JAPAN'S CHANGING RELATIONS WITH CHINA AND THE USSR

Created: 2/1/1981

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Japan'- ('hintinsiih Ch.su aiidSRl

Japan'$ nittoward China and away rrorn the USSR over the rust decade potundamental shift in the strategic equilibrium in Nurtheati Asia. ' can lausiblyit did in thebe pursuing inevenhjnded polk> towardCommunm powers. Instead. Tokyo is steadily weaving closer tics with Beijing, while its relations wilh Moscow have cooled considerably.

Barring uneapectedchan.es in tlw determinants shaping Tokyo's policy. Soviet-Japanese relations probably will remain cool through at leasl theGS Sino-Japnnese relations, on the other hand, probably -ill con-tinue to grow wronger. On ihe assumption that this mil take placeonical of continued coolness in US-Sovietealthy US-Japan alliance, and further impfovemeni in Sino-US relations, the Sovset Union mil find ilself increasingly isolated in Northeast Asia.

doe* not mcaa that Japan desires toaligo ilself with China against the Soviet Union or to adopt an antagonistic stance toward that country. The Japanese Government be'.em thai cither policy would ctsdinger national securit, and mil be careful thai the realignrneoi does not proceed loo far.n areas of Sovscl sertsilrviiy. Tokyo will restii pressurenakc iu policies conformhose ol Beijing. Moreover. Japan is likely to wpCTience frintration in its txonomic dealings with China and loively intcieai in liable, if not greatly eapanded. Irade with the USSR.

Among the force* shapingolicy toward China and ihe Soviet Union, none has been more important than the changing relationships among ihe four power* engaged in Noriheaii Asia.rive foradvantage hasess potent role in this inaun.ee than have broad strategic considerations. In approaching its Communistapan generally prefer*sove in tandem with ihe Unitedhich is Hill the dmsi important ciicrnal inHuence on Japanese foreign policy. Tokyo also would prefer lo balance iu relations witb ihe principals in tbe Siiso-Soviet dispute. The Japanese Government is convinced that Japan's long-term strategicrc best served not juV by building wrong, friendly relaiiotiiChina, but abo by maintainingnan agonist*he Sovicl Union.

None be less. Tokyo has decided thai iu pobocs cannot remain uruiTecied by ibe poaScies lhal China and ihe Soviei Union adopt toward Japan. China hasdemoo*ir*led ihat it desires good relations with Japan, bul ihe Soviet

union ha* been unwillingake the nep* (hai Tohjonecessarymprove bilateral rclaiwtu and objects to friendly ictaiions between Japan and China. moreover, ihc Sovici ir-vaston of Altjhanuon hainew concern* aboui Soviet foreign and defense poiiciei.esult. Tokyo has decided to coruolidate the link wilh Beijing and -ail for Moscowndicate an interest ineasonable jcttlemeni of iheir outstanding issues.

If currenl trend* persist and the incipient Japan-China-US ententeio coalesce. US inieresi* arc likely lo be affecicdrincipal ways:

Tokyo will persist in its effort lo sircnfihcn both Japan's conveflliotiil military capabilities and its defense lies with the Uniied States.

Moscow will pcrcenc ihese developments as ihreaiening to Soviet interests and may initialc Cswnterrneasaires in other rcf ions or on other issues thai would adversely affect US

Moscow rnd Beijing hold ihe keys to any svbuaniial alicraiion in thisornbsnaiioa of political and eccevomic failures sufficiently serious toreakdown in theodcraiaison program alnwt certainly wouldnajor kadcrship crisis and mighi ipdl over into ihc foreign policy arena, -here il would generate strains in Sino-Japanese relations. Alternatively, if Ihc USSR decided loerious, iiu-Utucd cfTort io impravc rebiioru with Japan, it might succeed inositive Japanese response. In either case, ihe possibilityS-Chioa-Japan entente would recede and Japan would revert loi policy of more nearly balanced relations with the two Communist powert.

Trad? With China and the

Resource Doelcrprvenl projectsO.iaa andhe

* e. * t

oO'

Appendls Tables

Trade With China and the USSR

Imports of Fuels From China and the USSR

Imperii of Wood From the USSR

Evports of Machinery to China and the USSR

Eaports of Steel lo China and the USSR

Backed Japanese Loan Commitments Related io Resource Development Proieets: USSR

Resource Development ftojects: USSR

Future Japanese-Supported Resource Development Proieets: USSR

Backed Japanese Loan Commitments Related to Resource Development Proieets: Chin* *

Resource Development rVosects: China

Future Japanese-Supporled Resource Development Projects: China

Japansh China and tbe USSR a

Imports From China and Ihe USSR

Exports to China and the USSR

Resource Development Projects

Lonn Commitments Related to Resource Development Projects in China and the USSR

Attiludes Toward the United States. China, and the USSR

Japan's CTunitirtg Rela Wilh China and the uss

Japan's relations with the two Communisl powers that oorninaie the Avan cennnent hateum-damenul change over the pgsl deeade.ce**of chaiije has moved through two distinct periods. The fin, covered. while the texoed bciasi8 and may rot ,e. have concluded At the beginning of, the Japarsese GovernmeM was attempting toeasonableis apsxoach toCommomti sutes andope ihat ii could itnpmx relationsboth. By the end of the decade, the Japanese had savccccded In strengthening their lica wilh China, bat txUiiosu with the USSR had deteriorated, and Tokyo couM no longer plausibly claim to be pursuing an evenhanded polod the two i

or Bala aceT*]

In Ihe. co>jii.or.apptji trd lot he lananese lo bepropi treesujor improvement in their reUfors with both China and the so-kl union. The United Stales' oprnmj to China and the relaxaiion of tS-Sovtei Umaons cleared the war for Ihe Japanese to work out an accornnsodalion of ifcrr own with tbe Chineseand io atiempt an .mrxovement in reUtiora with Moscow. The .esteraiion of dipte-maiie relations with China proved easy eooui" Even before Tanaha became Jipaisese rVinx Minister toei.uvf made ii clear that it was prepared toeasonable ^reenvrnt. fair- to buttress hisdomett* y utis/rinj bi* ctHinirymensrustrated desire for normal-rth Came. Tanaka went to dcmio, rwomoniha after his elect ran andfreedelnCtdrntt termsnau -Che* EalaJwscK of2 l^ to* crsti-cat Taiwan tssoe that had Neckedrrnaluat!onof relai

Tanaka ncn moved toimilar breakthroufh on the Soviet front. Although rbplomaiK rcUiiorn bad been talatnt inJapan .ad the Soviet Union had never agreedeace troaly afier rfcrid War il The only obstacle tareaty was Moscow's

refusal to rctnrn four imaR ubads aorta oflo-ca lied Northern Ternthai il hadto the closini days of the war and that theiider a* mcxral part of their brmeUnd

Tanaka appa really calculated that the rirospect of rar-dlv warming relations between Japan aadChinese anupnrvts would be sufficientenously about rcfaiing their (rip on ihe oVspuled islands, la addition, the Sovktt weredisplaying more imertU in involvingin ibe ecoaonuc devcloorncnt of Siberia Part of Tarulasio have been iohe Soviet* concrete mc.ntt.es so come to tenia on the termor.al issue by cutttvatirci ikev desu* for large-acale Japssese participaiion ia various Siberiande-elce-nani tcacmes Immediaicty after hrs tnpto China, ihe Prune MUM seat FrarrignOhira to Moscow to prepare the way for him tobii to ibe Sovietrip viewed as the logical sequel toalgrinuge to Bciji

Tbe Tanaka-Brcrhnev summit in Moscow to October

roved io be Ihe anea(sparsest .< ,

ity. Bcertecvnthusiastically of Iht advantage* both panic* would derm from cronceruc cnorcratioa in Siberia; Tanaka rrapranded pmiirvtty and the foHow-ing April relatedlion in Eipori-lmrort Bank oediu for three inie Siberianrojects. Tanaka abo vigorously tersemed 'a peat case for re-iura of tbe Northern Territories. Although Bres>ae* promised rcthmer. he held can the hope of rkaibtl.ty by permiijiag ihe lerrtiorial naac to be-nre peace treaty

Tokto found the ChirieK resrfOeding soSoviet Umonwo-track strategy.io tmuaim the tnoarscMum buth sp ia thenIIUTaufJsout ihe

Jsoanesc pnlnical world, pcomwiag moidon-sion. andesire toheadreaty

of pun and friendship Ai ihcsamc time. Bening iwusicd ituti true friendship must br bated on owrwi pntKiracs rnoai notably the rxinc-pif ol" oranrsupon lo efforts b. ihin) countries (ie, ibe USSR)uMnhhe Am-Pacific area. Already enshnned in2 TaiuUCIwu Joint Statement, IIhe Chirievc sard, would have to be incorr>watcd in any future irealy beiwccnibc

Tbc Sovici leadership spperently concluded lhal. in ibe loaa rua. ihc USSRkrac rnorc than il gained if il gate up ihe Northern Teniior.es in returneace (rcaty. Moscow war nol willingoderate tU position oa Ihe Son hemhough ila ru mm. to oblam add it tonal Japariese assistance is developing Siberia; Ihe Sovlcu eves asserted, with increasaai vigor, thai Ihcy had no intent ion of ever itiliming ihche USSR may have Uken this hard line in pan because it calculated that economic selfttesi would prove stronger than nationalism, lhai the Japanese would not permit iheir den re for reversarsnof ihe rslands loiaieifcre with their access toresources, and that shinuicl* they wcasM permit the lemwrial issue to fade away. Al Ihe same lime thai the ^evicts forced tbc indefinite pntiponc-mentorrel-lipases* peace treaiy. ihcy ilso made clear that ihcy would view as unfriendly andapanese decisioneace treaty -ith China lhai included aname|

ecade

Bestood or si kasl bubnesaJikrwith both the Soviet Usuras aad Chans. Tokyo found itself in an increasingly awkward poaitioa ssd with ssot as much leverage or freedom of rriaaeuver as il aeapartrntly believed it had wisest it ernbsrked on in peace ofTeasive. the Japanese Goverarrscirt had reached an inipsisieot* in part from the way is whkb It defined Japan's security and foreign pobcy intcrrsu. Prime Minister Fukad. umrncd up scene of the UM poise, goshrs caD for -

formula actually eipreaieds

that ilapan's mierest. firsi. io keep outthe Sino-Scmet shapule by iTHsmUining ft* eqssdiaUot between it* iwogreai CommuniHond. to ailopi an acoomrriodaiing,post arc loaard the outside world iapanicslarly toward the Sonet Ueaoaina, ihc only countries thatotential threat loceuriluBSBSssj

Withand Beijing each attempting to draw Japan to it* side or. failing that, to ensure lhal Japan did not gravitate toward ihe other. Tokyo'*io maintain an "covidislani poaiiion' mortgaged n* policy to the Communist power least dispOMtt to strengthen relations with Japan JH

For several years. tie situation remained frorenhanged ai all.ial wan with both countries cooled. The irKreasmgly harsh line thai Mrsacow was taking on the territorial Question ofTendcd Japanese sensibilities The public also was gradually becoming more aware of the growing Soviet military presence in Ibe Far East, and Japanese businessmen were divcovcr-ing that dealing wilh Ihe Soviets was more difficult than (hey had anticipated at the beginning of the decade, with regard to China, raaay Japanese were apprchcasm that ihc growing strength of the rad*al "Gang of I'm might damage bilateral trad* andevival of anuforeign sentiment and ihe leappearanee of sorneof thcescesseaof lb* Cultural Revolution

go

The sulrtnaie in Japsn's rditons wiih Cbisa sad ihe Soviet Uruon was broken by ihc purge of the Gang of Four in6 The moderate* whocaase w

foreign asaaianeer-*i*crss The Japanese brtieved ihe renew ad Chinese interestreaiy iieeimed from the grownitg sutus of Deng Xiacesruj-leader of thehit apparent belief that Japan could play aa important rule in China's rrieaJertuulioo. That Deng, no leas than those he suppJimrd. -anted to turn Japan agaisst ibe Sown Uaioe ddia tba end poae aa ia.br omnia Mc

SulTsesenil- fiesibie

toruster Fakuda, becasi* he had no

As the prospects for an eventual agreemmi between China and Japan improied. Moscow sei about tryingderail the process. The approach thai it chosethreats and pressure sod proved counter-productive. Official statements and prorugarKlatoward Japan warned of unspecified direif Tokyore.ii* containing an amiheccrnony clause. Not coincidently, at least in Japanese eyes, ihe Soviets began to strengthen their gatnson in the Northern Territories, therebyibe ease -tth which tbeir armed forces could be brought to bear against Japan and iheir determinationincorporate the disputed islands permanently into Ibe USSR. The rhetorical threats and the mililary gesiures look placeackdrop of whai ihe JapBrvrsc began ta seeteady andoviet miliury buildup in the Far East.

Union; Japan "ill proceed to improve relations *ith China. If. bo*ever, the Sovici Union ever sirscerely decides toapprochement wilh Japan, it will find thai Tokyo rt ready lo respond positively. In any case. Japan will not pcrmii its China policy io be diciaicd by ibe Soviet Union, nor mil it permit itself to be coerced.

Despite any imrsression that Beijing may try tocreaie about the character of the emcigine Sino-Japanese relationship, Japan will not align itself wiih China against the USSR J

Cerent Trends

The trends in Sinc-Japancse-Soviet relations already in evidence8 were reinforced by the signing of ihe Peace and Friend-.hip Treaty and. as ofre continuing in the same direction.

Japanese Government refused io be intimidated;8 iteace and Friendship Treaty with China lhal bound both countries io opposeBeijing hadbat left each freeefine its own position toward thirdJapan warned. Tokyo was satisfied that the treaty did not commit Japan to concrete anions against the Soviet Union and stressed in its cKplarulioits to ihe Soviets 'hat it had no intention of nankin ling in an anti-Soviet cabal. At the same time, Tokyo fell little need to go beyond that assurance, when the USSR displayed so little interest in responding lo Japanese desires and few inhibitions about trampling onscnsibilii

In general, the position taken by the Fukudamay be summed up as follows:

lthough Japan would prefer tonrelations wilh China and ihc Sovietolicies can no longer be unaffected by ihose that China and ibc Soviet Unwo adopt toward Japan.

China has shown that it wishes frienefly relations wiih Japan. If the Soviet Union nol only is unwilling io take steps necessary io improve relations with Japan boi objects to friendly relations between Jipan and China, ihen so much the woive for ihe Soviet

The strengthening of Ja pa new-Chinese relations was symbolically confirmed by Prime Minister Ohiraisii to Beijing in9 and Premier Hua Guofcng's reciprocal trip io Tokyo in MayThis eschtnge of visits by Ihe heads of thefirst in ihe history of Sino-Japanesetogciher withttendance at Ohira'sin June, closed the cycle that Ohira. as foreign minister, hadheloed to >nen civ, yuiiearlier, whenTanaU-Cltousumrru!.^

Before he died. Ohira made ii clear to tlx. Chinesetime had come io move beyond sentimentto substance. The basic framework ofagreements was in place. The governments ofcountries had met and held discussions allevels. There were many indications thatwere (irmly committedustained,lo co'.ioiidaie friendly relationsoneNow. Ohira asset led. Japan and Chinasubstance to ihe relationship, most importantlySino-Japanei* economic lies, and alsoihe rsnge of political issues lhat could

C.ie signnoic mjlU't relationship. OhiraVett -oiddew complnnt and more uraighfurward Japanese jreeoach io China, far fromooling of Japan* friendship *nh China. Iks*Idraatsiisonai Onusbed a* Use friendship,ccognti-sn aad iol> crarscc of onehor icormnga and of iheof opinson thai would be certain lo.

Ohiraled -hai he meant b> stressing put*-licty thai, although good relation* with China -ne smporiam lo Japan. ihey -uutd have to be cooducird in the comeu of Japan* rcUirom wnhotberarticularly the member slates of ike Auociaiase of Southeast Asian Nation* aad the United Suies rir-thermore. although Japan wouldevt to sapport the rnoderni/aiio* of Chinal would not help with China's miliury itvaderrti/aiion or sup^ori China'lanti-Soviei policies ^

Theppear to has* accepted Ohira's char-actenuiion of ihcuh faiare Sino- Japanese relations should be conducted Toiaccatcet thaio govern men i* manage to act in ihr* spirit, ibc chances lhal the relationship will prove resilient enough to absorboccasioniiI setbacks will be enhanced.

A certain amount of distrust between Tokyo andprobably inevitable in theof the signing of the Peace aad Friendship Treaty. Nevertheless, Tokyo clearly wished to coauia ihc damage doe* toJapanese-Soviet rcbiieetship aad aleiost certainly would have triedmprove tic* srith Moscow had th< Soviets not invaded Afghanistan, by coincidence only two week* afier Ohira retarned borne from his highly successful summit meeting with HuiBI

The iamlon has added0 Japan* rcUtkaas wrth ibe Sown Union apt ihat it has te-versed or drastically ahtredeiisiing pauents bat it has accelerated and reinforced (rind* already in progrvs* Japnrieae antipathy toward and dbiruu of ihc Soviet Union hive reached what may be posiwar highs.about Sovici intention* and about the im-rnicutronsiliunly wronger USSR ha* ieiensi-IWd. particularly because many Japaneseaho having increased doubts about Ibe strength god rrli-ability of ihe United Suiea Japan* response has been

to draw closerS protector.hink mure seriously aboutn defense requirements, and to coopcraic -ilh Western ssnviioei agjinu the Soviet Unsun. All of these move* have ia-.nu.ftcd Soviet cool-nesa la-ard Ike Jspancvc GosernrncM JJ^J

Tokyoaitcmpt lo curtail this ptvteetully dan-gerusrs trend. The new Su/akt govrrnment has already eipresoed interest incavurc of normality lo Japnpcse-Sovict relations. Ii hasalso laken the posiii-n. however, that if ihe Soviet Union v. tshes an imprvement in re Isillo take theno- only on ike luti^suathag Icrmurial issue but also on Afghanistan. Oa neither ismc have ihc Sovki* Od thairoblem to be discasscd

Key Delerssuaasts of Japeoese Policy

Strategic Ca

The csolauson of Japan'* relit .ens uiih its two pouerfal Comevunna acighhurs hasrcducirvnptca of tnlcrresatedmong ihem. nunc has been more important than ihe shifting strategic equilibrium among ihc four major actors engaged in Northeasi

/rouseerof CWaglughroughout ihcthe Japanese Government was fairly confident that at least two features on the rnier-nai*onal landscape -eld resrsin rrauosabfy stable. Tokyo's first asaurnptioa was thaiimportant alliance with the United Suies would continue. Tokyo remained conviiyced thai Japan's relationship wiih the Unitedvided the indispensable underpinning of Japan's security and forcga pcJictes. and that tbc el'is not would caatinuc. The Japanese oceasaonally had qualms about -here they filled is USre scceptcd WaJurigtoo'i assurance* lhal the albaac* with Janes was ihe "hocapis" of ihe US praviiion in Asia. The alignment with the Untied State.ramework with which polic; loward China and tbc Soviet Union had to remain generallyAlthough in tome ways Ibis framework opera ledoroiranvt on Japanese freedom or aciion. it aho itreogthened Japans position is ilsdralings withand I

Theecond assumption -as mat Sino-So*iei relation* oobM renjtn antagonistic or at least cool. The Japanese seem neverelieved ihat relations bcloeo China and ihe Soviet Loan might heal wflV-ntlyc.-mnivalsiheit noticies toward Ihiid countries. Since ai leasi theherefore. Ja-un no longer hat had to worry thai> moil impoflani potential enemies might ces againti it aiihey had in the. Thii appraisal has neatly enhanced Japan's sense of lecmiiv. In principle, il should also hate increased Tokyo's ability lobeivteen theCommunist

From ibe Japanese peripeetivr, Ihe seminallhat trsnsfotmcJ relations ihroughrut ibe four-power system was ihe Sine-US rapprochemental the. As long as China and the United State -en ai logaerheads. iheot feel free to rnpre deeisrvdy towardWashington la king the lead inBeijing, fncndly relation* between Japan aad China no longer seemed irycompa tiMc with strong Japanese- US rtUtrans Beinng. moreorcr. revetting Ibe lack it hadhe past. decUred that far from oesposing tiroag US-Japant aeeeoved of them and indeed believed that Tokyo thouW give than priority over Sino-Japancse relations. Going evenBci)ing felly endorsed both ihe US-Japan Mutual Security Treaiy and Japan's onn Self Defense Forcesresented with Ihii opportaaily, the Japanese moved quickly to establish diplomatic relations wilh Chi,

Tokyo -as aware thai ihe hand of frLndshlp thai China *as extending u> Japan and the Umied Statesguidedalculaied intent lo isolate the Soviet Union. Tokyo abo believed, however, lhat Washington intended to use improved relations with China togise Ihe Soviets aa incentive lo Improve ibeir own relations with the United State* la ihe US scemrio. detente along one bus would be ihe preludeetente rather thanong Ike other. US efforts toa rrlaunon of leniionie Soviets not only provides Tokyosodcl lhat it foundand cetuinly preferable to lhat of China's hostility toward Moscow- it also cleared the way for Japan to emalale that model As in tbe case ofJapaneserogress in improving Japanese Soviet relations

no longer seemed bail* to crcait stirs* in Japan'she laned Stale* |

Thus,daring lac First transition period| and on into ihe middle years of the arcade, ii was the Untiedhrough Us opening toward China and ill pursuit of detente with the Soviet Union, thai was at once ihe primary force fa* cnangc in the four power systemajor determinant of Japun's policy toward the Soviet Union and China. As the decade -ore on. however, the Soviel Union emerged as Ihe principal force generating realignments in the lyiiem. It made us presence felt primarily by negative rather than constrociive actions

The process began with US and Japaneseover the limitedcsieai to which tbe Soviet Union shared ibeir understanding of deiente The mostrtcmenise Soviets'were theenoe with which tWy pursued ihe urcngthemng of ibeir armed forces aad the willingness they displayed so intervene more aggressively ia Third Wnrid con-nicts, even when this jeopardi/rd improvemcot in east-Wests ihe Soviets escrtasiDgly sec-ncd to be playing tbe rose of bcgeasonisl. in which the Chinese had long been trymg to easthe United States and Japan became more wary of the USSR and began to move chaser lo Chinaas ihe Japanese preparedonclude ibe Peace and Friendshipey insisted that thecompte-lion of Ihe normaliration process with China should beositive bilateral development with no significantor other countries. Tokyo seems to hate calculated lhat once Ihe treaty was signed SovKi antipathy toward Japan would prove short lived.

la ret roti* estimate teetro to have resutied partially from wiihful thinking.ow dear thairowingith C'b.na carries with it more substantial ealcrnal cost, than ihe Japaneseected orhe, *eootd have lo pay. Some Japaaese suspect, for eiample. that thef China* JapancK flank may have helped free the Ouaeaedc Vietnam, an act that helped Moscow Strengthen .Li pro.lionMane-

Tokyo is also discovering that belterrelationversistent source of tension in Japan'sthine Soviet Union. Even beforeit -as chat--especially to thethe cumulative effectolid Japanese-US alliance, improvingrelations, and the continuing consolidation of relations between China and Japan would be live coalescencerilateral entente. It was also clear that none of the three was well disposed toward the USSR and that each, with varying degrees of intensity, viewed that country as the principal threatts security. Thus, the Soviet leadership had good reason to suspect that an anii-Sovsei coalition was in Ihe making. Ifoalition yelled into theof an alliance, the national security interests of ihe USSR would be gravely affected. Hence the un-lemiiting Sovietarly Japan, the weakest and most susceptible Iit wouliljiew with alarm further movement in that direct Ion iTM

he Scmci Union invaded Afghanistan. In Ibis case ii seems to have been the Soviets who miscalculated the effect of ibeir actions on others. The Unitedncreasing defense spending, pressing itsfollow suit, andIhe door to the transfer of nonlcthal militaryjfJ

ics and ibe USSF

tScvielsjJ

Although ihe extent of the Japanese reaction can be overdramaiiicd, there is to doubt thai the invasiontrong effect and helped alter the terms of reference of the domestic debate on security and foreign policy issues.esuL support for both the SDF and ihe alliance with the United Slates has increased, evenmore accuratelymilitary balance between the United States and ibeo be shifting In favor of tbe J

As for China, it has applauded the reaction in the United Stales and Japan and haa invited ihe twoto theirjoin with itorldwide anti-Soviet united rront. By invading Afghanistan, the Soviet Union hasowerful impetus to those trends in US-Japan-China relations that il finds mostdbturbtr

Nonet hc-

noi an adequate explanation of developing Japanese policy toward China and ibe Soviet Union. The Japanese have liad strong preferences of iheir own. which ihey have beta increasingly witling to voice and act on as they have become core confident of iheir own strength andless confidentof the strength and judgment of Ihe United Slates JB

Japan has lis own interpretaiion of where its strategic and foreign policy interest* lie. and the broad outlines of the policies il has devised to protect ihese interests are clear. First, the Japanese Government believes more strongly now thanears ago lhat Japan must maintain strong, friendly relations with the United Slates. This has implications for how Japan willits relations with China and ihe Soviethe Soviet* must nol be atTordcd opportunities io

foment discord between Japan and ihe United

Slates.

Japan must rvci submit to So.iet pressure to weaken ils sccuriiy tics with the United Stales.

IfrelationsbeiwceniheUnitedSutoandibeSoriei Union deterioraie, in general Japan should side with Washington.

China must not be permitted toource cf rivalry and distrust between Japan and ihe United Slates.fc *ork with the United States loooperative approach to Beijing.

Second. Ihe Japanese are convinced that their long-term stratcsic interests arc best served by maintaining good relations with China. The Japanese do not want ever again to be in conflict with China, or even to be estranged from that country, as they were during the COW War. Being on good terms with China not onlyess threatening security environment, it abo frees Japanese ailcnlion and resources for OtherIn support of ihts ob<cticc. Tokyo has devised several mutually reinforcing policies:

ha* moonrojd. sustained effort to cultivate the trust and good will of the Chinese leadership.

Ii hat avoided pressing for ihc resolution of pxen-lially csyntcntious issues.

Il has given evidence lhal il wbhese asas possible of the Chinese rnodernisaion effort.

Il has demonstrated its commitment to establishing closer Sino-Japanese relations by resisting strenuous Soviet opceisittoo to lhal process. |

Over the longer term. Ihe Japanese apparently hope thai these measures will helptrengthen ihe position of the relatively moderate elemenis in Beijing lhai Tokyo believes arc mosi likelyantemain on good terms *iih Japan. Al the same time, there can be no guarantee thai future Chinese governments will always be as friendly lowaid Japan as the current one is. The consequence for policy is thai Tokyo will not directly support the moderniia tion of ibe Chinese mili-tary estabtishmenit

Third, the Japanese are determinoa to ensure that Tokyo and Moscow never come into confticl or even driftituation iaossibility of conflki cassis: Tokyo is mindful thai Ihe Soviet Union could easily destroyolicy in support of this interest has beenevise. In general. Tokyo has tried io implement two seeminsly contradictory but actually baUncod policy lines. First, ii has:

to reassure Moscow that Japan has no hostile mieniions toward the Soviet Union and will not join wiih third countries in hostile actions against it.

- Trved to show that ftb btsshsesslikc basis with Moscow's effort to accelerate ihe economic development oi Siberia.

thai it is ready toeace treaty as soon as Moscow returns tbe Nonhcrn Territories.

At ibe same time, Tokyo has made dear ihat il is not "holly passive. It

Acquired through the Mutual Security Treaty with tbe Unitedeterrent against the perceived Soviet

Created armed forces of its own to supple mem, and enhance ibc credibility of. the treaty.

Has per*isied in pursuing good relations wilh ihe iwo most threatening potential enemies of the Soviet

Has become less inhibited about expressing its displeasure wiih. and taking counter measures against. Soviet actions deemed detrimental lo

A widespread sssumptsdn exists lhai Japanese foreign poUcy is dominated, if not determined,rive for economic advantage. In ihe case of relations wilh China and the Sovici Union, however, broad strategic considerations not only haveore potent role in shaping major policy decisions, but havetrong influence over ihe manner in which many apparently unrelated activiiicj^ncludingbeen conducted

Nonetheless, Japanese decision makers have been sharply attuned to economic considerations, which have influenced their view of how. and for whatJapan should approach the Soviet Union and China.^.

TrsaV. The trading relationship between Japan and the two Communist powers has been based on an exchange of Chinese aod Soviet energy resources, raw materials, and rela'Vety unsophisticated manufactured goods for Japanese steel, machinery, and -hoi: plants |

In the case of China. Japanese imports and capons have followed roughly parallel lines and have moved through two periods of rapid increase,]5 and8 to the present (see' The growth curves for Sino-Japanese irade generally have followed those for China's overall foreign irade; both have tended io respond to economic and politicalwiihin China, (c)

In the case of Ihc Soviet Union, imports grew rapidly34 aod Ihen leveled off. Simila:ly, capons expanded4nd ihcn slowed. The two bursts of activity is Smo-Jaisarieae Iradewith major political breakthroughs in bilateral relattons, and the upsurge in Japarscse-Soviet trade OCCTrreddurinetljevearswhen bilateral relations were relatively good.H

' Dataipsn'i tiwJ*Chin* sad it* Soviet Ua

proriOrdroenCUi A.

loercentorf ihe past decade Sonet umber has accounted for betweenndercent of Ja pan* umber importi. Japan obtains no timber from China. J

Japa nese btuineumen consider the Soviet Union and China io be important export marked. Although their respective shares in totalorts have been small, live Japanese believe the long-term potertialapid increase in demand for, oaviivneni, and steel is large. Moreover, these markets have taken on greater importance as recession in tte Wesi has lowered the demand for such goods (see figure

Tbe iwoinost prominent commodity categoric* of Japanese eiports lo China and the USSR arc steel and machinery. In machinery, the Soviet Union has proved io be the larger and more stable market; ex pons to China have cacillaied in response to shifts in Beijing's foreign trade and orvodcnuauon policiesowever, tbe gap between tbe two almost closed la four ce* the past fmt years, machinery exports to Ihe USSRercent of total Japaneseto be favceaWy noted by Japanese businessmen and officials

Wiib almosterceo- of Japanese steel eiports goingbiiu and*egree of export dependence seems toeveloped in steel. In this area China ranks first, with imports from Japansteadily,alue of mote itvanillion and acxounttng for more lhaaercent of Japanese Heel exports in each of the pasi two years. Exports lo ihe Soviet Union are also substantial,ercent of total steel exports for ihe pasi five yean (excepthen they lumped toercent j. Javvarveae steelmakers, therefore, can by noford to ignore these

f rejects. An important aspect

of Japan's effort to prornoTe ctpaaded trade wilh ihe two Ovnmuatst countries hat bee* Tokyo's support for resource ck*elopmcnt protects in both Causa and ibe

)

taro n 7i n 7a 7a rt n

A banc oomr>nent of Japan's foni-tcm ecvnoniic stralegyontinuing worldwide search for fweb aad raw ma Uriels. Two kry elements cf" this process arc aa effort to diversify Japan's soxrees of supplyi in provide ihe crethls,capiuJ goods, and teebneactrj aeceaaary to develop new wuna. oilfields, and timberi

trade daU suggest ihaL ia general. Chin* and the Sovalave not emerged as important source* of tajnpiy. Ncverlbclesa so mastnvc are Japan'shat the joint projects It has negotiated, first

wilh ihe So*tet Union and more recently with China, are from iheir points of view impressive in scope and represent badlvjeededof foreign exchange (see

The first requirement of resource doclupmc nt projects has always been credit. The protects tend lo have lengthy gestation periods and to be very expensive, and prospective partners often have beer, able to expand production to meet Japanese needs only when Japan has been willing toajor share of ibe costs. Chinaic Soviet Union have been no exception.

ong before Beijing was wilting lo permit foreigners to participate ia joint projects. Moscow negotiated its first resource developmentilh Japan. The formula devised became the prototype for all subsequent btlatc.-al compensation3 million worth of machinery,and consumer goods bached by Export-Import Bank credits and in returnortion of ihe natural resources ihat werethis case, toss and timber for Japan's housingecond agreement followedallingillion in Japanese equipment in return for manufacturing pulp and wood chips for ihe Japanese paper industiy. In addition,be Japanese put togetherillion package thai permitted the expansion of Vostochnyy Port near Nakhodka so that it coulda larger volume of coal and limber exports to Japan.

Il was not. however, when Tokyo made Its first large-scale, gewcrnmcnt-to-governmcnt loans to tbe Soviet Union, thai the process got under way in earnest.ighly political gesture. Japan') Export-Import Bank released more IhanSI billion mSSSO million for equipmentecond major timber0 million for developing ibeCbul'rnan coal field in South Yakctit.illion toward the cost of ihe initial eaptorauon phaseossible mulii-billKtn-doaar effortptoi.atural gat deposits. In addiiidn. Japan2 million lo exploration for Sakhalin offshore oil andrepayment dependent upon discovery of oil. Mach of Ibe espansion in bilateral trade that look place in subsequent years was fueled by these loans (sec figure Vmam

In the Soviet Union land later inhe Japanese often became deeply involved in ihe developmentaltre permittedimited on-me presence and no equity participation. In the case of Siberian limber, for eaansple. Japan presided:

Assistance in project planning and evcculim

and lran>pori iiail line or river.

Plants for processing some of ihe timber into pulp, wood chips, ot lumber.

Equipment and tecnisology necessary to expand port-handling capacity.

Ships to carry Ibe limber and timber products io Japan.

Consumer goods to fare Soviet workers to work on the ivocc

None of these ventures would have materialized had Japanese businessmen and officials not been convincedihey were profitable and eomlstent wilh Ihe broad', long-term economic interests both of Iheindustries and of ihe couniryhole. At tbe same time, however, the government abo hoped thai Ihe ventures would desnonstraie Tokyo's good will andote an improvement in bilateralpossibly even inducingjhe_Sovieis to discuss (heterritorial issue

. Japan's interest in Siberianseems to have wa-cd. All of the credits released ft nee then have been supplementary to agreements made earlier:

TwoadditiortaltoansforequipmentforSoulhmillion7illion inthe toul for the project0

and gas exploration, raising the toul for the project2 million.

Agreementrge-scale limber development deal is expected lobe reached soon: this will represent ihe third phaseroject that has been under waySJJ

No wholly new projects have been undertaken.the giant Yakutsk natural gas venture seems certain to go Ihe way of Ihe abortive Tyumen oil pipeline scheme. Existing projects will be continued

Figureapanese Loin Cotnmiimeni* Relatedesource Development Projects in China ind Iht USSR

M.llo- US

i

and rcrharu expersded. buwvodrarnatkdepartures appear lo be io Ibei|

Both sides had their reasons lor not pressing ahead with new resource deals. The Soviets have moved more ilowty io recent yean, both in expanding trade with the West and in negotiating joint projects In Siberia. The rapid growth tf Moscowin iheore ototioua approachime. Moreover,in inatalling and operating the large amount of imported equipment ledharpdrop in orders from

Japan has been reluctant to move further ahead in Siberia for both economic and political reasons.severe climate, great distances, and perennial

labor shortages are serious obstacles to profitable development. Moreover, the Soviets have "roved to be difficult businessTbry have sometimes overplayed their hand, apparently convinced thai Ibe Japanese, hungry for the resources lhat Siberia has to offer, trill ultimately accept Soviet terms. Butentrepreneurs ate used to operatinglobal economic arena and evaluate Siberian resourceproject* in light of tbeuring the. Japanese busirsessmen seem to havethat it would be more prudent and profitable to pursue diversification elsewhere. Nevertheless, they have kept the door open by continuing at least to discuss new projecu wilh lit* LSSH.H

The gradual deterioration of polii'sal relations during (hew wmeave affected Tokyo's willingness io back ambitiou. rew project* in Siberia. JapM'g political and bureaucratic leaden evidentlylittle strategic ineer iVc for promot ng ventures thai were often auesi>onabte ccnnomically -nd thai would increase Ihe =ouatry* dependence on the Soviet Uhtooime when Moscow *ce*ned increasingly unfrr-ndly and oblivious to Japanese hopes lorn the poiiiKal arena. The Soviet invasion of Afghann>an reinforced this perception |

The Chinese did not firall> decidet was in their interest to invite Japanese in el-ement in resource development. The change in policyonseouence of two converging Imperatives, first,decided to step up the pace of modern! ration by importing more foreign technology, machinery, and whole plants, ihe Chinese leadership had lo devise means of earning more foreign exchange. Among the moil promising options was togreaily increase thej ciporttof coal and ^troleum, been of which couldeady reaves in Japan. If thecoJd be persuaded to peovidc use credits neecsaary toeir-nd ad and coalon. this would help ftey.nga second problem -meeting China's own hft_ ing energy requirements. 3ejjing rlio may have been reeeplive to Tokyo'sbecause the Japanese were willing to help remove the transportalionimpeding ihe expansion of China's export capacity and because they offered generous financialin term* oTinicrtst rates aad repayment period* than (bote granted the Sovieis and easier that', those offered China by other Western

Asm the case of its veaiurea ia ibe Sonet Ussioe, okyo's position on resource ekvcic-jmetiihina ruts been tbc prodoelomplex of political aad^cernecoaoideratioris Political objectives teem lo have weighed more heavily in shaping the Japanese approach toward China, however, meal obviously ia Tokyo* decision to extend aid in Ihe form of long-term loans al highly concessional interest rates Tokyohopes (hat ihis nid and the expanded exports it will permit will not only help lo cement clraser bilateral relations but will support, if only indirectly and marginally, stability in China. The Japanese believe

that the currenteijing is more likely lhan any oihci lo discern the benefits for China ofblc. fr-endly rdationshipwith Japanspite of the invasion of Vietnam Iwo yearsless likely to lead China into dang-rous foreign adventures lhat might disrupt iu mcdernijaiion pro-

Resource dcvelopmeni agreceenu conduded with China this year abo arc iuended to serve definite economic objective* The Japanese sec China, like Siberia,rommng alternative source of supply for the energy resource* Japan needs. The Long-Term Trade Agreementigned inapid expansion in bilak.al trade basedapid increase in Chinese oil exports. Inhen it betan to appear thai the Chinese would noi be able to raise ihe capital necessary 'o expandil production. Tokyoillion line of credil from the Eapon-lmpoM Rank to develop China's capacity to produce andenergy resources. i

The focus of ibe joint effort ia the petroleum secio* is llieoflsheee fields in the BohaiGulf. Ininal agreement was reached5 million export-Import Bank loan lhat the Chinese could use to cover their half of envelopment coaU. Since this sum is to be matched by the Japanese investors participating in the venture, almosi SI billion in Japanese capital haibeen committed '0 this one pro/

Beginningowever, Beijing began to suggesi to the Japaneseight not be able to sustain ihe rate of increase inorts io Japan called for in ibe LTTA. that, instead, oil capons probably would level oft. and thai ii might lake longer than anticipated to bring the Bona! rigid into ceodssction. Mean.hilt, the Chineseil new al became available, coale best hope of fostering farther mcreasca in

China's failure to fulfill the promise* il had madewing largely loexctasrvely optimistic oil-production foreeasu made ia (he, came a. a

di>aprotniing se(bueh lo those Japanese who had been a: (he forefront t' ih; efforl toajor expansion In btlai.ial trade!

Baikal, ihcoal-related projectsarc concentratedmall area around Bohat Which is also the location of the Japanese oil eiploration effort

Political Co

Many of ihc events and irends outlined above filter Ihrough. and arc distorted by. the domestic political process, from which they return to the decisionmakers, in narrowly focused, idiosyncratic, cnotson-fams. Twoctoscfy relaicd key pr-lr.is need to be made in ihta connection, one related to generalperceptions of the Soviet* and Chinese, ihe other to Sovici and Chinese access io ibe Japanese potitical|

Although Japanese attitudes toward both of Iheirneighbors are com pies. Ihc Japanese arewethe Chinese but arc suspiiiuus. ftariul.toward ihe Soviets. J

Public attitudes appear to have undergone dramatic changes over the pastean (seeuring.oerceni of ihe Japanese disliked both counirks. Lciserceni liked one or Ihe other. Wiih the advent of detente, however, dislike of China and ihe Soviet Union declined. In ihc case of China, negative percept ions plummeted in ihe wake of the eupbona surrounding ihe resioraiion of diplomatic relations, and increasing numbers of Japanesecame to hold pcrsiirve sentiments toward Beijing. No comparable upswing in liking for the Soviet Union occurred JH

The most striking dcveJoptnent io take place after Ihc shift In opinionas the Increase in public dislike for the Soviet Union in ibe bier years of Ihe decade; in the year since Afghanistan, it has risen to unprecedented heights. ITius.at lb* beginning of, the Japanese public is far more favorably dis-poacd toward China than lowasddversary.

Unguisiically. and in icmuofjocsal, poliiieal. and religious norms. The Japanese alto appearespond positively io Ihe faci that tbe two people* are of similar racial stock. Overall, this respeci and affinity for China atTcctscurrent Japaneseatiiludes. In addition, many people feel residual guilt about Japan's aggics-sion against China innd iml

In general, therefore, the Japanese public is more likely to be sympathetic toward Chinese points of new and more willinge persuaded that they arc worth serious consideration. The Chinese hare recognired the opening this has given them and for JO yean haveophisticated campaign to build support in Japan and persuade the Japanese lo back positions favored by China .J

Except for the steadily shrinking minority of Japanese who still look to the Soviet Union as tbe chief defender of world socialism, few Japanese feel anycultural, orthe USSR. On Ihe contrary, most Japanese strongly dislikethe Sovietare aware of their country's historic rivalry with iheEmpire. Whai respect ihere is tends to be directed at ihe Soviet military-and hete the respeci it colored by fear. Far from feeling guilt toward the Soviet Union, ihe Japaneseense of grievtnee for Moseow's but-minute entry into World War II and io annexation of whai ihey regard as Japanese territory. The Soviets have notampaign sirnilar to that mounted by Beijing, possibly because Ihey have realized that inlimate rsocomparable opportu-nity existed for them. To the extern lhai ihey have tried to intervene in the Japanese political process, iheir approach has generally been crude and ounier-productrve^B

From the perspective of the Japanese decision maVer, efforts to strengthen relationsChina will ihut lend to be popular, while similar efforts to improve relations with the Soviel Union arc likely to yield more limited rxlitlcal rewards. Given the recent increase in popular antipathy toward ihe Soviets. Japanesemay be more inclined toirm position toward ihe USSR, while they will tend to view opposi-lion to close Sinn-Japanese relation*iabiUty>|atfJJJ

Prospects

Continued Drift Toward Bcijisg

Tokyo's drift loward China and away from ihc Sovici Union appears to have gathered considerableBarring unexpected changes in Ihe complex of determinants shaping Tokyo's policy, Soviet-Japanese relations probably will remain cool through al lean the; they may even deteriorate further. Sino-Japanese relations, on ihe other hand, probably will continue io grow stronger

On ihe assumption that this will take placeontext of continued coolness in US-Soviet relations, ahealthy US-Japan alliance and further im-provement in Sino-US relations, ihc Soviet Union will find itself increasingly isolated in Nonhcasi Asia. It. as seem* likely.attempt* io arresi thisby resorting lo ihe same heavyharded methods it has used in ihe nasi, it will only reinforce the process, which has come io be sustained by the shared concern of the other three powers about Soviet behavior and intentions. J

This does not mean thai Tokyo desires to lake *tdes wiih Beijing against the Sovietless con-elude an allunos wiih China or adopt an antagonistic stance loward the USSR. The Japanese arc convinced that either policy would endanger national security, and they will bensure that thedocs not proceed loo far. Should there be signs of aa incipient crisis in Soviet-Japanese relations, Tokyo will do iis beat to avert it.e same token, while Tokyo is likely to invest considerable effort jo furtherJapan's relationship with China, it will alsoertain distance from the Chinese, Il will resist pressure to conform its policies to these of Beijing, particularly to ares* of SovietFor it (east the neat fews not likely lo cooperate, except indirectly, in China's miliury rtwderniiattonr to permit iu defense ceTtciab to go beyond limited contacts with their Chinese counterparts. In sddiiion, the Japanese hate concerns of their own aboutilitarily powerful China might portend for iheir security!

* ir

Japan also it bound to eapcriencc considerable frutira-lion in iu future eeorsomic deatingi wilh Chin* ind io rcuinlivelyhe eeonomk benefits of liable, jfooi greaily eapaoded. trade -ith the Soviet

oil aad cat. coal, and limber will be ta de-ma nd in Japan for ihe indefinite fttture.esireetain and eipand access in this source of supply -ill inhibit ihe government from taking ueps thai nmight seriously alienatetat he lead inevere sarin ion* policy against Ihc Soviet Union. In addition, the Japanese consider ihealuable market for capons of technology, machinery, whole planu, and sleelThe government has backed these capons in ihc pan with Hapori-fmpon Bank credits and is likely lo continue to do to. partKularly if slow growth In Iha Weal limns Japanese sales in ihese marten. On ihe other hand, to the eaieni that bilateral relation*coot Tokyo is likely to becorne more caolious about mcrres-ing its financial nake ia lac Sennet Union or becommg dependent on thai country for toohare of its requirements for imported fuels and raw mat

What might cause0 review the bidding on Siberian resource deveioprnen,eepening of the crisis in world energy lupplies. One possibility lhal already may be under consideration would be to accept tb- ileamcoaloverburden currently beingr-o, ihe Chul'nvan coking coalto be caponed to Japan. Another and morepouiuihty is thai ihe Japanese could dec to* to go ahead wiih ihc large Yakutsk natural gat projeci wtth-osi US penWSpatsort- Here again. rsowgvtr large-tcalc deliveries of steam coal psobably would not begin until ihelater years of ibe decade

a tcriout deterioration ia bilateral relations. Tokyoill approve Japanese participation in tbe ea-plottation of Sakhalin cflskore oil and gat resources. Encouiaged by successful exploratory dnlltng latt rummer. Japanese buunrasmen believe lhal the devel-opnveni phase could begin as2 and that Ihc| probably solicitline of credit the following year. If. as now teems likely, Japanese butineaamen decide that it is worthwhile to proceed to the produaion phase, Tokyo proUbly will approve ihe project Although this could turnout io be larger than any of the jointied thus far. the vol-roes ofapan Mill would sot be btrge enough toi sigau ficaM desre* of csergySovM UsaOB. For ttra tesnc aad econcxrx reasons. Tokyo would isuust that any imports of Soviet natural gas be ekliverrd ia licracfred hnn by tanker*ipeline to Hokka.ii

Nevertheless. Tokyo'* commitment to supportodernization cffoit is not likely to be shaken, and Japan's trade *ith China probably will continue lo be larsjer than thai with the tSSR.S China is likely to be escorting moreoil and coal to Japnn than will ihe Sodc! Union

If Japan continuesove toward China and away from Ihe Soviet Union, and if the incipient Japan-China-US entente continues to coalesce. US interesls will be affected in two principal mays:

Tokyo will be likely to persbi in jit effort lo strengthen iisdcfcnseiies with the United Statetand increase it* convcniional military capabilities by accelerating imptcmcntation of its midterm defense Plan.

Moscow, for its pari, is likelyerceive theses threatening, or at feast damaging, to Soviet interesls and mighl initiaie couniermeasares in other regions or on other issues that wouldaffect US inlei

AhetTuiiKeSeessatiea

Japan will continue to drift toward China and away from the USSR unless one or more of Ihe mayor assumptions In this study prove wrong. Among these assumptions, perhaps the most critical involve future Soviet and Chinese policies toward Japan.H

This paper has assumed that China's policy toward Japan isunci ion of. first. Beijing's strategy lor dealing with ihe perceived threat from the Soviet Union and. second, iu strategy for accckraiingOf the (wo, ihe second is probably the most susceptible to change. Given the magnitude of the task lhat China'* current leadershipr the neat few

years, it is possibleeries of overlappingfailures could generate social,poliiical stresses sufficiently serious to causein the modcr rural nan program andmajor leadership crisis. Inevitably, one resulta blow io Chinese foreign trade andriaiions. as well as lo ChineseIf thedomcslic Chinese crisis spills overforeign policy arena, as similar crises have inJapan's overall relations wiib China couldseriously strained. If the Japanese foundovertures being rejectedorefundamentalist breed of Chinese leaders,be less forbearing and understanding thanbeen in the past. In any case, the currentstronger, more cordial bilateral relationsreversed

It brrvorc difficult tolausible scenarioa change in Soviet policy toward Japan that would be substantial enough to slow, much less reverse, the irend toward increased tension in bilateral relations. From the Japanese perspective, there are two principal problems: Moscow's refusal to settle the territorial issue on icrntt satisfactoryapan and. more(he aggressiveness thai has characterised ihe tccenl foreign policy of the Soviet Union as symbolized by iu invasion ofrjor improvement in bilateral relations almost certainly could not be achieved without major changes in ibe Soviet approach to both problems. This is not likely looccurjB

An adverse Japanese reactioa probably is one of (he potential costs the Soviets find least painful towhen making decisions affecting basicor foreign policy. Therefore,ore fruitful to focss on Ihe possibility that Moscow might alter il* policy on the Northern Territories, the less important of tbc two problemsJjj^fl

The Soviet* may question whether ihey would really gain very much If they returned ihe disputed islands. The Japanese mighteace treaty bul refuse toore cooperative attitude toward (be Soviet Union, As an object of Japanese friendship and cooperation, ihe Soviet Union in any case would still rank welt below China, lo say nothing of (he United Slates. Soviet fear that returning me islands would stimulate East Eurcapean and Chinese appetite* for

adjustments in iheir borders with ihe USSR isK ihe most important constrain! inhibiting the USSR fromove in this direction. The Soviets also wanl Ic avoid losing the rich fishing grounds and the opening of Ihe Sea of Okhotsk io foreign military aiciuiiu:.

hift In Moscow's position on the Noit hern Territories is possible, if only becausepolicy entails such heavy costs for ihe Soviet Union ill Japan. Some Japanese hone thai the new Soviet leadership that -ill be in place by iheight undertakehift. The likelihoodoviet imitative would increase if Moscow perceived an opportunity to make gains in other arenas. For eutopic, if si no- Japanese relations deteriorated.might calculate that an alt-out peace offensive towardinvolving real concessions on ihe territorial issue and perhaps more advantageous trade terms for Ihe Japanese, as welt a* acquiescence in current Japanese securitybe successful. The Soviets might hope not only to clear tbe way for the signingeace treatyignificantin bilateral relations, but also jowoo Japan away from China and toward tbc USSR. i

If either of the two principal alternatives materialired (strained Sine-Japanese relations or improved Soviet-Japanesehe possibilityS-China-Japan entente mighl emerge wauld recede and Japan would returnosition more nearly equidistant between the two Communist powers. This would lend 'osome Soviet concerns and thus reduce ihefor disruptive Soviet behavior.

If Sino-Jaroncsercialfcm deteriorated bul Soviet-Japanese relations remained coul. Tokyo would have even greater incentives to build up thcSDFand engage in more serious defense cooperaiion with tbe Uniied States

If Soviet-Japanese relations improved whitea neve relations remained friendly, the imnctusore posilivc approach to defense issues presumably would be reduced Tokyo might then permit allocations lo defense io increaselower rale and display leu interest in giving substance lo US-Japanese defense cooperation.

-V

Appendix A

Jain's Trcd* WllhChiu aixl Ibe

Jlh Chit* *od toe tSSR

,>fVnm

(frr USSR

Tout

Original document.

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