Building Bridges

As Canada shifts is gaze to the East it will need to manage the acrimonious relationship between East Asia’s great powers.

China and Japan are both important parts of Canada’s growing interest in the East Asian region. Both are targets of the Harper government’s ambitious trade agenda and both present considerable economic challenges and opportunities for Canadian business. However, the two are also on the brink of letting their strategic rivalry undermine their highly profitable economic relationship and spill over into wider regional issues. As a medium-sized country trying to re-engage the Asia-Pacific region, how can Canada navigate this troubled relationship?

Many believe that China and Japan’s rivalry is driven by recent tensions over the disputed Senkaku/Diaoyu islands. However, Sino-Japanese tensions are in fact much deeper. The Chinese government has made the demonization of Japan the cornerstone of history education in Chinese schools. Although this does not require a great deal of fact-fudging, the Japanese often wonder when the Chinese will accept the apologies they’ve offered (by Prime Minister Murayama Tomiichi in 1995 for instance) and focus instead on the considerable amount of Official Development Assistance Japan has given China since they normalized diplomatic relations in 1978.  For their part, Japanese people understand that they have to live next to China as it rises, and were once prepared to tolerate a few growing pains. However, following a decade of growing tension over disputed islands, marine resource exploitation, and China’s growing military capability, it seems most Japanese people have had enough. By contrast, the Chinese note that their maritime activity is perfectly normal for a growing power that relies on trade for 50 per cent of its GDP, and that Chinese naval ships need to sail close to Japan to get to the Pacific Ocean.

This rivalry risks destabilizing East Asia for two reasons. First, in the aftermath of the 2012 crisis over the Senkaku/Diaoyu islands, Japanese companies began moving their investments out of China into alternative markets like Malaysia and Vietnam. This accelerated a trend that has been underway for some time: the flight of capital from China to other markets in East Asia, such as Cambodia. The steady erosion of Sino-Japanese economic ties does not bode well for the future relationship and its impact could be accentuated by wider capital flight from China.

Second, because China is perceived to be the aggressor in the South China Sea (in fact they’re all to blame) Southeast Asia has shed much of its historical suspicion of security ties with Japan. This is illustrated by Philippine Foreign Minister Albert del Rosario’s recent statement to the Financial Times that the Philippines would welcome “a rearmed Japan shorn of its pacifist constitution as a counterweight to the growing military assertiveness of China”.  Japan has thus shed its informal preference not to discuss South China Sea issues at regional meetings. The degree of animosity towards China from Vietnam and the Philippines is such that South China Sea issues are now publicly debated at ASEAN related meetings. In the Japanese view, developments and norms established in the South China Sea could affect its relations with China in the East China Sea.

All this places Canada in a rather tight spot as Ottawa tries to round out its economic diplomacy with meaningful contributions to regional security. Canada is working with Japan on an Acquisitions and Cross Services Agreement, the basic building block of closer defense ties. This is unsurprising ­– Canada and Japan share a number of political and social values and such an agreement will make it easier for Canada to contribute to future humanitarian crises in East Asia. However, given the tone of Sino-Japanese relations, closer defense ties with Japan could be greeted with suspicion by China and expose Canada to Chinese criticism or reprisal. Is the Harper government willing to bear such costs in order to improve defense ties with Japan so soon after re-setting ties with China?

Many believe that Canada is uniquely placed to act as a bridge-builder in the region on maritime issues, as it has in the past. Whether Canada is still seen as an impartial party in these disputes is unknown. Potential economic partners like Vietnam may seek Canadian support for a region-wide condemnation of Chinese behavior on regional seas. Other partners, such as Indonesia, may seek Canadian support for a renewal of the SCS dialogues. Others, such as Japan, may join Vietnam in seeking support for their position. Navigating this diplomatic and political minefield will be difficult. Canada has turned to East Asia for economic reasons and any effort it makes to contribute to regional security needs to be understood in this light. Therefore, Canada should avoid public statement on sensitive territorial issues and attempting to foster dialogue with regional protagonists and support regional confidence and security building measures.  At the risk of overstating the possible lessons to be learned from Australia, it is certainly possible to improve defence ties with both China and Japan at the same time.