The regional policies of China and the United States (including US-Japan alliance coordination) will have long-term ramifications for the way in which competition is managed and cooperation is deepened around shared interests.

For the past two decades, the strategy espoused by Deng Xiaoping — for China to keep a low profile (tao guang yang hui) in international affairs — has been a key principle in Chinese foreign policy. However, around 2010, just before it overtook Japan as the world’s second largest economy in nominal terms, China appeared to disregard Deng’s dictate in favour of a more confident, assertive approach. This was prominently displayed at the ASEAN Regional Forum meeting in Hanoi that year as China attempted to keep territorial disputes in the South China Sea off the agenda. Ongoing tensions with Japan over the Senkaku Islands, the banning of fish imports from Norway in 2010 as retribution for awarding Chinese dissident Liu Xiaobo the Nobel Peace Prize, the blocking of banana imports from the Philippines in 2012 as punishment over the Scarborough Shoal dispute, and most recently China’s abrupt declaration of an Air Defence Identification Zone (ADIZ) in the East China Sea, which overlaps with Japan’s own ADIZ and covers the Senkaku Islands, are indicative of this trend.

The United States should respond appropriately in order to deter aggressive and unilateral behaviour, but it should do this while engaging and not containing China. This is further complicated by the fact that the United States must figure out how to rearrange its military posture as it seeks to extract itself from Afghanistan and Iraq and reduce its defence spending. To this end, the United States has declared its ‘pivot’ to Asia — which it has since renamed a ‘rebalancing’ so as to avoid any perception of containment — and joined the East Asia Summit.

From a Japanese perspective, however, there is concern that a significant gap in US and Japanese thinking may emerge about the best approach to managing the China relationship. Recently the United States has been distracted by domestic political gridlock. Additionally, US National Security Advisor Susan Rice, in a 20 November speech at Georgetown University, referred to operationalizing a new model of major power relations with China, which has been misinterpreted in the Japanese media as US accession to the G2 concept. This has sparked concern that the United States may agree to China’s own definitions of Chinese ‘core’ interests and it may become too accommodating toward China in the future. Recent statements by US Secretary of State John Kerry and US Secretary of Defence Chuck Hagel, affirming that the Senkaku Islands are covered under the US-Japan Security Treaty and voicing deep concern about China’s announcement of an ADIZ in the East China Sea, as well as the dispatch of B-52 bombers to the ADIZ, have made some progress toward assuaging Japanese concerns. But it is crucial that when the United States expands its cooperation with China, as it rightly must do, it conduct US-Japan alliance consultations ahead of time to prevent misunderstandings and ensure that new modes of cooperation are compatible with alliance structures.

Hitoshi Tanaka is a senior fellow at the Japan Center for International Exchange and chairman of the Institute for International Strategy at the Japan Research Institute, Ltd. He previously served as Japan’s deputy minister for foreign affairs.

 This article is an extract from East Asia Insights Vol. 8 No. 3 September 2013, which is available in full here, and is reprinted with the kind permission of JCIE.