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Japan hits back at China with wizard comment – Asia-Pacific – Al Jazeera English

Japan hits back at China with wizard comment – Asia-Pacific – Al Jazeera English.

Hayashi’s letter was an apparent response to an earlier op-ed by Chinese ambassador to London [AP]
The diplomatic bickering between Japan and China has descended into name-calling in the British press, with claim and counter-claim by the countries’ ambassadors invoking the fictional evil wizard of the Harry Potter series, Lord Voldemort.

In an opinion piece published in Britain’s Daily Telegraph newspaper on Monday, Tokyo’s envoy to London, Keiichi Hayashi, compared Beijing to the villain of JK Rowling’s multi-million selling books.

“East Asia is now at a crossroads. There are two paths open to China,” Hayashi wrote.

“One is to seek dialogue, and abide by the rule of law. The other is to play the role of Voldemort in the region by letting loose the evil of an arms race and escalation of tensions, although Japan will not escalate the situation from its side.”

Hayashi’s letter was an apparent response to an earlier op-ed – also invoking Voldemort – published by the paper on January 1 by Liu Xiaoming, Chinese ambassador to London.

In the letter, Liu harshly criticised Japanese Prime Minister Shinzo Abe’s recent visit to Tokyo’s controversial Yasukuni war shrine, which honours Japanese war dead, including men convicted of serious war crimes in the wake of Japan’s 1945 World War II defeat.

On Monday, Abe said he wanted to explain to leaders in China and South Korea why he visited a controversial shrine.

He expressed his hope that the leaders could meet to diffuse tension over longstanding territorial disputes and historical issues.

The shinto shrine is seen by China and other Asian nations as a symbol of Japan’s militarist past.

“If militarism is like the haunting Voldemort of Japan, the Yasukuni Shrine in Tokyo is a kind of horcrux, representing the darkest parts of that nation’s soul,” the Chinese envoy wrote.

In the Harry Potter series, a horcrux is a receptacle in which evil characters store fragments of their souls to enable them to achieve immortality.

Japan Population Falls by Record in Challenge for Abe’s Campaign – Bloomberg

Japan Population Falls by Record in Challenge for Abe’s Campaign – Bloomberg.

Japan’s population declined by the most on record in 2013, highlighting the demographic challenges faced by Prime Minister Shinzo Abe in his campaign to revive the world’s third-biggest economy.

The population fell by 244,000, according to Health Ministry estimates released yesterday, a seventh straight year of decline. Births fell about 6,000 from a year earlier to 1,031,000 and deaths increased about 19,000 to 1,275,000.

Rising welfare costs for an ageing nation threaten to worsen a debt burden that is already twice the size of the Japanese economy. At the same time, a shrinking population caps consumer demand, making it harder for Abe to drive an exit from 15 years of deflation.

The government’s decision to raise a sales tax to 8 percent from 5 percent in April is aimed at helping to secure funds for social welfare payments. That move threatens to undermine the momentum building in the economy from unprecedented monetary stimulus.

 

It’s not yet the end of the world as we know it, but watch Japan’s debt grow – Telegraph

t’s not yet the end of the world as we know it, but watch Japan’s debt grow – Telegraph.

Tokyo 2020: travel guide

“Japan has managed to muddle through, but it now looks as though it is close to a tipping point.” Photo: AP

 

We can all breathe a sigh of relief that the world is not going to come to an end as a result of a default by the US government. Well, for now, anyway. But this does not mean that debt problems have gone away. Indeed, across the Pacific a serious debt problem is still building in Japan.

Whereas the US debt crisis has been triggered by a disagreement between Democrats and Republicans over the role of the state in the economy and society, and specifically over “Obamacare”, Japan’s debt problem is a slow burner.

As a share of GDP, government debt has been growing since the early 1990s. This is the result of the long-running weakness of economic growth, repeated fiscal stimulus packages and a long period in which the overall price level has stagnated or fallen. Japan has managed to muddle through, but it now looks as though it is close to a tipping point.

The scale of the problem is staggering. Japan’s net government debt is about 140pc of GDP. This is way ahead of the US, which is on 87pc, and not that far below Greece. What’s more, it is easy to see the ratio increasing further. The IMF expects net debt to rise to 148pc of GDP over the next five years. In fact, if the economy performs badly, inflation remains low or borrowing costs rise, debt could easily follow an explosive path, with the ratio quickly rising towards 300pc of GDP.

So what to do? If Japan followed anything like this path, then some form of default would eventually become inevitable. Accordingly, why not cut the whole process short and get the thing over and done with by defaulting now?

Quite apart from all the usual objections to default, Japan suffers from another major obstacle, namely that its debt is overwhelmingly held by Japanese financial institutions, including banks. A default would land the financial sector with massive losses and could cause a catastrophic financial crisis.

The orthodox way to tackle debt is to impose austerity via cuts to government spending or increases in taxes. In fact, Japan will increase its consumption tax in April and quite considerable deficit reduction is promised for the next few years.

But this runs into two problems that are familiar from a European perspective. First, such austerity is not popular and the politicians in Japan may yet baulk at the scale of the tightening to be imposed.

Second, austerity tends to reduce GDP – even though George Osborne may believe that it hasn’t done so in the UK. If it does reduce GDP, then the debt to GDP ratio would probably rise.

Faster economic growth would help but is in practice difficult to achieve. The government is pursuing some supposedly radical structural reforms but it is unlikely that, even if these are pushed through, they will have much of an impact soon enough. And in trying to grow its way out of the debt problem, unlike America, Japan faces a huge demographic hurdle. It simply isn’t making enough Japanese. The size of the workforce is already falling and will continue to do so for decades.

The way out for Japan is to try to engineer a higher rate of inflation, perhaps much higher than the current 2pc target. For any given rate of increase of real GDP this would give a higher rate of growth of nominal GDP, that is to say, expressed in money terms. With debt fixed in money terms this would, other things being equal, bring down the debt to GDP ratio.

Admittedly, other things may not be equal. The danger is that markets would force up the rate of interest on Japanese debt and thereby increase the amounts that the government had to pay out in debt interest. That could easily offset the effect of higher inflation.

In fact, it could lead to the debt ratio ending up higher. Yet in the Japanese case, this is unlikely.

The Bank of Japan would continue to hold short-term interest rates at close to zero for several years. That would ensure that the rates on short-term debt remained subdued. Moreover, it would continue to buy huge quantities of Japanese government debt. It might also consider obliging financial institutions to hold extra amounts of government debt.

How would Japan achieve higher inflation? Quantitative easing (QE), or printing money, as it is colloquially known, will eventually give you higher inflation – provided that you do it on sufficient scale. This is what the Japanese central bank now seems prepared to do.

A fall of the yen would be a crucial part of the mechanism by which inflation moved higher.

This is what has happened recently. Japanese inflation has risen to 0.9pc, but almost wholly as a result of the fall of the yen from the high 70s to the dollar to about 100. There has been hardly any domestically generated inflation. But if the yen continued to weaken, that would surely follow.

Throughout the past 30 years, Japan has been a testing ground both for problems and their possible solutions that have appeared later in the West. It experienced a bubble economy in the late 1980s and then experienced the pain of a long drawn-out balance sheet recession, brought on by the collapse of asset prices and the drying up of credit.

It also went through a slow dragging deflation of consumer prices before anyone in the West thought that this was an issue. And for some time now it has faced the problems caused by an ageing and falling population.

Could it also show the way on the inflation solution to the debt problem which continues to bedevil so many countries in the West? For the UK, a deliberate embrace of higher inflation remains only a risk rather than a probability. For we are in a very different position from Japan. Our debt ratio is nowhere near as high and our potential to grow our way out of the problem is much greater, not least due to our more favourable demographic prospects. The same is true for the US.

But there are several members of the eurozone for whom this is not true. Greece and Italy spring to mind. Unless their debt is “forgiven”, some form of default appears inevitable.

While they remain in the euro, of course, they cannot default through inflation because they do not control their own monetary policy.

But if they were to leave the euro, the Japanese experience might be highly influential.

Roger Bootle is managing director of Capital Economics roger.bootle@capitaleconomics.com

 

How to Prevent a War Between China and Japan – Bloomberg

How to Prevent a War Between China and Japan – Bloomberg.

Photos: Getty Images; Illustration by A. Babar

China and Japan, Asia’s two most powerful nations, are increasingly jousting in the skies and in the seas near a set of disputed islands. Although their economies remain deeply intertwined, relations between the two governments seem locked in an irreversible, dangerous downward spiral.

Japanese Prime Minister Shinzo Abe further embittered feelings last week by visiting the controversial Yasukuni shrine, which honors the souls of Japan’s war dead, including 14 World War II leaders convicted as Class-A war criminals.

Needless to say, neither side seems terribly interested in a rapprochement. That’s a shame, because the deterioration in ties is fairly recent, stemming from a single incident involving the islands administered by Japan, which calls them the Senkakus, and claimed by China, which refers to them as the Diaoyu. A single, symbolic-but-generous gesture could well halt the slide.

Abe, though unquestionably a hawk on China, had nothing to do with the triggering event. In September 2012, then-Prime Minister Yoshihiko Noda ordered his government to buy several of the disputed islands from a private owner — an action which, in China’s view, effectively nationalized them.

Noda hadn’t intended to provoke the Chinese. On the contrary, he aimed to preempt a more aggressive gesture by hyper-nationalist politician Shintaro Ishihara — then Tokyo’s governor — who wanted to have the Tokyo metropolitan government purchase the islands and build on them to assert Japan’s sovereignty.

Still, barely two days before Noda’s decision, China’s then-President Hu Jintao had specifically warned him not to proceed. Hu’s concerns were legitimate. For years, China had quietly acceptedJapan’s “de facto” occupation of the islands even as it disputed sovereignty. By buying them, Japan appeared to be moving to “de jure” ownership. Given the nationalist mood in China, the Beijing government couldn’t risk appearing weak in its response.

If Abe really wanted to break the chain of escalation that has since played out between China and Japan, he could singlehandedly return to the status quo ante. He would only need to “sell” the islands to a private Japanese foundation or environmental group, ostensibly to preserve their undeveloped natural beauty.

Japanese hard-liners would no doubt regard such a move as a capitulation to China. It wouldn’t be. Even after a sale, Japan would continue its de facto occupation of the islands, as it has for decades. Since the islands’ purchase was made by a previous government, Abe’s Liberal Democrats need not feel bound by the decision. In fact, after pacifying his nationalist supporters by visiting Yasukuni, Abe may be in a stronger position to compromise on the islands.

In an interview with Bloomberg earlier this month, Abe called for a summit with President Xi Jinping of China and said, “Now is the time to go back to that starting point.” Abe was referring to a bilateral agreement he reached with Hu in 2006, during a previous term as Japan’s prime minister. Selling the islands would be a critical first step toward returning to that calmer time.

If Abe wanted to be bolder, he could make the same offer to China that Japan has made to South Korea over a different set of disputed islands: to have the issue resolved by the International Court of Justice. The chances of China agreeing to this are minuscule. But by taking the moral high ground, Japan would both reaffirm its reasonableness, and satisfy the major precondition China has imposed on any Xi-Abe summit — acknowledging that sovereignty of the Senkakus/Diaoyu is in dispute.

Of course, if it’s hard to imagine an Abe administration reaching out to Beijing now, it’s equally hard to see Chinese leaders responding constructively. Yet on a simple cost-benefit analysis, Xi has incentive enough to scale back aggressive naval and air patrols of the waters surrounding the islands. He has just embarked on a set of difficult, potentially far-reaching economic reforms. Although he can’t afford to look weak domestically, he also can’t afford a geopolitical crisis that would disrupt China’s economy and possibly global trade.

A major rebalancing is gradually taking place in Asia as China’s economy becomes larger than Japan’s. But it isn’t in China’s interest to push for this rebalancing too aggressively. When I was in Tokyo in early December, I was struck by the intensity of concern over China’s aggressive posturing. The harder the Beijing government pushes now, the more rapidly Japan will move to upgrade its military capabilities and strengthen its alliances with the U.S. and countries ringing China.

Both sides need to find a way to ratchet down their words and deeds. Japan can and should take a first, small step forward by “going back” and selling the islands. Any Japanese leaders who doubt the wisdom of doing so should ask themselves a question: Are they really better off today than they were two years ago?

(Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, is author of “The Great Convergence: Asia, the West and the Logic of One World.”)

To contact the writer of this article: Kishore Mahbubani at kishore.mahbubani@mahbubani.net.

To contact the editor responsible for this article: Nisid Hajari at nhajari@bloomberg.net.

 

Chinese Media Compares Japan PM To “Terrorists And Fascists”; Blasts Abe’s Homage To “Devils”, Urges Boycott | Zero Hedge

Chinese Media Compares Japan PM To “Terrorists And Fascists”; Blasts Abe’s Homage To “Devils”, Urges Boycott | Zero Hedge.

On Thursday, Japan prime minister Shinzo Abe stunned the world by defying everyone – including the EU and the US whose embassy sent a tersely worded letter in which is said that it is “disappointed that Japan’s leadership has taken an action that will exacerbate tensions with Japan’s neighbors” – when he visited the Yasukuni Shrine where Japanese leaders convicted as war criminals by an Allied tribunal after World War Two are honored along with those who died in battle, for the first time in 7 years. The response was fast and furious. Below, courtesy of Reuters, is a snapshot of the morning after in the Chinese media. The reviews of Abe’s action were not glowing.

In an editorial headlined “Abe’s paying homage to the devils makes people outraged”, the Chinese military’s People’s Liberation Army Daily said Abe’s action had “seriously undermined the stability of the region”.

“On one hand, Abe is paying homage to war criminals, and on the other hand, he talks about improving relations with China, South Korea and other countries,” the newspaper said. “It is simply a sham, a mouthful of lies.

“Today, the Chinese people have the ability to defend peace and they have a greater ability to stop all provocative militarism.”

Chinese Foreign Ministry spokeswoman Hua Chunying said Abe’s visit to the shrine “has already attracted the Chinese people’s ire and denunciation”.

“How can a person who is not willing to face up to their own history, to facts, win the trust of the international community or cause people to believe he has a role to play in maintaining regional and global peace and stability?” Hua said at a daily news briefing.

In a separate commentary published under the pen name “Zhong Sheng”, or “Voice of China”, the Communist Party’s People’s Daily said: “History tells us that if people do not correctly understand the evils of the fascist war, cannot reflect on war crimes, a country can never (achieve) true rejuvenation.

The Global Times, an influential nationalistic tabloid owned by the People’s Daily, urged China to shut its door to Abe and other Japanese officials who have visited the shrine this year.

“If condemnations are China’s only recourse, then the nation is giving up its international political rights easily,” the newspaper said. “Ineffective countermeasures will make China be seen as a ‘paper tiger’ in the eyes of the rest of the world.

“In the eyes of China, Abe, behaving like a political villain, is much like the terrorists and fascists on the commonly seen blacklists.”

A survey on China’s Sina Weibo microblogging site on Thursday showed that almost 70 percent of respondents would support a boycott of Japanese goods, with many users expressing outrage at the shrine visit. The survey was later removed.

And yet, all of this appears set to blow over since China, like America, is now more focused on daily noise: the topic was not one of the most talked about on Weibo, with people being more distracted by the latest celebrity gossip and the upcoming new year.

 

China (And Korea) Blast Abe’s “Absolutely Unacceptable” Visit To War Shrine | Zero Hedge

China (And Korea) Blast Abe’s “Absolutely Unacceptable” Visit To War Shrine | Zero Hedge.

It has been 7 years and 4 months since the last Prime Ministerial visit to Yasukuni Shrine (a symbol of Japan’s past militarism – and its convicted war criminals – which appears to be resurrecting); but in what China describes as an act that is “absolutely unacceptable to the Chinese people,” current Japanese Prime Minister Shinzo Abe paid tribute to the war dead today. The strong reaction was met with a rapid ‘apology’ of sorts as Abe stated officially, “I am aware that, because of misunderstandings, some people criticise a visit to Yasukuni shrine as an act of worshipping war criminals… [but] I have no intention at all to hurt the feelings of Chinese or South Korean people.”

In the past… (via Reuters)

China and South Korea have repeatedly expressed anger in the past over Japanese politicians’ visits to Yasukuni Shrinewhere Japanese leaders convicted as war criminals by an Allied tribunal are honored along with war dead.

The shrine is seen in parts of Asia as a symbol of Japanese past militarism.

Abe’s Excuse…

Via AFP,

Prime Minister Shinzo Abe said Thursday his visit to the controversial Yasukuni war shrine was a pledge that Japan would not go to war again and was not intended to hurt Chinese or South Koreans.

“I chose this day to report (to enshrined spirits) what we have done in the year since the administration launched and to pledge and determine that never again will people suffer in war,” he told reporters at the shrine.

I am aware that, because of misunderstandings, some people criticise a visit to Yasukuni shrine as an act of worshipping war criminals, but I made my visit to pledge to create an era where people will never suffer from catastrophe in war,” Abe said.

“I have no intention at all to hurt the feelings of Chinese or South Korean people.”

And The Chinese response…

Chinese foreign ministry Asian affairs dept head: Yasukuni visit “absolutely unacceptable to the Chinese people” pic.twitter.com/c3skU6FnTn

— Austin Ramzy (@austinramzy) December 26, 2013

And the consequences…

Chinese Foreign Ministry on Abe Yasukuni visit: “The Japanese side must bear all consequences.” #uhoh

— ian bremmer (@ianbremmer) December 26, 2013

The Chinese people are enraged…

Chinese netizens call for anti-Japan boycott and inquire about street protest on Strong Nation Forum http://t.co/FYp4SEjAmS

— Jessica Chen Weiss (@jessicacweiss) December 26, 2013

and The Koreans are now chiming in…

(LEAD) Abe’s Yasukuni visit to have diplomatic repercussions: Seoul http://t.co/n6iX6rz1pf

— Yonhap News Agency (@YonhapNews) December 26, 2013

 

Japan set to buy $240B worth of hi-tech weapons | StratRisks

Japan set to buy $240B worth of hi-tech weapons | StratRisks.

Source: NewsInfo

Japan set to buy $240B worth of hi-tech weapons

TOKYO—Japan announced on Tuesday that it would buy stealth fighters, drones and submarines as part of a splurge on military hardware that would beef up defense of far-flung islands amid a simmering territorial row with China.

The Cabinet of hawkish Prime Minister Shinzo Abe agreed to spend 24.7 trillion yen ($240 billion) between 2014 and 2019 in a strategic shift toward the south and west of the country—a 5-percent boost to the military budget over five years.

The shopping list is part of efforts by Abe to normalize the military in Japan, which has been officially pacifist since its defeat in World War II. Its well-equipped and highly professional services are limited to a narrowly defined self-defensive role.

Abe’s plan to upgrade Japan’s military capability comes with the establishment of a US-style National Security Council that is expected to concentrate greater power in the hands of a smaller number of senior politicians and bureaucrats.

Fears are growing in Japan over the rising power of China, with the two countries embroiled in a dispute over the sovereignty of a group of islands in the East China Sea, and the perennial menace posed by an unpredictable North Korea.

Joint defense force

New guidelines approved by the Cabinet on Tuesday said Tokyo would introduce a “dynamic joint defense force,” intended to help air, land and sea forces work together more effectively.

Abe said the shift would allow Japan’s military to better shoulder its responsibilities on the global stage, through what he has promoted as “proactive pacifism.”

“We hope to make further contributions to the peace and stability of the international community through proactive pacifism,” he said. “This shows with transparency our country’s diplomatic and defense policies.”

Spending will be raised to 24.7 trillion yen over five years from April 2014, up from the present 23.5 trillion yen over the five years to March 2014, but the figure could be trimmed by up to 700 billion yen if the defense ministry can find savings and efficiencies.

New hardware will include 3 drones, 52 amphibious vehicles, 17 Osprey hybrid choppers and 5 submarines—all designed to boost maritime surveillance and bolster defense of islands.

The spending will also encompass two destroyers equipped with the Aegis antimissile system and 28 new F-35 fighter jets, a stealth plane far superior to the F-15s that Japan currently has in service.

Analysts noted that much of this kit will replace obsolete equipment, but the shift in military priorities is evident.

“The guidelines underscore a clear shift of Japan’s major defense focus to the protection of its islands in the East China Sea,” said Hideshi Takesada, an expert on regional security at Takushoku University in Tokyo.

During the Cold War, Japan’s military was largely static, with the majority of resources in the north and east to guard against any invasion by Russia.

Changing dynamics

But changing dynamics and in particular the rise of China—where double-digit rises in defense spending are the annual norm—mean that Japan’s armed forces need to be located further south and to be able to deploy to the country’s many far-flung islands.

“The guidelines show Japan’s readiness for practical defense if China’s bluff turns to be real military action,” Takesada said.

Regional tensions were ratcheted up last month when China abruptly declared a new air defense identification zone over the East China Sea, including overdisputed Tokyo-controlled islands called Senkaku in Japanese and Diaoyu in Chinese.

Abe on Saturday denounced the declaration and demanded Beijing retract it immediately and unconditionally, after a summit with Southeast Asian leaders where a joint statement called for freedom of travel on the seas and in the air.

Beijing issued a sharp rebuke, singling out Abe for “slanderous remarks.”

The guidelines also call for Japan to boost its missile defense system to counter “a grave and imminent threat” from North Korea.

 

‘Pacifist’ Japan Launches “No Guts But All The War Spending Glory” Military Plan | Zero Hedge

‘Pacifist’ Japan Launches “No Guts But All The War Spending Glory” Military Plan | Zero Hedge.

We warned last week of the rising nationalism and concerns about Abe’s intentions and this evening the escalating tensions in the East China Sea are clear once again. In an effort to “normalize” an officially ‘pacifist’ policy, a hawkish Abe announced that Japan has tonight increased its military budget notably to buy drones, amphibious vehicles, submarines, and vertical take-off aircraft to boost defenses around the remote Senkaku islands. It seems the farce is getting more surreal as Japan also considers obtaining the means to counter ballistic missiles the point of launch. Why go to war and risk it all by printing and deficit spending your country into oblivion for a ‘purpose’ when you can do it without spilling a drop of blood?

Via AFP,

Japan said Tuesday it intends to boost military spending by five percent over the next five years, with a hardware splurge intended to beef up defence of far-flung territories amid a corrosive row with China.

The cabinet of hawkish Prime Minister Shinzo Abe agreed 24.7 trillion yen ($240 billion) would be spent between 2014 and 2019, including on drones, submarines, fighter jets and amphibious vehicles, in a strategic shift towards the south and west.

The shopping list is part of efforts by Abe to normalise the military in Japan, which has been officially pacifist since defeat in World War II. Its well-equipped and highly professional services are limited to a narrowly defined self-defensive role.

New defence guidelines approved by the cabinet on Tuesday said Tokyo will introduce a “dynamic joint defence force,” intended to help air, land and sea forces work together more effectively in the face of danger.

“China … is taking dangerous action that can draw unexpected contingencies,” said the guidelines.

Via Bloomberg,

The government will also consider obtaining the means to counter ballistic missiles at the point of launch, according to new security plans which set a total five-year budget of 24.67 trillion yen ($239 billion), up about 1 trillion yen on the previous five-year plan.

Japan will set up a marines-style force to deal with any island incursions, equipping it with 17 tiltrotor aircraft and 52 amphibious vehicles, as well as three surveillance drones, according to documents given to reporters in advance.

Of course, the populism garnered by such a move is worrisome as these two powers engage in a bigger and bigger pissing match; but it seems, as we warned here, that no matter the cost, there may be war. Bear in mind this move comes on top of passing the Secrecy bill last week.

The right to know has now been officially superseded by the right of the government to make sure you don’t know what they don’t want you to know. It might all seems like a bad joke, except for the Orwellian nature of the bill and a key Cabinet member expressing his admiration for the Nazis, “just as Germany needed a strong man like Hitler to revive defeated Germany, Japan needs people like Abe to dynamically induce change.”

We are sure the world (and the BoJ) will be more than happy to fund this latest Keynesian black hole.

 

China Slams Abe’s “Malicious Slander”; Warns Japan Is “Doomed To Failure” | Zero Hedge

China Slams Abe’s “Malicious Slander”; Warns Japan Is “Doomed To Failure” | Zero Hedge.

Overnight rhetoric in Asia became increasingly heated when China’s Ministry of Foreign Affairs expressed “strong dissastisfaction” at the slanderous actions of Abe’s Japanese government over the Air Defense Identification Zone (ADIZ) and the “theft and embezzlement” of the Diaoyu Islands. “Japan’s attempt is doomed to failure,” China warned ominously and as we highlight below, a reflection on the possible rational reasons for China and Japan to go to war over the Senkaku/Diaoyu islands highlights the seriousness of the ongoing brinksmanship in the East China Sea. If a war is fought over these long-contested islands, it will have an eminently rational explanation underlying all the historical mistrust and nationalism on the surface. War in the East China Sea is possible, despite the economic costs.

The ‘triangle’ of doom in the East China Sea…

Via Google Translate,

Q: Japanese Prime Minister Shinzo Abe held in Japan recently – especially during the ASEAN summit, accusing China to unilaterally change the status of the East China Sea, East China Sea, said China’s air defense identification zone designation is improper for the high seas against the freedom of overflight, asked China to revoke the measure. What is your comment?

A: We have made some Japanese leaders use international slanderous remarks China expresses strong dissatisfaction.

Diaoyu Islands are China’s inherent territory. Japan over the Diaoyu Islands theft and embezzlement have always been illegal and invalid. Since last year, the Japanese deliberately provoked the Diaoyu Islands dispute, unilaterally change the status quo of the Diaoyu Islands issue is none other than the Japanese themselves. In this regard, the Chinese law to take the necessary measures to safeguard national sovereignty and territorial fully justified, blameless.

East China’s air defense identification zone designation is intended to protect national defense aviation security measures, consistent with international law and international practice, do not affect the countries of aircraft overflight freedoms enjoyed under international law. Deliberate on this issue in Japan to China to launch an attack, an attempt to tamper with the concept, the implementation of double standards, mislead international public opinion, Japan’s attempt is doomed to failure.

“Rationalist Explanations For War” In The East China Sea

Submitted by Ankit Panda of The Diplomat,

Events in the East China Sea since 2009 have thrust to the forefront the following frightening question: will China and Japan imminently go to war? Conventional answers in the affirmative point to the deep level of historical mistrust and a certain level of “unfinished business” in East Asian international politics, stemming from the heyday of Showa Japan’s imperialism across Asia. Those on the negative often point to the astronomical economic costs that would follow from a war that pinned the world’s first and third largest economies against its second in a fight over a few measly islands, undersea hydrocarbon reserves be damned.

I can’t pretend to arbitrate between these two camps but I find that far too many observers sympathize with the second camp based on rational impulse. Of course China and Japan wouldn’t fight a war! That’d ruin their economies! I sympathize with the Clausewtizean notion of war being a continuation of politics “by other means,” and the problems caused by information asymmetries (effectively handicapping rational decision-making), but the situation over the Senkaku/Diaoyu islands can result in war even if the top leaders in Tokyo and Beijing are eminently rational.

Political scientist James D. Fearon’s path-breaking article “Rationalist Explanations for War” provides a still-relevant schema that’s wonderfully applicable to the contemporary situation between China and Japan in the East China Sea. Fearon’s paper was initially relevant because it challenged the overly simplistic rationalist’s dogma: if war is so costly, then there has to be some sort of diplomatic solution that is preferable to all parties involved — barring information asymmetries and communication deficits, such an agreement should and will be signed.

Of course, this doesn’t correspond to reality where we know that many incredibly costly wars have been fought (from the first World War to the Iran-Iraq War). So, if wars are costly — as one over the Senkaku/Diaoyu islands is likely to be — why do they still occur? Well, the answer isn’t Japanese imperialism or because states just sometimes irrationally dislike each other (as the affirmative camp would argue). It’s more subtle.

Fearon’s “bargaining model” assumes a few dictums about state knowledge, behavior and expectations ex ante. I’ll cast the remainder of the model in terms of Japan and China since they’re our subjects of interest (and to avoid floating off into academic abstractions).

First, China and Japan both know that there is an actual probability distribution of the likely outcomes of the war. They don’t know what the actual distribution is, but they can estimate what is likely in terms of the costs and outcomes of going to war. For example, Japan can predict that it would suffer relatively low naval losses and would strengthen its administrative control of the islands; China could predict the same outcome, or it could interpret things in its favor. In essence, they acknowledge that war is predictable in its unpredictability.

Second, China and Japan want to limit risk or are neutral to risk, but definitely do not crave risk. War is fundamentally risky so this is tantamount to an acknowledgement that war is costlier than maintaining peace or negotiating an ex ante diplomatic solution.

The third assumption is a little dressed up in academic jargon: there can be no “issue indivisibility.” In plain English, this essentially means that whatever the states are fighting over (usually territory, but it could be a pot of gold) can be divided between them in an infinite number of ways on a line going from zero to one. Imagine that zero is Japan’s ideal preference (total Japanese control of the Senkakus and acknowledgement as such by China) and one is China’s ideal preference (total Chinese control of Diaoyu and acknowledgement by Japan). Fearon’s assumption requires that there exist points like 0.23 and 0.83 (and so forth) which set up some sort sharing between the warring parties. Even solutions, such as one proposed by Zheng Wang here at The Diplomat to establish a “peace zone,” could sit on this line.

If the third assumption sounds the shakiest to you that’s probably because it is. “Issue indivisibility” is a nasty problem and a subject of quite some research. It usually is at the heart of wars that seek to decide which state should control a territory such as a Holy City (the intractability of the Arab-Israeli conflict is said to be plagued by indivisible issues).

So, is the dispute over the Senkaku/Diaoyu fundamentally indivisible? Probably in the sense of splitting sovereignty over the islands, but probably not in the sense of some ex ante bargain similar to what Zheng proposed. Even if the set of solutions isn’t infinitely divisible, whatever finite solutions exist might not fall within whatever range of solutions either Japan or China is willing to tolerate — leading to war.

Fearon actually doesn’t buy the indivisibility-leading-to-war theory himself. He reasons that generally almost every issue is complex enough to be divisible to a degree acceptable by each party (undermining the infinite divisibility requirement), and that states can link issues and offer payments to offset any asymmetrical outcome. In the Senkaku/Diaoyu case, this would mean a solution could hinge upon Japan making a broader apology for its aggression against China in the 20th century or China taking a harsher stance on North Korea (both unlikely).

Relevant to the Air Defense Identification Zone is Fearon’s description of war arising between rational states due to incentives to misrepresent capabilities. China and Japan’s leaders know more about their country’s actual willingness to go to war than anyone else, and it benefits to signal strong resolve on the issue to extract more concessions in any potential deal. Japan announcing its willingness to shoot down Chinese drones earlier this year and its most recent defense plans are example of this, and China’s ADIZ is probably the archetype of such a signal. Instead of extracting a good deal, what such declarations can do is force rational hands to war over the Senkaku/Diaoyu islands.

Fearon’s final explanation — regarding commitment problems leading to war — is slightly ancillary to the core discussion about the Senkaku/Diaoyu islands given Japan’s constitutional restraints on the use of force (rendering preemptive, preventative, and offensive wars largely irrelevant in the Japanese case). Regardless, the point remains that even if the Senkaku/Diaoyu islands might seem like a terribly silly thing for the world’s second and third largest economies to go to war over, war can still be likely.

As I observe events in the East China Sea, I mostly recall Fearon’s warnings on certain types of signals leading to brinksmanship (the divisibility issue is far murkier). Both Japan and China don’t seem to be relenting on these sorts of deleterious signals. Additionally, given that Chinese and Japanese diplomats haven’t had high-level contact in fourteen months, even the more primitive rationalist’s explanation, that war occurs because a lack of communication leads to rational miscalculations, becomes plausible.

A reflection on the possible rational reasons for China and Japan to go to war over the Senkaku/Diaoyu islands highlights the seriousness of the ongoing brinksmanship in the East China Sea. If a war is fought over these long-contested islands, it will have an eminently rational explanation underlying all the historical mistrust and nationalism on the surface. War in the East China Sea is possible, despite the economic costs.

 

Abe Approval Rating Plunges (But Japan Is Not Venezuela, Yet) | Zero Hedge

Abe Approval Rating Plunges (But Japan Is Not Venezuela, Yet) | Zero Hedge.

Japan’s PM Shinzo Abe has seen his approval ratings collapse for the first time since his ‘devalue-to-glory’ strategy was unveiled a year ago. Kyodo News reported, support for Mr. Abe fell 10.3ppt to 47.6%, while Japan News Network reported a 13.9-point fall to 54.6% as WSJ reports, public concern over the controversial secrecy bill (designed by Kafka, inspired by Hitler) and its nationalist overtones merelyexacerbated Japanese people’s concerns about their pocketbooks (as incomes stagnate and costs rise). As Abe plays lip service to economic issues (with a very Maduro-like speech recently on profit margins and wage increases), there is little but public outrage to hinder his plans as his ruling Liberal Democratic Party has big majorities in both houses of parliament, with no election scheduled until 2016. So much for Abenomics…

The secrecy bill has finally raised the Japanese peoples’ ire it would seem

*JAPAN UPPER HOUSE PANEL ADOPTS SECRECY BILL AMID UPROAR

*ABE: SECRETS BILL NECESSARY TO PROTECT LIVES AND PROPERTY

The right to know has now been officially superseded by the right of the government to make sure you don’t know what they don’t want you to know. It might all seems like a bad joke, except for the Orwellian nature of the bill and a key Cabinet member expressing his admiration for the Nazis, “just as Germany needed a strong man like Hitler to revive defeated Germany, Japan needs people like Abe to dynamically induce change.”

Via WSJ,

All three media surveys signaled public concern after the ruling coalition steamrolled the passage of a controversial bill to set stricter penalties for intelligence breaches amid objections from opposition parties.

Around 80% of those questioned in all three polls felt that the bill wasn’t thoroughly debated in parliament.

In a news conference Monday, Mr. Abe said it was necessary to push through the secrecy bill quickly to protect public safety, but acknowledged the criticism.

“We must sincerely and humbly accept the people’s harsh criticism,” Mr. Abe said, adding that “I myself should have taken more time to carefully explain” the bill.

Mr. Abe’s high poll numbers early in his rule created a virtuous circle that allowed him to push through policies that were seen as aiding the economy and lifting the stock market, which in turn further sustained his popularity, allowing him to win a key election, and extend his power.

His sustained high support rate over the past year has been unusual among recent Japanese prime ministers. Starting with Mr. Abe’s own first one-year term, which ended abruptly in September 2007 after his party lost an election and his popularity plunged, Japan ran through six unpopular prime ministers in six years.

One big change for Mr. Abe between his first term and his second has been his focus in his most recent stint on pulling Japan’s economy out of its long slump. Long seen as a conservative nationalist, devoted to building up Japan’s military and global clout, he devoted much of his first term to those causes.

“The Cabinet must understand the risks involved in moving ahead with Mr. Abe’s agenda,” Mr. Nakano said. “It faces a tough decision, whether to push ahead with Mr. Abe’s conservative goals, or to focus on Abenomics in a bid to revive popularity.”

So, it’s for your own good Japan…

It seems Abe is going to need to raise that stock market even more to keep his popularity…

Meanwhile, the nationalist talk continues…

  • *ABE:NO PROSPECT OF SUMMITS WITH CHINA, SOUTH KOREA NOW

And yet last night’s speeches sounded awfully like an awakening of the Maduro-style -ism of Venezuela’s control system “economy”

  • *ABE: REAL BATTLE FOR ECONOMIC RECOVERY STARTS NOW
  • *ABE CALLS FOR COMPANIES TO BOOST WAGES MORE THAN PRICE GAINS
  • *ABE SAYS TOYOTA, HITACHI EXECUTIVES PLEDGED TO RAISE WAGES

Raise wages, cut margins, or else… we can only hope this stress does not bring on another bout of chronic diarrhea (as none of these Japanese leaders are getting any younger).

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