Washington's Eastern Sunset

The Decline of U.S. Power in Northeast Asia

Jason T. Shaplen and James Laney

From Foreign Affairs, November/December 2007

Summary:  After 60 years of U.S. domination, the balance of power in Northeast Asia is shifting. The United States is in relative decline, China is on the rise, and Japan and South Korea are in flux. To maintain U.S. power in the region, Washington must identify the trends shaping this transition and embrace new tools and regimes that broaden the United States' power base.

JASON T. SHAPLEN, a Policy Adviser at the Korean Peninsula Energy Development Organization from 1995 to 1999, is a Director at the nonpro?t organization Project Renewal. JAMES LANEY, U.S. Ambassador to South Korea from 1993 to 1997, is President Emeritus of Emory University.

Another potential downside for the United States arises from the fact that as the amount of U.S. debt held outside the United States has surged, China, Japan, and South Korea have accumulated the lion's share of it. As of March 2007, Japan and China (excluding Hong Kong) ranked first and second, respectively, as the world's largest foreign holders of U.S. debt, together accounting for 47 percent of the almost $2.2 trillion total. China, in particular, has been a major player recently, increasing its share by almost $100 billion in the year ending March 31, 2007. The implications are potentially far-reaching. If China simply stops buying U.S. Treasury bills at the same pace as it has been, it could damage the U.S. economy. That means Beijing has leverage over the United States that it could employ in the area, possibly with respect to Taiwan.

Finally, the new economic dynamic in Northeast Asia has had an impact on Japan. Lacking a strong military since the end of World War II, Japan has relied on its economic might to shape and protect its security interests. But China's recent resurgence has diminished Japan's economic stature in Northeast Asia compared with what it was in the 1970s and 1980s. Furthermore, Tokyo has cut the amount of global development aid it distributes, much of it in Asia, by 35 percent since 1997, in large part because of economic troubles. Unable to use its economic muscle as effectively as it did in the past, Japan is resorting to a new form of nationalism as a way to shape and protect its security interests. The full impact of this change is still unknown.

To be sure, the shifting economic picture in Northeast Asia also has some clear positive effects. The most important is that greater economic integration among China, Japan, and South Korea decreases the likelihood of confrontation between them for one simple reason: all sides simply have too much at stake economically to risk upsetting the status quo. This is also true of U.S. relations with Northeast Asia: the region now accounts for 25 percent of global trade and 24 percent of U.S. trade, giving the United States a major stake in stability there.

A REVOLUTION IN MILITARY AFFAIRS

The new economic dynamic in Northeast Asia is only one factor changing the region's balance of power. The rapid rebalancing of military forces has also been a critical ingredient, with important realignments under way in Japan, South Korea, and China.

The U.S.-Japanese relationship continues to be the most important alliance in Northeast Asia and should remain a pillar of the United States' presence in the region. Nevertheless, Japan is fundamentally reassessing how it views its own security needs and is rapidly adopting a more assertive posture in the face of China's economic and military ascendance and the possible reunification of North and South Korea. It also recognizes that as the world's second-largest economy it must participate more actively in global security, particularly if it wants to win a permanent seat on the UN Security Council.

The most publicized security-related change in Japan is the drop in the number of U.S. troops stationed in the country. Washington and Tokyo have agreed that 8,000 U.S. marines positioned on Okinawa will be redeployed to Guam, leaving a total of 40,000-42,000 U.S. troops in Japan. This change, although emotionally important to the Japanese, is unlikely to affect the operational capability of U.S. forces in the Pacific. Advances in military technology allow the United States to do more with fewer troops stationed farther from the battlefield. Starting in 2008, the United States will also base a nuclear-powered aircraft carrier in Japan for the first time, bringing a new feature to its posture there. Joint military exercises between U.S. and Japanese forces have further improved integration and interoperability between the two forces, two features that were notoriously poor in the past. Finally, although Japan's defense force remains relatively small, with 240,000 troops, its $44 billion budget is the world's fifth-largest. The Japanese Self-Defense Forces are also well equipped, with 1,000 tanks, a blue-water navy, and an air force that is scheduled to accept delivery this year of midair refueling tankers, an addition that will extend Japan's operational reach beyond self-defense.

The more profound changes in Japan's security posture, however, have been in the realm of policy and institutional reform. Constrained by a U.S.-written pacifist constitution, Japan watched the Cold War from the sidelines and left its security in the hands of the United States while it concentrated on its economic development. As the historian Kenneth Pyle notes in his book Japan Rising, during that era Tokyo imposed on itself eight security-related restraints. It vowed not to deploy Japanese troops overseas, participate in collective self-defense arrangements, develop power-projection capabilities for its military, develop nuclear weapons, export arms, share defense-related technology, spend more than one percent of its GDP on defense, or use outer space for military purposes.

Today, as Pyle notes, Tokyo is scaling back or abandoning all of these self-imposed restraints. In addition to supplying fuel for the warships of the coalition forces operating in Afghanistan, this past May, the Diet passed a bill calling for a national referendum as early as 2010 to amend Article 9 of the constitution, which renounces war, prohibits the threat or use of force to settle international disputes, and bans Japan from having a formal military. The government has also been seeking to reinterpret the constitution in order to allow Japan to engage in collective self-defense with the United States, which could theoretically include supporting the United States in a conflict with China over Taiwan. Japan is seeking to develop its capability to project power: earlier this year, it requested to buy 50 F-22 fighter bombers from the United States, it has purchased the midair refueling tankers, and in August it launched the Hyuga, an aircraft carrier for helicopters. Its decision to join the United States in developing a ballistic missile defense system for the region belies its past commitments not to export arms or share military technology. And last year, the ruling Liberal Democratic Party voted to allow Japan to use outer space for military purposes. (The Diet is expected to vote on the matter later this year.) Finally, earlier this year, Tokyo formally elevated the Japan Defense Agency to the status of a full ministry. The move's symbolism was not lost on observers: on security matters, Tokyo is coming out of its shell.