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Article Excerpt
Interdependence theory claims that increased trade and closer economic ties would reduce the likelihood of conflict and bring greater security. Increased interdependence between the two major Asian rivals--China and Japan--has given hope for an end to the disputes which have marred their relationship and for an eventual reconciliation between them. Nevertheless, despite economic interdependence, Sino-Japanese rivalry has escalated in recent years, fuelled by historical legacies and misunderstandings. The simultaneous development of military power by both countries has had an unsettling effect upon their relationship which has become more difficult to manage. Japan has been developing a naval force with a modernized Aegis capability as part of a security burden sharing arrangement with the United States which would allow it to defend critical sealanes. As Japan develops an effective naval capability for this purpose it stimulates concern in Beijing which sees in this effort a means to intervene in the Taiwan situation or, in cooperation with the US, an attempt to contain it. As China develops its military power to deter Taiwanese independence and counter an American move to come to Taiwan's defence, suspicions within Japan are similarly stimulated. China also intends to develop a naval capability to protect its oil imports from the Middle East which would threaten the security of Japan's sealanes. Naval rivalry would undermine the benefits of Sino-Japanese interdependence exacerbating existing difficulties in the relationship, rendering it more unpredictable. It would also challenge the development of East Asian regionalism and, depending on its intensity, may damage it beyond repair. This article examines the theme of Sino-Japanese rivalry within interdependence, identifying the aggravating factors as well as the conditions which could ameliorate it.
Interdependence and Rivalry
Chalmers Johnson once claimed that East Asian regional security could be based on interdependence between East Asian actors, and between Japan and China in particular. (1) Interdependence has indeed been popularized as a means to bring peace and security to troubled regions based on the view that increased trade and economic ties would create disincentives for conflict. It is possible, however, to have interdependence and rivalry between major actors for a variety of reasons which could, under certain circumstances, degenerate into conflict. Interdependence is an ambiguous term which conceals many complex issues and difficulties; it has been used synonymously with openness, integration and mutual sensitivity. (2) According to Richard Rosecrance and Arthur Stein there are at least three main definitions of interdependence; first, interdependence can be a relationship of interests so that if one state's position changes another would be affected; second, interdependence can increase national sensitivity to external economic developments; third, there is Kenneth Waltz's definition of interdependence in terms of a relationship which is costly to break. (3) Baldwin identified interdependence in terms of both sensitivity and vulnerability; sensitivity interdependence means responsiveness to developments or policies and the creation of "mutual effects". (4) If sensitivity is understood in terms of its effects it may exist without high levels of trade as political sensitivity is possible without economic interdependence. The Islamic world, for example, is extremely sensitive to America's support for Israel and popular protests and demonstrations can be triggered by perceived shifts in the American position in relation to the Palestinian issue. Vulnerability interdependence, however, stresses the opportunity costs and the benefits that would be lost if a relationship were disrupted. In this sense interdependence can be understood as mutual vulnerability where two states find themselves in a relationship which would entail significant costs to break. (5) Sensitivity is possible without a significant degree of vulnerability in a relationship, but vulnerability assumes sensitivity.
Interdependent relationships are rarely in equilibrium as one side is usually more dependent on the relationship than the other, resulting in asymmetrical interdependence. Political economists since Albert O. Hirschman have extensively debated the notion of asymmetrical interdependence and its impact upon relations between states. (6) Drawing upon Hirschman's work, Keohane and Nye noted that trade asymmetries would allow the less dependent side an opportunity to wield power over the more dependent. (7) This move from trade asymmetry to power and bargaining strategies is itself contentious. (8) Some have agreed that symmetrical trade relationships may create incentives for accommodation while asymmetrical relationships may actually increase tensions and the prospect for conflict. (9) Others have argued that the bargaining opportunity created by asymmetrical interdependence may not necessarily be utilized or translated into power. (10) Many interdependent relationships may be asymmetrical but there is no question of a power advantage, or of a deliberate attempt to gain power over the more dependent side. The notion of asymmetrical interdependence is a deduction from trade inequality which may or may not be relevant to the political relationship. What is missing is the intermediary factor of political agency. Sensitivity interdependence identifies the effects produced in two countries which are closely linked by trade or other ties but it cannot predict their responses to any particular event. Vulnerability interdependence identifies the costs associated with any attempt to disrupt a close trade relationship but it cannot predict how a political leadership will assess those costs. In a majority of cases the political relationship functions normally irrespective of trade asymmetries and disputes are resolved without the threat of trade disruption. Trade and investment patterns have expanded considerably in the era of globalization and asymmetries have been created which usually are not translated into power advantages.
The domestic factors influencing the behaviour of the political leadership are critical. When two countries which have a history of conflict and rivalry are brought together in a situation of tight interdependence the increased sensitivity may aggravate the relationship. Keohane and Nye noted that increased interdependence may exacerbate tensions between states which are not used to dealing with each other. (11) If political leaders are motivated by national ambitions or a sense of entitlement, or should they be pushed by a military with an expansionist agenda, rivalry within interdependence is then possible. Interdependence is valued differently by the business and the security communities within a political system as they respond to dissimilar needs. The business community and the ministries associated with trade and finance may be committed defenders of economic interdependence within the decision making system. Within the broad group called the security community--which includes the defence ministry, the military and supporting think-tanks--the appeal of interdependence may be mitigated somewhat by a concern for national security. Within the security community there may be a small but politically influential group of military hardliners and ideologues for whom economic interdependence with a rival country would be regarded as vulnerability. Hardliners may acquiesce in the development of interdependence with countries regarded as threats or historical enemies if the economic growth created results in the development of new capabilities and weapons systems. Access to the advanced information technology necessary for the development of new weapons may only be possible in an interdependent relationship, which is seen by the military or security community as an instrument of national power enhancement. In a representative or pluralist system the influence of the security hardliners over decision-making would be balanced and checked by the business community and the proponents of interdependence. In a non-representative or authoritarian political system the decision-making process may allow a hardline military group uncontested influence over the critical issues of national security without accountability. Direct access to the political leadership in this way would permit a hardline military to promote national ambitions and expansionist plans overriding the concern for interdependence and the interests of the business community.
Anglo-German Interdependence Before 1914
The most conspicuous example of rivalry within an interdependent relationship is Britain and Germany before the First World War. It reveals how misunderstanding and error may arise as a product of an interdependent relationship, and to that extent the example is still relevant today. Before 1914 Britain and Germany were bound by a specific interdependence, as well as a general dependence upon trade. In terms of specific or mutual interdependence Paul Kennedy noted that the City of London was financing German orders for Australian wool, Peruvian silver and other raw materials which were paid for by bills drawn on London accounts. Lloyds of London insured much of the German merchant marine, even against wartime losses resulting from the action of the Royal Navy. (12) Moreover, Britain was Germany's second export market after the US taking 14.2 per cent of German exports in 1913. (13) Both countries, moreover, exhibited a general dependence on external trade and had much to lose in the event of war; Britain was the centre of international finance and much of its income was derived from financial services. (14) The exports of Germany's chemical and electrical industries increased significantly in the pre-war period and in 1900 France, Italy, Belgium, the Netherlands and Luxembourg accounted for 25 per cent of German exports. (15) Nonetheless, Germany engaged in a programme of naval expansion which challenged the supremacy of the Royal Navy and provoked British suspicion of German motives. (16) Germany's aim was to ensure that Britain would remain neutral in any war on the continent. Britain was indecisive and gave Germany no clear signals as the cabinet was torn between pro-German and pro-entente groups, the latter calling for cooperation with France and Russia against Germany. R.J. Sontag concluded that had Britain warned Berlin in 1914 that military action against France would bring Britain in on the French side, the conflagration which followed might have been avoided. (17)
How is it that interdependence between two major European powers failed to prevent one of the most destructive wars of the twentieth century? Overall, the explanations point to the importance of the political factor and how the leadership responds to interdependence according to ideological or nationalist predispositions. Britain and Germany misread each other's intentions after negotiations over naval reductions broke down in 1912. Thereafter, both sides avoided the naval question and their cooperation over the First Balkan War of 1912-13 encouraged them in the belief that relations had improved, and that disagreements had been removed. In short, a grave misunderstanding had been created. As Sontag noted: "German statesmen had been encouraged to hope that England might remain aloof from a continental war by the improvement of relations since 1912." (18) This belief in Britain's neutrality arose because of the influence of the pro-German group in the British cabinet which created the strong impression in Germany that Britain would not support France and Russia. Sean M. Lynn-Jones argued that the improvement of Anglo-German relations after 1912 created a "false belief" in both...
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