After a period of diplomatic rancor earlier in the decade, Japan and China have demonstrably improved their bilateral relationship since 2006. Sino-Japanese relations over the past ten years have followed a remarkable trajectory: from a disastrous Japan visit by former Chinese President Jiang Zemin in 1998 to Hu Jintao's well-orchestrated and highly successful visit to Tokyo in May 2008. The emerging détente has expanded to include breakthrough agreements on territorial disputes, various high-level exchanges, and reciprocal port calls by naval vessels. Despite the rollercoaster of political and diplomatic ties, other aspects of the relationship have remained relatively consistent. China-Japan economic interdependence has grown as trade and investment flows have surged over the past decade. China-Japan economic ties serve as an anchor for the overall bilateral relationship, and the two nations and have become the key players in a robust East Asian trade and investment network. On the other hand, military strategists in each country remain wary of the other's motives. Beijing is suspicious of any moves that hint at Japan developing a more assertive and active security posture, and Japanese defense planners note with alarm China's burgeoning military modernization. Japanese defense documents have publicly declared their concern with Beijing's lack of transparency and apparently aggressive military spending over the past several years. In addition, occasional incursions by Chinese vessels into Japan's territorial waters have kept tension high at times despite the overall improving relations. The détente, pursued with vigor by leaders in both Beijing and Tokyo, follows an exceedingly tense period in the relationship under former Japanese Prime Minister Junichiro Koizumi (2001-2006). Koizumi's annual visits to the controversial Yasukuni Shrine, which honors Japan's war dead—including several convicted Class A war criminals—particularly rankled Beijing. The visits, together with changes to Japanese history textbooks that critics claim whitewash Japan's wartime behavior, led to large, sometimes violent anti-Japan protests in Chinese cities that damaged Japanese diplomatic posts. Since 2006, political leaders on both sides—even those whose rhetoric was the most vehement—appear to have concluded that political accommodation is the best course, at least temporarily. The fact that this trend has survived several political transitions in Tokyo is particularly promising. Many analysts contend that the short- to medium-term outlook is remarkably stable, but acknowledge that fundamental distrust and disagreements over history could threaten ties in the longer term. In short, it appears that these disputes have created a firm ceiling for Chinese-Japanese relations; the question is if this recent détente points to the establishment of a new, higher floor. The durability of the recent détente could have significant implications for U.S. interests. U.S. interests in the region are generally well served by pragmatic Sino-Japanese accommodation. Equanimity in the Tokyo-Beijing relationship not only fosters stability and prosperity, but also allows the United States to avoid choosing sides on delicate issues, particularly those related to history. During the tension of the Koizumi years, U.S. officials voiced fears—both publicly and privately—that the discord was harmful to regional stability. Multilateral efforts such as the Six-Party Talks on North Korea's nuclear program can be complicated by acute bilateral tension among the participants. On the other hand, some U.S. officials and analysts who view China as a security threat find the recent détente somewhat disconcerting. Although this tends to be a minority view among influential policymakers, this school of thought advocates building up Japan's military capability to deter any of China's strategic ambitions. This camp encourages Japan to move past some of restrictions placed on its military, including Article 9, the so-called peace clause of the Japanese constitution, authored by U.S. officials during the post-war occupation. The chance for Japan and China to grow too close for U.S. interests appears, at this point, remote. Historical grievances and contemporary distrust, combined with the inherent tension of two major powers competing in the same region, seem to preclude the possibility of a more exclusive political partnership between Tokyo and Beijing that could marginalize U.S. interests. Moreover, despite some signs of drift in the U.S.-Japan alliance, the American security commitment to Japan appears to remain fundamentally solid. In the event of a conflict in the Taiwan Straits, Japan would almost definitely play a role in a U.S. military response. The presence of 47,000 U.S. troops in Japan (65% of them stationed in Okinawa, geographically proximate to Taiwan) implies that a U.S. counter-attack could be staged from Japan. To many security analysts, Taiwan's status as a potential flashpoint for conflict between China and the United States provides a fairly reliable bulwark for the U.S.-Japan relationship despite periodic bilateral tension. In the post-Cold War environment and into the 21 st century, both Japan and China have reassessed their bilateral and regional strategies and likely will continue to do so in light of continuing global changes. Each country figures as an important calculation in these ongoing strategic reassessments, as does the United States. China's overriding primary goal is sustainable economic development at home. In pursuit of it, Beijing has placed a high priority on maintaining a "peaceful international environment" both regionally and globally. Smooth ties with the United States and Japan are thought to figure prominently in Beijing's foreign policy calculations, on the theory that even the appearance of a more overt pursuit of its interests could prompt responses from Washington and Tokyo that would be detrimental to its own continued development. Concern about China, for instance, could lead the United States to strengthen its alliance with Japan, or could convince Japan to strengthen its own defense resources. In addition, Beijing now sees itself facing new national security challenges in the post-Cold War environment. Among these challenges are the demise of the Soviet Union and international communism, the surge in U.S. global power, and pro-independence activism on Taiwan. Beijing appears suspicious about the extent of Japan's own regional ambitions—for example, its territorial claims in the East China Sea—and the degree to which these may adversely impact China's economic and political interests. Chinese leaders are especially concerned about the potential role of Japan—both directly and as host to U.S. military forces—in the event of a conflict involving China's claims on Taiwan. Despite its status as a world economic superpower, Japan is struggling to adjust to increasingly challenging domestic and geopolitical realities. Domestically, the economy is struggling in the current global downturn, after an extended period of stagnation in the 1990s. In its first real experiment with divided government, the political process is uncertain and somewhat paralyzed. Demographically, concerns about a shrinking labor force have grown more acute, driven by Japan's combination of a low birth rate, strict immigration practices, and a rapidly-ageing population. Outside its borders, Japan cannot ignore China's skyrocketing economic growth and political clout. Its impressive GDP per capita and admirable standard of living for its citizens notwithstanding, Japan sees the enormous challenges ahead. Tokyo's strategy appears to be to maintain its close security ties with the United States, re-assert itself as a crucial trading partner for other Asian nations, and avoid counterproductive spats with Beijing, its main regional competitor. Japan also would like to raise its global profile in order to be recognized for its generous provision of foreign aid and other contributions to international development. In 2004, Japan accelerated its longstanding efforts to become a permanent member of the United Nations Security Council by forming a coalition with Germany, India, and Brazil (the so-called "G-4") to achieve non-veto membership for all four countries. Though the Bush Administration backed Japan's bid, it did not support the G-4 proposal, and Security Council reform efforts have stalled. Japan is the second-largest contributor to the U.N. regular budget, paying more than 20% of the total, more than twice the percentage paid by the third-largest contributor. Overcoming Beijing's traditional opposition to permanent membership for Japan is a key obstacle to realizing this eventual goal. China's relationship with Japan is complex and long-standing, dating back at least to the first century A.D. when China's greater size, advanced achievements, and more prominent culture served as both model and rival to its smaller neighbor. Geographic proximity brought the two countries into constant contact over the centuries through maritime trade, cultural contacts, periodic military battles, regional rivalries, and economic exchanges. Much of Japanese development—including its culture, religion, form of writing, and philosophical tradition—was greatly influenced by comparable traditions in a more developed and more influential dynastic China. This relationship of Chinese dominance changed in the late 19 th century, when Japan's growing militarism and imperial ambition enabled it to gain a series of military victories and impose punitive economic arrangements over the weakened Qing Dynasty and the government that replaced it, that of the Republic of China (ROC). In addition to requiring China to pay huge indemnities, Japan's victories included the annexation of Taiwan (after the 1894-1895 Sino-Japanese War), acquisitions in China's Shandong Province, occupation of Manchuria, and full-scale invasion of the Chinese mainland. By the end of World War II, Japan's military campaigns and conquests in China had left a legacy of bitterness that continues to affect Sino-Japanese relations into the 21 st century. In 1949, Mao Zedong's communist forces triumphed in the civil war with the ROC government. Mao established the People's Republic of China (PRC) on the mainland, and the government of the ROC fled to Taiwan, an island off the south China coast. Japan-PRC relations since then have consisted of attempts at economic and political engagement mixed with periods of renewed tension and confrontation.