The latest round of tension between Japan and China reveals the underlying instability in East Asia. The Chinese are in high dudgeon over Japan's arrest of a Chinese fishing captain, whom Japanese officials claim rammed Japanese vessels in disputed waters in the East China Sea. They have apparently shut off exports of rare earth materials (though China denies it) to Japan and threatened greater sanctions unless Japan complies with its demands to release the captain (the Japanese did).

The incident reveals that Beijing is willing to use its increased economic strength as a tool of coercion, no matter the consequences for its own standing in international markets. But that is not all it reveals. Indeed, this is one in a series of arguments and incidents between China and Japan over the last decade related to sovereignty, territory, rights to natural resources, and China's expanding maritime capabilities in and around Japan.

The key factor in Asia's underlying instability, then, may not be the perception of China's rise relative to the United States' decline. Rather it may be China's rise relative to Japan's decline. The Chinese economy has now overtaken Japan's. China spends more on defense than does Japan. And within Japan as well as the rest of the region, there is a perception that Japan cannot shake its stagnation.

Great power conflicts often begin when a once stronger country believes it is losing its relative position to a rival. This is a more accurate description of Japan's attitude toward China than of the U.S. attitude toward China. In addition to this perceived change in power position is the emotional aspect. These two countries harbor great reservoirs of mutual resentment and hatred, which may not drive their disputes but certainly makes them worse.

For Washington, the lesson is that the era of great power politics is far from over in Asia. Its finite diplomatic energy should be spent on the "high politics" among Asia's great powers--issues of war and peace (or how to avoid the former and maintain the latter), rather than on the "low politics" of climate change and currency disputes. The diplomatic tasks with respect to Japan, one that should be carried out at senior and sustained levels, is to help shake Tokyo out of stagnation, and to help Japan become a more coherent and powerful strategic actor. Washington's future in Asia depends upon a rich, strategically active Japan.

The diplomatic task with respect to China, one that should also be carried out at senior and sustained levels, is not to paper over the many disagreements and clashing political objectives that characterize China-U.S. relations. The task at hand is to manage the growing Sino-U.S. security competition--a competition that increasingly appears to be about two very different visions for Asia--so that rivalry does not lead to conflict. With its economic coercion in blocking the export of a strategic commodity, mixed with its use of gunboat diplomacy, Beijing is looking, as security expert William O'Neil has said, a bit too much like Imperial Japan.

Dan Blumenthal is a resident fellow at AEI.

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