The world is abuzz with the rising tensions between China and Japan in the East China Sea, where the two are quarreling over the energy-rich Senkaku Island chain (known as the Diaoyu Islands in China). Complicating the issue is a similar dispute between South Korea and Japan over another energy rich island chain in the East Sea/Sea of Japan, known as Takeshima in Japan and Dokdo in South Korea. Add this to the already tense territorial relationship between various states in the Asia-Pacific region which include the Philippines, Thailand, India, and Vietnam, and it is no wonder many are discussing the prospects of outright military conflict erupting in the region.
But despite the rhetoric and saber rattling, the prospects for conflict are less than those who sell the news would have you believe.
Most troubling to observers are the anti-Japanese demonstrations that have been flaring up across China and a naval "show of force" by the Chinese navy into Japanese controlled waters. But it is important to keep this all in perspective. China’s economy is slowing and the ruling Chinese Communist Party (CCP) is preparing for a change in leadership. What’s more, the CCP has been at the receiving end of a lot of criticism in the wake of the Gu Kailai murder trial and its revelation of wide-spread corruption by her husband, Bo Xilai, a high-ranking CCP official. There is also the bizarre case of the son of another high-ranking CCP official, Ling Jihua, who died after he crashed his Ferrari while naked and in the company of two women. The CCP derives a great deal of its legitimacy from the country’s impressive economic performance over the past 30 or so years. With the economy slowing and the perception that the ruling party is corrupt, out of touch, and incompetent, while in the midst of a power transition, it becomes easy to see why the CCP may benefit from ratcheting up nationalist sentiment, particularly against its long-time rival Japan. It is unlikely the Chinese government would allow the situation to escalate to a point of actual conflict. Not only does China have important economic relations with its neighbors, including Japan, it knows it is a conflict it cannot win.
The rise in tensions in the South China Sea come in midst of America’s "Pacific pivot" – a large scale multi-dimensional strategic realignment of military, economic, and political resources to the Asia-Pacific region that began in earnest in November 2011. The United States is looking to build an institutional framework in the region similar to the one it created in Europe after World War II. At the center of this framework is, arguably, a need to "contain" China, or at least strongly influence its strategic calculus as it modernizes its military and becomes a more assertive regional and global power. Should the situation in the region come to blows, China is well aware that those it would be fighting have military alliances and agreements with the United States. Fighting Japan or South Korea is one thing. Fighting the United States is another. Fighting any combination of the U.S. and another regional power – particularly Japan – is simply un-winnable.
More important when considering the prospects for conflict in the region is the simple financial calculus: states go to war when the cost of doing so is less than the perceived rewards. While these islands may be rich in energy resources, it is unlikely that they exceed the economic and political costs of a war between any of these countries. A war between Japan and China would be a crippling blow to an already fragile global economy, particularly to the economies of those states involved. NATO taking out Libya could be done on the cheap; war between China and Japan cannot. It is not for nothing that China has already stated it would not use force to resolve territorial issues in the region. China and Japan may be flexing their muscles a bit, but both know it is in their best interests to resolve differences through negotiation, not war.