Some Asian archenemies are coming together, some are spoiling for the fight while diffident fence-sitters dread the economic and political consequences of having to choose sides.

Despite deep-seated hostilities and contested territorial claims, Japan and South Korea showed signs this week that they were ready to settle their grievous legacies of occupation, hideous war crimes and fierce competition to join an Indo-Pacific bloc promoting “the principles of freedom, rule of law, sovereignty and territorial integrity.”

To do that, Seoul took the lead to compensate, with Japan’s contributions, the Koreans’ forced labor during the Japanese colonial rule from 1910 to 1945. Most of the funds will reportedly come from Korean beneficiaries of the 1965 war reparations treaty with Japan.

That controversial move was billed as a decisive step to build a Trilateral Security Dialogue among Washington, Tokyo and Seoul to deal with North Korea’s nuclear threat – and with China’s economic, political and military challenges.   

We are looking here at an impressive diplomatic advance whose practical policy value remains to be seen.

China cannot be contained and isolated

Indeed, North Korea’s problem is simple and well known. Pyongyang will not get rid of its formidable nuclear arsenal under any circumstances. An erstwhile window for negotiations on security guarantees, lifting of sanctions and economic help in exchange for disarmament is closed. The trust – always in a very short supply – has been definitely lost for any meaningful dialogue in the foreseeable future.

Attempts at isolating and containing China are equally problematic. But the troika partners will try. Their high-level representatives met in Honolulu late last month to block Beijing’s access to critical technologies, advanced semiconductors, batteries and rare earth minerals.

That’s a very tight spot for Japan and South Korea. For both countries, China is by far the largest trade partner. China takes about a quarter of their exports, and China’s huge and growing markets offer lucrative investment opportunities.

Dislodging China from the rest of east Asia will be even more difficult – if not impossible. With a total trade volume of $970 billion in 2022, ASEAN (an association of ten Southeast Asian nations) is China’s largest trade partner. China’s merchandise sales to ASEAN soared last year at an annual rate of 22%.

But, as Germans keep reminding, trade is a double-edged sword. Some influential center-right German media are pointing out that China is vulnerable to trade sanctions because it is highly dependent on European suppliers of a wide range of products and services. Berlin is also opening a European salvo against China’s 5G technologies.

Having unsuccessfully tried to destroy Russia’s economy, some Germans, and other Europeans, believe that they can use the trade weapon to influence China’s domestic and foreign policies. That, of course, is a reckless thought about the relationship with China -- a country with an E.U. €856.3 billion ($900 billion) trade business last year.

East Asia’s security tensions will get worse

But that’s how far some Europeans are ready to go against their “strategic and systemic” rival who also happens to be their -- by far -- the largest trade partner. And they are forgetting that China can truly destroy Europe’s flagship automobile and chemical giants who staked their future on Chinese markets.  

China, however, continues to plead for reason, common sense and a respectful “win-win cooperation.” The question is whether Beijing would do better to learn from Russia’s apparent belief that Moscow’s “Western partners” would not do the “unthinkable.”

The most glaring example of that are the problems created for Russia’s air transport industries. Moscow so much believed in its suppliers that the Sukhoi Superjet 100 (SSJ100) was almost entirely built with U.S. and European technologies, down to the cabin setup by the famous Ferrari designer Pininfarina and an Italian service center. Sanctions changed all that, and the plane is now being rebuilt with only domestic inputs.

So far, China’s response to trade problems has been to reportedly allocate $140 billion to bolster its self-sufficiency in semiconductors and advanced manufacturing technologies.

China also warned South Korea about unfriendly trade practices and against joining the Quadrilateral Security Dialogue (aka the Quad Group) consisting of Australia, India, Japan and the U.S. The Quad Group is part of Washington’s “pivot to Asia” to contain China and to challenge Beijing’s red lines about its maritime borders and the status of Taiwan.

In that context, India presents a serious problem for China because it is also a member of BRICS and the Shanghai Cooperation Organization. Beijing, therefore, takes as an affront Delhi’s participation in a blistering attack on China (without naming it) in a Quad Foreign Ministers’ statement of March 3, 2023.

China realizes that it is on a path of an increasingly dangerous confrontation with the U.S. and its allies. Beijing’s rhetoric is now more assertive, its combat readiness has been stepped up, and its military budget was just raised by 7.2% for the second consecutive year.

East Asia’s economic and security outlook will become more tense in the months ahead. The key events are expected after President Xi Jinping’s Moscow meeting next month with Russia’s President Vladimir Putin.