January 29, 2014

NYT's Sorkin: Conflict Between Japan, China Is at Dangerous State

The tension between Japan and China now represents a real risk for the global economy, says New York Times columnist Andrew Ross Sorkin

"The long-simmering battle between China and Japan may be close to boiling over," he writes. "One top executive [at the World Economic Forum in Davos, Switzerland, last week] went so far as to describe the nations' relationship as a 'stealth war.'"

The clash between Japan and China includes a contest for control of the Senkaku Islands. Japanese Prime Minister Shinzo Abe turned heads in Davos when he said Japan's relationship with China is in a "similar situation" to that between Germany and the United Kingdom prior to World War I.

"I probably spoke to no less than 40 U.S. CEOs here [in Davos,] and I would say this issue came up in more than half of those conversations," Ian Bremmer, founder of the Eurasia Group consulting firm, tells The Times. 

"This week at Davos, for me, the big takeaway was that China-Japan was much more problematic than we thought. The possibility that you get anti-Japanese sentiment in a big way and it causes real disruption on trades and hurting both economies is real."

Some experts say the conflict makes it hard for the United States to deepen relationships with both countries at once.

"In a perfect world you could do both simultaneously without conflict, but in practice, whatever you do with one side, the other side sees it as being done against them," Ely Ratner, senior fellow at the Center for a New American Security, tells The Guardian.