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Regional Overview:………………………………………………………………………………1 Old Challenges, New Approaches by Ralph A. Cossa and Brad Glosserman, Pacific Forum CSIS Pyongyang reverted to form this quarter, reminding everyone that old challenges would not be easily or quickly negotiated away. Its attention-getting devices included a failed “satellite launch” and an apparently successful nuclear test, along with a promise to never return to the Six-Party Talks. At the annual Shangri-La Security Dialogue, Secretary of Defense Robert Gates showed the Obama administration’s softer, gentler side while the senior Chinese representative demonstrated that the “Cold War mentality” lives on. Politics as unusual was the order of the day, as North Korea apparently grappled with the issue of succession, continued civil (or not so civil) disobedience in Thailand resulted in the cancellation of several ASEAN-related summits, and the prime minister in Malaysia stepped down. It was better news for India’s prime minister, who won a resounding victory this quarter, a feat which many expect Indonesia’s president to duplicate next quarter. Nevertheless, there are signs that the ASEAN Regional Forum (ARF) may actually be coming of age. U.S.-Japan Relations:…………………………………………………………………………..17 Coordination amid Uncertainty by Michael J. Green, CSIS, and Nicholas Szechenyi, CSIS Prime Minister Aso Taro put off the election with the hope that additional economic stimulus measures would increase support for his Liberal Democratic Party. But Aso received a real boost when Ozawa Ichiro resigned as opposition leader in May due to a funding scandal. That boost quickly evaporated when Ozawa was succeeded as head of the Democratic Party of Japan by Hatoyama Yukio. As a result, most analysts continued to predict a victory for the DPJ in a general election expected in August and uncertainty continued hanging over the U.S.-Japan relationship. Japan’s political mess did not get in the way of close U.S.-Japan coordination in response to a series of North Korean provocations. President Obama also made progress in nominating key personnel to guide the U.S.-Japan relationship. The quarter came to a close with the U.S. Congress gearing up for a budgetary battle over the future of the F-22 stealth fighter, which the Aso administration has said it wants to buy, and Secretary of Defense Gates has said he does not intend to sell. iii U.S.-China Relations:…………………………………………………………………………..27 Laying the Groundwork for Greater Cooperation by Bonnie S. Glaser, CSIS/Pacific Forum CSIS After the completion of the first round of “get-acquainted” meetings aimed at laying the foundation for cooperation on a broad range of issues, the U.S. and China agree that the bilateral relationship is off to a good start. While there is acute awareness of the challenges, there is a shared sense that their futures are inextricably linked and that cooperation is essential to global economic prosperity and security. The quarter opened with the first meeting between Presidents Hu and Obama on the sidelines of the G20 financial summit. On separate visits to Beijing, Todd Stern, the U.S. special envoy for climate change, and House Speaker Nancy Pelosi underscored the importance of combating the effects of global warming. U.S. Treasury Secretary Timothy Geithner traveled to China to prepare for the first round of the Strategic and Economic Dialogue. Washington sought China’s cooperation on regional security issues, including North Korea and Afghanistan-Pakistan. The Defense Consultative Talks were held in Beijing, giving a desperately needed boost to the bilateral military relationship. U.S.-Korea Relations:………………………………………………………………………….39 All North Korea, All the Time by Victor Cha, CSIS Korea Chair/ Adjunct Senior Fellow Pacific Council The quarter saw a plethora of provocations by North Korea, ranging from ballistic missiles tests to the country’s second (and more successful) nuclear test. The United Nations Security Council responded with Resolution 1874 that called for financial sanctions and the institutionalization of a counterproliferation regime that would have made John Bolton proud. The U.S. and ROK presidents held their first summit amidst all this noise and sent clear signals of alliance solidarity. Washington exhibited the closeness of the alliance, being the only country to send a presidential delegation to the funeral of former President Roh Moo-hyun. These rhetorical demonstrations of the alliance’s strength, however, cannot drown out the potential substantive setback to the alliance as the KORUS Free Trade Agreement continues to languish. U.S.-Russia Relations:………………………………………………………………………….49 Laying the Groundwork by Joseph Ferguson, National Council for Eurasian and East European Research President Barack Obama traveled to Moscow in early July to meet the Russian leadership, the political diarchy of President Dmitry Medvedev and Prime Minister Vladimir Putin. The meetings were conducted in a cordial atmosphere, but this particular summit stood out from summits of the past two decades between U.S. and Russian leaders: there was no backslapping camaraderie or using first names. Obama conducted the visit with a minimum of pomp and a maximum of professionalism. His job was to assess the state of U.S.-Russian relations, assess the leadership situation in Russia, and to decide on the best path to improve bilateral relations. Although most of the headlines stated that the results of the summit were “mixed,” Obama seems to have achieved what he wanted and laid the groundwork for achieving normalcy in relations for the next six months or so. The most pressing issues, however, remain unresolved, and it is not clear if progress can be sustained beyond the end of the year. iv U.S.-Southeast Asia Relations:………………………………………………………...............57 President’s Cairo Speech Resonates in Southeast Asia by Sheldon Simon, Arizona State University Southeast Asia media and elites praised President Barack Obama’s Cairo address for opening a new dialogue with Muslims and acknowledging U.S. transgressions after 9/11. Washington excoriated Burma’s ruling junta for transferring opposition leader Aung San Suu Kyi to prison for violating the regime’s detention law, characterizing the charges as ”baseless” and an excuse to extend her incarceration beyond scheduled elections in 2010. Thai political turmoil disrupted ASEAN-related meetings in April. In the Philippines, this year’s Balikatan exercise involved 6,000 U.S. troops and focused on responses to natural disasters as the Philippine Congress is scheduling new hearings on the Visiting Forces Agreement. Human rights concerns in Southeast Asia were raised again in the annual U.S. watch list on human trafficking with most of the region cited for an unwillingness or inability to stop the notorious trade. Finally, the U.S. praised Southeast Asian maritime defense cooperation in suppressing regional piracy as well as contributing to counter-piracy patrols in the Gulf of Aden. China-Southeast Asia Relations:………………………………………………………………67 Ferment over the South China Sea by Robert Sutter, School of Foreign Service, Georgetown University, and Chin-hao Huang, SIPRI The highlight of the quarter was continued maneuvering by China and Southeast Asian claimants over disputed territory and related economic claims in the South China Sea. Last quarter’s widely publicized face-off between the U.S. surveyor ship USNS Impeccable and harassing Chinese vessels was followed by incidents and commentary this quarter that underlined China’s view of an important U.S. role in challenging Chinese maritime claims in Southeast Asia. Chinese official statements and commentary and the actions by Chinese defense and security forces underlined a firm Chinese position in support of territorial and resource rights disputed by some Southeast neighbors and the U.S. Meanwhile, the pace of Chinese diplomacy picked up with economic support to Southeast Asian neighbors weathering the decline in trade and investment during the ongoing global economic recession along with visits and interaction with senior Southeast Asian leaders. China-Taiwan Relations:………………………………………………………………………77 Moving Relations toward a New Level by David G. Brown, The Johns Hopkins School of Advanced International Studies Beijing and Taipei made significant progress in improving cross-Strait relations this quarter. In May, “Chinese Taipei” participated for the first time as an observer in the World Health Assembly. In April, the third round of ARATS-SEF talks produced three new agreements and an understanding to open Taiwan to investors from the mainland. These developments have been well received in Taiwan and have produced increasing de facto dealings between government officials from the two sides. The recent precipitous decline in cross-Strait trade appears to be bottoming out and Beijing has taken steps to help Taiwan economically. Although there is still no indication that Beijing has reduced the military forces targeted at Taiwan, Hu Jintao has called for preparations concerning a peace agreement and confidence building measures. v North Korea-South Korea Relations: ………………………………………………...............87 So Long, Kaesong? by Aidan Foster-Carter, Leeds University, UK The second quarter of 2009 saw North Korea make headlines around the world, as it likes to do. (On their leisurely train journey across Siberia toward Moscow in the summer of 2001, Kim Jong-il told his Russian host, Konstantin Pulikovsky: “'I am the object of criticism around the world. But I think that since I am being discussed, then I am on the right track.”) The quarter was neatly, perhaps deliberately, bookended by missile launches. On April 5 after a two month build-up, while the world watched the preparations via spy satellites, the DPRK finally fired its long-awaited Taepodong-2 long-range missile. Ostensibly this was to put a satellite in orbit – although neither the International Telecommunication Union (ITU) nor anyone else has managed to observe any new object soaring across the heavens. Meanwhile, relations between the South and North continued to deteriorate as interaction became more caustic and the stakes higher. By the end of the quarter, the rest of the world watched again as the North launched more missiles. China-Korea Relations:……………………………………………………………………….103 Pyongyang Tests Beijing’s Patience by Scott Snyder, Asia Foundation/Pacific Forum, and See-won Byun, Asia Foundation North Korea’s missile launch on April 5 and nuclear test on May 25 posed a test to the international community. For China, the tests highlighted the tensions between its emerging role as a global actor and a commitment to North Korea as an ally. On June 12, China voted in favor of UN Security Council Resolution 1874 condemning North Korea’s nuclear test. China now must decide whether it will actively implement the resolution. As a result of North Korea’s declining trade with South Korea and the international community, China’s economic leverage with North Korea has grown. But it is unclear whether China will utilize such leverage given strategic concerns about regional stability and the impact on the political succession process now underway in Pyongyang. Meanwhile, economic policymakers in Seoul are aggressively seeking to expand South Korea’s share of the Chinese market in an effort to shore up the economy and benefit from Beijing’s massive stimulus plan. However, there is growing Sino-South Korean competition to secure overseas export markets and energy sources. This competition is influencing South Korean assessments of China’s role as a global economic power. Japan-China Relations:…………………………………………………………….................113 High-level Meetings Intensify as Old Problems Simmer by James J. Przystup, Institute for National Strategic Studies, NDU Intensive high-level meetings marked the second quarter of the year for Japan and China. In April alone, Prime Minister Aso Taro met three times with China’s leaders, President Hu Jintao and Premier Wen Jiabao. Efforts to structure a response to North Korea’s April 5 missile test and May 25 nuclear test dominated bilateral diplomacy. Japan’s call for a strong response in the UN Security Council met with Chinese appeals for caution and restraint. Japanese efforts to begin implementation of the June 2008 agreement on the joint development of natural gas fields in the East China Sea and to resolve the January 2008 contaminated gyoza cases made little progress. Issues of history were rekindled by Prime Minister Aso’s offerings at the Yasukuni Shrine and the release of movies on the Nanjing Massacre in China. The quarter ended with senior diplomats again discussing implementation of UN Security Council Resolution 1874, which imposed sanctions on North Korea. vi Japan-Korea Relations:……………………………………………………………………….123 Pyongyang’s Belligerence Dominates by David C. Kang, University of Southern California, and Ji-Young Lee, Georgetown University The second quarter of 2009 saw a rapid increase in tensions between North Korea and all its neighbors, and this tension dominated relations during the quarter. In rapid succession, North Korea tested a long-range intercontinental ballistic missile (which failed), a nuclear device (successfully), dared anyone to start a war with it, and then dispatched a ship suspected of carrying small arms on a route most believed destined for Myanmar. Japan led the way in responding to North Korea, introducing harsher sanctions and calling for wider international moves to punish Pyongyang. Seoul-Tokyo relations moved closer as leaders in both capitals agreed on how to react to North Korea and both leaders welcomed the Obama administration’s moves for UN sanctions. China-Russia Relations:………………………………………………………………………133 Summitry: Between Symbolism and Substance by Yu Bin, Wittenberg University Between June 14-18 Russian and Chinese heads of state interacted on a daily basis at three summits: the Ninth annual SCO summit and the first ever Brazil, Russia, India, and China (BRIC) summit (both in Yekaterinburg), and their own annual bilateral meeting in Moscow. The locus of Russian-China relations was, therefore, “relocated” to Russia. Economic issues dominated these meetings as the global financial crisis deepened. Mounting danger on the Korean Peninsula and instability in Iran were also recurring themes. President Hu Jintao’s five-day stay in Russia ended when he joined President Dmitry Medvedev to watch a spectacular performance by Chinese and Russian artists in Moscow’s Bolshoi Theatre for the 60th anniversary of Russian-China diplomatic relations. About the Contributors……………………………………………………………………….145 vii