Seeing Double

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Irina Kalashnikova / Reportage / Getty Images

Sharp contrast A surprisingly well-dressed woman strides across Pyongyang's Kim Il Sung Square

There are two ways to view Northeast Asia, and right now, both of them are on display. The first is to see the region as one of the world's cockpits of tension, instability and potential catastrophe. Japan and China — one an established power, the other a rising one; one in a state of political paralysis, the other brimming with self-confidence; one a key U.S. partner, the other a potential rival — face each other, old enmities sharpened by modern slights, real and imagined. On the divided Korean peninsula, a nuclear-armed Stalinist monarchy, an ally of China, sits next door to a vibrant democracy, an ally of the U.S. Put all those ingredients into the hot pot, and it's easy to see why commentators frequently imagine that its taste will one day be a bitter one.

But here's the second way to look at the region: as a zone of peace and prosperity. For nearly 20 years, from the 1930s to the 1950s, Northeast Asia was wracked by war. No longer. While North Korea remains a hermetic society and a cruel, poor dictatorship, the modern history of South Korea and Japan, by contrast, has been one of astonishing human progress, with health and wealth rising to levels unimaginable 50 years ago. In the past 20 years, their prosperity has been joined by that of China.

So which is it to be? A region of conflict, or one of peace? There's been some evidence for the first of late. In North Korea, the regime of Kim Jong Il appears to be heading for the start of a transition of power to his son Kim Jong Un. For the army of Pyongyang watchers, that's enough to get the nerves on edge; to fray them a little more, the succession issue has come at a time when the Seoul rumor mill has it that Kim, who suffered a stroke two years ago, is again sick. Quite apart from possible jockeying for power in Pyongyang, relations between the North and the South have been harmed by the sinking of the South Korean naval ship Cheonan in March. On Sept. 13, Seoul released its long-awaited report on the incident, which in effect concludes that the Cheonan was sunk by the North. North Korea and its patrons in Beijing are making noises that they would like a resumption of the six-party talks (between the Koreas, Japan, China, the U.S. and Russia), which were supposed to handle North Korea's nuclear question until Kim walked out of them in April 2009. But neither Washington nor Seoul is prepared to rush into an early resumption of the talks until they have a sense that they will deliver anything more than bragging rights in Pyongyang that it has forced the U.S. back to the table.

While tension on the peninsula ramps up, relations between China and Japan, awkwardly, have taken a nosedive. Japan's anemic recovery from the Great Recession is being hampered by the rise in the value of the yen, which recently hit a 15-year high against the dollar. That hurts Japan's exports, and its recovery still depends more than it would like on world markets. Some in Japan have fingered China, which has been on a buying spree of Japanese bonds, as partly responsible for the yen's appreciation.

On top of this, on Sept. 8, Japan took into custody a Chinese fishing vessel that it said was illegally in Japanese waters around the islands in the East China Sea that China calls the Diaoyu and Japan the Senkaku. (In both languages the names mean "fishing islands.") Beijing's Foreign Ministry spokeswoman said that "Japan's so-called evidence-taking is illegal, invalid and in vain," and the Chinese government summoned the Japanese ambassador to a series of meetings on the incident while the state-owned press kept up a drumbeat of anti-Japanese criticism. On Sept. 13, Tokyo released the 14-man crew but kept the boat's captain in custody. Though popular manifestations of anger against Japan have not reached anything like the levels they did in 2005, when revisions to Japanese textbooks sparked riots in Chinese cities, China is notoriously prickly about its territorial claims in the seas abutting its coast.

Now look at the bright side. It is far from clear that North Korea is going through a succession crisis or, indeed, that Kim's regime is any more of a danger than it usually is to anyone other than its long-suffering people. At the recent World Economic Forum meeting in Tianjin, experts on North Korea said that Kim's regime is shifting its posture from one of "military first" to "economy first" — something that indicates political confidence rather than its opposite. Though many in the West doubted it would happen, the transition of power in 1994 to Kim Jong Il from his father Kim Il Sung occurred without evident crisis. Nobody — surely including China's rulers — likes the way North Korea behaves, but its tantrums have been managed, more or less, for years. Perhaps they can be for years longer.

Outside North Korea, the region's economies continue to motor ahead. China is now the main trading partner of both Japan and South Korea (and runs a deficit with both). The International Monetary Fund has just revised its estimate of South Korean growth this year to 6.1% (this for a developed economy) and the local stock exchange recently hit a two-year high. Officials in Seoul worry about a polarization in their society, with young people finding it difficult to get jobs — last winter the unemployment rate was the worst in 10 years, though it has come down markedly since then. But there is a palpable pride in Seoul that the South has managed the Great Recession better than any other Organization for Economic Cooperation and Development economy, a pride bolstered by the fact that Seoul will host the next G-20 summit — the first time it has been held in Asia — in November.

That leaves Japan, the nation that should be the rock on which regional peace and prosperity should be built. It isn't. It is cruel to say so, but politically the world's second largest developed economy, which has seen six Prime Ministers in four years, is becoming a bit of a joke. True, on Sept. 14, Naoto Kan, who has been PM for all of three months, fought off a stiff challenge in an election for president of the ruling Democratic Party of Japan (DPJ) by Ichiro Ozawa, the DPJ's veteran "shadow shogun." A loss in that election would have forced Kan to resign.

Conventional wisdom, especially outside Japan, held that it would have been disastrous for Japan had Ozawa, the quintessential backroom wheeler-dealer, become Prime Minister. I'm not so sure about that. Ozawa, love him or hate him, has a thought-through vision for the need to break old habits in Japan, to wrest power from a bureaucracy that has done little over 20 years to institute necessary reforms, and to have Japan play a role in the world commensurate with its economic heft. Without pushing the analogy too far, he reminds me of Charles de Gaulle in the last years of the Fourth French Republic, tucked away in Colombey-les-Deux-Eglises, a constant reminder of the failings of smaller men and whose assumption of power in 1958 was necessary for France to break from the past. Ozawa's election as leader of the DPJ would at least have made him responsible for putting his ideas into practice, rather than giving him just another chance to criticize others for failing to do so.

From Seoul to Taipei to Jakarta, Asia's political leaders are implementing pragmatic reforms, chasing foreign investment, forging new industries and taking the risks for which Japan was once famous. A Japan that managed to do that would not simply underpin Northeast Asia's prosperity. As the U.S.'s oldest and most important friend in the region, it would also reinvigorate an American presence that has been a critical balance wheel ensuring rivalries do not get out of hand.

There are plenty of commentators who will warn you of the danger of "black swans" swimming into view in Northeast Asia — unpredictable events with unimaginably bad consequences. From more madness in Pyongyang to a real Sino-Japanese spat, they are not hard to imagine. But I pray for a white swan: the end of Japan's 20-year political funk, and the beginning of a period when it plays with confidence the role in the region and the world that its wealth and talents suggest it should. Then we would know for sure that the real Northeast Asia is the peaceful, prosperous one.