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Key U.S. Security Policy Issues

The Korean Peninsula
Preparing for an Unstable or Assertive China
Dealing with a Changing Japan
Defining the Place of Multilateralism in the Regional Security Order

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The Korean Peninsula

The Korean issue is perhaps the most challenging and important of all of the issues facing the United States in the region. U.S. interactions with Pyongyang have a direct impact on the vital interests of Japan, China, and South Korea. Therefore, Washington will be challenged to consider the positions of these powers very carefully.

Leadership Succession. The death of Kim Il Sung, and the uncertainties surrounding the succession of Kim Chong Il, affect every aspect of the Peninsula's security; the fate of North Korea's nuclear program, the dynamic of North/South relations, and the future U.S. role in Korea will all be influenced by events now unfolding in Pyongyang. The policies of the U.S. and the other concerned powers--mainly China, Japan, and of course South Korea--are of crucial importance in shaping future events in ways that may channel North Korean behavior in more positive directions.

Like so much about the North, the final outcome of the succession remains full of uncertainty. Some analysts hold that planning and preparation for the succession, which began as early as the mid-1970s, was essentially complete by the time of Kim Il Sung's death. Indeed, the absence of early signs of real opposition suggests that the younger Kim may be well on the way to consolidating his position as leader. But questions about the longevity of his tenure and the direction of his policies remain.

Some observers believe that, because Kim Chong Il is dependent upon the extremely conservative elites of the Korean People's Army (KPA) and Korean Worker Party (KWP), there will be no major policy changes in the short term. Others note that the younger Kim is well connected with the technocratic circle in the North that has long argued for greater flexibility in economic and foreign policies, and that is now poised to regain the ascendancy it enjoyed at the end of the last decade. In this view, the regime change holds some promise for the future.

Clarity is probably years away. In the meanwhile, the U.S. and its allies will have to make decisions on the basis of uncertain information.

The Nuclear Issue. Efforts to come to terms with the nuclear problem, which have the highest priority for all interested parties, have two components: to secure a freeze on all North Korean nuclear activity, and to evaluate--and, if necessary, roll back--any progress the North may have made towards developing nuclear weapons. If, as appears likely, the purpose of the nuclear program is to secure the existence of the North Korean regime in some form, Pyongyang can be expected to make every effort to sustain the ambiguity that surrounds its nuclear accomplishments. Further, there is some tension between efforts to learn about and roll back the program on the one hand, and the process of maintaining a freeze on the other. The effort to accomplish the former could well impact negatively on the latter, as North Korea makes cooperation on a freeze contingent upon a reduction in demands for clarification of past activities.

The August 1994 Geneva agreement provides some ground for optimism. In effect, the North agreed to freeze its nuclear program, and observe NPT/IAEA commitments. Pyongyang also promised it would not reprocess the eight thousand fuel rods now in storage or refuel its reactors. In return, the U.S. offered to facilitate North Korean acquisition of light water reactors and eventually to consider steps towards some form of diplomatic recognition of the North. Pyongyang now has positive inducements to move ahead in expanding relations with Washington and Seoul, and with the region in general. The agreement does much to defuse concerns in Beijing, Tokyo, and even Southeast Asia about the potentially divisive course of events before the meeting in Geneva.

Prior to Geneva, the U.S. tended to part ways with China, Japan, and South Korea on the question of priorities in dealing with the nuclear issue. Washington's stance, in which deterrence was central, reflected a deep concern about the international proliferation dimensions of the problem, particularly the potential impact on the future of the Nonproliferation Treaty regime. Japan, China, and South Korea also appreciated the proliferation threat, but, as the powers that stand to lose the most in the event of conflict, were more concerned than Washington to avoid antagonizing the regime in Pyongyang. The Geneva agreement has relieved some of the immediate pressures engendered by these differences. However, the differences remain, and in the future, Tokyo, Beijing, and Seoul will probably continue to be more willing than Washington to tolerate the ambiguity surrounding nuclear activities in the North.

Even though some aspects of the problem may be easier to manage after the Geneva agreement, others remain undiminished. For example, while verification of the North's agreements on reprocessing are verifiable, assessing compliance with NPT/IAEA standards ultimately requires investigation of two waste facilities, which North Korea adamantly rejects. Solving this problem through negotiation will be difficult. Another source of difficulty, which directly affects U.S.-South Korean relations, is that Seoul does not want U.S. negotiations with Pyongyang to impinge upon its own prerogatives in dealing with the North. One way in which it manifests this concern is by raising the issue of "challenge inspections" (demanding, in effect, that Pyongyang open virtually all of its military bases to ad hoc inspection) in the process of North/South dialogue. Finally, Pyongyang retains a card it has played with success in the past: the ability to use the ambiguity surrounding its past nuclear accomplishments to influence the pace and content of the negotiation process.

Pyongyang's high stake in its nuclear program, when coupled with the uncertainties surrounding the leadership succession, make for a tense situation. Internal political instability in the North still carries with it the possibility of an attack upon the South, and prudence dictates that every effort be made to foreclose the North's military option for achieving its goals. This, in turn, argues for adopting an array of diplomatic and military measures designed to enhance deterrence without undercutting the negotiations.

Korean Peninsula

South Korean Confidence. In the longer run, the major uncertainties on the Korean Peninsula concern the questions of North/South dialogue and reunification. There is a firm regional consensus in favor of preserving stability. Part and parcel of that conviction is the judgement that an incremental approach to reunification is best. All concerned parties agree their interests would be best served by gradual, peaceful progress towards reunification--the so-called "soft landing."

Since the election of President Kim Young Sam in December 1992, South Korean politics has evolved in ways that have surprised many observers. By implementing a series of adroit domestic measures and holding the line on foreign policy, President Kim has managed to project an air of competence. Most notable in this regard have been the twin success of convincing the public that he is willing to deal with corruption and winning acceptance by the military. Combined with the general perception that South Korea's economic future is bright, this has created considerable confidence about the effectiveness of South Korean political and economic institutions. There is also a general feeling that, if a smooth constitutional transfer of power follows President Kim, South Korean politics will have turned an important corner.

Further, the Republic of Korea Army has begun to address historical problems related to intelligence, command and control, air defense, and air and naval capabilities. Scheduled improvements and air and naval procurement programs will eventually help to remove remaining weaknesses, and very probably give the South an overall military advantage. In the short term, however, U.S. assistance will continue to be necessary. It is increasingly likely that the outcome of a North Korean attack would be the destruction of the Pyongyang regime. However, such a victory would be achieved only at the cost of the temporary loss of Seoul and widespread destruction throughout the peninsula.

The South Korean approach to reunification remains optimistic. The predominant view is that the goal of a united Korea is best achieved by using South Korea's increasing diplomatic, economic, and military strength to enhance deterrence, and by patiently encouraging the political and economic evolution of the Pyongyang regime. Seoul's belief that time is on its side influences its stance in the dialogue with the North, because it feels less pressure to make concessions than in the past. This view, along with Seoul's concern that it not be marginalized, contains the potential for some friction with the United States. The challenge will be for Washington to find the proper overlay between its dialogue with Pyongyang and the process of North-South dialogue.

Destination of U.S. Merchandise Exports, 1975-93

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Preparing for an Unstable or Assertive China

The Stability Question. The course of economic and political evolution in China is of concern to U.S. policy simply because China's size, resource base, and growing national strength mean that its influence extends into every corner of the region. Some observers, citing a marked rise in strikes, peasant protests against government inefficiency and corruption, and urban discontent over inflation and corruption, judge that Beijing will not be able to both sustain economic development and maintain a stable unitary state, making China a potential source of considerable regional instability.

Others hold that, despite obvious problems that are characteristic of all developing societies, China's leaders will in the long run successfully use sustained economic growth to offset dissenting voices, buttress their position, and eventually forge a new, effective relationship between the center and the provinces. Indeed, since his "Southern Journey" at the beginning of 1992, Deng and the proponents of market-oriented reform have staked much on the gamble that continued economic growth will guarantee both stability and the continued leadership of the Chinese Communist Party.

A third view, related to the second, emphasizes the possibility that pressures engendered by China's experience with market economics will ultimately result in greater pluralism, which will in turn be manifested in more democratic political institutions. Most proponents of this view hold that a more democratic China will emerge as a force for regional stability.

Earlier this year, Beijing acknowledged the intensity of the problems it faces by announcing a shift in national priorities from pursuing economic growth to maintaining social stability, which had previously been merely a corollary of economic development. Under the new formulation, however, stability takes precedence, even if it means that some growth must be sacrificed in the short run. The threat to stability in China has two basic sources: uncertainties surrounding the leadership succession, and fissiparous pressures engendered by uneven economic development in various areas.

A successful transfer of leadership requires the emergence of an individual who, like Deng Xiaoping, can forge an authoritative consensus among divergent interests. The impending succession will also involve the empowerment of a younger generation of leaders who owe their positions more to mastery of technical skills than to associations developed in the revolutionary environment of the past. Most important of all, a successful succession will require the restoration of a measure of legitimacy to the rule of the Chinese Communist Party.

At this time, it is not clear whether Jiang Zemin will be able to consolidate his position after Deng passes from the scene. Although he now holds all of the most important official leadership positions, a significant number of Party and government officials regard him as more of a passive respondent to emerging events than a strong leader who actively defines the policy environment.

It is more likely that Deng's passing will usher in a period of collective leadership that will persist for a number of years, and during which individuals will jockey for position until one is able to gain power. Most observers consider it unlikely that this process will produce changes in the basic direction of domestic or foreign policies. More than 80 percent of prices in China are now set primarily by market mechanisms, and it would be nearly impossible to reverse course without major, regime-threatening dislocations. Similarly, domestic imperatives will encourage China to pursue moderate foreign policies designed to avoid confrontations that might upset regional stability. Moves toward a more aggressive or confrontational foreign policy would endanger economic progress, again with dire consequences for the Beijing regime. However, U.S. policy makers must be prepared to face the possibility that the imperatives of succession politics may motivate China's leaders to harden positions on sensitive U.S.-China issues such as Taiwan, trade, and human rights.

China's Growing Assertiveness. The main long-term Chinese foreign policy objective will be to secure what Beijing sees as China's rightful position as a leading force in regional and global affairs. To that end, Beijing faces a challenge with two dimensions, one immediate and tactical, and one strategic and future oriented.

In an immediate and tactical sense, Beijing will focus on the national interests that are most pressing and keep potential challenges to those interests under control. Specifically, the Chinese leadership seeks to use diplomatic means and the specter of improving PLA military capabilities to put teeth into Chinese claims in the South China Sea. Beijing also seeks to deploy military forces that are capable of reinforcing Chinese demands on Taiwan, even though the Chinese remain fairly sanguine about future developments in both of these areas.

The second, more strategic dimension is the challenge to create an economy that is capable of supporting the wide range of economic, political, and military options that will guarantee that China has a major voice in creating the new regional structure of security relations. Although China's recent economic growth has been spectacular, the economy may be reaching the point at which deficiencies in its legal, energy, transportation, and communications infrastructures will begin to inhibit future growth. In the late 1980s, similar deficiencies in the rural infrastructure brought a virtual halt to increases in agricultural productivity, raising problems that have yet to be overcome.

Beijing's firm declaratory positions on Taiwan, Hong Kong, and the South China Sea, and its military modernization program (with its emphasis on force projection), provide concrete manifestations of Beijing's commitment to have a strong voice in the region. In light of this, U.S. relations with Beijing assume critical importance. If U.S.-China relations remain stable, it will provide a force for stability in the region. If the relationship were to deteriorate, on the other hand, then other powers would face pressure to choose sides, thus making it difficult to avoid tensions. Washington's 1994 decisions to restore military-to-military ties with China and to separate economic and trade issues from human rights concerns may have set the stage for a recovery from the deterioration of Sino-American relations that occurred after Beijing's violent suppression of the student democracy demonstrations of 1989.

However, there are politically powerful constituencies within China, most notably within the military, who feel that China may be paying too high a price for Washington's favor. According to this view, the U.S. is anxious to prevent the rise of a powerful China as a new peer competitor in the region. This judgment that Washington has tacitly adopted the view of China as an enemy clouds Beijing's evaluation of other aspects of U.S. China policy.

Taiwan is potentially the most disruptive issue in bilateral relations. China's senior leadership already judges that continuing U.S. political, military, and economic support fosters the increasingly independence-minded political culture that characterizes the island today. Anti-U.S. factions among the Chinese leadership portray Washington's Taiwan policy as the means by which the U.S. perpetuates the division of China, prevents the integration of the two economies, and retards China's economic development. They hold similar views with respect to U.S. human rights policies, Washington's position on China's entry into the GATT/World Trade Organization, Beijing's military technology transfer and arms control policies, and the U.S. position on the Spratly Islands/South China Sea question. In each of these cases, concerns about a putative U.S. effort to constrain China has had a crucially important influence on Beijing's assessment of the situation.

Thus far, economic and political considerations have prevented Beijing from taking the openly confrontational stance advocated by the proponents of this view. Moreover, it is most unlikely that this will change dramatically in the next few years, since China has so much to lose. However, anti-U.S. forces are already a potent factor in policy deliberations, and may enjoy increased influence in the future. Much, therefore, will depend upon the evolution of U.S. policies in particular areas of friction. As the dominant regional power, the United States faces the challenge of accommodating to China's rise in ways that do not threaten its own economic position or its relations with its friends and allies.

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Dealing with a
Changing Japan

Political Weakness and the Domestic Focus. During the next few years, Japanese leaders, like their counterparts elsewhere in the region, will be focused primarily on domestic issues and problems. Overcoming Japan's stubborn economic recession is the most immediate problem facing the fragile coalition of Socialist Prime Minister Tomiichi Murayama. Neither former Prime Minister Miyazawa's 13-trillion Yen Package, passed in the spring of 1993, nor the 6-trillion Yen plan proposed by former Prime Minister Hosokawa in September of that year produced any significant economic upturn.

In the opinion of many observers, the fact that Japan's economic performance remains sluggish despite such initiatives signals that nothing short of basic reform--involving market opening and a dramatic loosening of regulatory strictures--will be sufficient to achieve results. This view is reinforced further by continuing pressure from the United States, Europe, and China to be more forthcoming in market access, technology sharing, and investment practices. And yet, despite the outcome of the Framework Talks with the United States, Tokyo apparently remains unwilling, and probably unable, to implement such a program.

This is a result of a second problem now confronting the Japanese political system: the political vacuum created by the end of the 38-year reign of the Liberal Democratic Party (LDP) in early 1993. Unless the Japanese are able to forge a new consensus of political forces to replace the defunct LDP-based system, it is highly unlikely that any government will be able to undertake thoroughgoing economic reform measures. Even with the benefit of a new electoral reform law that reduces the number of candidates that any party might field, that process will require a number of years, as conservatives, socialists, and middle-of-the-road forces all compete for advantage. Political weakness is likely to remain a feature of the Japanese political landscape for the next two or three years at least. In the meantime, Tokyo will find it difficult to respond to the pressure for change emanating both from within and without. Washington should expect Japanese movement on issues of concern to the U.S. to proceed in a frustrating series of starts, stops, and reversals.

Foreign Policy Aspirations. In foreign policy, Japan is seeking to acquire a role in international affairs that is commensurate with its economic strength and influence. Tokyo's campaign to gain a permanent seat on the U.N. Security Council, its willingness to participate in U.N. peacekeeping operations, and the opening of its rice market to better prepare for participating in GATT and the WTO all illustrate this aspiration, as well as a willingness to begin to change established customs in order to achieve it.

Another possible indicator of things to come is the effort begun during the Hosokawa administration to expand and solidify political and economic ties with Asia. Japan now surpasses the United States in trade and investment in China. Also, Tokyo was quick to distance itself from the U.S. position on Chinese human rights policies. In a similar way, Hosokawa's apology to South Korea for the injustices of Japanese colonial rule have paved the way for an improved relationship between the two powers. Such actions, along with Prime Minister Murayama's September travels in Southeast Asia, represent an attempt by Tokyo to create options as it confronts regional uncertainties.

Japan's foreign policy aspirations provide the U.S. with opportunities, such as obtaining a more-active Japanese role in peacekeeping and disaster relief operations. At the same time, a more internationally assertive Japan could feed worries in the region that Tokyo seeks to fill the power vacuum created by U.S. withdrawal.

Shifting Security Priorities. Tokyo is also facing a number of major decisions about its defense and national security policies. Although Japanese defense planners have been slow to acknowledge it publicly, the collapse of the Soviet Union removed the need to include a specific military threat in Tokyo's unspoken defense calculus. Although relations with Russia continue to be a source of tension, there is little expectation that these will be expressed in military terms. Concerns about a possible Chinese military threat remain similarly unconvincing with the Japanese public. In fact, depending on events in North Korea, Japan may face no military threat at all in the next few years. In these circumstances, the need to structure the Self Defense Forces for the "defense of Japan" rings increasingly hollow.

No serious consideration is given to ending Japan's Mutual Security Treaty with the United States. However, within Japanese defense circles, there is a lively discussion about defining a new rationale for the alliance, one that will replace the imperatives of Cold War containment strategy with a formulation more in tune with present and future realities.

Such thinking is based upon two considerations, one positive and one more negative. On the positive side, there is a feeling that Japan must be more responsible for safeguarding its own prosperity and interests. On the negative side, there is a sense that the United States will have neither the capability nor the political will to come to Japan's aid in any but the most extreme circumstances. For example, while it is accepted that the U.S. would do its part to defend Japan from any actual attack, and that the U.S. nuclear umbrella remains effective, there is considerably less confidence that Washington would provide military support to Japan if Tokyo had to deal with a crisis in the South China Sea or the Senkaku Islands. In other words, the alliance may not be useful to Tokyo's efforts to deal with the military contingencies Japan is most likely to face.

Irrespective of the path traveled, whether positive or negative, the end point is the same. Increasing numbers of Japanese officials believe that, while Tokyo should continue to cooperate with Washington and other regional powers to maintain the peace and stability of the region, Japan should develop a force that is able operate more independently of the United States, in order to deal with the military contingencies Tokyo is most likely to face.

Much of this thinking is reflected in the report of the Prime Minister's Advisory Group on Defense Issues, published in August 1994. Convened by former Prime Minister Hosokawa and accepted, albeit with reservations, by Prime Minister Murayama, the Blue Ribbon Panel affirms the centrality of the alliance to Japan's defense posture, but also calls for upgrading consultation mechanisms, improving joint training and logistics mechanisms, and enhancing cooperation in command, control, and communications. More significantly, the report calls for Japan to play an active role in shaping the new regional security order by participating in cooperative security efforts, and for allowing regular Self Defense Force units to participate in U.N. peacekeeping operations. Finally, the report in effect advocates reducing force size in order to permit qualitative improvements in weapons systems, including theater missile defense.

It is extremely unlikely that the present socialist-led coalition has the strength or the inclination to effect a wholesale change in Japan's defense posture. However, defense policy eventually could be the issue that separates the socialists from their LDP partners in the coalition. Moreover, as new coalitions evolve, this new view of defense issues is likely to persist, and there is reason to believe that it will be reflected in acquisition and R&D policies. If events in fact do develop in this direction, the United States will face the necessity of making some hard decisions of its own about the way the alliance operates, and especially about channels of communication between the alliance partners and new roles, missions, and capabilities for the Self Defense Force. Dealing with the North Korean nuclear issue will test this capability. Also, it will be necessary to consider very carefully the reactions of other regional powers who, mindful as they are of the past, will be concerned about any changes in Japan's defense posture.

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Defining the Place of
Multilateralism in the
Regional Security Order

Washington's bilateral security alliances and access agreements form the backbone of the U.S. presence in East Asia. Whether this system will continue to offer the best guarantee of regional security, or whether the security environment would be improved if a larger degree of multilateralism were to evolve, is a major question now confronting the United States. However, extreme caution is required in approaching this issue, as U.S. efforts to assess the advantages of multilateralism could raise additional questions in the region about the durability of U.S. security commitments, and thus encourage speculation about a diminishing U.S. role and presence.

The Trend Toward Multilateralism. Since 1980, eight multilateral organizations, associations, or agreements have developed or been concluded. Although levels of institutionalization vary and are in some cases quite rudimentary, all of these new institutions appear to have achieved permanent status. Multilateralism has become a fact of regional political life, especially on economic issues, and to a lesser degree in security matters. The interest in multilateralism provides the U.S. with an opportunity to become an integral part of an emerging Asia Pacific community.

Among the factors accounting for the rise of multilateralism, two stand out as being most important. Both have direct implications for U.S. policy.

The first is the broad perception that the U.S. military presence is likely to be reduced significantly before the end of the decade. Regional analysts assess that the force of approximately 100,000 U.S. troops in East Asia envisioned by the Bottom-up Review will not become a reality. It is also generally perceived that even if U.S. forces were to remain present in some numbers, the domestic focus of the Clinton administration, the U.S. Congress, and the U.S. public will reduce Washington's willingness to become involved in disputes in Asia, with the possible exception of Korea. In this context, multilateralism becomes, in the view of some regional powers, a means of placing limits on the influence of any potential hegemon such as China or Japan by enmeshing them within a larger consensual framework. The challenge for Washington is to convince the region's leaders that the U.S. commitment to the security of East Asia is not in doubt.

Second, the momentum generated by success in the economic sphere will continue to spur the growth of organizations devoted to expanding and managing trade, and success in economic coordination may encourage efforts to adopt multilateral approaches to security issues as well. As economic and national security concerns continue to converge, multilateralism in economic affairs will naturally tend to move into the security sector. Issues such as overlapping Exclusive Economic Zones, technology transfer regimes, arms sales, access to trade routes, and environmental security all have both an economic and a security dimension requiring multilateral consultations. Officials in Singapore, Malaysia, and Thailand were frankly surprised at the alacrity with which participants joined discussions at the just-concluded ASEAN Regional Forum. As a result, the organizing committee is reportedly considering a more specific agenda for the next session, which may well convene with an expanded ASEAN membership including Vietnam and Laos. If this occurs, the momentum of the impulse towards multilateral security cooperation will continue its increase.

The Limits of Multilateralism. At present, the effort to promote multilateralism is centered where it began, in Southeast Asia and ASEAN. At its core, it retains the original focus on consultative mechanisms and economic concerns. Indeed, there is surprising unanimity about the potentialities and limits of this approach. For example, most nations, including the U.S., agree that multilateral activity should continue to emphasize economic issues. They also feel that, where security issues are concerned, multilateralism is most appropriately viewed as a means of enhancing comprehensive security by consultation and cooperation. Although some players, such as Australia and Canada, argue for more rapid progress towards institutionalization of security cooperation, and have offered plans for building such institutional frameworks, this call is regarded with considerable skepticism elsewhere in the region as being premature. Nor does any participant see multilateral approaches to security as an immediate replacement for the present system which centers on the United States and its network of bilateral security alliances. Even China, which may embrace a different view in the future, recognizes that for the present, the U.S. forward military presence provides an essential component of regional stability. Virtually all regional analysts agree that multilateral approaches to managing security concerns must be based upon a reliable U.S. military presence manifested in strong bilateral security relations.

One explanation for this "least common denominator" approach is that it is difficult for nations to agree on any specific agenda for consideration by multilateral fora. For example, with respect to the two major regional flashpoints--the Korean Peninsula and the South China Sea--neither China nor North Korea is willing to accept multilateral management. On the contrary, China defines its claims in the Spratly Islands as a sovereignty issue, while North Korea, for reasons of its own, remains committed to dealing directly with the United States. Because of such limitations, bilateral relations between the region's nations and the U.S. are likely to remain the most important factor in the Asia Pacific security scene for the rest of this decade.

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