August 2011

Japan Center for International ExchangeConsolidating East Asia Cooperation:
A New Role for Northeast Asia
Hitoshi Tanaka, Senior Fellow, JCIEThe balance of power in East Asia is shifting, presenting new risks to regional stability. In order to mitigate these risks and maintain and strengthen regional
peace, stability, and prosperity, it is critical that regional
cooperation be consolidated. East Asia has seen a proliferation of multilateral forums, primarily through theASEAN-led processes, but consensus building and principles of noninterference have often dominated at theexpense of deeper cooperation. It is time for East Asia toreinvigorate regional cooperation. To this end, ASEAN
must be encouraged to take measures to strengthen its
role, especially in addressing domestic governance issues, and the three big players in northeast Asia—China,Japan, and South Korea—should take a more proactive
approach, providing greater input and substance to East
Asia regional cooperation.

The Shifting Balance of PowerThe need to consolidate East Asia regional cooperationis all the more urgent today because of the shifting balance of regional power taking place in both the economic and military spheres. Most significant is China’srise. China has shown phenomenal rapid economic
growth, averaging an annual GDP growth rate ofgreater than 10 percent over the last decade and almost
quadrupling its GDP per capita from US$949 in 2000
to US$3,744 in 2009. This impressive growth meant thatlast year China overtook Japan as the largest economy
in Asia and the second largest economy in the world after the United States. With its increasing wealth, China
has also increased its military spending. Over the last
decade, China’s military spending has more than tripled from US$32 billion in 2000 to more than US$114
billion in 2010. This increase in military spending has
seen China’s share of world military spending morethan double over the same period from 3 percent in2000 to 7 percent in 2010. China is now second only to
the United States in its military expenditures.
China’s rise is in contrast to what is happening in
the United States and Japan. The United States is still
the largest economy and military spender in the world;
however, it is in relative decline. The global financial
crisis has depressed US growth. Japan’s GDP has beenstagnating for more than a decade, its annual GDPgrowth also posting negative figures in the wake of thefinancial crisis and averaging less than 1 percent overthe last decade. Public debt has become a problem forboth countries. US public debt has soared in recent
years and become a major political issue, while Japan’s
debt-to-GDP ratio is roughly 200 percent, the largest
for any advanced industrialized country.
In terms of military spending, the United Statesaccounts for more than 40 percent of the total world
share. However, military budget cuts have already beenannounced, and some consider this to be only the tipof the iceberg if the United States is to bring its spending to sustainable levels. Japanese military spending
remains less than 1 percent of GDP. Since the Japanese
economy has been stagnating, its military spending
has also remained virtually unchanged for the last decade. As other countries have continued to increase
their spending, Japan’s share of total world militaryspending has decreased from 5 percent in 2000 to 3
percent in 2010. Compared with 10 years ago, Japan
has dropped from the third to the sixth largest militaryspender in the world, trailing the United States, China,France, the United Kingdom, and Russia.
While the balance of power has been shifting,
China has also shown a more assertive attitude toward
regional security affairs. This has clearly been demonstrated by China’s approach to the Senkaku Islands andSpratly Islands vis-à-vis Japan in the case of the former
and the Philippines and Vietnam in the latter.

multilateral forums—including ASEAN+3, the ASEAN
Regional Forum (ARF), the ASEAN Defense MinistersMeeting+8, and the East Asia Summit (EAS), to namesome of the more prominent ones. However, simply
continuing the proliferation of multilateral forums
misses the underlying objective of their establishment:
to promote regional integrity through deep regional
cooperation. What is needed now is not the establishment of new forums. East Asia already has a forumwith all the right players. The crucial step that must
be taken now is to reinvigorate cooperation and give it
real substance.
ASEAN currently faces many challenges that undermine its ability to lead East Asia regionalism. First,ASEAN’s soft approach and principle of nonintervention have proven incompatible with the task of managing disputes effectively among its own members. Thishas been demonstrated by the ongoing CambodiaThailand border dispute and continuing difficulties
surrounding Myanmar.
Second, the strength of ASEAN’s leadership is dependent on which country happens to occupy its annually rotated chairmanship. The destabilizing potentialof this practice was recently highlighted by concerns
over the possibility of Myanmar’s assuming the chairmanship in 2014.
Finally, and crucially, many ASEAN states, including some of its more democratic members, have notachieved adequate standards of good governance. For
instance, while Indonesia has made great progress inmanaging its democratic transition, it is still plagued
with widespread corruption and ethnic tensions.
Malaysia and Singapore are both tentatively taking
steps to move from developmental dictatorships toward somewhat more democratic governance. Whilethey show some encouraging signs, this is still a volatile
process and whatever small gains they make are easily reversible. In Thailand, tensions between the proThaksin populist Red Shirts and the pro-­monarchist
Yellow Shirts movements, rooted in the deep economic
and social divide between Bangkok and the Thai countryside, remain on a knife’s edge. The recent electionof a new prime minister, Yingluck Shinawatra (a surrogate for her brother Thaksin who was ousted in acoup in 2006), has given optimists cause for hope, but

ASEAN’s Challenges
Given the need to manage the shifting regional balance of power by consolidating regional cooperation,
there is no one obvious candidate to take the lead.
Historically, ASEAN has been given the driver’s seatto lead East Asia regionalism. This arrangement hassuited the ASEAN countries well as it helps mitigate
their sense of vulnerability resulting from their historical experience of colonial subjugation. For Chinaand Japan, too, this arrangement was considered beneficial, as it allowed them to circumvent their rivalry
for regional leadership, while still channeling their input through ASEAN from behind the scenes. Using its
position in the driver’s seat, ASEAN has been instrumental in creating processes and establishing many
EAST ASIA INSIGHTS2August 2011

Joint Leadership in the Region

it remains to be seen whether the frail institutions ofdemocracy will come of age or continue to be undermined by royalists, the military, the judiciary, and thebureaucratic elite.
With ASEAN countries facing such difficulties, it isstill not clear if ASEAN will indeed be able to achieve
its goal of creating a joint security community by 2015.
If one looks beyond the immediate subregion toward
the wider East Asia, it is evident that ASEAN is notoperating from a position of strength in the quest tofurther consolidate East Asia cooperation.

In order to consolidate East Asia cooperation andmanage the shifting balance of power, we need a morerefined approach, rather than searching for a single nation to take the driver’s seat. To this end, a sophisticatednetwork of regional partnerships should be establishedamong the EAS members. The key features of this network should be dual pillars of a strengthened ASEAN
on the one hand and China–Japan–South Korea trilateral leadership on the other. A stronger ASEAN andmore proactive leadership by China, Japan, and South
Korea will allow for more meaningful interaction toconsolidate regional cooperation. China, Japan, andSouth Korea have made some significant progress instrengthening their cooperation. For example, rather
than meeting on the fringe of ASEAN+3 summits they
have started to hold independent trilateral summit
meetings, and they are now creating a joint secretariat
to coordinate trilateral cooperation. The three nations
are likely to have more opportunities to consult, notjust on trilateral issues but also on broader issues ofregional cooperation.
Giving China a share of the driver’s seat can be seenas a strategy for bringing it into the fold as a regional
stakeholder while recognizing its rapid economic
growth and increased military power. China would
then be balanced by Japan and South Korea, both ofwhich have strong alliances with the United States.
For ASEAN, this approach balances its high stakes in
Chinese markets with its disputes with China in theSouth China Sea. By having the three northeast Asiannations take joint leadership to give substance to inclusive regional cooperation centering upon the EAS—
which the United States and Russia will formally join
this year—we will be able to address various concerns
brought about by the changing balance of power.

Northeast Asia’s Challenges
China’s rapid economic growth and soaring militaryspending leaves no doubt that it is on the rise. But muchof the regional debate on managing the transitioning
balance of power in East Asia is based on suspicionsthat China aims to play a hegemonic role. Outsideof China, nobody is willing to accept this outcome.
Further, China must deal with its own domestic issues,
maintaining economic growth while at the same time
addressing inflation, corruption, and the intensifying
rich-poor and urban-rural divides.
Meanwhile, Japan is suffering from a fatal lack of
domestic political leadership, which is exacerbating
the stagnation of its economy and the somewhat slow
process of recovery from the March 11 earthquake andtsunami. The leadership void was already clear prior to
the disaster, with Japan’s inability to resolve challenges
facing the US-Japan alliance or to show leadership in
the international arena.
For its part, South Korea has made great progress inrecent times. Economically, it has grown to become the15th largest economy in the world, gained membership in
the OECD and its Development Assistance Committee(DAC), and played an active role in the G20. Politically,
South Korea has made the difficult transition from a developmental dictatorship to a mature democracy. This
will undoubtedly allow South Korea to play a significant role in regional cooperation. But instability on theKorean Peninsula, as a result of North Korea’s military
provocations, nuclear development, and uncertainties
regarding regime succession, means that managing theNorth Korean issue needs to be its primary agenda.

EAST ASIA INSIGHTSA Regionwide Approach to Resources
Cooperation
Advocates of consolidating regional cooperation havedebated various possible approaches. Of these, regionwide cooperation on resources is a practical andmeaningful way forward that would allow the nationsof East Asia to consolidate regional cooperation andmitigate the likelihood of conflict arising as a result of3

August 2011

the shifting balance of power. This cooperation would
be centered on the EAS, given that its membershipcomprises all the right countries, and might entail collaboration in four areas: joint development of energyresources, guidelines for nuclear safety and energysaving measures, food security, and safety of the sea
lines of communication.
First, jointly developing energy resources can kill
two birds with one stone: it not only helps address energy shortages, it also helps to build confidence among
the nations involved. For instance, China and Japan
were able to conclude a basic agreement for the joint
exploration of natural gas in the East China Sea despite
differences in their interpretations of internationallaw. History has shown that when looked at throughthe lens of a bilateral issue, nationalistic tensions areliable to flare up on both sides, but if viewed througha multilateral lens and conducted as a regional project,
the prospects become increasingly viable. For instance,
Chinese and Japanese disagreements on oil pipeline
routes from Russia might be managed more effectively
if they are designed to meet regional needs rather thancompeting national interests.
Second, regional guidelines for energy safety and­energy-saving measures should be developed. Reducing
dependence on fossil fuels and fighting against climatechange are challenges with implications that transcendborders. East Asia cannot survive without nuclear energy in at least the short term, so regional efforts should
be made to strengthen international nuclear safeguards.
At the same time, over-reliance on nuclear energy is also
dangerous, as the Fukushima crisis has made all too
clear, and regional efforts to develop new technologies
to utilize renewable energy resources—such as wind,solar, and geothermal energy—should be developed tosupport the region’s energy needs over the longer term.
This will also help to mitigate future resource conflicts
as fossil fuel resources become exhausted.

Third, cooperation is needed to ensure regional
food security. The population of Asia is growing,
especially the middle class, which already numbers
more than half a billion people and within the next
20 years is forecast to climb as high as 2.5 billion. This
newly emerging middle class will demand more andhigher-quality food, which in turn necessitates improved food production technology and the liberalization of agriculture across the region to boost foodproduction efficiency.
Fourth, anxieties over the safety of the sea lines ofcommunication need to be managed to guarantee resource transportation. More than 80 percent of Japan’s
primary energy resources are imported from abroad,primarily through sea-based transportation. China
heavily relies on energy resources, too, delivered
through the Malacca Strait. Since the anxieties overmaintaining the safety of the lines represent a sharedinterest in the region, it should be coordinated as a
joint regional exercise.
◆ ◆ ◆The shifting balance of power in East Asia presents newrisks to regional stability and necessitates the consolidation of regional cooperation. While ASEAN should
continue driving, China, Japan, and South Korea
should also share in the driving duties. Thus, by focusing on concrete areas of cooperation that will havewidespread impact across the region, true multilateral
cooperation should be able to overcome the challenges
of competing national interests that often plague bilateral cooperation, particularly with and among some of
the major powers in East Asia.
Hitoshi Tanaka is a senior fellow at JCIE and chairmanof the Institute for International Strategy at the Japan
Research Institute. He ­previously served as Japan’s deputy minister for ­foreign affairs.

East Asia Insights
East Asia Insights is an occasional newsletter focusing on East Asia community building
from the Japanese perspective.
Published by: Tadashi Yamamoto, President, JCIE
Please direct any comments or questions to eainsights@jcie.or.jp.
Japan Center for International Exchange
www.jcie.or.jp

EAST ASIA INSIGHTS

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August 2011