Asia Eur J DOI 10.

1007/s10308-012-0308-4 O R I G I N A L PA P E R

Regional leadershipJapanese style: Japan through the crisis

Julie Gilson

# Springer-Verlag 2012

Abstract The Japanese government faces many competing challenges as it seeks to balance its multilateral and bilateral relationships within and beyond the region: whilst addressing its rapidly changing contentious domestic politics, there is pressure for it to realign relations with the USA, manage the rise of China, strengthen links with its region and continue to deal with its lingering historical legacy. All of these demands are now set against the backdrop of a so-called lost decade of economic woes and global economic recession. This article demonstrates how the Japanese government is apparently adopting a de facto multilevel foreign policy, attempting to engage in a range of bilateral and collective initiatives simultaneously and to assume a regional leadership role whilst having to manage difficult bilateral relations, notably with the USA and China.

Introduction The variously defined region of Asia represents a major economic powerhouse. With over 50% of the world's population, and sustaining the fastest rates of growth in the world (UN 2011), the notion of the Asia Pacific as a dynamic, significant global region is prevalent (ADB 2008; Kawai 2005; Okamoto 1997). Kawai shows how intra-regional trade (as a percentage of total East Asian trade) increased from 35% in 1980 to 54% in 2003 (2005: 2), and it subsequently rose to 59.3% in 2010 (ADB 2011). This increase is attributable to a multitude of factors (such as the deregulation of financial systems, the opening of securities and other markets, domestic reforms, leading to expanded foreign trade, direct investment and financial flows) that have driven trends towards economic integration in the region (Kawai 2005: 22). One Asian Development Bank report observes that the question is no longer whether Asia will be central to the 21st century economy, but rather how it will exercise its prominent role and how its dependence on the rest of the world has decreased (ADB 2008). The extent to which regional initiatives will play a significant role in
J. Gilson (*) University of Birmingham, Birmingham, UK e-mail: j.a.gilson@bham.ac.uk

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Asia's collective economic future and who will sit in the driving seat for such a development are currently being debated. Against this background, Japan is brandishing its ordinary credentials: new Prime Minister Yoshihiko Noda likens himself to a mud-dwelling fish, stressing his humble origins through a poem by Mitsuo Aida (BBC 2011) whilst some commentators define Japan's current regional stance as its ordinary period (Inoguchi and Bacon 2008). And yet, having to deal with rapidly changing contentious domestic politics, realigning relations with the USA, faced with rise of China, strengthening links with its region and its lingering historical legacy, all against the backdrop of a so-called lost decade of economic woes and global economic recession means that becoming ordinary for Japan is, in fact, no ordinary feat. This article demonstrates how the Japanese government is struggling to cut through its tangled foreign policy and to balance its multilateral and bilateral relationships within and beyond the region. The Japanese government is apparently adopting a de facto multilevel foreign policy, attempting to engage in a range of bilateral and collective initiatives simultaneously (see Hook et al. 2011). This approach, examined in further detail below, also reflects the difficulties for Japan in assuming a leadership role in East Asia, where bilateral relations, notably with the USA and China, render difficult any attempts at formulating novel regional strategies. The concept of regional leadership for both the Japanese government and its people has been debated since 1945. In the wake of a humiliating and disastrous defeat following the dropping of atomic bombs on Hiroshima and Nagasaki in August 1945, and since the ending of the 6-year allied occupation of Japan and the signature of the USAJapan Security Treaty in 1951, both domestic attitudes and foreign pressures have served to shape Japan's own view of its position within Asia. Today, whilst the global and regional structures within which Japan pursues its foreign policy have changed, the question of leadershiphow to conceive of it and how to realize itremains central to Japan's deliberations about its relationships with key allies, to its economic and political standing in global institutions, and to its understanding of its own regional position. Thus, whilst we debate academic approaches to the concept of leadership, we also need to consider it within the terms set out for and understood within Japan itself. This article elucidates two principal issues for Japan as it seeks to steer a multi-pronged course in its regional participation: the ways in which the Japanese government has learned to utilize multilateral frameworks for regional cooperation; and the challenges posed to its multilateral regional diplomacy by the changing posture of its key allies and rivals within Asia, notably China and the USA. In order to examine these factors, the article compares and contrasts Japan's regional economic diplomacy in 1997with the unfolding of the Asian financial crisiswith the crisis situation of 2010. On both occasions, Japan had to face opponents to its initiatives; first, in the form of the USA and more recently from a more proactive regional positioning by China.

Regional leadershipJapanese style What does regional leadership mean? More significantly, what does it mean in Japan's own understanding of where it belongs in Asia? Following Ravenhill, this article does

Regional leadershipJapanese style: Japan through the crisis

not equate regionalism with forms of integration per se, but rather links it to common forms of multilateral cooperation and novel frameworks for dialogue and agreement (2010). In so doing, it rejects the notion that of necessity regionalisms boon is multilateralism's bane (Baldwin and Jaimovich 2010), in favour of regarding the region as one of several domains for multilateral activity. To this end, Keohane's distinction between normative and institutional multilateral offers a useful point of departure: normative multilateralism focuses on the principles that underpin collective behaviour and it is enshrined in legal documents, strong institutionalization and clear obligations for members; whilst institutional multilateralism simply offers the means for implementing the goals of participating states, and embraces diverse memberships, different levels of institutional frameworks and both ad hoc and permanent forms of engagement (Keohane 2006). Thus, whilst normative multilateralism can create generalized principles of conduct for all participating members to follow and can have the effect of socializing states into particular forms of behaviour and shared values (Ruggie 1993: 11), its institutional counterpart is not constrained by legal obligation, but rather offers a way for accepting diversity amongst participants and for permitting loose coalition building for issue-specific ends. This approach also draws on literature on alliance building, in which alliances may be regarded as useful frameworks for non-binding collaboration or else may bind and restrain the exercise of self-interest by entailing collective interests, sympathy, and solidarity (Stein 1990: 1524). Importantly, Stein goes on to explain how alliances are not necessary where the interests of potential member states are already closely related; rather, they serve to manage difficult relations in an environment of competition and conflict (1990: 168). This ad hoc approach to alliances, moreover, is not dependent on sustained institutional frameworks, but enables participants to come together to resolve or discuss issues of common concern (see Gilson in Beeson 2011). Ad hoc alliance buildingled by the need to respond to particular issues and events in novel and different wayslies at the heart of Japan's varied foreign policy approach. This approach does not preclude strongly institutionalized engagement, but rather focuses on a state implementing its foreign policy through a variety of both loose and institutionalized channels, as well as through formal and informal mechanisms for dialogue. The legacy of history In many ways, Japan's pursuit of multilevel foreign policy has been driven by its difficult historical relations with the rest of Asia. The Yoshida Doctrine (focusing on national rebuilding under a USA umbrella of economic, political and security guarantees after the occupation) followed by the USAJapan Security Treaty ensured that Japan functioned in a postwar greenhouse (Hellman 1988) and as a result it was not characterized as being strongly embedded within the region (Inoguchi and Bacon 2008: 86). In the post-Cold War era, Japan has sought to rejoin Asia, by engaging in and initiating new multilateral mechanisms; notably the Association of Southeast Asian Nations (ASEAN)+3 process and the East Asia Summit, as well as the G20 framework (Hook et al. 2005: 180; and 2011). The ASEAN+3 was inaugurated in 1997 as a mechanism

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for the collective discussion of political, security and economic issues (ASEAN 2011). Adding to the proliferating institutional frameworks, the ASEAN+3 members decided in 2004 to hold an East Asia Summit as a forum for dialogue, the first of which took place in 2005 in Malaysia. The principal ambition of the East Asia Summit was to act as a forum for dialogue among the 16 original members to discuss issues across a wide spectrum of political, economic and security interests. The fifth summit in Vietnam in 2010 agreed to the addition of the USA and Russia as member states, and continued a broad dialogue on a range of diverse topics (East Asia Summit 2010). These initiatives were viewed by some commentators as signaling the emergence of a new form of regionalism (Stubbs 2002), whilst others were more skeptical about its long-term value (Beeson 2003; Hund 2003). The relationship of the East Asia Summit to the ASEAN + 3 remains unclear and there is a debate as to which framework is best equipped to advance the project of building an East Asian Community. To date, China has appeared to favour the ASEAN+3 framework, whilst Japan supports the broader-based East Asia Summit, as will be explored further below. Japan proposed other regional initiatives over the past decade, including the plan, begun with discussions in 2006, to establish a Comprehensive Economic Partnership for East Asia for the members of the East Asia Summit. This proposal is allied to the creation of the Economic Research Institute for ASEAN and East Asia, and both are designed to advance liberalization. They lie side by side with a separate proposal to create an East Asia Free Trade Area, and senior economic officials have been tasked by ASEAN and the East Asia Summit to look into both (ASEAN Plus Three 2009). The early period of these initiatives formed the backdrop to Japan's desire to launch the Asian Monetary Fund (AMF) in 1997 and the subsequent Chiang Mai Initiative, as will be shown below, whilst the later proliferation of initiatives provides the context for the most recent developments. For Japan, these mechanisms serve as one means to strengthen relations with its regional neighbours. Simultaneously, they also issue from a desire to manage bilateral relations with the two major players in the region; namely the USA and China. The USA and China Japan remains linked strategically to the USA through the Treaty of Mutual Cooperation and Security between the USA and Japan signed in 1951 and renewed in 1960 (see Hook et al. 2011). This treaty not only symbolizes the characteristics of a security relationship between the two countries, but also epitomizes the idea that the USA and Japan share ideological underpinnings, such as mutual support for free market economy and the respect for human rights. For many in Japan, as well as the wider region, the USA has for a long time been regarded as a stabilizing factor within Asia (Simon 1993: 130). In recent years, the difficulties of retaining the USA as the key strategic partner in Asia have been highlighted by the domestic question of continued US military bases on Okinawa. Thus, whilst for Calder the crisis following the tsunami of March 2011 provided the opportunity for a concerted focus on human security issues, detracting from the thorny problem of Okinawa, in the event the problems on Okinawa remain salient (Calder 2011). Okinawa continues to accommodate over 50% of the 45,000 US military personnel on Japan and the agreement to relocate the Futenma Air Base has still to be realized (Sakamaki 2011).

Regional leadershipJapanese style: Japan through the crisis

Against the background of these difficult issues, domestic debates also dogged the Japanese government's attempts to confirm participation in the US-sponsored TransPacific Partnership agreement, aiming to establish a large tariff-free region representing 43% of global trade and to act as a bulwark to rapidly growing China (Wallace 2011). Prime Minister Noda has faced tough opposition from his own ruling party politicians, as well as from the farm lobby and this ongoing episode has further eroded confidence in his ability to lead, which will be explored further below. These issues, demonstrating ongoing commitments and challenges to the relationship with the USA, illustrate that the historically embedded partnership is far from straightforward. The rising power of China poses quite a different set of challenges for Japan. The September 2010 collision between a Chinese trawler and Japanese coastguard in contested territorial waters led to escalating bilateral tensions in an already fraught relationship (Hook et al. 2011). For Drifte, the three most contentious issues continue to be Japan's interpretation of its behaviour during the war until 1945, views on Taiwan and territorial disputes. Periodically, Japan's leaders arouse anger within China about the legacy of war, when they visit the Yasukuni Shrine of the war dead or are seen to support the issuing of controversial history textbooks. The Taiwan issue elicits Chinese suspicions about Japan's own occupation of Formosa, as well as Chinese concern about Japan's de facto attachment to the US position on Taiwan because of its links through the USAJapan Security Treaty (Drifte 2010). The matter of the Senkaku (Diaoyu) islands brings to the fore claims about sovereign rights and access to natural resources, whilst Koo suggests that joint economic success in the area could either reap mutual benefits or lead to a more aggressive stance by China (2009: 228). Whilst their mutual distrust often leads to outright rivalry (Yahuda 2003: 195), Japan and China now have to address mounting security concerns against the backdrop of intensifying bilateral trade relations. These trade relations broke records in 2011with Japan's total trade with China rising 17.9% compared to the previous year (taking it up to US$163.2 billion in the first half of the year according to JETRO figures), ensuring that China continues to be Japan's premier trading partner since it replaced the USA in 2007 (Japan Today 2011). In May 2011, the Japanese minister for economy, trade and industry and his Chinese counterpart signed an agreement to enhance bilateral trade in order to help Japan address the consequences of the March earthquake and tsunami. Funabashi goes further, to state that a strong SinoJapanese economic relationship must be at the heart of Japan's recovery (Funabashi 2011). One way or another, then, Japan has to find a way of accommodating these varied and changing issues with its giant neighbour. Observers like Calder go as far as to note that it is not how Japan navigates these respective bilateral relationships, but how it strengthens the trilateral relations among Japan, China and the USA that will determine Tokyo's ability to carve out an effective regional foreign policy (2006: 136; see also Dieter and Higgott 2003: 449). Some scholars witness arenas in which China appears to be the most pro-active power in the three way competition (Dosch 2010). The Japanese government is also increasingly concerned about possible Japan passing as Washington seeks to reassure Beijing about its recent moves in Asia and Australia (http://www.voanews.com/tibetan-english/news/US-StrengtheningAmerican-Presence-in-Asia-Not-Aimed-against-China-135245333.html). Increasingly, as Japan seeks to juggle these different forms of multilateral engagements and alliances,

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the additional issue of its own tumultuous domestic politics also influences strongly its ability to project a strong regional persona. Domestic dynamics As Yoshihiko Noda took over as the sixth Japanese prime minister in 5 years in summer 2011, nobody has faith that he is in it for the long haul and the relative halcyon days of former Prime Minister Junichiro Koizumi are distinctly in the past. Not only does he have to face an Upper House dominated by the long-time power holders, the Liberal Democratic Party (LDP), he also has to face down opposition within his own party, particularly the biggest faction controlled by Ozawa Ichiro, which backed an alternative candidate for Democratic Party leadership. The population remains concerned at the lack of sufficient response to the needs of tsunami survivors, as well as the effects of recession. For Noda to enjoy continued premiership, he needs, at the very least, to regain support for the Democratic Party of Japan (DPJ) government, to limit the party in-fighting and to garner support from minor parties in order to shore up his own political position. The DPJ came to power in 2009 under Yukio Hatoyama on a platform that sought, inter alia, to re-engage with China, claiming that their LDP predecessors had failed to initiate meaningful dialogue with Beijing (Hughes 2009: 8423). But the DPJ under Noda appears to be moving away from this position and attempting to strengthen once again Japan's relations with the USA, simultaneously eschewing Hatoyama's promise to build a grand vision such as an East Asian Community (Sieg 2011). Making soothing noises to Washington is one thing, but contentious issues such as moving the Futenma airbase remain and nobody is betting that Noda will be in power long enough to address any one of these thorny questions, let alone the overarching relationships against which they arise. Against this background of enduring obstacles, then, the Japanese government continues to pledge its support for various approaches to regional community building, and its previously rejected proposal for an AMF may even be taking root once more.

Reincarnating the Asian Monetary Fund? In the wake of the 1997, Asian financial crisis the Japanese government surprised many people with its proposal for an AMF and subsequent regional financial initiatives through the so-called Chiang Mai Initiative (CMI). In many ways, these have been revivified since 2010 in the form of the Chiang Mai Initiative Multilateral (CMIM). It is worth comparing and contrasting the situation in 1997 and 2010. 1997 When the 1997 Asian financial crisis unfolded, regional multilateral initiatives were all rather young and untested. A proposal for an ASEAN Free Trade Area had been agreed in 1992, to eliminate trade barriers and improve regional competitiveness. At its heart was a Common Effective Preferential Tariff, designed to reduce and remove tariff and non-tariff barriers to intra-regional trade (depending on categories of products), with an

Regional leadershipJapanese style: Japan through the crisis

initial deadline of 2003. In 1995, members agreed to accelerate the process towards economic integration. Until the creation of the ASEAN Plus Three framework, the proposal for a regional free-trade area was confined to the borders of ASEAN membership.1 The financial crisis was also a spur to the creation of the ASEAN Plus Three (APT) itself in 1997, from which the Chiang Mai Initiative, a web of bilateral currency swaps to be used in crisis was launched. The only other major regional initiative before the late 1990s was former Malaysian Prime Minister Mahathir's 1991/1992 proposed East Asian Economic Caucus (EAEC), and this was ultimately subsumed within the APEC structures initiated by Japan and Australia in 1989 and formalized into a summit in 1993. The APEC Bogor Declaration of 1994 saw member states pledge to achieve regional free trade by 2010 (or 2020 for less developed economies). Preceded by a failing US commitment to APEC and dissatisfaction within Asia at its ability to facilitate regional cooperation, the 1997 financial crisis provided the catalyst for change within the region. Indeed, after the regional financial crisis of 1997 there was much speculation that economic and political cooperation in Asia would be intensified (Munakata 2006: 130). The 1997 crisis in Asia accentuated the need for regional monetary cooperation in order to deal with the overwhelming (and political) power of international capital (Katada 2002: 85). The crisis created shock waves throughout a region that recognized starkly its own inability to deal with its intra-regional problems. Following the collapse of the Thai baht in June 1997, the actions of the Japanese government therefore came as a surprise to many, when it proposed the creation of an AMF. The idea behind the AMF, launched by Vice Minister for International Finance Eisuke Sakakibara (known as Mr Yen), was to create a US$100 billion fund to provide various forms of support for crisis-hit regional economies, as well as a pool of reserve currency in case of future such crises (Amyx 2002). However, it was opposed by the USA and the International Monetary Fund (IMF), which expressed concern about the likely duplication of IMF activities (see Dieter and Higgott 2003: 433; Dobson 2005: 217; Wang 2000: 207). There was also concern about Japan taking a stronger role in the region and Chinese opposition followed quickly on the heels of the USA, thus reinforcing the obstacles facing Japan (Amyx 2002). As a result, the AMF ultimately fell to the wayside in favour of a more IMF-centered approach (Lipscy 2003). At the same time, however, it did demonstrate considerable evidence of a Japanese agenda for greater regional monetary cooperation and in so doing galvanized Japanese commitment to such regional initiatives (Dieter and Higgott 2003: 448). Towards the end of 1998, the Japanese government launched the New Miyazawa Initiative to provide US$30 billion in aid to crisis-ridden economies in the region, including to Malaysia which had resisted IMF assistance (Ministry of Finance, Japan 2011). Following this action, in May 2000 alongside the Asian Development Bank board meeting, Japanese Finance Minister Kiichi Miyazawa introduced what came to
When AFTA was signed, ASEAN had six members (Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand). It now comprises the ten states of ASEAN, which also include Vietnam, Laos, Myanmar and Cambodia. The newer members have a longer time frame within which to meet their AFTA commitments.
1

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be known as the Chiang Mai Initiative (CMI, see Sussangkarn 2010). This mechanism, expanding on ASEAN's own arrangements, created bilateral currency swap arrangements among the ASEAN+3 states, explicitly supported the role of international financial agreements, notably the IMF, and aimed expressly to respond quickly to any short-term liquidity problems among these currencies (for details, see Henning 2002, chapter 3). Although promising, this agreement pledged only to examine further the possibility of this arrangement and did not represent a final deal. Officials therefore worked hard to construct a framework of principles and means for successful negotiation (Henning 2002: 1213). In fact, Henning looked to the future of such swaps rather presciently: if extra-regional shocks persist and Asian governments are dissatisfied with the multilateral response, they will have regional arrangements on which to build and a powerful incentive to do so (2002: 31). This period of crisis also led to a number of other regional initiatives and considerations of how the Asian region could seekalbeit within the confines of IMF prescriptions- to help itself should subsequent such crises arise. One important proposal issued from a meeting of the Asian Finance and Central Bank Deputies in Manila on 18 19 November 1997 and was endorsed by APEC's members; namely, to establish regional economic surveillance designed to complement, rather than challenge, the IMF's own global surveillance mechanism (Lipscy 2003). This modified AMF was to offer a A New Framework for Enhanced Asian Regional Cooperation to Promote Financial Stability (Katada 2002: 85); it became known as the Manila Framework and was endorsed by ASEAN in December of that year (Nanto 1998). Other initiatives gathering pace included the endorsement by the APT Summit 2002 of the idea of an East Asia Summit as a regional community for prosperity and peace (Green and Gill 2010: 89). It held its first meeting in 2005, with ASEAN, India, Australia, New Zealand and it did not replace the APT (for membership, see Green and Gill 2010: 9). In the wake of the proposals for the APT and EAS, Japan also pursued bilateral free-trade agreements or EPAs (which include FTAs and agreements on the free movement of people, goods and capital) (Fukushima 2010: 108). From the start, the Japanese government expressed a preference for the open, broad membership of the EAS, whilst China sought to promote the narrower APT process (Green and Gill 2010: 9; Hund 2003: 400). 2010 Following continued work on the CMI, 2010 saw its multilateralisation. At the tenth APT Finance Ministers Meeting in May 2007, the CMI had been pushed forward and in February 2009 members agreed to expand the fund to US$120 billion up from the original level of US$78 billion proposed in 2008. Strategically, in 2009, Hong Kong was added as a member and its participation increased China's total contribution to US$38.4 billion, equal to that of Japan (Xinhua News Agency 2009).2 This represented an important compromise, effectively ensuring that Japan was the major single contributor to the fund (and thus avoiding a possible equal firsts proposal), but China and Japan became (through China+Hong Kong) the largest co-equal contributors
2 China and Japan agreed to contribute 32% each of the amount, South Korea 16%, with the ASEAN countries providing the remaining 20%.

Regional leadershipJapanese style: Japan through the crisis

(Rathus 2009). This is significant as contributions are likely to be reflected in voting weight. Eventually, the CMIM Agreement was signed on 28 December 2009, and took effect on 24 March 2010. The CMIM, then, makes currency swaps multilateral, enabling them to be withdrawn simultaneously with one agreement. It adheres closely to the IMF and like its AMF predecessor is designed as a supplier of liquidity during crises. For a number of observers, the region took another step forward in financial cooperation as a result of this agreement (Tsang 2011). For Tsang and others, moreover, the bigger step is the creation of the ASEAN+3 Macroeconomic Research Office (AMRO), a more emphatic reincarnation of the doomed 1997 Asian Monetary Fund (Tsang 2011). The AMRO would have the authority to administer the funds set up within the CMIM, and would avoid the problem in 20082009 where CMI swaps could not be applied in the face of a liquidity shortage because of the absence of such mechanisms for surveillance (Rana 2011). In May 2011, the APT Finance Ministers Meeting in Hanoi agreed to double the CMI to US$240 billion and, importantly, to appoint a Chinese national (Wei Benhua) to be the first director of the AMRO followed by a Japanese national (Yoichi Nemoto) before the end of Wei's full term. This bitterly fought diplomatic battle for the chair of the AMRO will ensure a clash between the different approaches of China and Japan: China will work towards delinking the CMI from the IMF, whilst Japan will seek to ensure that the CMI acts as a regional body of the IMF (Rathus 2011). Indeed, the CMIM has been conceived with the strong IMF linkage in mind, as emergency credit will only be granted through the CMIM if states are engaged with IMF negotiations (Grimes 2011). For Grimes, this third party enforcement by the IMF is crucial for addressing Sino Japanese rivalry (Grimes 2011). In many ways, then, the CMIM issues from the natural evolution of decisions taken in 1997 and the original Japanese initiative. It also, however, arises in a context where the difficulty in reforming the governance structures of the IMF has been clearly leading to the evolution of a more flexible decentralized global monetary architecture, as well as to the proliferation of other regional structures such as the Arab Monetary Fund and Latin America Reserve Fund (Rana 2011). Nevertheless, the new proposed structures have yet to be implemented and applied and Japan's own ability to shape their formation has yet to be proven. Region building? Fundamental to all of these initiatives has been the level of regional commitment to collective problem solving (see Katada 2002: 85). For Katada, these initiatives appear as a large step towards the institutionalization of Asian economic regionalization in a pure Asian form rather than the Asia Pacific one (which would include the major presence of the United States) (2002:85). What is more, Tsang sees the palpable regional momentum driven by a germane desire to erect a robust bulwark against the vagaries of global finance and therefore the specific demands of the current difficult economic period strengthen the rationale for greater alliance building (Tsang 2011). However, Yahuda showed how the formation of earlier mechanisms such as APEC and the ASEAN Regional Forum (ARF) did little to promote closer interactions between Japan and China (Yahuda 2006). As the wrangling over AMRO contributions

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suggests, Japan is struggling to accept the economic parity and potential overtaking by China. The Japanese government is also diversifying its responses to growing regional cooperation by engaging simultaneously in multiple levels of varying initiatives. For example, in 2007, Tokyo proposed a 16-country Comprehensive Economic Partnership Agreement in East Asia, and signed economic partnership agreements with individual ASEAN states in the wake of China's proposal for a ChinaASEAN free-trade agreement (Hughes 2009: 847). At the same time, whilst Japan's attempts to take a leading role in 1998 were hampered by a difficult war legacy, dependencies on US and SinoJapanese rivalry, none of those factors has disappeared in 2011 (Katada 2002: 86). Thus, for Japan, the move towards regionalization can only be regarded as a pragmatic strategic decision situated within a multipronged approach to regional and international economic policy making. There is no central or unique commitment to the region per se.

Conclusion: the regional future for Japan It is clear to many observers that the Asian financial crisis from 1997 represented an important moment in developing ideas about East Asian regionalism and in particular about the role to be played by Japan, which was beginning to shed some of its historical legacy. As China began to demonstrate a greater willingness for multilateral solutions and for working with its neighbours to address regional collective action concerns, it looked as though progress could be made towards a post-AMF solution. However, as this article has sought to demonstrate, marrying bilateral exigencies with multilateral opportunities and incentives has not been easy for Japan. In its early attempts to set up mechanisms for regional economic cooperation in 1997 Japan was stymied most publicly by the USA. In its most recent iteration Japan's plans for Asian monetary cooperation have been most acutely influenced by China's regional claims (see Lincoln 2004: 160). The introduction to the workshop from which this special issue derives recognized the important point that the fate of the East Asian economies are so intricately intertwined as trade and investments flow within the region to compensate for the slower demand from the developed economies. The post-crisis world is bound to look different. But the unresolved issue both of regional leadership within Asia and of Japan's difficulty in acquiescing to a greater Chinese role, makes the passage look bumpy (Park 2011). Thus, Dieter and Higgott's words resonate more for 2011 perhaps than they did in 2003 when they were written: successful regional policy coordination will be as much dependent on SinoJapanese relations and leadership as on US relations with these two states, either singularly or collectively(2003: 432). Further, If Japan is to embed itself within Asia, then it has to reconcile itself to much deeper linkages to and alignment with China (Inoguchi and Bacon 2008: 86). There is, therefore, the possibility that these two powers will learn to cooperate with each other within the confines of a regional institution, even when bilaterally relations are tense (Rathus 2009). Where does this leave Japan's ploy to carve out an ordinary role? The ploy must be for quiet diplomacy and multilateralism where possible. For many years, Japanese policy-makers have pursued their objectives through multiple channels simultaneously

Regional leadershipJapanese style: Japan through the crisis

(bilateral, regional and multilateral) and have often proven skilful at maneuvering between and amongst these levels (Hook et al. 2002:205; Hughes 2009: 846). Japan's preferred option of diluting bilateral tensions and the power of China within broader multilateral frameworks and an interweaving of bilateral agreements cannot be divorced from the need for strong regional leadership in the face of global economic crisis. It remains to be seen whether the newest regional initiatives were reached only because of the effects of exogenous shock (Rathus 2009) and whether Japan's strategy for multilevel action can provide sufficient impetus for the region to move forward in its alliances. More importantly still, can the new regional architecturewhich has yet to be signed, sealed and testedbe sustained in the longer term given the bilateral and domestic challenges faced by Japan. In juggling between balancing its key bilateral partners and pushing forward regionalism in many guises the Japanese governmentin whatever formhas little choice than to refine and develop its multi-pronged strategies, and it cannot be regarded as a zero-sum between bilateralism and multilateralism (Inoguchi and Bacon 2008: 93). Rather, as Fukushima insists, Japan must allow both bilateralism and multilateralism to flourish (2010: 117). This newly assertive strategic pragmatism of the Japanese government may offer the only possible strategy for Tokyo to manage their multiple foreign economic policy demands in the wake of the regional and global crisis (Hook et al. 2011).

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