TOKYO (Reuters) - The sudden bitter feud between Tokyo and Beijing will likely push Japan to mend ties with close ally Washington and reach out to other countries in the region that are also wary of an increasingly aggressive Beijing.
The dispute could also give momentum to debate inside Japan over whether to relax further the constraints of a pacifist constitution on its military to beef up its own defence.
Still, Japan’s growing dependence on China’s dynamism for economic growth means responses must be finely calibrated. China has been Japan’s biggest trade partner since 2009, replacing the United States in the top spot.
“China is a very promising market, a very promising growth centre,” said Hitoshi Tanaka, a former senior Japanese diplomat.
“China and Japan are enjoying very deep interdependence, so let us create confidence in the region and at the same time, prepare for an unpredictable China. For that, we have to very quietly and deliberately move to create various partnerships in the region,” Tanaka said. “It is a balance between the two.”
Prime Minister Naoto Kan, already staggering under woes from a weak economy and strong yen to a divided parliament, has come under heavy domestic fire since prosecutors released a Chinese captain being held after his fishing boat collided with Japanese patrol boats near disputed islets.
Even his sudden release has not ended the dispute, as Asia’s two biggest economies press their claims of sovereignty over the rocky islets in the East China Sea, home to valuable fishing grounds and potentially vast oil and natural gas fields.
“What this shows is that economic integration alone does not guarantee stability,” said Andrew Horvat, director of the Stanford Japan Centre in Kyoto.
“This incident ... has proved to the Japanese that they need the U.S. security relationship from a strategic point of view. And they need to take defence seriously, which they have not.”
The prosecutors’ decision to release the skipper followed mounting worries about an escalating war of words between the two countries and overt pressure from Beijing, including a halt to top-level diplomatic contacts.
Japan has been investigating reports, denied by China’s commerce ministry, that Beijing imposed a ban on exports of rare earth minerals vital to products from electronics to cars.
China has also detained four Japanese nationals on suspicion of violating a law protecting military facilities, although Tokyo said the incident was unrelated to the islands row.
Tokyo’s relations with Washington frayed after the Democratic Party of Japan swept to power last year pledging warmer relations with Asian neighbours and more equal ties with the United States.
Then-prime minister Yukio Hatoyama’s failed attempt to revise a 2006 deal to relocate a Marines airbase on southern Okinawa island, host to half the U.S. forces in the country, fanned local opposition to the plan, which Kan says he will implement.
Sino-Japanese ties have long been plagued by mistrust born of China’s bitter memories of Japan’s past military aggression.
But Tokyo is hardly alone in worrying about China’s growing assertiveness. China claims swathes of the South China Sea, where Taiwan and several of the 10-member Association of Southeast Asian Nations (ASEAN) also assert sovereignty.
“What this may demonstrate to everyone is that they need to keep America here ... as a useful counterweight to the Chinese,” said Phil Deans, a professor at Temple University’s Japan Campus.
Japan should also reach out to other countries in the region confronting an aggressive China, said Katsuhiko Nakamura, executive director at Asian Forum Japan, a think tank.
“They need to build a strategy,” Nakamura said. “It’s not only Japan that faces pressure from China as its economic might grows.”
The flare-up in the territorial feud and Tokyo’s growing concerns about China’s expanding naval reach coincide with a sweeping review of Japan’s defence policies.
Advisers to the government last month voiced concern about China’s military build-up and called for a revision of the exclusively defensive policy adopted after its defeat in World War Two. They also called on the government to relax an arms export ban and consider lifting a self-imposed prohibition on collective self-defence, or aiding allies under attack.
“When thinking about how to cope with China, Japan will have to consider several things that have been taboo, such as collective self-defence and the ban on arms exports,” Asian Forum’s Nakamura said. “We need to debate this.”
Whether Kan’s government can respond with any clarity to the security dilemma must be in doubt given the distractions of an economy stuck in the doldrums, infighting in the DPJ and a hamstrung parliament.
Opposition parties have vowed to grill Kan and his ministers during a parliament session that begins on Friday. They have little confidence that the government can rise to the challenge.
“It’s diplomatically tone-deaf,” Nobutery Ishihara, the main opposition party’s No.2 executive told a TV show at the weekend.