After Davos, The China-Japan 'Cold-War' "Situation Is Getting Worse"

Tyler Durden's picture

China and Japan’s war of words reveals a larger struggle for regional influence akin to a mini Cold War. Last week's tempestuous pissing contest in Davos, which The FT's Gideon Rachman notes, left people with the belief that "this is not a situation that is getting better; it is getting worse." Following Abe's analogies to WWI, China's Yi compared Abe's visit to the Yasukuni shrine to Merkel visiting the graves of Nazi war criminals and as the rhetoric grows the US has asked for reassurance from Abe that he will not do it again. So we have two countries, each building up their militaries while insisting they must do so to counter the threat of their regional rival. Added to this, a deep distrust of each other’s different political systems coupled with a history of animosity makes the two nations deeply suspicious of each other. Each country insists it loves peace, and uses scare tactics to try to paint its opponent as a hawkish boogeyman. Sound familiar to anyone else?


As The WSJ reports,

U.S. officials say they are seeking assurances from Japan that Prime Minister Shinzo Abe won't repeat a visit to a war shrine that angered China and South Korea and will ask Mr. Abe to consider reaffirming Tokyo's previous formal apologies over World War II in a bid to ease tensions in East Asia.


But even as Washington looks for calm, Seoul and Beijing bristled again this week over new comments by Mr. Abe on his shrine visit, underscoring the challenges the U.S. faces in its diplomatic push.

The FT sums up the tensions in Davos last week...


Via Shannon Tiezzi via The Diplomat,

Lately, it seems that Japanese officials can’t sneeze without incurring the wrath of the Chinese — and vice versa. So it’s no surprise that even conciliatory statements from Shinzo Abe have been soundly rebuffed. On Thursday, Abe wrote a message, published in local Chinese-language papers, conveying greetings for the lunar new year. According to Reuters’ translation of the Japanese-language version, Abe insisted that Japan has “taken the path of peace” since World War II, and “nothing has been changed in the policy of continuing to uphold this position.”

Friday, Abe further extended the olive branch. According to Channel NewsAsia, Abe told a parliamentary session that “Japan and China are inseparable.” He also expressed his desire for the two countries to restart diplomatic meetings. “Instead of refusing to hold dialogue unless issues become resolved, we should hold talks because we have issues,” Abe said.

China flatly rejected these overtures. Responding to earlier requests for a bilateral dialogue, Qin Gang responded with bitter sarcasm: “Such kind of dialogue will be of no effect. Chinese leaders are very busy. Let them spend more time on things useful and effective.” China has repeatedly expressed its position that no diplomatic meetings between China and Japan can be held until Shinzo Abe proves his sincerity. During Friday’s press conference, Qin Gang laid down a specific path for restarting dialogue: Abe should declare that “I will pull back from the precipice, immediately admit and correct mistakes and make no more visits to the Yasukuni Shrine.”

As I wrote earlier, at this point it seems impossible that anything Abe will do will satisfy Chinese leaders (the things he could do, like apologizing for his visit to Yasukuni and/or Japan’s imperialistic past, are incredibly unlikely). To Chinese officials, Abe is “self-contradictory,” as an editorial in China Daily put it. Unless Abe apologizes for and refrains from repeating actions that upset China (from visiting Yasukuni to building up Japan’s military), China will dismiss as insincere his rhetoric about dialogue and peace. Meanwhile, from the Japanese perspective, were Abe to devote the rest of his administration to proving his friendship to China, it would have obvious negative repercussions for Japanese interests.

So we have two countries, each building up their militaries while insisting they must do so to counter the threat of their regional rival. Added to this, a deep distrust of each other’s different political systems coupled with a history of animosity makes the two nations deeply suspicious of each other. Each country insists it loves peace, and uses scare tactics to try to paint its opponent as a hawkish boogeyman. Sound familiar to anyone else?

Ever since the Cold War ended, strategists have been warning leaders to drop the “Cold War mentality.” But it apparently hasn’t worked, because that is exactly what we have right now between China and Japan. The two countries identify so strongly as rivals that it’s impossible for either country to do or say anything without triggering a response from its counterpart. The tensions pop up in the most unexpected places – during Abe’s Africa tour, during a global economic summit in Switzerland.

Even the strong economic ties between China and Japan haven’t helped forestall tensions. In fact, it’s the other way around – tensions are eroding the economic relationship. The Telegraph recently reported that, according to a poll, 60 percent of Chinese business leaders are unwilling to work with Japanese firms. In 2012, China-Japan tensions even erupted into outright calls to boycott Japanese products, with rioters targeting Japanese businesses and restaurants. While Japan’s business view of China is less affected (according to The Telegraph, 80 percent of Japanese are willing to continue trade with China and South Korea), economic interests are shifting to other regions, notably Southeast Asia. Economic ties are likely to continue worsening. It’s certainly hard to see the next round of negotiations on a trilateral China-Japan-South Korea free-trade agreement going off as planned in February 2014.

As with the Cold War, part of the problem is that both China and Japan willfully read each other’s every move as a challenge or threat. For all the distrust between China and the United States, the problem hasn’t reached this level (yet). The U.S. has too many potential enemies (Russia, Iran, North Korea) and too many global interests for China to realistically interpret every diplomatic or strategic maneuver as somehow anti-China (although certainly some hawks within China do try). Japan, with its more limited global presence and strategic interests, is a different story. Meanwhile, as China is currently limiting its military build-up and strategic goals to the near seas, it’s easy for Tokyo interpret each move (for example, a new air defense identification zone) as directly aimed at Japan.

My colleague Zachary wrote Friday that one byproduct of the United States’ decline could be the emergence of regional hegemons. We might be seeing the beginning of this process now, with China and Japan in a Cold War-style battle, not for global power but for regional dominance. The territorial dispute highlights this by increasing the possibility of military conflict, but even if the Diaoyu/Senkaku Islands were to sink into the ocean tomorrow (one possible benefit of global warming) the tensions would remain. It’s a regional Cold War, currently being fought with words but with an arms race looming on the horizon. And, like the Cold War, tensions are unlikely to end until one country claims victory.


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stocktivity's picture

Isn't it almost time for Obama and family to go on another vacation?

old naughty's picture

It's always the other guy started it first...

Problem is: It sounded definitely like old familiar rhetoric.

SilverDoctors's picture

The Chinese credit crunch is also getting worse. 
The Central Bank of China just halted all domestic bank transfers for 3 days, and all renminbi foreign currency conversions for 9 days!

Tyler Durden's picture

You mean the PBOC announcement that was not announced anywhere on the PBOC's site? Or perhaps the 7 day Repo rate in China today is lower because 30+ Chinese banks didn't read a Forbes rumor?

Squid-puppets a-go-go's picture

speakin of which - "Such kind of dialogue will be of no effect. Chinese leaders are very busy"

reminds me of team america wold police/ kim jung il

"Do you have any idea how F&*%# busy i am?!"



G.O.O.D's picture

We need mega tons of steel on the bottom of the ocean so we can get back to work. Seems like a great way to run a world, don't it?

XitSam's picture

Sounds like Obama is getting ready to turn Japan over to (Communist) China. I hope he gets a good price. Knowing Obama, he's doing it for free.

Ballin D's picture

We cant let the economic experiment in Japan fail.  Now if some factor outside of their economic policy could be blamed before everything implodes...

lakecity55's picture

I don't get it Reggie. Don't they know we are also communists? I gave them all our coal mines in a secret treaty and got them a deal on the bank building and vault.

Maybe you need a little book like that mao guy had.

Great idea! I'll give Ayers a call.

Carpenter1's picture

My neighbour's dog barking is of more concern to me than a bunch of posturing world leaders warning of imminent doom. 

Carl Popper's picture

Lol.  Whoever thought that a couple of anarchists in the Balkans, complete amateurs, could have ignited world war 1?


I worry about theirs and ours stupidity than their posturing.

Not Too Important's picture

You really think it was a couple of anarchists that started all that?

Like a dozen Saudis with boxcutters . . .

lakecity55's picture

Go take a look at my list of puppet classes they had at Davos.

Greenskeeper_Carl's picture

Maybe they can duke it out while at the same time the US can invade Iran and Syria.
Pretty sure my idea just made Paul krugman and every central banker in the world jizz their pants

Spanky's picture


Thanks for the link.

matrix2012's picture


United States Circumvented Laws To Help Japan Accumulate Tons of Plutonium


The United States deliberately allowed Japan access to the United States’ most secret nuclear weapons facilities while it transferred tens of billions of dollars worth of American tax paid research that has allowed Japan to amass 70 tons of weapons grade plutonium since the 1980s, a National Security News Service investigation reveals. These activities repeatedly violated U.S. laws regarding controls of sensitive nuclear materials that could be diverted to weapons programs in Japan. The NSNS investigation found that the United States has known about a secret nuclear weapons program in Japan since the 1960s, according to CIA reports.

A year ago a natural disaster combined with a man-made tragedy decimated Northern Japan and came close to making Tokyo, a city of 30 million people, uninhabitable. Nuclear tragedies plague Japan’s modern history. It is the only nation in the world attacked with nuclear weapons. In March 2011, after a tsunami swept on shore, hydrogen explosions and the subsequent meltdowns of three reactors at the Fukushima Nuclear Power Plant spewed radiation across the region. Like the bombs dropped on Hiroshima and Nagasaki, Japan will face the aftermath for generations. A twelve-mile area around the site is considered uninhabitable. It is a national sacrifice zone.

How Japan ended up in this nuclear nightmare is a subject the National Security News Service has been investigating since 1991. We learned that Japan had a DUAL USE nuclear program. The public program was to develop and provide unlimited energy for the country. But there was also a secret component, an undeclared nuclear weapons program that would allow Japan to amass enough nuclear material and technology to become a major nuclear power on short notice.

That secret effort was hidden in a nuclear power program that by March 11, 2011– the day the earthquake and tsunami overwhelmed the Fukushima Daiichi Nuclear Plant – had amassed 70 metric tons of plutonium. Like its use of civilian nuclear power to hide a secret bomb program, Japan used peaceful space exploration as a cover for developing sophisticated nuclear weapons delivery systems.

Political leaders in Japan understood that the only way the Japanese people could be convinced to allow nuclear power into their lives was if a long line of governments and industry hid any military application. For that reason, a succession of Japanese governments colluded on a bomb program disguised as innocent energy and civil space programs. The irony, of course, is that Japan had gone to war in 1941 to secure its energy future only to become the sole nation attacked with nuclear weapons.

[...] Read on here
Flatchestynerdette's picture

the US has asked for reassurance from Abe that he will not do it again.


Just before they asked Abe's economic minister to buy another $7 billion in US bonds to keep pace with being number 2 behind China of US debt holders - all to keep the US in neutral.


29.5 hours's picture


Good point. The Japanese politicians have been doing this shrine provocation for a long long time--and the U.S. government is just now noticing and wanting reassurance? The U.S. is long past expecting to pull off the objective innocent bystander act.



Yenbot's picture

Shrine provocation?!

If a Chin-, er, Red Chinese told you not to go to a (insert Church, temple, mosque, or burlesque show of your choice here), would you give a fuck? Abe's religion is his own damn business, and the US Govt has no business pimpin for Red China to rob him of his religious Liberty. BTW, anyone can go to the Shrine anytime (it's online). Kennedy should go there.

Peter Pan's picture

I think the Chinese are showing a bit of bravado believing that the USA will back them when push comes to shove, while China is showing bravado because it suspects that the USA will stay clear of any conflict.

Those that do not send their children to the front line are apt to do crazy things.


suteibu's picture

Substitute Japanese for your first Chinese and I agree. 

buzzsaw99's picture

blah blah stop tearing down my shitty wall blah blah

TheDarkKnight's picture

"Chinese leaders are very busy. Let them spend more time on things useful and effective.”


 Very busy cooking the economic numbers i presume?

Carl Popper's picture

China government officials know they are in deep trouble. 


Uniting the people against an external enemy is a classic move of any fragile government facing severe economic issues.  The commies know they are only in power as long as they continue to deliver unsustainable growth, or if they can unite the people against an external enemy. 


The Chinese are also desperate for resources, and have old grievances and territorial claims.  The perfect storm.  War is not necessary for the government to achieve the benefits of focusing the peoples' attention elsewhere, but most huge wars seem to start and escalate due to miscalculation.

BandGap's picture

Double dittos for the Japanese, Carl. They have zero resources and their manufacturing base is dick. Look it up.

29.5 hours's picture




When I read your post, I substituted "Japan" and "U.S." for Chinese -- and "capitalist cronies" for "commies" and guess what? It came out equivalent.

Does this sound familiar to ZH denizens?   "they are only in power as long as they continue to deliver unsustainable growth"

Blaming this particular mess on commies and Chinese won't work.

Atomizer's picture

Good. Another fine use for a precision assault rife. The last dying words, please don't hurt my family. Click, bang. The family is safe, the cartel sits in fear, no family and innocent children would ever be harmed. History repeats 

nmewn's picture

So, I guess the Grammys don't draw the publics attention like it used to? ;-)

suteibu's picture

Any time I read something which includes a climate change reference, the whole article is suspect.

Jack Burton's picture

That's an odd way to expand one's knowledge. Mental blinders have been proven not to alter reality, but are proven to reinforce political dogmas. Global cooling is real I am told by EXXON, MOBIL and MASSY Coal. 3% of science can't be all wrong, especially if they are working for good old honest oil and coal corporations. We all know science and especially physics is relative, meaning one can choose republican physics instead of the hoax of democrat global warming hoax. It is after all politicians whose views on the physics that carry weight.

I am going long arctic shipping, it is proven to save millions over the older routes, now that the Northwest passge opens in summer, profits are set to soar. That is why Russia and US Oil firms are building the arctic drilling rigs getting ready for the great arctic sea oil rush, made possible by the warmest arctic in 45 million years. Money talks, business talks and they say "Global Warming is real and they are spending billions of investment dollars betting that it will only get warmer with each passing year, my money is firmly invested with theirs. Go north young man, that is the future. If I could find a way to invest in Greenland, I would, soon there will be funds to provide the capital to drill and mine in the newly Ice Free regions on Greenland. It's real, money is flowing north to cash in. Gold miners are working in Alaska and the Yukon on gounds coverd by glaciers only 20 years ago. Are they liberal fools for mining virgin gorund free of ice for the first time in 35 thousand years?

suteibu's picture

What about the reference was germaine to the article?  It was completely superflous and added, in my opinion, only to give credibility to the subject simply by its association with a serious article on foreign policy.  You were being propangandized and you don't seem to care.


Not Too Important's picture

The Force is strong with this one.

Cabreado's picture

"meaning one can choose republican physics instead of the hoax of democrat global warming hoax."

Jack/James, over and over, you expose yourself as an opportunist, rather than a believer in anything in particular.


Apostate2's picture

Another interesting development as much for the activity as for the players:(SCMP 27/1/14)(a repost)

'The first scientific ocean drilling expedition led and sponsored by China sails from Hong Kong tomorrow into the South China Sea - the subject of territorial disputes between Beijing and neighbouring countries.

Thirty-one geologists will drill at three sites for sediment and rock cores during the 62-day international expedition aboard the American scientific drill ship Joides Resolution.

The ship will pass through and drill in regions claimed variously by China, the Philippines and Vietnam. Operated by the National Science Foundation, the ship has received permission from Manila and Beijing but is awaiting a response from Hanoi to drill at a site in the southwest of the South China Sea. 

Xinhua yesterday reported that three People's Liberation Army naval vessels patrolled the James Shoal, 80 kilometres off the coast of Malaysia's Sarawak state and 1,800 kilometres from the Chinese mainland. The shoal is also claimed by Malaysia and Taiwan. Troops aboard the ships - an amphibious landing craft and two destroyers - held "an oath-taking ceremony to safeguard the area's sovereignty".'

(Edit my fat fingers)

Son of Captain Nemo's picture

And if there were no U.S. military bases throughout Japan only getting bigger and better in Okinawa as of recently much to the chagrin of the people on that island who have wanted the U.S. military out of the Country for years.  Add to this the complexity of USD currency controls in the Region....

Guarantee life would only be better between the two if the fucking Yank were no longer in the picture!

The sad fact is, Abe's "foot-in-mouth" problem aside, they both know who their true mutual enemy is and has been since the close of WWII!

suteibu's picture

Attempts by Japanese politicians to bridge the gap with China have been stifled by the US for years, most recently by Obama, i.e. Hatoyama.

The post-war US East Asian foreign policy has thrived on tension there.

laomei's picture

Here's the fact of the matter. Any conflict between China and Japan will either be a very limited one or Japan gets nuked to glass.  I mean, that's just the way it works.  China's not willing to put up with Jap shit ever again after the last time.  

Not Too Important's picture

"Nuked to glass"? I just don't get it.

Tokyo is so radiated, that by US standards (raised quarterly) the entirety of greater Tokyo should be scraped clean down 30 feet, and buried in a trench 5 miles deep. There isn't a child in Tokyo (greater Tokyo) that doesn't have a low white blood cell count. They're all just waiting to die, then the adults. I won't even talk about the US military and their families that are thoroughly radiated. Keep an eye on the USS Reagan sailors, they're the canary in the coal mine.

Japan is dying. Why go to war, at all that cost, over an island that will be completely uninhabitable in a few years? I can see the benefit of waving your sword around, but why not just let Nature take its' course, and if you want to be a complete bastard, go on TV and laugh about it? All of mainland Asia is going to watch what's coming with a smile on their face. The Japanese wore out their welcome decades ago.

Or is it a matter of starting a war and getting Japan nuked to cover up what's coming? Do we really want all of Japan's nuke plants bombed and blown skyhigh into the atmosphere and make the world worse that it already is? Hundreds of thousands of tons of enriched uranium and plutonium blowing in the global wind? There isn't a lung in the Northern Hemisphere that isn't full of it now.

Fuck me.

Not Too Important's picture

"China's not willing to put up with Jap shit ever again after the last time."

Like this?

Unit 731. Makes Mengele look clean:


laomei's picture

I live basically right next to one of the residential compounds for the 2nd artillary bigshots and see them around all the time.  I have asked that theoretical, and yes, they sure as shit would nuke Japan if Japan even contemplated an attack of any sort on Chinese soil.  Not "strategic", just flat out extermination of them all.