When President Obama heads to Beijing next month for a summit of the Asia-Pacific Economic Cooperation (APEC), it will be an opportunity to take stock of the “rebalance”: to measure its impact on the region and the success of its objectives. Three years after Obama first announced the strategic shift in American military, economic and diplomatic resources (“the Pivot”) in 2011, the results are something of a mixed bag. The United States has enhanced military partnerships while outlining plans for bolstering its military presence in the region, yet on the economic front, Trans-Pacific Partnership (TPP) talks drag on with tenuous prospects. Diplomatically, the Pew Research Center on one hand reports a plurality of respondents in every Asian country polled except Pakistan, Malaysia and China view the United States as its greatest ally. On the other hand, pluralities in these three are joined by Indonesia in viewing the United States as their nations’ greatest threat.

For the Chinese press, however, the fix is in. As Xinhua noted in August, thanks to the American rebalance, the neighborhood has “lost its tranquility” by emboldening partners to take a hard stance towards China. Yet this narrative ignores not only the role that China’s unilateral actions and bellicose talk have had in sending neighbors in the South China Sea scrambling for naval upgrades, but also discounts how a momentous series of decisions in the East China Sea has impacted regional dynamics. In September 2012, Japan’s national government announced that it had agreed to purchase three of the five disputed Senkaku islands (known to mainland China as Diaoyutai; Taiwan as Tiaoyutai) from their private Japanese owner. The Japanese decision to nationalize these islands and the Chinese decision to confront Japan over the action have perhaps done more to shape the rebalance and the success of its implementation than any other actions.

Decisions...

Much about the decisions remains a matter of conjecture. When Japan sparked the crisis through its purchase on September 11, 2012, it did so ostensibly to preempt the governor of the Tokyo Metropolitan Government, ultranationalist Shintaro Ishihara, from himself purchasing the islands. Ishihara had declared his intention to do so months earlier in April 2012 and would likely have built structures on the Senkakus explicitly to provoke China. Reinhard Drifte’s extensive examination in the Asia-Pacific Journal of the incident describes the Japanese decision-making process as driven by the belief that they were choosing between the lesser of two evils and then attempting to convince China of this view. Whether or not Japan believed it had succeeded in doing so, Drifte notes that a delay in the deal with Ishihara after his private survey of the islands on September 2 created the opening for the central government to purchase them instead.

Much about Japan’s decision indicates communication failures. Subsequent comments by Japanese officials imply Prime Minister Yoshihiko Noda’s government was surprised by the Chinese response, and former U.S. Assistant Secretary for East Asian and Pacific Affairs Kurt Campbell said in a 2013 interview “Even though [the United States] warned Japan, Japan decided to go in a different direction, and they thought they had gained the support of China, or some did, which we were certain that they had not.”

Did the United States know Japan would purchase the islands? Perhaps not imminently, but by September 2012, it should have been clear that one of the “two evils” would occur. This is all the more readily apparent when one considers that the most important question—whether Japan could have prevented Ishihara’s purchase of the islands through some other, less incendiary means—is strangely never asked, but often assumed by those who have subsequently criticized the decision. If there was a third option it is not now readily discussed, and was likely not then obvious.[1] This is an excellent example of the need for creativity in diplomacy and government, but it seems time and energy were spent elsewhere once Noda’s circle believed it had found a palatable option.

Unfortunately for Japan, the timing of its decision solidified its unpalatability. Hu Jintao, in the midst of a leadership transition, was reportedly, in August 2012, confronted by the party’s future leaders demanding he take a stronger position on the dispute, and only two days before the Japanese announcement, briefly met with Noda at that year’s APEC summit. Because it is assumed Hu and Noda talked about the Senkakus, analysts believe Hu lost face by the announcement. Hong Kong activists landing on the Senkakus in August 2012 were followed within days by Japanese activists. But the latter were seen by the Chinese to be more hospitably treated in their eviction as—unlike the former—they were not “illegally” arrested by the Japanese Coast Guard, thereby prompting riots in China. To top off the timing muddle, mid-September is a time of anniversaries condemning Imperial Japan’s aggression, such as the anniversary of the Mukden incident.

To be sure, the nationalization was not the first row between China and Japan over the islands. The 2010 ramming of Japanese Coast Guard vessels by a Chinese fishing boat and the captain’s subsequent arrest sparked a diplomatic stand-off that ended only with his release. However, unlike such previous incidents, and very likely because of the political damage done to the Japanese government from that perceived capitulation, there was no willingness this time on the Japanese side to make concessions in the wake of the Chinese backlash. Japan acted, China chose to react, and neither side chose to back down. As Drifte puts it, “Both sides made it impossible with their extreme and diametrically opposed positions to find a compromise.”

…And Consequences

These decisions have had far-reaching impacts on the United States’ rebalance initiatives, and on the rebalance goal of fostering a stable region. Most immediately, the resultant Japanese-Chinese hostility “definitely helped improve U.S.-Japan ties,” notes a longtime China analyst. Prior to the East China Seas issues, ties were “trending a bit negative,” with previous prime minister Yukio Hatoyama going so far as to advocate for what was seen by many as a loosening of the alliance, as well as calling in 2009 for an “East Asian Community” that excluded the United States. The subsequent 2010 fishing boat incident and undiminished enmity with China after the 2012 nationalization convinced Japanese leaders of the importance of repairing security ties with America.

Such thinking coincided with the return to power of nationalist prime minister Shinzo Abe in December 2012, who has pushed through “significant” increases in naval spending—including for a Japanese “Marine Corps” able to retake Chinese-captured islands, a new defense export framework, structural reforms of Japan’s national-security apparatus, and most recently a controversial reinterpretation of the constitution to allow Japanese forces to come to the aid of allies under attack in limited circumstances—the right of collective self-defense. Meanwhile, James Holmes points out the operational experience borne of countering the hundreds of Chinese incursions into the waters and airspace around the disputed islands has strengthened the Japanese Maritime Self-Defense Force’s proficiency.

The decisions in the East China Sea also impacted Asia more broadly by spurring Japan’s enlistment as a full-fledged partner in the rebalance in order to create strategic depth and also look for economic partners. Zachary Keck says China’s refusal to back down over the Senkakus and the dispute’s intensification increased Japan’s “willingness to cooperate with the U.S. outside its immediate area, and led it to enhance its own diplomacy and military cooperation with powers outside of Northeast Asia. Nowhere was this more the case than in Southeast Asia. One of the biggest stories of 2013 was Japan’s reemergence in Southeast Asia, with Abe’s concern over China as the driver”—sentiments echoed by the China analyst with whom I spoke.

American initiatives to gain and maintain relationships and military access in Southeast Asia are of particular importance for the rebalance, as the strategy relies not just on rebalancing resources from other theaters to Asia, but also within Asia. In his new book about the strategic competition in Asia, Fire on the Water, Robert Haddick notes the historic “basing geography” of the region, namely that “the congealing of U.S. military power in bases in the north-west corner of the Pacific” has generated part of the “strategic problems policymakers and commanders now face” and are trying to overcome. U.S. efforts to break through such limitations include new military presence agreements with Australia, the Philippines and Singapore, as well as overtures for closer cooperation with many others in the region.

With Japan on board, the United States found an ally particularly suited to its efforts to build partnership capacity in the South China Sea. “During his first year in office,” says Keck, “Abe personally visited every single ASEAN nation,” and Japan began an era of patrol boat diplomacy, with agreements for their sale to Vietnam and the Philippines, and reports of a deal with China-backed Sri Lanka to the west. There are also indications that the United States and Japan want to develop a framework for greater surveillance and information-sharing among South China Sea states, although what shape this would take is unclear. Additionally, the new export rules made possible deals with China-skeptic powers along Asia’s periphery, currently in various stages of negotiation: submarines to Australia and amphibious US-2 military aircraft to India.

Japan is also strengthening its historically strong economic ties with Southeast Asia, which researcher Malcolm Cook believes is a “Second Wave” of foreign direct investment in the region, due in part to concerns about overconcentration of overseas production in China. Violent anti-Japanese riots at Chinese factories in the wake of the Senkakus’ nationalization likely factors into investment decisions. Such investment and aid can serve multiple strategic purposes, such as a $6B aid and trade deal with Bangladesh. In addition to funding infrastructure, including a deep-sea terminal and industrial park exclusively for Japanese investors, the package also removed Bangladesh as a rival candidate for a temporary seat on the UN Security Council.

For their part, Southeast Asian nations have been driven into closer cooperation with the United States and Japan less as a result of actions in the East China Sea than China’s behavior closer to home. These have been exemplified by China’s parking of an oil rig in Vietnam’s claimed exclusive economic zone (EEZ) for two months this summer; its forcible tactics in contesting control over ownership of reefs, shoals and islands; and the capability buildup on those it already controls. Yet the tactics and actions China unveils in the East China Sea, such as the no-notice declaration of an air defense identification zone (ADIZ) last December and the threatened use of a flood of fishing vessels cannot help but have raised concern for their replication elsewhere.

A Measure of Success

While the nationalization of the Senkakus and Chinese response may have encouraged Japan’s embrace of certain rebalance initiatives, Japan has elsewhere been more reluctant, most notably in talks over the TPP, where its tariffs and market restrictions have been some of the greatest sticking points. Nor does Japan’s partnership on strategic aspects of the rebalance mean that the United States is succeeding in accomplishing its ultimate strategic objective: stability. As Carl Thayer argues, “territorial disputes in East Asia pose a risk for U.S. alliance management and the U.S. strategy of rebalancing in the Asia-Pacific.” This is true not only of the Senkakus, but also Japan’s spat with South Korea over their control of the Dokdo islets (Takeshima to Japan) and with Russia over its control of the South Kuril Islands (Northern Territories to Japan). While the fallout from the Senkakus’ nationalization certainly didn’t cause these conflicts, some of the resultant nationalist fervor among Japan’s leaders has generated severe challenges in the country’s relations with its World War II victims, China and South Korea, through revisionist gestures.

The China analyst notes another trade-off: “On one hand, reinforcing alliances is a key pillar of the rebalance. On the other hand, a second key pillar is improving ties with China, and here the East China Sea problem has hurt the rebalance.” It is this second pillar that is the hardest to achieve without sacrificing the others.

As much as China has admonished the United States as the source of instability in the region, Washington has encouraged its partners and allies to use peaceful means of conflict resolution, with the decision to nationalize the Senkakus arguably an exception. China has meanwhile repeatedly engaged in unilateral and controversial actions, seeming at times to not care what its neighbors think.

But there are signs a ratcheting down of tension of the conflict in the East China Sea at least may be at hand. Japan, which has until now refused to acknowledge that the Senkakus are subject to an ongoing territorial dispute, has reportedly agreed to the concession, at least privately. In exchange for doing so, and thereby lending a modicum of legitimacy to China’s rights to press its claims, Abe will supposedly be able to meet with Xi on the sidelines of November’s APEC summit in another echo of U.S. action. Both sides may at last calculate that there is more to be gained by combating growing economic malaise than posturing at combating each other. A further indication that the timing is right is that despite a visit by three of his cabinet members and an offering sent on his behalf to the Yasukuni shrine, Abe was still able to meet Chinese premier Li Keqiang at an Asia-Europe summit in Milan, which augers well for the prospects of a Xi-Abe meeting.

While positive signs and first steps, a private acknowledgment and symbolic chat will not by themselves result in a permanent settlement or lasting defusing of regional tension. But Japan’s acknowledgment of the dispute does open one route to such a solution: submission of the dispute to an international tribunal. That China would not likely support adjudication of its claim in the East China Sea through a tribunal (it has not, after all, itself filed for arbitration) highlights the challenge of pursuing regional stability through cordial relations with a China that can appear to, but must not be allowed to, require the abandonment of respect for the rule of law as the price of friendship. Japan’s decision to so far not file may be a calculation that doing so would inflame the situation anew, although cynics can rightly say that this hasn’t been the government position.

While no firm verdict on the rebalance will be in by November, it’s clear that a set of decisions two years ago greatly impacted both its successes and challenges. Given the importance of the region for America’s national interest in the years to come, it’s also clear the rebalance is an effort worth the time and energy to help ensure its success. The flare-up of tensions over the Senkakus, not caused by the rebalance, should not be the most important shaper of its legacy.

Scott Cheney-Peters is a surface warfare officer in the U.S. Navy Reserve and the former editor of Surface Warfare magazine. He is the founder and president of the Center for International Maritime Security (CIMSEC), a graduate of Georgetown University and the U.S. Naval War College, and a member of the Truman National Security Project’s Defense Council. The views expressed in this article are his alone and are not official positions of any of his affiliated organizations.

[1] The difficulty is compounded by reports that the seller both wanted to sell to Ishihara for his nationalist views and financially needed to sell. Finding an alternative, less nationalistic “private” buyer—perhaps an ecological foundation—might have provided an option, but it too would have relied upon the owner’s willingness to sell to that buyer and the buyer’s willingness to foot the bill, and gambled on the Chinese response.

Image: Flickr/Al Jazeera English/CC by-sa 2.0