September 23, 2010 By Robert Amsterdam

China-Japan Conflict Reveals Asia’s Institutional Deficit

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What began with an arrest of a Chinese fisherman in disputed waters has escalated into the most intense  diplomatic dispute between between Japan and China in recent memory.  The incident has provoked severed ties, reciprocating arrests, frozen trade, and unusually bellicose language. 

The rhetoric is nothing short of chilling:  “This matter has already seriously damaged China-Japan relations,” said a spokesman for China’s Ministry of Foreign Affairs. “The key to solving this problem is in Japan’s hands.”  Japan hasn’t been quite so conciliatory either.  Even Sec. of State Hillary Clinton reluctantly had to throw a hat into the ring today, stating to Japan’s foreign minister that the islands under dispute are covered by the 1960 Japan-US Security Treaty, suggesting that Chinese aggression could implicate an American military response. 

Perhaps even more illuminating of the geopolitical zeitgeist and waning status of U.S. power in the region, was how little it mattered.  The crisis currently spiraling out of control highlights the potential damages caused by a paucity of coordinating mechanisms among Asian nations – laying bare the shortcomings of regional multilateral institutions and their ability to handle dispute settlement.