanese Zero.

Japan has also been launching “Information Gathering Satellites” since 2003. The most recent, launched earlier this year, is thought to have resolving power far superior to any other nation’s. Japan has enlarged her intelligence service. Particularly in cooperation with Taiwan (below), Japan will achieve intelligence dominance in the region.

What is missing?

Japan has only very short-range missiles. Now, however, she has undertaken a program to build a maneuverable missile having sufficient range and payload to pose a severe problem to any adversary, and a 1,000 mile-range missile nicknamed the “Japanese Tomahawk” about which in fact we know very little.

The Japanese speak of these as counter-strike missiles: in other words, to be used only after being attacked. Nothing, however, prevents their pre-emptive use. Likewise, they are intended to be conventional. Nothing, however, prevents the Japanese from unscrewing a conventional warhead and replacing it with a nuclear weapon.

In other words, Japan is now on the threshold of becoming a regional great power, not capable of attacking or invading her adversaries, but of paralyzing them by means of her advanced military capabilities. This fact transforms the Asian strategic situation. No longer will China be able to intimidate without fearing retaliation. The Hague decision will be proclaimed as justification, and who can gainsay the legitimacy of that?

Japan will become an Asian alliance focus in the emerging alliance—“The Quad”—of Australia, the United States, India, and Japan—hammered out, significantly, on the sidelines of this year’s ASEAN conference in Manila, so far China’s chief target. Also, she will become a non-U.S. source of advanced weaponry.

This last point—weapons supply—is particularly significant with respect to Taiwan. United States policy has always been to keep Taiwan weak enough that China can imagine conquest, yet fulfill the letter of the Taiwan Relations Act which requires us to supply defensive armament, by selling mostly obsolete or unwanted systems at great profit to our defense contractors. In fact, the loss of Taiwan, while it would be a crime against humanity, would not affect American security.

It would, however, mortally threaten Japan, whose main islands are 800 miles away, while her closest small island, Yonaguni, is less than 70 miles from the east coast of Taiwan. Japan and Taiwan are part of the same mostly submerged ocean mountain range. So we may expect Japan and Taiwan to cooperate in whatever ways are necessary to keep China at bay. If we continue to seek to please China even as we supply Taiwan with inadequate equipment, we may expect Japanese systems to fill the gap—submarines, naval vessels, state of the art aircraft. Not to mention close intelligence cooperation. Taiwan is often thought of as an American issue. Look at the map, though. It is a Japanese issue.

Finally, we must speak of diplomacy. Japan is widely distrusted, though this is perhaps a myth. Even South Korea, which was tortured brutally by Japan during the period she was a colony (1910-1945), maintains a high level of day to day security interaction with Tokyo. Japan’s diplomatic prowess is often underestimated, in part because she conceals it. But, particularly if aided by the United States and other “Quad” powers, she will show great effectiveness. “The Quad,” which China never imagined but was instrumental in creating as a counterbalance to her aggression, is more than a sufficient counterweight.

Note that China has created this situation for herself. She has no real allies: does anyone expect Russia or Pakistan to go to war on her behalf? Rather, by making such vast territorial claims from India to Japan (with the Russian Primorskii Krai, which controls the Pacific coast of Eurasia from Korea north on deck as the next), she has alienated, effectively, all her neighbors—here I include unstable Pakistan and opportunistic Russia—creating what political scientists would call a “countervailing coalition.”

Our greatest 19th century general, Winfield Scott, might have called it “an anaconda” that China has created, but in the toils of which she now finds herself. This entanglement will render impossible China’s miscalculated policies.

Note too that without China’s aid or at least acquiescence, North Korea would not be able to command the attention or elicit the fear that she does now. She is a dependent variable in this larger change, which will undermine and weaken her. South Korea is furthermore high on the list of nuclear capable states.

Actions elicit equal and opposite reactions, so Newton states. Clausewitz notes that unlike physical reactions, those in conflict, being the product of the human mind, are entirely unpredictable. When she set out on her ill-conceived expansion program, China wrote off both Japan and the United States. Now, they are at the heart of the game.

Of course, all of this could go wrong. The possibility of a war worse than any in history erupting in Asia remains with us. The developments outlined here, however, render that less and less likely, while a cold and peaceful standoff looks more realistic.

If such should turn out to be the case, we may date its onset from the Japanese election that has brought Abe to complete power. Now, our task is to create an alliance with Japan such as the late Ambassador Hisahiko Okazaki always advocated—as close as ours with the United Kingdom.

So let us celebrate a war that I believe has been averted!


[1] 流亞洲 ”日本4 小時內 ‘清空’中國東海艦隊” in當代世界 October 2015, http://mp.weixin.qq.com/s?__biz=MzA3NzY1ODg0Mg==&mid=2649667933&idx=5&sn=e8e3d08c32f890c2401ef7baf99dac58&chksm=8754b6e8b0233ffeb7a6e6f4bd865546855b51407bfc05a2fe6f95c7a7936e560888742dbf58&mpshare=1&scene=5&srcid=1016RLOGG4OLHCUBEgPeO034#rd, p. 1.

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Looper: The Asian Financial Crisis Redux?

Financial crises and their associated economic disruptions (or vice versa) can alter the international political order among countries by changing their relative power relationships.  What precipitates these crises and disruptions have many origins; but in many cases their underlying causes slowly build up pressures that suddenly erupt in a ruinous episode.  Decades of declining economic productivity, big budget deficits, and an overvalued currency eventually led Russia to default on its sovereign debt in 1998.  Following on the heels of the demise of the Soviet Union, the default led Russia into a particularly nasty recession as well as a particularly dark eclipse of its power across Asia and Europe for over half a decade.

Another crisis that began a year earlier, the Asian financial crisis, also changed what many had at the time expected to be the political trajectory of Southeast Asia.  The proximal cause of the crisis was the devaluation of Thailand’s currency, when its central bank ran short of U.S. dollars needed to defend its pegged exchange rate.  That triggered several similar crises across Asia and ultimately derailed Southeast Asia’s “tiger economies.”  Also derailed was the internal stability that Southeast Asian governments had attained after decades of conflict during the Cold War.  After the crisis, Indonesia’s long-ruling President Suharto was removed from office, and Malaysia’s equally long-serving Prime Minister Mahathir Mohammed was weakened (leaving office in 2003).  Thailand, whose prosperity in the early 1990s allowed it to become the first East Asian country to acquire an aircraft carrier in 1997, saw its wider ambitions thwarted.  Indeed, most countries in the region turned inward, as they shelved military modernization plans and their citizens clamored for political change.  On reflection, had the region made those military investments and developed the political self-confidence that often comes with internal stability, it would have been in a better position to balance China’s rise today.

Instead, Southeast Asia grasped at China’s refusal to devalue its currency during the crisis as a sign of friendship and inspired hope that they need not balance China’s rise and could assimilate their giant neighbor into the region’s multilateral norms.  Fifteen years on, that hope has proven misplaced.  China emerged from the Asian financial crisis relatively unscathed and ultimately became more assertive.  While it had to write off a mountain of bad loans on the balance sheets of its state-owned banks, Beijing really had no other choice, since those banks play a key policy role in its management of the Chinese economy.  Fortunately for China, continued foreign direct investment and major domestic infrastructure spending allowed it to grow out of its economic problems.

Southeast Asia was not so fortunate.  As the economies of countries like Thailand expanded during the first half of the 1990s, they also attracted a great deal of speculative investment and credit.  Eventually Thailand’s economy cooled, as less productive investments were made, U.S. interest rates rose, and Japan sharply devalued its currency.  As a result, the stability of Thailand’s leveraged economy and the ability of its central bank to defend its exchange rate peg became dubious—prompting money to flow out of the country and credit to suddenly contract.  A similar logic played out in other East Asian economies, causing a domino effect that engulfed Indonesia, Hong Kong, Laos, Malaysia, the Philippines, and South Korea.  Within a few months, local currencies plummeted, hundreds of businesses were shuttered, and millions found themselves unemployed.

Today, economic clouds are once again gathering over East Asia.  And Mark Twain’s quote seems particularly apt: “history does not repeat itself, but it does rhyme.”  The region’s economic growth is slowing.  Yet Southeast Asian countries continue to pile high consumer and sovereign debt.  They are even considering issuing U.S.-dollar denominated obligations, which are more difficult to pay off if their local currencies devalue.  But, of course, that may not occur this time, since the countries of Southeast Asia learned to amass large U.S. dollar reserves to forestall any run on their currencies.  As China and Taiwan showed during the 1997 Asian financial crisis, large U.S. dollar reserves can help avert the worst effects of such an event.

But such financial defenses are now starting to be tested, as Japanese Prime Minister Abe Shinzō’s economic policies have caused the yen to sharply fall against currencies across Southeast Asia (whether intentional or not).  As a result, Southeast Asian exporters are feeling the strain and have already called upon their respective central banks to match the Japanese effort.  But without an overt exchange rate peg to defend, Southeast Asian central banks have more leeway than they did in 1997.  And fortunately for them, U.S. interest rates are unlikely to jump in the coming year.  Still, the groundwork for a second Asian financial crisis is in place.  This time, China may not be spared, as many of its exporters are already barely profitable, the structural distortions in its economy are as big as ever, and it seems to lack a clear way to grow out of the next crisis (apart from even more domestic infrastructure spending).  But should Southeast Asia again turn inward, the United States should be prepared to do more to maintain the region’s balance of power.  A wider Asian financial crisis that ensnares Japan or South Korea may require an even larger American effort.  But this does not mean that American military power will be what is needed.  Rather, the region’s countries are keen on other sorts of American engagement, particularly economic ones.  And it is precisely those ties that will be most wanted if a crisis does occur.

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