The Northeast Asia Situation
FY2022 Northeast Asia Study Group Report

March 2023

Northeast Asia Study GroupIntroduction
As heightened military tensions and uncertainty are expected to continue on the Korean
Peninsula in 2023, the Northeast Asia Study Group has analyzed the current situation in
Northeast Asia in order to formulate discussion points and recommendations for Japan’sdiplomacy based on the future outlook. This report is a compilation of the points raisedby the study group members in their respective areas of expertise and theirrecommendations. Although the report does not cover the situation on the Korean
Peninsula comprehensively, it indicates points that require attention when looking at thefuture development of the situation and offers suggestions for Japan’s efforts. In addition,
the study group has published commentaries analyzing the situation on the Korean
Peninsula regularly in FY2021-2022. Please refer to these commentaries on the NPI
website as well.
1. Overview of the overall situation
In 2022, North Korea launched a record 37 ballistic and cruise missiles. North Korea has
been accelerating its nuclear and missile development in line with the “five-year plan forthe development of the defence science and the weapon system” decided at the 8th
Congress of the Workers’ Party of Korea in January 2021, and this trend is expected tocontinue in 2023.
In September 2022, the Supreme People’s Assembly enacted a decree on the use ofnuclear weapons, and Chairman Kim Jong-un made a speech stating that North Korea
would not give up nuclear weapons first. In October 2022, Kim Jong-un led militarytraining for tactical nuclear operations forces, and, in November 2022, he and his daughter
watched the test-firing of the “Hwasong-17,” an intercontinental ballistic missile (ICBM)
believed to be capable of reaching the U.S. mainland. In addition to the development ofnuclear weapons and missiles, North Korea is now preparing to actually use them, andthe appearance of Kim’s daughter has triggered debate in South Korea and other countries
on the question of Kim’s successor.
Meanwhile, the South Korean administration of Yoon Suk-yeol, which took office inMay 2022, has focused on defense and deterrence in its North Korea policy, and, as aresult, military tensions between South Korea and North Korea have inevitably furtherheightened. South Korea’s own efforts to strengthen its national defense capabilities, suchas the establishment of a preemptive strike system known as the “Kill Chain,” thestrengthening of extended deterrence through U.S.-South Korea joint military exercises,
and the deepening of security cooperation between Japan, the United States, and South
Korea will continue in the future. On the other hand, despite the Yoon administration’s1

efforts on the security policy front, it is likely that the debate within South Korea on its
own nuclear armament, the reintroduction of U.S. tactical nuclear weapons, and U.S.South Korea nuclear sharing will continue to be actively pursued.
Although the Yoon administration has presented an “Audacious Initiative” that
includes offering incentives to lead North Korea to denuclearization, North Korea has
strongly rejected the idea. The U.S. will not abandon resuming negotiations with North
Korea, but for North Korea, now is probably the time it will aim to strengthen its nationaldefense capabilities. In Japan-North Korea relations, North Korea may seek dialogue atthe tactical level, but no major moves are expected.
On the other hand, a major change is taking place in South Korea’s Japan policy after
the Yoon administration took office. The biggest pending issue in Japan-South Korea
relations is the issue of “liquidation” of the assets of Japanese companies that were seized
to pay compensation in the wake of the Supreme Court of Korea ruling in the so-called“wartime workers” lawsuit. The Yoon administration has set up a public-private
consultative body to discuss the issue and is trying to settle it in a way that compensation
payments to the plaintiffs (wartime workers) will be shouldered by a foundation in South
Korea, not by Japanese companies. Since the plaintiffs are of the opinion that at least an
apology by Japanese companies and investment in the foundation are necessary, talks arecontinuing between the Japanese and South Korean governments on this point, and it isexpected that a resolution will be reached in the first half of 2023. If there is a prospectof resolving pending issues between the two countries, it should give momentum tocooperation between Japan and South Korea, as well as between Japan, the U.S., andSouth Korea, in various fields. However, as the country enters a political period aroundthe middle of 2023 leading up to the April 2024 general election for members of theNational Assembly, it should be noted that South Korea’s domestic politics will become
unstable, and the conflict between the ruling and opposition parties will become
increasingly sharp.
2. Foreign and security policy of the Yoon Suk-yeol administration(1) The Yoon Suk-yeol administration has set one of its national policy agendas becoming
a “Global Pivotal State” capable of being influential in the international community,transforming itself from a state that is influenced by the international community. As soon
as it took office, the Yoon administration acted swiftly to restore security cooperation not
only between the U.S. and South Korea but also between Japan, the U.S., and South Korea.
In the situation on the Korean Peninsula, the Yoon administration is promoting major
reforms to build a strong military through aggressive investment and development ofadvanced science and technology in order to realize “peace through strength.” With2

regard to North Korea, the administration has made it a principle to build deterrence
through “overwhelming force,” revived the name of the “Three-Axis” system to counter
an attack by North Korea using weapons of mass destruction and has demonstrated its
willingness to launch a preemptive strike. In response to this stance of the Yoon
administration, North Korea has flirted with the use of tactical nuclear weapons, andNorth Korean military UAVs entered South Korea’s territorial airspace at the end of 2022,
and the confrontation between South Korea and North Korea is escalating.
(2) In light of the above situation, it is desirable for Japan to carefully check the security
policy of South Korea in addition to the developments in North Korea, and to promote
cooperation between Japan, the U.S., and South Korea, as well as between Japan andSouth Korea, while taking care not to excessively increase military tension between South
Korea and North Korea.
Since 2022, policy debates within South Korea have been intensifying with the optionof its own nuclear armament in mind, along with discussions on extended deterrence bythe U.S. Therefore, it is necessary to hold regular Japan-South Korea and Japan-U.S.South Korea strategic dialogues, both inter-governmental and private, to maintain close
communication and understand each other’s strategic intentions.
(3) The Yoon administration is seeking to strengthen security cooperation relations not
only with Australia and other major Indo-Pacific nations, but also with NATO, based on
the U.S.-South Korea alliance. In the fall of 2023, South Korea is planning aninternational conference to gather defense chiefs from major countries participating in theUnited Nations Command (UNC). Japan, while appreciating South Korea’s efforts tobuild international cooperative relations within a multilateral framework, should actively
consider cooperating together and, in some cases, taking joint initiatives between Japanand South Korea. The Japanese government should also take appropriate measures while
keeping well-informed of trends as to whether the reactivation of the UNC function,
which is believed to have been completed once, will be coupled with the Yoon
administration’s policy development and re-strengthened.
(4) The May 2022 United States-Republic of Korea Leaders’ Joint Statement calls forU.S.-South Korea cooperation to build a defense industry supply chain. Japan shouldcarefully consider and explore the possibility of building a Western defense industry
supply chain and playing a certain role in it, in conjunction with the strengthening of thedefense production and technology infrastructure outlined in the new National Security
Strategy (NSS).
33. Security cooperation between Japan-U.S.-South Korea and Japan-South Korea(1) In December 2022, the Yoon administration announced the “Strategy for a Free,
Peaceful, and Prosperous Indo-Pacific Region,” which is the South Korean version of theIndo-Pacific strategy. South Korea’s support for the establishment of an order based onuniversal values such as “freedom, democracy, rule of law, and human rights” isconfirmed by the U.S.-South Korea alliance. Japan, which aims to realize a “Free andOpen Indo-Pacific” (FOIP) Vision, should also actively evaluate South Korea’s strategy
and strengthen cooperation with South Korea not only on the North Korean issues but
also on other issues in the Indo-Pacific region.
(2) In November 2022, the leaders of the three countries—Japan, the U.S., and SouthKorea—issued the “Phnom Penh Statement on Trilateral Partnership for the Indo-Pacific,”
clearly stating that the three countries will promote cooperation in the Indo-Pacific region
as well as in their North Korea policies. Security cooperation among the three countries
has been steadily evolving as evidenced by confirmation that the three countries will share
missile warning data on the North Korea issue.
Meanwhile, in order to promote security cooperation between Japan and South Korea,
it is first necessary to restore trust between the political and defense authorities of the twocountries. Specifically, it is desirable to realize such measures as the revival of shuttle
diplomacy between the leaders of the two countries, the convening of Japan-South Korea
Foreign and Defense Ministerial Meeting (2+2), the resumption of regular consultations
between defense authorities, and various exchanges, including mutual visits between theJapan Self-Defense Forces (JSDF) and the Republic of Korea Armed Forces leaders andunits. If security cooperation between Japan and South Korea is to progress in the future,
the conclusion of Acquisition and Cross-Servicing Agreements on the Reciprocal
Provision of Supplies and Services (ACSA) would also come into view.
(3) A common concern for both Japan and South Korea is how to deal with China, which
has become a major power. However, since the two countries have different geopolitical
positions and different concerns with China, their perceptions and policies toward China
are not the same. Japan and South Korea, which have common interests in building andmanaging stable relations with China, should cooperate in the management of their4

relationship with China by utilizing the framework of trilateral cooperation that has been
advanced so far. This effort will also lead to joint initiatives and contributions by Japanand South Korea in the Indo-Pacific region.
4. Japan-South Korea cooperation from the perspective of economic security(1) The Yoon administration is promoting efforts to strengthen supply chains, but as thereare limits to what South Korea can do on its own due to the intensifying U.S.-China
conflict, the situation in Ukraine, and other factors, it is also open to international
cooperation. The United States, Canada, Australia, ASEAN countries such as Viet Namand Indonesia, and Middle Eastern countries such as Saudi Arabia and the United ArabEmirates (UAE) are mentioned by South Korea as partners for bilateral cooperation in
supply chains, but Japan is not mentioned. Although Japan and South Korea belong to thesame group of countries in the Indo-Pacific Economic Framework (IPEF) and the “Chip4” alliance for semiconductors, cooperation between the two countries in the area ofsupply chain resilience has not materialized.
(2) On the other hand, as of 2022, Japan is South Korea’s fourth largest trading partner,
while South Korea is Japan’s fifth largest trading partner. Despite their being mutuallyimportant trade partners, it seems unnatural that cooperation between Japan and South
Korea has not progressed, especially when one considers the high degree ofinterdependence in semiconductors and other items that are important for economic
security. In addition, disruptions in the supply chain of South Korean industry are notfavorable to Japan, as, for example, the effects of the shortage of urea, an ingredient inagricultural fertilizer and diesel exhaust fluid, in South Korea have had a ripple effect onJapan’s economy. It is desirable for Japan and South Korea to cooperate in strengthening
supply chains, which will be a subject of discussion at the IPEF, and there are many areas
where the two countries can cooperate, such as the sharing of inventory information on
semiconductors and critical minerals.
(3) Japan-South Korea cooperation in third countries, particularly those in ASEAN, isalso an issue. As a countermeasure to the problem of South Korea’s high dependence on
imports from China, South Korean companies are seeking to transfer some of their5

production in China to their ASEAN bases. However, this kind of transfer is not
something that can be done overnight. In addition, the South Korean government’s
nearshoring support policy is uncertain. On the other hand, Japanese firms haveestablished production networks in ASEAN much earlier than their South Koreancounterparts. There is potential for cooperation between the two countries’ firms, such as
South Korean firms taking advantage of Japanese firms’ production bases in ASEAN.
5. Precautionary measures for managing Japan-South Korea relations(1) Even after the biggest current concern of the wartime workers issue is resolved,
various others, including issues regarding history, are expected to continue to emerge
between Japan and South Korea. For example, the Japan-South Korea Agreement on theContinental Shelf Joint Development, which entered into force in 1978, is expected to benegotiated for renewal in 2028 to mark its 50th anniversary, and it is already anticipatedthat there will be disagreements between the two countries over the right to survey anddevelop Block 7 (Japan-Korea Continental Shelf Joint Development Area), where oil
reserves are expected to be found. With regard to these foreseeable issues, it is advisablethat researchers and experts, including experts across disciplines (including internationallaw and other fields), beyond their expertise in Japan and South Korea, consider possible
options in advance. The current discussion on how to resolve the wartime workers issue
is one of the proposals that have emerged in the past, and it can be seen now that theoptions should have been considered and sorted out at an earlier stage.
(2) Given the possibility of a change from a ruling party government to an opposition
party government in South Korea every five years, building a broad network with South
Korean political parties will also contribute to the stability of Japan-South Korea relations.
It is worthwhile to try to build relationships not only at the level of politicians, but also
among party practitioners and party organizations. In addition to bilateral exchanges
between political parties in Japan and South Korea, it would be a good idea to consider
the use of international political party organizations to promote exchanges between
political parties. Study meetings, etc. could be held annually as much as possible at thelevel of the National Diet of Japan and the National Assembly of the Republic of Korea
members, local assembly members, and staff members to try to steadily build a
relationship for the future. (Currently, among South Korean political parties, the People
Power Party is a member of the International Democrat Union, and the Justice Party is a6

member of the Progressive Alliance.) Promotion of these exchanges would contribute tothe stability of relations between the two countries to establish some kind oforganizational or institutional framework so that exchanges will not be disrupted even if
there is a change in membership due to elections.
6. Situation in North Korea and Japan-North Korea relations(1) Twenty years have passed since the 2002 “Japan-DPRK Pyongyang Declaration,” butdirect talks between Japan and North Korea have long since ceased, and the goal ofachieving normalization of diplomatic relations as soon as possible has virtually come toa standstill. In May 2019, former Prime Minister Abe Shinzo stated that he was willing
meet with North Korean leader Kim Jong-un without conditions and included a similarstatement in his policy speech in January 2020. As of January 2023, in his policy speech
every year, Japan’s prime minister has stated that he would meet Chairman Kim Jong-un
without any conditions, but there has been no response from North Korea. With thecessation of direct talks between the two countries, Japan has been unable to communicate
directly with North Korea on the security issue of North Korea’s nuclear weapons andmissiles.
(2) Even if North Korea were to launch a diplomatic offensive in the future, the order ofpriority would likely be the U.S., South Korea, and then Japan, so restoration of JapanNorth Korea relations would still take time. In addition, unless meaningful progress ismade in denuclearizing North Korea, it will be difficult for Japan to conduct independent
diplomacy due to the constraints of international sanctions. North Korea has taken ablatantly pro-Russian stance in the war in Ukraine, and there is a strong likelihood that it
will regard the U.S.-China confrontation as a “new Cold War” and will continue to alignitself with China and Russia to check the U.S. in the short term.
(3) On the other hand, the abduction issue is also a humanitarian issue that should beurgently resolved as a bilateral issue between Japan and North Korea, while emphasizing
international cooperation, and efforts should be made to return to the Stockholm
Agreement of May 2014 and resume talks on the issue of Japanese abductees remaining
in North Korea, including Japanese remains and Japanese wives. On the other hand, given
7that North Korea criticized Japan’s handling of the General Federation of Trade Unionsof Korea (GFTUK), i.e., the treatment of North Korean residents in Japan, in its
September 2022 Song Il-ho statement, Japan may carefully consider establishing a forumfor talks between Japan and North Korea that would include various issues raised byNorth Korea, such as issues related to the GFTUK and North Korean residents in Japan.
(4) The Yoon administration has announced that it will actively work to improve humanrights in North Korea. At the same time, it has stated that it will establish substantive
measures to address the issues of separated families, confirmation of the life-or-deathstatus of South Korean military prisoners of war and abductees, and repatriation ofabductees. There are already more than 30,000 North Korean defectors living in SouthKorea, and the South Korean government’s strength lies in its ability to gather information
about North Korea through the defectors. Since families of abductees sometimes live
under the status of second-generation returnees, etc., it is desirable that the two countries
work together to address the issue of South Korean and Japanese nationals in North Korea.
In addition, Japan and South Korea should cooperate by gathering and sharing
information regarding returnees from Japan and their Japanese wives in North Korea andSouth Koreans in North Korea.
(5) Due to Japan’s own sanctions, which began in 2006, Japan’s imports from North
Korea have been reduced to zero since 2007 and exports reduced to zero since 2009. Since
then, the Japanese government has continued to impose its own sanctions on North Korea,
but measures such as limiting the monetary amount of remittances to North Koreansliving in Japan and banning travel to North Korea have failed to have a significant impact
on North Korea. While sanctions against North Korea by the international community
continue, there has been a series of news reports that North Korea is obtaining hugeamounts of foreign currency through cyberattacks. These funds are naturally believed to
be used for military buildup. Japan should consider how to respond to this situation,
recognizing that it is no longer possible for Japan’s own sanctions to achieve the objectiveof denying North Korea funds for weapons production.

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