dangerous rocks: from strategic moderation ......the rivalry for domestic politics has persisted,...

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2019-12

DANGEROUS ROCKS: FROM STRATEGIC

MODERATION TO STRATEGIC COMPETITION

Cho, Daniel

Monterey, CA; Naval Postgraduate School

http://hdl.handle.net/10945/64121

Downloaded from NPS Archive: Calhoun

NAVAL POSTGRADUATE

SCHOOL MONTEREY, CALIFORNIA

THESIS

DANGEROUS ROCKS: FROM STRATEGIC MODERATION TO STRATEGIC COMPETITION

by

Daniel Cho

December 2019

Thesis Advisor: Robert J. Weiner Second Reader: Michael A. Glosny

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4. TITLE AND SUBTITLEDANGEROUS ROCKS: FROM STRATEGIC MODERATION TOSTRATEGIC COMPETITION

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6. AUTHOR(S) Daniel Cho

7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES)Naval Postgraduate SchoolMonterey, CA 93943-5000

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13. ABSTRACT (maximum 200 words)At the turn of the 21st century, the Senkaku/Diaoyu territorial dispute between China and Japan evolved

from strategic moderation to strategic competition. This thesis examines the causal factors that facilitated the transition from status quo management to status quo rivalry. Before 2010, escalations were relatively restrained along maritime lines and both countries sought to moderate the tension through diplomatic conduct and joint ventures related to the disputed islands. However, misunderstandings driven by more potent domestic pressures, growing threat perceptions, and political opportunism by nationalistic leaders amidst a socio-political and economic transition evolved the dispute into a new level of competitive stability post-2013. More importantly, the escalations from 2010–2013 reinforced growing threat perceptions, and strengthened the political platforms of nationalistic leaders who capitalized on the territorial dispute escalation to advance their agendas. While China and Japan have, so far, re-established a new battle rhythm that attempts to effectively moderate the dispute, the risk of misunderstandings has increased with both countries embarking on more proactive foreign policies backed by more assertive diplomatic and militaristic levers. As a result, while the usefulness of the rivalry for domestic politics has persisted, the risk of conflict has also increased.

14. SUBJECT TERMSSino-Japanese relations, power transition theory, economic interdependence, territorialdisputes, Senkaku Islands, Diaoyu Islands, constructivism, domestic politics, domesticleaders, nationalism, threat perceptions

15. NUMBER OFPAGES

11516. PRICE CODE

17. SECURITYCLASSIFICATION OFREPORTUnclassified

18. SECURITYCLASSIFICATION OF THISPAGEUnclassified

19. SECURITYCLASSIFICATION OFABSTRACTUnclassified

20. LIMITATION OFABSTRACT

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NSN 7540-01-280-5500 Standard Form 298 (Rev. 2-89) Prescribed by ANSI Std. 239-18

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Approved for public release. Distribution is unlimited.

DANGEROUS ROCKS: FROM STRATEGIC MODERATION TO STRATEGIC COMPETITION

Daniel Cho Lieutenant Commander, United States Navy BS, Indiana University at Bloomington, 2009

Submitted in partial fulfillment of the requirements for the degree of

MASTER OF ARTS IN SECURITY STUDIES (FAR EAST, SOUTHEAST ASIA, THE PACIFIC)

from the

NAVAL POSTGRADUATE SCHOOL December 2019

Approved by: Robert J. Weiner Advisor

Michael A. Glosny Second Reader

Afshon P. Ostovar Associate Chair for Research Department of National Security Affairs

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ABSTRACT

At the turn of the 21st century, the Senkaku/Diaoyu territorial dispute between

China and Japan evolved from strategic moderation to strategic competition. This thesis

examines the causal factors that facilitated the transition from status quo management to

status quo rivalry. Before 2010, escalations were relatively restrained along maritime

lines and both countries sought to moderate the tension through diplomatic conduct and

joint ventures related to the disputed islands. However, misunderstandings driven by

more potent domestic pressures, growing threat perceptions, and political opportunism by

nationalistic leaders amidst a socio-political and economic transition evolved the dispute

into a new level of competitive stability post-2013. More importantly, the escalations

from 2010–2013 reinforced growing threat perceptions, and strengthened the political

platforms of nationalistic leaders who capitalized on the territorial dispute escalation to

advance their agendas. While China and Japan have, so far, re-established a new battle

rhythm that attempts to effectively moderate the dispute, the risk of misunderstandings

has increased with both countries embarking on more proactive foreign policies backed

by more assertive diplomatic and militaristic levers. As a result, while the usefulness of

the rivalry for domestic politics has persisted, the risk of conflict has also increased.

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TABLE OF CONTENTS

I. INTRODUCTION..................................................................................................1 A. MAJOR RESEARCH QUESTION AND MAIN FINDINGS ...............1 B. IMPORTANCE ..........................................................................................3 C. LITERATURE REVIEW .........................................................................5 D. METHODS AND SOURCES .................................................................13 E. ORGANIZATION ...................................................................................14

II. 2001–2009: A DECADE OF TENSE MODERATION ....................................17 A. CHINA’S RAPID RISE ...........................................................................17

1. 21st Century China in Transition ...............................................17 2. China and the World ...................................................................22 3. Domestic Pressures and Opportunities ......................................24

B. JAPAN’S RELATIVE DECLINE ..........................................................29 1. Economic Stagnation and Failure in Governance ....................30 2. Political Leaders and Domestic Politics .....................................33 3. Domestic Pressures and Opportunities ......................................37

C. EXPLAINING THE PERSISTENCE OF PRE-2010 STRATEGIC MODERATION...............................................................40

III. EMERGENCE OF POST-2010 ESCALATION...............................................45 A. 2010-2011 MISUNDERSTANDINGS: TRAWLER COLLISION .....46

1. General Overview of Escalation Event ......................................46 2. Escalation Analysis and Policy Implications .............................50

B. 2012-2013 MISINTERPRETATIONS: ISLAND NATIONALIZATION AND CHINA’S ADIZ ......................................53 1. General Overview of Escalation Event ......................................53 2. Escalation Analysis and Policy Implications .............................56

C. NEW NORMAL IN THE DISPUTE BATTLE RHYTHM .................59

IV. EMERGENCE OF POST-2013 STRATEGIC COMPETITION ...................63 A. XI JINPING AND THE CHINA DREAM ............................................65

1. China’s Diaoyu Maritime Policy and Activity ..........................68 B. SHINZO ABE REDUX: BALANCING BETWEEN

PRAGMATISM AND REALISM ..........................................................73 1. Japan’s Senkaku Maritime Policy and Activity ........................78

C. THE CLASH OF PERSISTENT ISSUES, AND EVOLVING CIRCUMSTANCES IN A CHANGING EAST ASIA .........................81

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D. CONCLUSION: LONG-TERM IMPLICATIONS TO REGIONAL STABILITY .......................................................................83

LIST OF REFERENCES ................................................................................................85

INITIAL DISTRIBUTION LIST ...................................................................................97

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LIST OF FIGURES

Figure 1. Japan Coast Guard Maritime Activity Report. ..........................................60

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LIST OF TABLES

Table 1. China’s Diplomatic and Militarized Confrontations, 1978–2008. .............10

Table 2. China’s Economic Trends (Post-WTO Entry) ...........................................18

Table 3. China Quality of Life Trends .....................................................................19

Table 4. People’s Republic of China Military Expenditures ...................................21

Table 5. People’s Liberation Army Force Composition ..........................................22

Table 6. Japan Economic Trends from 1990 to 2010 (5-year increments) ..............31

Table 7. Japan Spending, Debt and Population Trends (5-year increments) ...........32

Table 8. Real GDP (% Growth, Annually) among Asia-Pacific Countries from 2001 to 2009 ..............................................................................................32

Table 9. Japan Quality of Life Trends from 1990 to 2010 (5-year increments) .....33

Table 10. Japan’s Military Expenditures ...................................................................41

Table 11. China Coast Guard Force Level, 2005–2020 .............................................71

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LIST OF ACRONYMS AND ABBREVIATIONS

A2AD Anti-Access and Area Denial ADIZ Air Defense Identification Zone AEW Airborne Early Warning ASEAN Association of Southeast Asian Nations CRS Congressional Research Service CCG China Coast Guard CCP Chinese Communist Party CFDD China Federation for Defending the Diaoyu Islands CMP China Maritime Police CNOOC China National Offshore Oil Corporation CPC Communist Party of China DOD Department of Defense DPJ Democratic Party of Japan ECS East China Sea FDI Foreign Direct Investment FLE Fisheries Law Enforcement GWOT Global War on Terror HADR Humanitarian Assistance and Disaster Relief ICJ International Crisis Group ICJ International Criminal Court IR International Relations JCG Japan Coast Guard JSDF Japan Self-Defense Forces LDP Liberal Democratic Party MIT OEC Massachusetts Institute of Technology Office of Economic

Cooperation MOD Ministry of Defense MINDEF Minister of Defense MOFA Ministry of Foreign Affairs NATO North Atlantic Treaty Organization

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NDPG National Defense Program Guidelines NK North Korea NPA National Police Agency NPC National Party Committee NSC National Security Council ODA Overseas Development Assistance OECD Office of Economic Development PAFMM People’s Armed Forces Maritime Militia REM Rare Earth Metals SAG Surface Action Group S/D Senkaku/Diaoyu SECDEF Secretary of Defense SECSTATE Secretary of State SIPRI Stockholm International Peace Research Institute PKO Peace Keeping Operations PLA People’s Liberation Army PRC People’s Republic of China UNCLOS United Nations Convention on the Law of the Sea UNSC United Nations Security Council WTO World Trade Organization

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ACKNOWLEDGMENTS

I would like to thank my primary advisor, Professor Robert J. Weiner, for

his support in helping me complete this thesis. More importantly, I would like to thank

him for his patience, understanding, and willingness to help guide me during this thesis

process so that I could get the most out of the experience. I would also like to thank

my second reader, Professor Michael A. Glosny, for his expertise and helpful feedback

in ensuring that I produced a quality thesis. Both professors were invaluable in “Opening

the Door” to East Asia by providing me with the foundational knowledge required to

successfully execute my professional obligations in the Indo-PACOM Area of

Responsibility.

Lastly, I would like to thank my wife, Minami Saikusa, for her unwavering

support, patience, and kindness. Her willingness and openness to offer me fresh

perspectives helped challenge my assumptions and biases, ensuring that I approached

my thesis with an objective mind and a level of impartiality that enabled me to

arrive at reasonable conclusions based on a fair assessment and consideration to both

sides.

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I. INTRODUCTION

A. MAJOR RESEARCH QUESTION AND MAIN FINDINGS

The Senkaku/Diaoyu (S/D) territorial dispute between the People’s Republic of

China (PRC) and Japan has persisted since the normalization of Sino-Japanese relations in

1972.1 Despite the challenges of reconciliation due to historical disagreements rooted in a

traumatic wartime past, mutual interests and external threats encouraged both sides to

manage their differences pragmatically. After establishing formal relationships in 1972,

the Sino-Japanese relationship was based on strategic priorities against the Soviet Union,

and economic priorities to rebuild their respective nations.2

Although new volatile factors such as Japan’s growing influence as an economic

superpower, Beijing’s pursuit of a more nationalistic policy following the 1989 Tiananmen

Square incident, and concerns related to the negative implications of a U.S.-Japan Security

Alliance produced new anxieties that heightened tensions over the S/D territorial

dispute, the prospects of mutual economic benefit and active dispute management

continued to help moderate tensions through the end of the 20th century. Furthermore,

these same factors continued to encourage restrained actions toward the territorial dispute

in the early 2000s, despite contentious issues like U.S.-Japan alliance discussions, U.S.-

Japan joint statements on the Taiwan issue, and Prime Minister Koizumi’s controversial

visits to the Yasukuni Shrine threatened to escalate the S/D territorial dispute.3

However, starting in 2010, the territorial dispute began to escalate rapidly, backed

by increased militaristic and non-militaristic activity within the Japanese identified

contiguous and exclusive economic zones associated with the Senkak/Diayou islands. In

addition to the increase in antagonistic maritime activity, there was also an increase in

1 “Tensions in the East China Sea,” Council on Foreign Relations, accessed February 5, 2019, https://www.cfr.org/interactive/global-conflict-tracker/conflict/tensions-east-china-sea.

2 Ming Wan, “Sino-Japanese Relations during the Obama Presidency,” Wilson Quarterly (Winter 2016), https://wilsonquarterly.com/quarterly/the-post-obama-world/sino-japanese-relations-during-the-obama-presidency/.

3 Ming Wan, “Sino-Japanese Relations during the Obama Presidency.”

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state-backed political rhetoric and civic protests, as well as unilateral decisions, from both

sides, that enflamed the already tense situation. Rather than moderating escalations, both

sides were making decisions to escalate the situation. Despite a backdrop of shared

understanding, and cautious but willing cooperation, “What explains the evolution of the

S/D territorial dispute, from pre-2010 moderation to post-2010 escalation and ultimately

toward a new normal of heightened competition post-2013? Answering this overarching

question inevitably produces a couple more questions to sufficiently answer the reasons for

the uncharacteristic escalation as well as its future implications. First, what role did

regional structural changes play in shaping both countries domestic audience as well as its

domestic politics? Second, how has the 2010 to 2013 escalation period influenced the

perceptions, and consequently the future interests, and goals of Chinese and Japanese

leaders moving forward?

While pre-2010 experienced strategic moderation, regional structural changes and

the domestic volatility it produced laid the foundation for a new set of escalations to occur

from 2010 to 2013. Specifically, economic transitions leading to China’s rise and Japan’s

relative decline created challenges as well as opportunities. In terms of challenges, both

countries had to act in response to a more assertive citizenry that began to influence how

Beijing and Tokyo managed the territorial dispute, directly and indirectly. In terms of

opportunities, public pressure gave nationalistic leaders an opportunity to exploit the public

sentiment, confidence in China and anxiety in Japan, to advance their political agendas. In

China, rising prosperity led to increased confidence and higher expectations. In the case of

Japan, declining prosperity relative to China meant increased anxiety as well as higher

expectations. This clash of higher expectations from a rising power and a relatively

declining power exacerbated the growing threat perceptions that already existed. Given this

dynamic, misinterpretation of each other’s actions and intentions became highly likely,

paying the way for more competitive, and antagonistic, behavior that mutually reinforced

threat perceptions of each other. Furthermore, the post-2010 escalation experience

strengthened mutual threat perceptions while also legitimizing nationalistic leader’s

political agendas and strengthening their political profile. As a result, the evolution of the

territorial dispute into a new battle rhythm, based on strategic competition, has emerged,

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supported by a return of nationalistic leaders with more assertive policies and bolder

agendas.

B. IMPORTANCE

Understanding the drivers of escalation regarding the S/D territorial dispute, in

particular, understanding what contributed to the uncharacteristic escalation between 2010

to 2013, is significant and worthy of research for geopolitical, and security cooperation

reasons. Geopolitically, it is important to study the evolution of the territorial dispute in

order to understand the role that the S/D islands plays in Sino-Japanese relations as well as

Sino-U.S. relations. Now that both countries are facing each other as relatively equal

powers of regional influence with China surpassing Japan in the economic realm, this has

forced Japan to re-assess its security and economic position, leading the island nation to

become more proactive in leveraging institutions internally and externally to address a

changing regional environment.4 This sense of insecurity regarding China’s rise has also

helped re-ignite the political discourse regarding Article 9 as well as facilitating

incremental but significant changes to the U.S.-Japan Security Agreement; all of this

occurring amidst a changing Japan in which the politically elite are becoming more

nationalistic in their rhetoric.5 China’s rise is also a challenge to the United States, a

country that then-President Barack Obama proclaimed as a Pacific Power during his

America’s Pivot to Asia Speech.6 As a strong proponent of the liberal, rules-based order

and the global economy that it supports, the United States has a strong interest in supporting

Japan’s role in upholding the established order as well as understanding the impact of

China’s rise, and consequently challenge to the status quo. As the region transitions into a

new dynamic power relationship that equalizes the role and influence of China in a space

traditionally led by Japan and the United States, relevant stakeholders will need to be better

4 Sheila Smith, “How Japan Views China’s Rise,” Interview by Richard N. Haas, Council on Foreign

Relations, March 12, 2015,https://www.cfr.org/event/how-japan-views-chinas-rise. 5 Zhiqun. Zhu, “The Japan-China Relationship as a Structural Conflict,” E-International Relations, last

modified December 31, 2013, https://www.e-ir.info/2013/12/31/the-japan-china-relationship-as-a-structural-conflict/.

6 “Text of Obama’s Speech to Parliament,” Sidney Morning Herald, November 17, 2011, https://www.smh.com/au/national/text-of-obamas-speech-to-parliament-20111117-1nkcw.html.

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informed in order to properly address the core factors that drive the relationship as well as

the contentious disputes that de-stabilize them. And although current-President Donald

Trump’s America First policy has a fundamentally different approach to addressing the

challenges in the Indo-Asia-Pacific region, there is bipartisan recognition within the

American political, security, and business leadership of the critical importance that the

region holds to America’s security and prosperity and thus, the value that a stable U.S.-led

Indo-Asia-Pacific provides.7

From a security, and regional stability standpoint, it is important to understand how

the volatility, in particular, the escalatory behavior of the S/D dispute impacts U.S.-Japan

security commitments within the context of the U.S.-China relationship. Knowing what

factors contribute to the escalation of the East China Sea (ECS) territorial dispute will

ensure that the United States upholds its security commitments to its allies in the region by

promoting stability and peaceful conflict resolution without unnecessarily going into a

militarized armed conflict due to misunderstandings and misinterpretations.8 More

importantly, understanding China’s behavior toward the S/D territorial dispute also reveals

China’s long-term goals and ambitions in the Indo-Asia-Pacific Theater. According to the

2019 Department of Defense (DOD) annual report to Congress regarding the military and

security developments of the PRC, “Over the coming decades, they are focused on realizing

a powerful and prosperous China that is equipped with a ‘world-class’ military, securing

China’s status as a great power with the aim of emerging as the preeminent power in the

Indo-Pacific region.”9 Avoiding unnecessary military conflicts in an era of advanced

conventional and non-conventional weaponry with the potential to inflict large human

casualties requires an intimate understanding of the influential players in the region as well

7 Patrick M. Cronin, “Trump’s Post-Pivot Strategy,” Diplomat, November 11, 2017,

https://thediplomat.com/2017/11/trumps-post-pivot-strategy/. 8 BBC. “Viewpoints: How Serious are China-Japan tensions?” BBC, February 8, 2013,

https://www.bbc.com/news/world-asia-21290349. 9 Office of the Secretary of Defense, Annual Report to Congress: Military and Security Developments

Involving the People’s Republic of China 2019 (Washington, DC: Pentagon, 2019), https://media.defense.gov/2019/May/02/2002127082/-1/-1/1/2019_CHINA_MILITARY_POWER_REPORT.pdf.

https://www.bbc.com/news/world-asia-21290349https://media.defense.gov/2019/May/02/2002127082/-1/-1/1/2019_CHINA_MILITARY_POWER_REPORT.pdfhttps://media.defense.gov/2019/May/02/2002127082/-1/-1/1/2019_CHINA_MILITARY_POWER_REPORT.pdf

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as the factors that influence the evolution of complex issues in order to identify the right

mechanisms in which to mitigate risks and promote conflict resolution or compromise.

C. LITERATURE REVIEW

Realism and Constructivism are two prominent international relations (IR) schools

of thought that identify the factors that could potentially explain the escalatory nature of

the S/D territorial dispute between China and Japan. Scholars have aimed to increase the

explanatory power of these overarching theories by using all three levels of analysis from

the system, state, and individual to explain the escalatory behavior observed in the S/D

dispute as well as the broader and equally volatile nature of the Sino-Japanese relationship.

This literature review will briefly present the fundamental premise of these two theoretical

perspectives and then provide supporting scholarship from subject matter experts that

narrow the theoretical lens to the various levels of analysis to explain the causes of the

escalatory behavior exhibited in the S/D territorial dispute. Lastly, this literature review

will also consider the role that domestic leaders and domestic politics has on the escalation

of the S/D dispute along with how structural changes can also produce threat perceptions

that lead to more escalatory behavior.

Realists view the international system as anarchic and composed of rational and

self-interested actors. They expect conflict as the more likely behavior and that states

pursue power to ensure security. According to Organski, as the relative balance of political,

economic, and military power becomes more aligned between states, the probability of

armed conflict increases; with the dissatisfied weaker state exhibiting more aggressive and

antagonistic behavior toward the satisfied stronger state.10 Augmenting this theory, Lemke

extends the premise to regional hierarchies as well, arguing that each region contains its

own system of dominant and rising powers.11 Lim connects this theoretical perspective to

China’s highly dissatisfied position in the regional hierarchy by measuring its level of

10 A. F. K. Organski and Jacek Kugler, The War Ledger (Chicago: University of Chicago Press,

1980), 19. 11 Douglas Lemke, Regions of War and Peace (Cambridge: Cambridge University Press, 2002), 49–

50.

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satisfaction based on military expenditures, the rise of a China model domestic regime, and

China’s role in shaping current institutions as well as creating alternative institutions.12

Further supporting this logical reasoning, Glosny acknowledges the legitimate concerns

that China’s East Asian neighbors, like Japan, have regarding China’s rise in the absence

of the Taiwan issue. He points to Chinese official and academic commentary and PLA

operational preparations in the East China Sea stated in the 2006 Science of Campaigns

publication as evidence of an increasingly assertive China that is capable and willing to

defend its territorial claims.13 Beyond rhetoric, Glosny also points out the actual maritime

activity that is occurring in vicinity of the S/D islands consisting of patrols by submarines,

survey ships, and surface combatants.14 For Japan, Hughes states that China’s rise has

produced a sense of anxiety regarding how to manage the evolving bi-lateral relationship

that has historically been characterized as careful engagement. Even with the emergence

of the growing North Korea (NK) threat, Japanese policy-makers continue to frame their

short and long-term security based around North Korea and China respectively.15 Japan

has continued to express its concern for China’s military modernization, its steadily

increasing military expenditure, the general lack of transparency of its military policies,

and its willingness to project power beyond its borders.16 From both perspectives,

structural changes are facilitating more volatile aggressive and escalatory behavior.

As an alternative to power transition theory within the realist school of thought,

constructivists counter-argue that the international system and the drivers of interactions

12 Yves-Heng Lim, “How (Dis)Satisfied is China? A Power Transition Theory Perspective,” Journal

of Contemporary China 24, no. 92 (2015): 296–297, https://doi.org/10.1080/10670564.2014.932160. 13 Michael Glosny, “Getting Beyond Taiwan? Chinese Foreign Policy and PLA Modernization,”

National Defense University (January 2011): 5, https://ndupress.ndu.edu/Portals/68/Documents/stratforum/SF-261.pdf.

14 Glosny, “Getting Beyond Taiwan?”, 5. 15 Christopher W. Hughes, “Japan’s Response to China’s Rise: Regional Engagement, Global

Containment, Dangers of Collision,” International Affairs 85, no. 4 (July 2009): 4, https://doi.org/10.1111/j.1468-2346.2009.00830.x.

16 Hughes, “Japan’s Response to China’s Rise,” 41.

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between states and individuals are socially constructed and not naturally inherent.17 Wendt

elaborates on this notion by stating interactions and experiences can shape ideas which in

turn produce interests and goals.18 Based on this logic, some scholars analyze how frequent

and various interactions between China and Japan influence their behavior toward one

another. Putting this line of reasoning within the context of Sino-Japanese, Uemura uses

the Cultural Constructivist approach to explain how the bilateral relationship developed

and evolved through specific cultural behavioral pattern known as Guanxi.19 He argues

that the relationship’s initial warming period was driven “not out of pure good will” but

due to China’s behavioral expectation to “assume the morally dominant position.”20 As

time passed on without Japan properly atoning for its past, the relationship between to shift

from warmth to animosity which Japan in kind began to perceive China as hostile; placing

the bi-lateral relationship down a path of increasing animosity beginning in the 1990s.21

According to Smith, continued disagreements regarding, “the history of their relationship

and their identity in the history of the region,” have also exacerbated the tensions

surrounding the S/D territorial dispute.22 Thus, historical and territorial disagreement have

converged well into the 21st century, creating a foundational basis in which strong

emotions and heated rhetoric can fester, producing occasional flare-ups whenever

controversial actions or statements are made leading to national civic protests and fierce

official rhetoric. Smith also connects this increasingly escalatory hostility of the people

with the more assertive national identities that Xi Jinping and Abe Shinzo are trying to

cultivate in the 21st century. While Prime Minister Abe envisions a future in which future

17 Nicholas Onuf, “Constructivism: A User Manual,” in International Relations in a Constructed

World, ed.Vendulka Kubalkova, Nicholas Onuf, and Paul Kowert (New York: Taylor & Francis, 1998), 58–63.

18 Alexander Wendt, Social Theory of International Politics (Cambridge, Cambridge University Press, 1999), 1.

19 Takeshi Uemura, “Understanding Sino-Japanese Relations: Proposing a Constructivist Approach in Chinese Studies,” Journal of Contemporary East Asia Studies 2, no. 1 (2013): 27, https://doi.org/10.1080/24761028.2013.11869059.

20 Uemura, “Understanding Sino-Japanese Relations,” 27. 21 Uemura, “Understanding Sino-Japanese Relations,” 27. 22 Sheila A. Smith, “Japan and the East China Sea Dispute,” in Contested Terrain: China’s Periphery

and International Relations in Asia (Summer 2012): 370–390, doi: 10.1016/j.orbis.2012.05.006.

https://doi.org/10.1080/24761028.2013.11869059

8

generations no longer need to apologize for Japan’s wartime past, Xi Jinping is pursuing a

“China’s Dream” campaign to restore the glory of China before its century of humiliation.

Smith points to the volatile nature of this social construction that links the past with the

future which also inevitably, influences China and Japan’s views and attitudes toward one

another and consequently their approach to managing the S/D territorial dispute.23

Integrating the realist and constructivist perspective regarding the volatile Sino-

Japanese relationship, other scholars have approached the territorial dispute with a hybrid

perspective. Nakano argues that a strong driver in the most recent escalation of the S/D

islands was due to a threat perception brought about by a balance of power shift between

China and Japan.24 Kim explores the cross-section between power and nationalism as a

driver in the escalatory trends exhibited in the territorial dispute. Kim states that although,

“shrewd diplomacy and careful management have controlled the dispute for decades,

especially when there was a relatively stable power parity in the region,” the failure to

come to a shared historical understanding amidst a gradual regional power shift has fueled

the politics of nationalism, further increasing the tensions related to the territorial

dispute.25

Distinct from both the realist and constructivist explanation, others have focused

on the role and impact that domestic leaders and political pressures have had on the

escalation of the S/D territorial dispute in the early part of the 21st century. From a

theoretical perspective, Byman and Pollack argue that individual leaders can matter due to

their ability to influence state intentions and consequently its foreign policies with other

states.26 They also assert that individual leaders matter the most when power is

concentrated and when institutional processes at the systemic, domestic, and bureaucratic

23 Mina Pollmann, “Japan and China: ‘Intimate Rivals’,” Diplomat, June 15, 2015,

https://thediplomat.com/2015/06/japan-and-china-intimate-rivals/. 24 Ryoko Nakano, “The Sino-Japanese Territorial Dispute and Threat Perception in Power

Transition,” Pacific Review 29, no. 2 (2016): 168, https://doi.org/10.1080/09512748.2015.1013493. 25 Jihyun Kim, “The Clash of Power and Nationalism: The Sino-Japan Territorial Dispute,” Journal of

Asian Security and International Affairs 5, no. 1 (March 2018): 44–45, https://doi.org/10.1177/2347797017750268.

26 Daniel Byman and Kenneth Pollack, “Let Us Now Praise Great Men: Bringing the Statesman Back In,” International Security 25, no. 4 (April 2001): 134–135, https://doi.org/10.1162/01622880151091916.

https://thediplomat.com/2015/06/japan-and-china-intimate-rivals/

9

level are ambiguous and finally, when situations are fluid.27 In the 2013 fire control radar

targeting incident between a Chinese frigate and a Japanese destroy, Jakobson highlights

the lack of transparency in Beijing with most major decisions being made by a seven-

member Politburo Standing Committee, headed by Xi Jinping.28 Her conversations with

Chinese officials have also revealed Xi Jinping’s leadership role in heading a S/D dispute

committee known as the “Office to Respond to the Diaoyu Crisis” in response to the

nationalization of the S/D islands by the DPJ-led Japanese government.29 However,

Jakobson acknowledges the limits of Xi Jinping’s control and influence over specific

activities and quotes a Chinese official who states that the maritime enforcement agencies

are given significant leeway to enforce Beijing policies and if a mutually undesirable

escalation occurs, senior leaders are often placed in a difficult position of either restraining

actions or supporting their [subordinate] efforts to defend China’s national interests.30

While the most powerful leaders may not always have full control or awareness of all the

tactical and operational aspects of a sensitive and volatile issue, it does reveal the role that

leaders, in general, have in influencing the direction of a contentious issue. This brings into

focus the challenges of domestic pressure that Cho and Choi assert are a strong driver of

the escalation in the S/D territorial dispute. They argue that when domestic leaders are

seeking to achieve or retain legitimacy, they are more likely to behave more aggressively

in the territorial dispute. In Japan, DPJ’s attempt to avoid criticism from the public and

opposition parties led them to adopt more assertive stances regarding the S/D islands.

Conversely, China’s perceived threat of Japanese political opportunism during the 2012

18th National Congress of the Communist Party of China (CPC) led Beijing to develop a

hardline stance against Japan. This also led Beijing to pursue a state-led campaign that

27 Byman, and Pollack, “Let Us Now Praise Great Men,” 140–142. 28 Linda Jakobson, “How Involved Is Xi Jinping in the Diaoyu Crisis?” Diplomat, February 8, 2013,

https://thediplomat.com/2013/02/how-involved-is-xi-jinping-in-the-diaoyu-crisis-3/?all=true. 29 Jakobson, “How Involved Is Xi Jinping in the Diaoyu Crisis?” 30 Linda Jakobson, “China’s Foreign Policy Dilemma,” Lowy Institute, last modified February 5,

2013, http://www.lowyinstitute.org/publications/chinas-foreign-policy-dilemma.

http://www.lowyinstitute.org/publications/chinas-foreign-policy-dilemma

10

stoked anti-Japanese sentiment in order to reinforce national unity during this political

transition.31

In contrast to the realist and constructive perspective which focuses on the factors

that contribute to the escalatory nature of the S/D territorial dispute, Krista Weigand’s

study offers a more nuanced perspective. Weigand’s analysis regarding the escalation of

the disputed islands, as shown in Table 1, reveals that periodic escalations in the 1990s and

2000s were strategic and intentional actions in response to certain security, economic, and

domestic issues.

Table 1. China’s Diplomatic and Militarized Confrontations, 1978–2008.32

Date Type Chinese Action Linked Issue

Apr-1978 Militarized

Armed fishing vessels supported by the government surrounded the disputed islands

Peace and Friendship Treaty negotiations with Japan

Oct-1990 Diplomatic

Foreign Ministry demanded Japan withdraw claim of islands

Potential SDF deployment to Gulf War

Dec-1991 Militarized Armed ship warning shots fired No issue linkage

Feb-1992 Diplomatic Territorial Waters law passed

Potential SDF deployment to UN peacekeeping operations

Aug-1995 Militarized

Two fighter planes flew in airspace near disputed islands Japanese economic sanctions

Jul-1996 Militarized

Two submarines deployed to the disputed islands

Ratification of UN Convention on the Law of the Sea; U.S-Japan security alliance renewal; economic sanctions Japan-US security alliance renewal; economic sanctions

Sep-1996 Militarized

Warships dispatched near disputed islands, joint maneuvers and mock blockade conducted by Air Force, Navy, Army

Japan-US security alliance renewal; economic sanctions

31 Hyun Joo Cho and Ajin Choi. “Why do Territorial Disputes Escalate? A Domestic Political

Explanation for the Senkaku/Diaoyu Islands Dispute,” Inha Journal of International Studies: Pacific Focus 31, no. 2 (August 2016): 254–255, https://onlinelibrary.wiley.com/doi/abs/10.1111/pafo.12073.

32 Adapted from Krista E. Wiegand, “China’s Strategy in the Senkaku/Diaoyu Islands Dispute: Issue Linkage and Coercive Diplomacy.” Asian Security 5, no. 2 (May 2009): 170–193. https://doi.org/10.1080/14799850902886617.

https://doi.org/10.1080/14799850902886617

11


Oct-1996 Militarized

Navy conducted military surveillance around disputed islands


Nov-1996 Diplomatic

Official claim of sovereignty made to the United Nations


May-1999 Militarized

Navy dispatched warships to waters surrounding disputed islands

Japanese bill reaffirming Japan-US security alliance

Jul-1999 Militarized

Naval drills conducted near disputed islands

Japanese bill reaffirming Japan-US security alliance

Jun-2002 Diplomatic

Government-backed activists attempt to land on disputed islands

Japan announced 10% reduction in aid to China; China suspicious of Japan’s eager support of U.S. war on terrorism

Jun-2003 Diplomatic


SDF troops dispatched to Iraq to help US-led coalition in Iraq War

Oct-2003 Diplomatic

Government-backed activists attempt to land on disputed islands No issue linkage

Jan-2004 Diplomatic


Japanese Prime Minister Koizumi visited Yasukuni Shrine

Mar-2004 Diplomatic

Government-backed activists attempt to land on disputed islands Important bilateral talks in early April

Jul-2004 Military

Naval ship conducts research in disputed waters; training, intelligence gathering in Japanese waters

No issue linkage; Japan announced it would begin its own oil exploration

Oct-2004 Military Naval ships in disputed waters

Japan-US talks held on security alliance; Japan hosts multilateral maritime exercises; Japan reveals missile defense plan

Nov-2004 Military

Nuclear Han-class submarines deployed to disputed waters

Japanese SDF reveal military scenarios against China

Feb-2005 Military

Two destroyers deployed to disputed waters

US and Japan declare Taiwan is mutual security concern; renewed U.S.-Japanese security agreement

Apr-2005 Diplomatic

Nationwide protests against Japanese involvement in Diaoyu Islands approved by government

New “whitewashed” history textbooks issued in Japan; Japan actively bid for seat on UN Security Council

12


Sep-2005 Military

Five naval ships deployed to disputed waters; spy planes collected data on Japanese military vessels; military established special naval research fleet for East China Sea

To influence upcoming talks on territorial dispute; Koizumi insistence of right to visit Yasukuni Shrine

Oct-2005 Diplomatic

China canceled talks on territorial dispute and visit by Japanese Foreign Minister

Japanese Prime Minister Koizumi visited Yasukuni Shrine for 5th time

Oct-2006 Diplomatic

Government-backed activists travel to disputed islands No issue linkage

Feb-2007 Military

Research ships found surveying in Japanese waters

No issue linkage; to influence talks on joint natural gas development

Aug-2007 Diplomatic

Government-backed activists travel to disputed islands

To commemorate Japan’s invasion of China 70 years ago

Oct-2007 Diplomatic

Government-backed activists travel to disputed islands

No issue linkage; to influence talks on joint natural gas development

Weigand argues that the S/D dispute represents a useful vehicle to advance

Beijing’s political, and policy goals.33 Her analysis is compelling given the empirical

evidence showing issue linkage, and coercive diplomacy exhibited in the data from 1978

to 2008. Furthermore, looking at the data, it could be argued that the S/D territorial dispute

was more aggressive, and antagonistic, risking the potential for armed conflict between

China, and Japan in the 1990s, and that it became increasingly state-managed characterized

by more institutional means of expressing discontent in the 2000s. From Weigand’s

perspective, the escalation of the territorial dispute was deliberate, strategic, and most

importantly, intentional. In the 20th century, while both countries domestic politics

prevented perfect coordination or collective understanding internally, from a bilateral

perspective, both Beijing, and Tokyo worked earnestly to temper the escalations, driven by

a desire to maintain the status quo, in the short-term, and a willingness to appropriately

manage the territorial dispute within a strategic context. Each scholarly analysis that seeks

to explain the management of the S/D territorial dispute provides a strong foundation and

33 Krista E. Wiegand, “China’s Strategy in the Senkaku/Diaoyu Islands Dispute: Issue Linkage and

Coercive Diplomacy,” Asian Security 5, no. 2 (2009): 178, https://doi.org/10.1080/14799850902886617.

13

logical argument for what causes states to exhibit more aggressive and antagonistic

behavior. This thesis will scrutinize these perspectives more deeply in order to identify the

causal factors that helped facilitate the territorial dispute through each of its phases from

pre-2010 restrained moderation, 2010-2013 escalation, and post-2013 competitive

moderation.

D. METHODS AND SOURCES

Recognizing that power can be measured, defined, and interpreted in many ways,

this thesis will use the power-as-resources hybrid approach that measures power in terms

of resources but evaluates the relative validity of those indicators by assessing how they

actually influence the outcomes.34 Therefore, similar to this line of logic, the paper will

examine and analyze the economic changes and military developments that were occurring

in China and assess how these changing indicators ultimately influenced China’s behaviors

toward the S/D dispute from 2010 to 2013. Conversely, for Japan, economic changes and

security policy evolutions will be examined and analyzed to assess how these changing

indicators produced conditions that resulted in Japan’s actions toward the S/D dispute from

the same time period. For clarification purposes, it is important to highlight a key

distinction with regard to this methodical approach. The focus of the military and economic

power analysis is not to prove that a power transition took place in terms of discrete

variables but to show how these developments created the perceptions and ideas that in

turn produced conditions that laid the foundation for future interactions. To establish this

link, primary and secondary sources will be used as outlined in the following paragraphs.

For economic changes, the primary sources will come from the respective country’s

Ministry of Finance, the World Trade Organization (WTO), Office of Economic

Development (OECD), and lastly from academic institutions like the Massachusetts

Institute of Technology Organization of Economic Cooperation (MIT OEC). Examining

changes in GDP (as measured by various metrics), bi-lateral and global trade, foreign direct

34 Michael Beckley, “The Power of Nations: Measuring What Matters,” International Security 43, no.

2 (Fall 2018): 13–14, https://doi.org/10.1162/isec_a_00328.

14

investment, savings rate and wage growth from the various economic databases will be

necessary to prove empirically that a transition was taking place.

For military developments, the primary sources will come from the respective

country’s Ministry of Defense, the Stockholm International Peace Research Institute

(SIPRI), and Unclassified DoD and policy think tank reports to the United States Congress

in order to assess what changes are occurring in Chinese and Japanese military capabilities.

Examining military expenditures, military modernization initiatives, and unit readiness and

sustainability will be necessary to prove empirically the evolving nature of the military

dimension and its potential for stronger influence as a lever in diplomatic affairs.

For sociopolitical impact of economic and military changes, the International Crisis

Group (ICG), surveys from the Pew Research Center, news and media sources providing

coverage of civic group’s actions and commentary by influential peoples will be examined.

In addition, analyzing official policy white papers and speeches from domestic leaders will

also be referenced to show how economic and military changes produced perceptions and

guided decisions and behaviors. Scholarly sources from China and Japan subject matter

experts will be used to support the overarching argument and guide the overall analysis.

Analyzing economic and military trends and examining them from the

sociopolitical perspective within the context of the S/D territorial dispute will help link

these interactions together enhancing our understanding of how these separate but

complementary factors contributed politically and bureaucratically elite’s policy behaviors

and interactions.

E. ORGANIZATION

The thesis will be framed around specific time periods to show how changing

structural conditions contributed to changing perceptions which culminated in the

uncharacteristic escalation of the S/D territorial dispute. This in turn caused a fundamental

shift in how Beijing and Tokyo approached the dispute with respect to the Sino-Japanese

relationship post-2013. Therefore, the thesis will be organized into four chapters as

outlined below:

15

1. Introduction

2. 2001-2009: A Decade of Tense Moderation

3. Emergence of Post-2010 Escalation

4. Emergence of Post-2013 Strategic Competition

This thesis will examine and assess the changing trends during the 2001–2009

period that contributed to the weakened moderation and isolated, yet heightened periods of

escalation. This period was a time of significant transition between China and Japan that

provided the impetus for more antagonistic behavior on both sides of the East China Sea.

Following this overview, the thesis will analyze the 2010–2013 period which culminated

in a more assertive China and an increasingly wary Japan. This uncharacteristic escalation

would evolve the territorial dispute into a new normal as a result of the misunderstandings

that occurred. Lastly, the post-2013 escalation period will be reviewed to understand the

current state of the dispute as well as assess the long-term strategic implications of the

dispute.

16


17

II. 2001–2009: A DECADE OF TENSE MODERATION

The first decade of the 21st century was a time of volatility for both China and

Japan, domestically, and more importantly, bi-laterally, within the context of the Sino-

Japanese relationship. For China, structural changes produced confidence and

assertiveness within the people as well as the leadership. The significance of this domestic

change was a more dynamic and bolder Chinese posture toward domestic and foreign

policy issues. For Japan, structural changes meant a relative decline which created equally

potent but less positive sentiments. This domestic transition toward increased anxiety also

produced a more dynamic and bolder Japanese posture that led to an equally assertive Japan

driven by domestic expectations for a stronger response.

While proactive management of the territorial dispute persisted, this underlying

current of competitive tension would lay the foundations, and arguably help facilitate, a

series of unintended consequences that would escalate the S/D territorial dispute into a new

cycle of dispute management.

A. CHINA’S RAPID RISE

In China, the socio-economic and political transformation the country experienced

paved the way for a more assertive leadership collective and emboldened civic society.

Internal structural changes profoundly influenced public discourse, causing China’s new

leadership to re-examine the Senkaku/Diaoyu (S/D) territorial dispute that was temporarily

shelved by the previous generation of Chinese and Japanese leaders.35

1. 21st Century China in Transition

The primary drivers of China’s economic rise was due to internal structural and

institutional changes that had domestic and international significance.36 While interpretive

35 Reinhard Drifte, “The Japan-China Confrontation Over the Senkaku/Diaoyu Islands – Between

Shelving and Dispute Escalation,” Asia-Pacific Journal 12, no. 3 (July 27, 2014): 9–11, https://apjjf.org/-Reinhard-Drifte/4154/article.pdf.

36 Barry Naughton, The Chinese Economy: Adaptation and Growth, 2nd ed. (Cambridge, MA: MIT Press, 2018), 1–2.

18

attempts on statistical measures are often a subject for debate given the dynamic nature of

social processes that are influenced by many variables, the significance of the institutional

reforms started by Deng Xiaoping and reinforced by his successors during the latter part of

the 20th century and into the early 2000s can be best understood by looking at the

significant growth observed in key economic indicators as shown in Table 2.37

Table 2. China’s Economic Trends (Post-WTO Entry)38

Indicator 2001 2002 2003 2004 2005 2006 2007 2008 2009

Annual Growth (Real GDP, %)

8.33% 9.13% 10.04% 10.12% 11.40% 12.72% 14.23% 9.65% 9.40%

Total Trade (% of GDP) 38.53% 42.75% 51.80% 59.51% 62.21% 64.48% 62.14% 57.50% 44.68%

Exports (% of Global Exports)

3.55% 4.14% 4.80% 5.35% 5.98% 6.68% 7.28% 7.58% 7.87%

Net FDI (In, approx. USD)

47 Billion

53 Billion

57 Billion

68 Billion

104 Billion

124 Billion

156 Billion

171 Billion

131 Billion

Net FDI (Out, approx. USD)

9 Billion

6 Billion

8 Billion

7 Billion

13 Billion

23 Billion

17 Billion

56 Billion

43 Billion

China’s rapid growth and transformation into an export-oriented trading

powerhouse during this decade also meant a significant increase in the overall quality of

life (QOL) for its citizens. While China’s aggressive industrial-driven growth produced an

unbalanced economy in which capital investment exceeded personal consumption and the

proportion of national income was collected largely by the capitalist, Kroeber argues that

looking beyond the aggregate statistics reveals that all levels of Chinese society was

37 From 2008–2009, a Global Financial Across occurred that produced a downward trend in economic

growth worldwide, to include Japan, the United States and other G-20 states. 38 Adapted from World Bank, World Development Indicators (WDI).

19

uplifted from this economic explosion.39 Supporting this argument, Naughton also makes

a similar assertion stating that although the unevenness of the rapid growth has increased

the level of inequality in Chinese society, the overall QOL improved across the board.40

Despite the increased cost of living, the increase in spending power allowed the Chinese

people to improve their standard of living through improved housing, access to more

consumables, and the ability to save extra money.41 Table 3 provides a brief snapshot of

Chinese QOL over the first decade of the 21st century showing a marked improvement

despite a wavering Gini Coefficient.

Table 3. China Quality of Life Trends42

Indicator 2000 2005 2010 Gini Coefficient 0.60 0.65 0.62 GDP per Capita ($ 2011, PPP)

$3,701 $5,719 $9,526

Adult Literacy (%, 15 and older)

90.9% N/A 95.1%

Life Expectancy (Birth, Years)

72 74 75.2

Education Index 0.481 0.535 0.602 Internet Users (%, Population)

1.8% 8.5% 34.3%

Unemployment (%, total labour)

4.5 4.1 4.2

Rural Population Access to Electricity (%, rural population)

94.1% 96.2% 98%

Employment in Services (%, population)

28.1% 34.6% 43.6%

Vulnerable Employment (%, employment)

53.3% 45.3% 36.9%

39 Arthur R. Kroeber, China’s Economy: What Everyone Needs to Know (New York, NY: Oxford

University Press, 2016), 182. 40 Naughton, The Chinese Economy, 237–238. 41 Kroeber, China’s Economy, 182. 42 Adapted from United Nations Development Programme, Human Development Data (HDD).

20

One argument presented to explain the inconsistency in the data is that the

government’s focus on social services, support of agricultural prices and rural incomes

likely had, to some degree, helped ease the transition that inevitably produced winners and

losers.43 A big reason why Beijing responded in this manner may be due to the fact that

Hu Jintao, who served from 2002 to 2012, was the paramount leader during this period of

transition; Hu Jintao’s early political career in rural China is often referenced by Chinese

experts in explaining his personal motivations in addressing inequality and promoting

stability.44

Beyond the social impact, the wealth generated as a result of China’s trading

activity also enabled China to pursue significant modernization of its security apparatus.

While China’s military expenditure as a share of GDP and government spending remained

relatively constant, it increased significantly from a per capita perspective. Table 4

provides a broad overview of the PRC’s funding allocation to its defense budget.45 Since

a macro-perspective of China’s defense expenditures doesn’t reveal the significance of its

military development, a more intimate analysis of the nature of Beijing’s defense spending

provides a better understanding of China’s rise from the military and regional security

perspective.

43 Naughton, The Chinese Economy, 237. 44 Marc Lanteigne, Chinese Foreign Policy: An Introduction, 3rd ed. (New York, NY: Routledge,

2016), 25. 45 SIPRI estimates of the People’s Republic of China’s Military Expenditures, Not Actual Figures.

21

Table 4. People’s Republic of China Military Expenditures46

Indicator 2001 2002 2003 2004 2005 2006 2007 2008 2009 Military

Expenditure (% of GDP)

2.1% 2.2% 2.1% 2.1% 2.0% 2.0% 1.9% 1.9% 2.1%

Military Expenditure (% of Gov’t Spending)

11.98% 11.87% 11.63% 11.58% 10.98% 10.96% 10.54% 8.38% 8.09%

Military Expenditure (per Capita,

$)

21.6 24.7 26.9 30.7 34.7 41.6 50.9 64.2 78.1

According to the 2010 China Military Power report, a Department of Defense

(DOD) report to Congress on the military and security developments involving the PRC,

the communist state has undergone an expansive military modernization campaign since

the turn of the 21st century. Consistent with Hu Jintao’s vision of Harmonious Society,

nothing in China’s National Defense Paper’s from 2000 to 2010 provided any indication

of the PLA’s desire to challenge the territorial sovereignty of regional neighbors or use its

military for hostile means. With the exception of the Taiwan issue that has been

consistently a core interest of the CCP, the party’s official rhetoric has been focused on

cooperation. In fact, the SECDEF 2010 report recognized the positive benefits of PRC’s

military modernization by pointing to the PLA’s active involvement in performing

international peacekeeping operations (PKO), humanitarian assistance and disaster relief

(HADR), as well as counter-piracy operations, but the report also emphasized the concerns

the Department of Defense (DoD) had regarding the PLA’s pursuit of anti-access and area-

denial (A2AD) capabilities.47 While not an imminent danger, the report acknowledged that

Beijing’s investment in its military, while natural for any rising power, also had strong

implications for how China could use its military force to, “gain diplomatic advantage or

46 Adapted from Stockholm International Peace Research Institute, SIPRI Master Database. 47 Office of the Secretary of Defense, Annual Report to Congress: Military and Security

Developments Involving the People’s Republic of China 2010 (Washington, DC: Congress, 2010), https://dod.defense.gov/Portals/1/Documents/pubs/2010_CMPR_Final.pdf.

22

resolve disputes in its favor.”48 Reinforcing this sentiment, the same report provided a

snapshot depicting the rapid growth of the PLA’s acquisition of more modern warfare

operational systems and platforms as shown in Table 5.

Table 5. People’s Liberation Army Force Composition49

Platform/Asset Type 2000 2004 2008 2009 Naval Surface Force ~2% ~5% ~25% ~25% Submarine Force ~8% ~9% ~48% ~50% Air Force ~1% ~10% ~20% ~25% Air Defense Force ~5% ~10% ~35% ~42%

China experts, like Glosny, argue that China’s pursuit of limited power-projection

capability is driven by rational behavior that reflects Beijing’s desire to secure its overseas

interests and fulfill its international obligations, but acknowledges that these developments

could also be used to prevent, “others from challenging Chinese sovereignty and seizing

resources.”50 In the end, it would be up to Beijing to alleviate any concerns that its regional

neighbors may have about China’s military rise. While the early 2000s did not produce any

significant military to military interactions between the PLA and the JSDF, the rise of

China’s military power relative to Japan’s stagnant military budget and constrained defense

policy did produce a sense of anxiety and concern in Japan, foreshadowing the escalation

in 2012 and the years following; characterized by progressively more militaristic activity.

2. China and the World

Beyond material changes, globalization had also given China a greater voice in the

multi-lateral institutions that facilitate global governance. While China’s entry into the

48 Office of the Secretary of Defense, Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2010.

49 Source: Office of the Secretary of Defense Annual Report to Congress on Military and Security Developments Involving the People’s Republic of China 2010. https://archive.defense.gov/pubs/pdfs/2010_CMPR_Final.pdf

50 Michael A. Glosny, Phillip C. Saunders, and Robert S. Ross, “Debating China’s Naval Nationalism [with Reply],” International Security 35, no. 2 (2010): 167, http://www.jstor.org/stable/40981246.

23

WTO in 2001 gave China greater access to the global market economy, it was China’s

participation in regional institutions like the Asia-Pacific Economic Cooperation forum,

the East Asian Summit, the Shanghai Cooperation Organization, and the ASEAN+3 in

addition to Beijing’s membership in the United Nations, in particular, its seat on the United

Nations Security Council (UNSC), that provided Beijing with a forum in which it could

express its position on important issues and influence regional policies in the pursuit of its

domestic interests. Compared to the monolithic China of the past, the PRC of the 21st

century led by a new generation of leaders that had more international experience became

more proactive in leveraging global institutions to address the challenges it had

domestically and abroad..51 Some scholars argue that China’s increasing membership into

multi-lateral institutions regionally and internationally have not always been positive,

instead revealing China’s dissatisfaction with the prevailing norms and principles that

provide the foundation for the current international order. According to Lim, China’s push

for limiting the United States, India, Australia and New Zealand out of the Association of

South East Asian Nations (ASEAN) network, its official rhetoric promoting ASEAN+3 as

the main driver of East Asian long-term growth, and its constant reminder to smaller

countries of China’s status as a great power is indicative of China’s ambitious goals in

pursuing its interests abroad.52 While China has ratified the United Nations Convention on

the Law of the Sea (UNCLOS), Beijing has rejected the UNCLOS mandate that countries

subject themselves to international arbitration for settlement of maritime disputes,

preferring instead to resolve disputes bi-laterally between disputing states only.53 Not

surprisingly, Beijing’s rejection of the United Nations International Criminal Court (ICJ)

decision related to China’s dispute with the Philippines regarding the Paracel islands

reinforced in some people’s mind of China’s expected behavior with other maritime and

territorial disputes. While Japan is not a small country, economically nor politically,

Beijing’s desire and ability to leverage its rising status in the region combined with its

51 Lanteigne, Chinese Foreign Policy, 75. 52 Lim, “How (Dis)Satisfied is China? A Power Transition Theory Perspective,” 296. 53 Jingchao Peng and Njord Wegge, “China and the Law of the Sea: Implications for Arctic

Governance,” Polar Journal 4, no. 2 (2014): 29, https://doi.org/10.1080/2154896X.2014.954887.

24

deeper knowledge of international law gives Beijing more incentives to adopt a stronger

posture toward its territorial dispute with Japan.

From the legal perspective, Ramos-Mrosovsky argues that the manner in which

international law is constructed has actually dis-incentivized conflict resolution or

compromise. His central argument is backed by three key points.54 First, UNCLOS is too

simplistic to address the uniqueness of the Senkaku/Diaoyu islands dispute. By defining

the economic and strategic value of territory based on a simplistic definition, it

unrealistically increases the value of the islands to be of more importance. Second, the

nature of international customary law regarding the acquisition of territory incentivizes

both countries to pursue more aggressive policies to prove territorial sovereignty. This tit-

for-tat diplomacy leads to an increasingly hostile and escalatory behavior that is fueled by

practical and emotional motivations. Lastly, the ambiguity of customary international law

discourages legal mediation due to its unpredictability and encourages competing nations

to create justifications that fit their narrative.

3. Domestic Pressures and Opportunities

Twenty-first century internal structural changes produced a renewed sense of

confidence and assertiveness within China. For the people, it increased their ability to

become more vocal and influential in domestic affairs. For the CCP, it increased their

ability to become more influential in international affairs, but it also required them to

become more attune to public opinion. The significance of this transition meant a rise in

ethnic nationalism that, with the help of social media, was effectively externalized by the

people and its leadership. In addition, nationalism created an opportunity and a threat for

the CCP’s collective leadership that was gradually becoming more sensitive to the public,

a citizenry that began to have an increasingly greater influence on domestic politics as well

as foreign policy. A minor yet still important factor that also contributed toward the threat

perception developed by Japan was the decentralization of leadership that enabled other

54 Carlos Ramos-Mrosovsky, “International Law’s Unhelpful Role in the Senkaku Islands,” University

of Pennsylvania Journal of International Law 29, no. 4 (2008): 906–907, https://scholarship.law.upenn.edu/jil/vol29/iss4/2/.

https://scholarship.law.upenn.edu/jil/vol29/iss4/2/

25

interest groups within the Chinese power structure to operate more independently based

only on general guidance from the center. This failure in lock-step coordination would

ultimately add confusion and increased mistrust between China and Japan.

While tensions within the Sino-Japanese relationship were still proactively

managed through 2009, this structural transformation produced a sense of pride, confidence

as well as opportunism throughout Chinese society that eventually would facilitate the

emergence of more volatile domestic pressures that would influence Beijing’s approach to

its domestic and international affairs later on.

The most significant change was a shift in Beijing’s leveraging of national

sentiment and public opinion that it had exploited since the Tiananmen Square event. While

the CCP had always been strategic in its handling of civic protests in order to maintain

party control and advance its interests, the 21st century produced a new dimension of

volatility that required Beijing to pursue a more nuanced, and a more deliberate

management toward civilian demonstrations. This challenge would inevitably influence

Beijing’s responses toward Tokyo’s diplomatic behavior in a variety of Sino-Japanese bi-

lateral issues like the S/D territorial dispute as well as more broadly, in terms of global

governance. Weiss argues that, “the decision to allow or repress nationalist protest helps

signal an authoritarian government’s intentions and shapes its room for diplomatic

compromise.”55 Further elaborating on this core argument, Weiss asserts that the costs of

curtailing and the risks of failure in repressing protests produce incentives, or alternatively,

constraints which have led Beijing to adopt a tougher foreign policy stance.56 Supporting

this idea that a more assertive and confident public and its strategic management by the

Chinese state has become more prominent in the post-2000 era is the massive endeavor by

Beijing to measure public sentiment through the use of polling companies.57 According to

Lampton, Chinese diplomats have often referred to public opinion as a strong influence in

55 Jessica C. Weiss, Powerful Patriots: Nationalist Protest in China’s Foreign Relations (Oxford:

Oxford University Press, 2014), 2. 56 Weiss, Powerful Patriots, 3–4. 57 David M. Lampton, Following the Leader: Ruling China, From Deng Xiaoping to Xi Jinping

(Berkeley: University of California Press, 2014), 72.

26

Beijing’s policy decisions regarding Taiwan, the United States, as well as its maritime

disputes with its regional neighbors.58 His interview with Niu Xinchun, an analyst at the

China Institutes of Contemporary International Relations, also suggested that public

opinion was becoming a stronger influence on Beijing. Xinchun explains that the

“insecurity of leaders who needed public support, along with a more self-confident and

assertive public [was the cause of] Beijing’s tougher posture in 2009 and 2010.59 While

the explanation provided by Chinese diplomats and Xinchun, a scholar that works for the

Chinese government, can be interpreted in many ways, one thing that is clear was the

growing role that public opinion played in the decision making calculus of Chinese leaders.

According to Zhao, “many Chinese, and many in the leadership, believe that China’s rising

power gives their country the ability to settle historical and territorial disputes on China’s

terms.”60 Consequently, this conviction as well as a desire to preserve regime survival has

created a pressure on the government to respond forcefully during escalations when

protests become too costly to curtail or too risky to repress after the protest has gone long

underway.61

A good example of the government-people dynamic and the increasingly complex

role that nationalist protests have on state affairs was the 2005 anti-Japan protests that

occurred during a low point of Sino-Japanese relations. Prior to the 2005 nation-wide anti-

Japan protests, there were a series of events that contributed to the rising tension. Japanese

historical textbook controversies, Prime Minister Koizumi’s repeated visits to the

controversial Yasukuni Shrine, the Japanese government’s decision to lease two of the

Senkaku/Diaoyu islands from the private owner and periodic landings on the islands by

private citizens gradually increased the temperature of the strained relationship. The latter

58 Lampton, Following the Leader, 73. 59 Lampton, Following the Leader, 73. 60 Suisheng Zhao, “Beijing’s Japan Dilemma: Balancing Nationalism, Legitimacy, and Economic

Opportunity,” in Uneasy Partnerships: China’s Engagement with Japan, the Koreas, and Russia in the Era of Reform, ed. Thomas Fingar (Palo Alto: Stanford University Press, 2017), 88.

61 Duan Xiaolin, “Think Territory Politically: The Making and Escalation of Beijing’s Commitment to Sovereignize Diaoyu/Senkaku Islands,” Pacific Review 32 no. 3 (2018): 437, https://doi.org/10.1080/09512748.2018.1490805.

https://doi.org/10.1080/09512748.2018.1490805

27

two interactions even led to grassroot protests, facilitated by the internet, as well as live

demonstrations in front of the Japanese Embassy in Beijing.62 However, it was Japan’s bid

to join the United Nations Security Council (UNSC) that signaled a marked change in the

size and nature of the anti-Japan protests. According to Weiss, “at least 38 cities…an

estimated 280 organizations, 107 universities, 41 technical schools, and 28,230,000

internet users signed petitions against Japan’s bid.”63 Initially, to avoid the costs of

rejecting Japan’s bid amidst rising international consensus, Beijing took a softer approach

to its opposition toward Japan’s bid. They pointed to Chinese public opinion, which they

tacitly allowed to simmer, as one of the reasons for why China could not support Japan’s

request to join the UNSC.64 According to Weiss, there is some evidence that points to

Beijing’s deliberate attempts to manage the nature, content, and scale of the protests that

were picking up steam. Civic groups had to work with the Public Security Bureau for

assembly in public places, the government would limit domestic coverage by local

newspapers, and instruct select civic groups like the China Federation for Defending the

Diaoyu Islands (CFDD) to stay home.65 However, the rising anti-Japan and consequently,

anti-government sentiment growing amidst Beijing’s continued soft stance toward the issue

and the exacerbating role of civic protestors with other agendas resulted in higher costs of

curtailment and risks of repression. This inevitably pushed Beijing to adopt a more

assertive stance regarding Japan’s UNSC bid in order to preserve the CCP’s legitimacy,

and accountability to its people.66 This gradual evolution of a state-complicit protest that

ultimately resulted in public pressured-state behavior reveals the increasingly complex role

that nationalism had begun to play in domestic politics, facilitated by structural changes

that increased the ability of the people to mobilize and express themselves.

Although a shift back to the center by Xi Jinping has not eased the tensions

surrounding the territorial dispute, which will be examined more closely in the last chapter,

62 Weiss, Powerful Patriots, 129. 63 Weiss, Powerful Patriots, 131. 64 Weiss, Powerful Patriots, 138. 65 Weiss, Powerful Patriots, 140, 144. 66 Weiss, Powerful Patriots, 146.

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the second factor that played an important role in stressing the Sino-Japanese relationship

at the turn of the 21st century has been a result of a more collective form of leadership that

weakened the control of the Paramount Leader during this first decade. According to

Lampton, a senior Chinese official stated that the Hu Jintao era of leadership would be a

shift toward collective leadership that would make decisions based on consensus but would

mean less authority for the Paramount Leader.67 This turned out to be true because this

more de-centralized approach to decision making would ultimately produce an unintended

consequence that would ultimately increase the escalatory behavior near the

Senkaku/Diaoyu islands.

Most notably this de-stabilizing behavior came from the People’s Liberation Army

(PLA), China Coast Guard (CCG), and State-owned oil companies, organizations that had

enjoyed greater freedoms during the Hu Jintao era to make decisions at the tactical and

operational level.68 The diversity of influence among this collective leadership structure

created a “two centers” problem in which China’s Paramount Leader and the Politburo

Standing Committee were, at times, reacting to PLA or other agency decisions that had,

for better and for worse, significant consequences for Chinese foreign policy.69 While civic

protests on or near the disputed islands operated under a mutually agreed upon protocol,

the trend of increased official Chinese maritime activity was markedly different. The

discovery of oil, gas, and other natural resources led to the 2003 drilling of the gas fields

near the disputed islands by the China National Offshore Oil Corporation (CNOOC).70

Despite Japanese protests, in 2005, the Chinese deployed five warships to escort its

government research vessels survey mission in the same area.71 The decade leading up to

the September 2010 incident also experienced increased Chinese maritime activity near

Japan. In 2004, a Chinese submarine conducted a submerged transit near Okinawa,

67 Lampton, Following the Leader, 68. 68 Lampton, Following the Leader, 186. 69 Lampton, Following the Leader, 189. 70 Zhao, “Beijing’s Japan Dilemma: Balancing Nationalism, Legitimacy, and Economic

Opportunity,”79. 71 Zhao, “Beijing’s Japan Dilemma: Balancing Nationalism, Legitimacy, and Economic Opportunity,”

80.

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resulting in an apology by Beijing explaining that it was a procedural misunderstanding.72

In 2008, four Chinese destroyers came even closer, passing through the Tsugaru Straight

in between the islands of Honshu and Hokkaido and then transiting through Okinawa’s

main island and Miyako island.73 In 2010, a larger fleet of ships conducted an exercise in

the East China Sea before passing between Okinawa’s main island and Miyako Island.74

This growing influencing has also coincided with an increase in lobbying for higher

budgets by exploiting the CCP’s threat perception awareness by pointing to threats on its

maritime border that challenge the PRC’s territorial sovereignty.75 Foreshadowing the de-

stabilizing and risky nature of this arrangement, the lack of a coordination mechanism

between Beijing and its Security enforcement apparatus was a driving factor in Xi Jinping’s

decision to establish an interdepartmental task force to manage the increasingly escalatory

and complex nature of the territorial dispute with Japan in 2012.76 While pre-2010 was a

period of moderation, structural changes and new domestic pressures and opportunities

began to threaten the stability of the territorial dispute, causing leaders on both sides of the

East China Sea to become more wary and doubtful of its sustained stability.

B. JAPAN’S RELATIVE DECLINE

In Japan, the political volatility occurring domestically coupled with its relative

decline amidst a regional power transition with China created a distinct yet familiar

experience that would nonetheless produce the same behavior of increased resolve and a

bold assertiveness reflective of the priorities within Japanese domestic politics.

72 Seiichiro Takago, “Japan and the Rise of China: From Affinity to Alienation,” in Uneasy

Partnerships: China’s Engagement with Japan, the Koreas, and Russia in the Era of Reform, ed. Thomas Fingar (Palo Alto: Stanford University Press, 2017), 108.

73 Takago, “Japan and the Rise of China: From Affinity to Alienation,” 108. 74 Takago, “Japan and the Rise of China: From Affinity to Alienation,” 108. 75 Lampton, Following the Leader, 190. 76 Lampton, Following the Leader, 171.

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1. Economic Stagnation and Failure in Governance

The first decade of the 2000s was a time of significant political volatility that some

Japan scholars would argue was a consequence of the “lost decade” of Japan’s economic

stagnation that began in 1991. While Japan’s economic engagement with China during the

1990s provided some economic relief, this was short-lived and Japan’s fraught economic

condition would reach a new peak of severity as a result of the 1997 Asian Financial Crisis,

an economic downturn that would also drag down the rest of the region. Although the turn

of the 21st century marked a reversal in Japan’s weak economic state, it was still a period

of persistent economic stagnation and price deflation that, along with the changing regional

security environment, produced significant socio-political anxiety over the future prospects

of Japan by leaders and civilians alike. As a result of the persistence of this economic

stagnation, many would refer to Japan’s condition during this time period as the “lost two

decades.”77

Aggravating this unsettling trend was the rise in Japan’s aging population in

conjunction with dwindling population growth that painted a grim picture for Japan’s

ability to be competitive and sustainable in the 21st century.78 From a domestic

perspective, this worrying economic trend was occurring in conjunction with a steadily

rising suicide rate that, according to the Japanese Cabinet Office, was largely driven by

health issues, economic concerns, and livelihood issues.79 From an international

perspective, this relative decline was also occurring amidst a steady rise in real GDP growth

in other parts of the Asia-Pacific, a region in which other countries like South Korea, India,

the ASEAN group of nations, and especially China, were experiencing higher growth

77 Derek Scissors and J. D. Foster, “Two Lost Decades? Why Japan’s Economy Is Still Stumbling and

How the U.S. Can Stay Upright,” Heritage Foundation, February 23, 2009, https://www.heritage.org/asia/report/two-lost-decades-why-japans-economy-still-stumbling-and-how-the-us-can-stay-upright.

78 Jonathan Shaw, “After Our Bubble: America’s Economic Prospects and Cautionary Lessons from Japan,” Harvard Magazine, July-August 2010, http://www.harvardmag.com/pdf/2010/07-pdfs/0710-HarvardMag.pdf.

79 Cabinet Office, Outline of Suicide and Implementation Status of Suicide Prevention in Japan 2014 [Summary] (Tokyo: Cabinet Office, 2014), 8.

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rates.80 Japan’s relative decline compared to others and the socio-political anxiety that the

overall condition produced can best be understood through an examination of specific

economic and quality of life indicators during this 20-year period. Table 6 provides a brief

snapshot into Japan’s floundering economic condition during the lost two decades.81 Table

7 provides a broad overview of the QOL stagnation which coincided with the economic

stagnation during this time.

Table 6. Japan Economic Trends from 1990 to 2010 (5-year increments)82

Indicator 1990 1995 2000 2005 2010

Annual Growth (Real GDP, %) 4.89% 2.74% 2.78% 1.66% 4.19%

Consumer Prices (annual %) 3.08% -0.13% -0.68% -0.28% -0.72%

Producer Prices (annual %) 1.50% -0.85% 0.05% 1.66% -0.14%

GDP Deflator (annual %) 2.61% -0.53% -1.38% -1.04 -1.90% Business Confidence Index 102.45 99.31 99.71 100.91 99.71

80 Andrew L. Oros, Japan’s Security Renaissance: New Policies and Politics for the Twenty-First

Century (New York: Columbia University Press, 2017), 72. 81 The drop exhibited in 1997–1998 is largely attributed to the Asian Financial Crisis that had

produced an overall downward trend in economic growth in Asia. 82 Adapted from World Bank World Development Indicators (WDI), International Monetary Fund

(IMF) Database, and Office of Economic Cooperation and Development (OECD) Database.

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Table 7. Japan Spending, Debt and Population Trends (5-year increments)83

Indicator 1990 1995 2000 2005 2010

Social Services and Welfare (% of Government Spending)

- - 37% 42% 46%

Government Debt (as % of GDP) 52.89% 61.74% 100.46% 130.46% 162.30%

Population 65 and above (% of Population) 11.87% 14.30% 16.98% 19.65% 22.50%

Population 0–14 (% of Population) 18.47% 16.25% 14.78% 13.83% 13.35%

Population 15–64 (% of Population) 69.66% 69.46% 68.23% 66.52% 64.15%

Population Growth Rate 0.34% 0.38% 0.17% 0.01% 0.02%

Table 8. R