Monday, September 13, 2010

China and Japan: Naval and Trade Tensions

While World War 2 effectively blew out the European volcano, in Asia national tensions have mostly been suppressed by the long time presence of the 7th Fleet. Despite rapid economic development, there have been only gradual steps towards regional political unity as compared with the EU. This is possibly because of the fundamental weakness in the development strategy, in that it is based on export cartels and not domestic consumption - though domestic consumption and living standards have increased dramatically as a byproduct of export success.

With China now buying Japanese bonds to diversify away from dollars, strengthening the yen and cutting into Japanese-based exporter profits, these two powers are seeing a commensurate rise in territorial disputes over oil and natural gas rich areas in the waters of East Asia.

1'Wary Japan seeks clarity on China military outlay' - Reuters
2'China raises pressure on Japan in sea dispute' - Reuters
3'Wikipedia Commons' - Map Image
4'Look Out for the Diaoyu Islands' - NYT; Kristoff

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