Soviet Policy in East Asia: A New Beginning?

Under Mikhail Gorbachev the Soviet Union has greatly increased its efforts to improve relations with the countries of East Asia, particularly China, but also Japan and South Korea, and with Southeast Asia, Australia and New Zealand. There has been a new diplomatic flexibility, frequent visits, a drive for better trade links, an effort to join regional economic organizations such as the Asian Development Bank and the Pacific Economic Cooperation Council (PECC), a variety of arms control proposals and a determined effort to change the poor image of the Soviet Union in the region.

In a number of speeches, especially those in Vladivostok in July 1986 and Krasnoyarsk in September 1988, Gorbachev has said he wants to lower the level of military activity in the Pacific, to help resolve regional tensions, to improve Moscow's bilateral relations with all the countries in the region, to advance multilateral cooperation, particularly economic cooperation, and generally to create a "healthier" situation.

There is no euphoria about Gorbachev in Asia, as there may be elsewhere, but his initiatives have had an impact, particularly on China and South Korea. A summit meeting between Gorbachev and Deng Xiaoping will take place early in 1989, the first such meeting between two top Soviet and Chinese leaders in 30 years. An informal dialogue between Moscow and Seoul has begun and both sides are anxious to expand economic and even political relations. Moreover, it seems likely that Moscow and Tokyo will also reach some sort of modus vivendi in the near future, despite their territorial dispute. And if Vietnamese troops withdraw from Cambodia, as Moscow is now pressing Hanoi to do, a major constraint on Soviet relations with the member countries of the Association of Southeast Asian Nations (ASEAN) will be removed.

In sum, the Soviet Union may well succeed in normalizing relations with East Asia during the next few years. The Soviet Union, however, has not become a status quo power. Moscow now seeks to revive atrophied diplomatic instruments unused by former and longtime Foreign Minister Andrei Gromyko in order to increase, not to reduce, Soviet influence abroad. Thus, this new Soviet moderation offers both challenge and opportunity for the United States. The challenge arises from the fact that the moderation may actually result in a less aggressive strategy but a more active and effective Soviet diplomacy. The opportunity is to take advantage of the new Soviet moderation in an effort to reduce the U.S. security burden and to ease global and regional tensions.

II

Even if Moscow improves its relations with the Asia-Pacific countries, it will remain at a considerable disadvantage in the region. The United States, despite all the talk about decline, continues to be the predominant power in the Pacific. It has presided in recent decades over a vigorous expansion of trade, investment and growth among the East Asian countries. The United States has a highly effective ally in Japan, which seeks to support, and not to challenge, U.S. leadership. The two countries have a compelling stake in maintaining and strengthening the web of security and economic ties that sustain an open world economy and the defense of Western interests. The United States also has a number of other allies and friends in the Pacific, several of them bound by treaty commitments, and all of them sharing an interest in maintaining a robust American presence in Asia in order to balance other "close-in" powers which they fear most. By contrast, the Soviet Union has only military power in East Asia; its economic relations are minimal, and its few allies in the region are poor, politically isolated and without much influence.

The Soviet Union is also at a disadvantage because it is still regarded with suspicion virtually everywhere in the region. Despite the latest Soviet force reductions, China remains encircled by Soviet military power. Japan insists on a settlement of its territorial dispute with the Soviet Union before substantial progress toward easing tensions can be achieved. Most Southeast Asian countries are reluctant to allow a large Soviet presence because of fears that the Soviets may aid local insurgents. Moreover, the failure of Stalinist economics, which has become increasingly evident all over the communist world, has made the Soviet Union virtually irrelevant as an ideological model in a region consisting of the fastest-growing market economies in the world. The extreme underdevelopment of Siberia and the Soviet Far East, a vast region with a tiny population and a weak infrastructure, will handicap any Soviet effort to develop more active economic relations with East Asia's market economies.

There is also a basic dilemma in Moscow's new effort to woo East Asia through flexible diplomacy. In the past, the Soviet Union's principal method of expanding its influence was through military power and aggressive behavior. If Moscow now seeks influence through diplomacy and trade, its leverage will be limited because it has little to offer. If, on the other hand, it resorts once again to employing its military power-as it did in the 1970s when it deployed SS-20 missiles, invaded Afghanistan and supported Vietnam's invasion of Cambodia-it will again mobilize a coalition of powers against it.

Despite these difficulties, Gorbachev's diplomacy has already scored some successes. The Soviet leader has laid the groundwork for a summit meeting with Deng Xiaoping by showing more flexibility than any of his predecessors. He accepted the Chinese position in the dispute over the Amur River border and he has systematically addressed all three of China's declared "obstacles" to normalization of Sino-Soviet relations: Soviet troops on the Chinese border, the Soviet occupation of Afghanistan and the Soviet support of Vietnam's occupation of Cambodia. Some Soviet troops have already been withdrawn from Mongolia and, in his recent U.N. speech, Gorbachev promised to pull out a "considerable" number of those remaining; Soviet military exercises and forces elsewhere on the Chinese border have been reduced; the Soviet army has begun a withdrawal from Afghanistan; and Moscow is now negotiating directly with China on Cambodia, while urging the Vietnamese to withdraw. The only substantial obstacle remaining is Vietnam's continuing occupation of Cambodia. But even this could be overcome in the near future. The shape of a political settlement in Cambodia is likely to be one of the chief topics for discussion at the upcoming Deng-Gorbachev summit.

There has also been an acceleration of Sino-Soviet trade. The Soviet Union is now China's fifth-largest trading partner, and border trade is expanding with particular rapidity. Total trade grew from $363 million in 1982 to $2.6 billion in 1986, a sevenfold increase. According to one Soviet specialist on China, there are plans for five or six hydroelectric plants along the Amur River. The Soviets are also suggesting Sino-Soviet cooperation in joint ventures in the Soviet Far East, and the Chinese are interested. And the Soviets are helping to refurbish 17 plants that they originally built in China in the 1950s, and are building seven new ones.

Moscow and Beijing are again referring to each other as "comrades," and offering positive assessments of each other's reforms. Indeed, they are rediscovering a common identity as socialist states, now that both are determined to develop a new, non-Stalinist and more pragmatic version of socialism. Party-to-party relations may even be resumed. The Chinese have already reestablished relations with most of the East European communist parties.

In short, the deep freeze in Sino-Soviet relations has ended, and a new stage is beginning.

Both sides have powerful motives to continue this process of normalization. Each believes that its most urgent priority for the next decade or more is to modernize its economy; this requires a peaceful international climate, reduced defense spending and calm along the 4,500-mile Sino-Soviet border. They both hope to increase their flexibility and maneuverability in the great power triangle that includes the United States. By improving relations with Moscow, Beijing also hopes to pressure Moscow's client state, Vietnam, to withdraw from Cambodia quickly and to accept China's (and the West's) preferred solution to the Cambodian problem-a dissolution of the existing pro-Hanoi government of the People's Republic of Kampuchea (P.R.K.) and its replacement by a genuinely neutralist four-party coalition led by Prince Norodom Sihanouk. Most important, now that Gorbachev is withdrawing from Afghanistan and concentrating on improving Russia's stagnant economy, the Chinese see a much reduced Soviet threat for some time to come. Within the next few years it is therefore likely that there will be a border settlement and a substantial mutual withdrawal of Soviet and Chinese forces from the border.

There are also economic considerations. For both Moscow and Beijing, barter trade preserves scarce foreign exchange. And, for China, Soviet technology is more appropriate than Western technology for those enterprises built by the Soviets in the 1950s.

A return to a 1950s-type alliance, however, seems out of the question. Even the development of an intimate and trusting relationship seems highly unlikely. For years to come, China's two major concerns will be security and development, and in each category China has much more to gain from the West than the Soviet Union. In the strategic realm, so long as the Soviet Union has the most powerful army on the Eurasian continent, keeps one-third of its nuclear weapons in the Far East, maintains a huge Pacific fleet off China's coast, and supplies arms to two of China's adversaries, India and Vietnam, the Chinese will want to maintain stable relations with the West in order to balance Soviet power. China's view of the United States as a crucial counterweight to the Soviet Union in Asia is implicit in a variety of Chinese writings and explicit in informal conversation with Americans.

Moreover, there is a continuing wariness in China, as there is in the West, about Gorbachev's motives. In a 1986 book, The Soviet Far East Military Buildup, Chinese analyst Yao Wenbin warned that the new Soviet "peace offensive" in Asia was designed to divide the "anti-hegemonic" forces and to sow discord in U.S. relations with China, Japan and other Asian countries. Even more recently, the Chinese noted that Gorbachev's announced reduction of 500,000 troops worldwide was in part designed to weaken European defense efforts, dampen defense cooperation between the United States and Europe, and strengthen calls for a U.S. troop withdrawal from Europe.

A basic constraint on any Sino-Soviet rapprochement will be the geopolitical rivalry between the two great continental land powers, which is bound to continue. China and Vietnam will also continue to eye each other warily, even after Hanoi withdraws from Cambodia. Hanoi keeps a large portion of its 1.2-million-man army on the Chinese border and there is a continuing territorial dispute over the Spratly Islands in the South China Sea. China will therefore continue to be wary of Vietnam's alliance with Moscow. To balance that combination, China and Thailand are developing a much closer military relationship. The two countries have recently agreed to set up a war reserve stockpile on Thai territory. In Korea, which borders on China's strategic province of Manchuria, the Chinese are concerned-although they do not say so publicly-about growing military ties between Moscow and Pyongyang. In South Asia the Chinese are still worried about the Soviet-Indian connection and continuing Soviet pressure on Pakistan.

In the economic sphere, China's relations with the Pacific market economies are almost certainly going to continue to be much more important than its economic relations with the Soviets. China conducts less than five percent of its trade with the Russians whereas its trade with Japan, the United States and other Pacific countries constitutes more than two-thirds of its booming trade.

In sum, the Chinese, for their own reasons, will not move so close to Moscow as to jeopardize their relations with the West. The power balance in East Asia will not be changed. The probable normalization of Sino-Soviet relations will occur without trust or intimacy, and the West should not fear it. Indeed, such a détente between the two great Asian land powers-if it leads to a Soviet withdrawal from Afghanistan, a Vietnamese withdrawal from Cambodia and a general reduction of tension in Asia-is in the West's interest, particularly as long as both Moscow and Beijing are preoccupied with domestic reform and seek stable relations with all the Western powers.

The main impact of the Sino-Soviet détente will be on Moscow's Asian allies. North Korea and Vietnam will find it more difficult to play China off against Russia. As a result, pressures will grow for North Korea to come to terms with South Korea and for Vietnam to accommodate itself to China and ASEAN. The principal effect on India will be to move it in the direction of better relations with China and the United States. Thus, the Soviet Union's allies in Asia may be forced to reconsider some of their past policies, which could in turn open new opportunities for an astute American policy.

III

For Gorbachev, reaching a modus vivendi with Japan will probably be his greatest single challenge in East Asia. He wants technological assistance from Japan in order to develop Siberia, and he needs Japan's support if the Soviet Union intends to join the dynamic Pacific economy.

Gorbachev has taken a number of small steps to improve relations with Japan. Soviet Foreign Minister Eduard Shevardnadze has resumed regular exchanges with his Japanese counterpart after a lapse of a decade, and Gorbachev has expressed a desire to visit Japan. This would be the first such visit by a Soviet leader in the postwar period. In contrast to earlier Soviet comments that dismissed Japan as a stooge of the United States, Gorbachev has made positive statements about Japan's growing role and importance in global diplomacy. And in contrast to their former rigid and unyielding manner, Soviet diplomats have adopted a new style which the Japanese press refers to as "smile diplomacy." Moscow has appointed a new Japanese-speaking career diplomat, Nikolai Soloviev, as the Soviet ambassador to Japan.

Even on the territorial issue of returning the northern islands, Moscow is displaying new flexibility. While Soviet officials used to say that the issue was closed and there was nothing to discuss, they now concede it is a problem that needs to be resolved. When Shevardnadze visited Japan in December, he signed a communiqué implicitly recognizing the existence of a territorial dispute. As a result, preparations are now under way for a summit between Gorbachev and Prime Minister Noboru Takeshita sometime later this year.

Both Moscow and Tokyo have strong incentives to compromise. For the Soviets, easing relations with Japan is essential to gaining entrance to the Asian Development Bank and the PECC and to achieving access to Japanese technology, objectives which now rank very high on Gorbachev's agenda. For its part, Tokyo will not want to be left out of what may be a worldwide rapprochement with the Soviet Union. Moreover, if European and American businessmen and bankers encourage trade with Moscow, the Japanese private sector will want to do the same.

But even if Gorbachev is able to reach an understanding of sorts with Tokyo, the Soviet Union and Japan will continue to be adversaries. First, the territorial dispute will not be fully resolved. The Soviets are unlikely to return all the disputed islands because they are of considerable strategic importance. The islands straddle the passage between the Sea of Okhotsk and the Pacific Ocean and are extremely valuable for the Soviet navy, which hides many of its missile-firing submarines in the Sea of Okhotsk. Control of the disputed islands allows the Soviets to monitor the entrances and exits to that strategically vital body of water. Without such control, Soviet submarines would have to operate in the open waters of the Pacific, where the American navy would pose a much greater threat. Moreover, the Soviets fear that returning the islands to Japan would set a precedent for other countries from which the Russians took territory during World War II to make their own territorial demands on the U.S.S.R., thus opening a Pandora's box of irredentist aspirations at a time when ethnic tensions are already on the rise inside the Soviet Union. In any case, the Soviets have little incentive to give back any of the islands without obtaining a major concession in return.

A second constraint on Soviet-Japanese relations is Japan's firm alliance with the United States. Despite serious trade problems, both Tokyo and Washington have very powerful economic and strategic incentives to strengthen an alliance that has been the cornerstone of Pacific prosperity and security. Indeed, military cooperation between the two Pacific allies has been growing steadily during the past decade because of their common view of the Soviet Union as a hegemonic threat. Japan has been gradually but perceptibly increasing its contribution to Pacific security. Tokyo has already deployed more modern destroyers than the United Kingdom has in its entire navy; the Japanese also have four times more P-3 aircraft for antisubmarine warfare than the American Seventh Fleet and as many modern aircraft defending their homeland and sea-lanes as the United States uses for its entire continental defense. Japan has also become the largest donor of economic development assistance to such key Asian countries as China, the Philippines and India.

Meanwhile, the Soviets have built up forces in the Sea of Okhotsk and the northern part of the Sea of Japan, and the United States and Japan are making efforts to counter this buildup. Thus, the region around the Japanese archipelago is becoming one of the major theaters of the U.S.-Soviet military rivalry in Asia.

Third, the limitations of the Soviet economy combined with recent structural changes in the Japanese economy make it unlikely that economic relations between the two countries will improve rapidly. In the 1970s Japan was one of the top three capitalist countries in trade with the Soviet Union. But by 1981 Japan had fallen to fifth among the capitalist nations trading with Moscow. Japanese enthusiasm for getting involved in large Siberian development projects has largely evaporated because, since the 1970s, Japan has established a more fuel-efficient production method for its industries and greatly diversified its sources of oil supply. At a time of plentiful oil and relatively low energy prices, the Japanese have lost much of the appetite they once had for exploring Siberian coal and gas reserves. Of some 100 joint ventures the Soviets have signed recently, Japan's share is only a meager five projects-a good indication that Siberia is no longer as alluring for Japanese business.

In any case, there is a legacy of mistrust that is bound to inhibit any substantial warming of relations. The two countries have been at odds for most of this century and have yet to sign a peace treaty ending World War II. They fought four times, the last time in 1945 when the Red Army entered Manchuria in the final weeks of World War II. The Japanese still regard this as a "stab in the back" that violated the Soviet-Japanese treaty of neutrality in 1941. Moreover, the Soviets kept over half a million Japanese prisoners in the Soviet gulag and many of them never returned home. As a result of this history, Japanese public opinion polls regularly show that the Soviet Union is the least liked and most distrusted of all foreign countries.

Within the Japanese elite, and particularly among the professional diplomats who are Soviet specialists, dislike of the Soviet Union is deeply rooted. This stems in part from the crude and condescending behavior that the Russians displayed toward Japan during the Gromyko era. As a result, perhaps more than any other country in the Western alliance, the Japanese are extremely cautious and skeptical about the changes in the Soviet Union under Gorbachev.

IV

In Korea the Soviets are playing a new game designed to have the best of both Koreas. They are increasing their strategic relations with North Korea while demonstrating new flexibility toward South Korea. Since Kim Il Sung's visit to Moscow in 1984, the Soviets have supplied Pyongyang with new military hardware, including SU-25 ground attack aircraft, the most effective of the Soviet Union's attack planes; MiG-29 Fulcrum aircraft, one of the most sophisticated planes in the Soviet arsenal; and SA-5 Gammon surface-to-air missiles along with the advanced Tin Shield early warning radar network, the first time this system has been deployed outside the Soviet Union. All of this contrasts with Moscow's reluctance in the 1970s to supply the volatile North Korean dictator with advanced weapons. For its generosity, Moscow has been able to gain overflight rights over North Korean territory and its Pacific fleet has made calls at North Korean ports. North Korea has also toned down its independent foreign policy and fallen in with Gorbachev's general line.

Meanwhile, Moscow is holding out olive branches to the Republic of Korea. Despite Pyongyang's boycott, the Soviets attended the Olympic Games in Seoul, and in his speech at Krasnoyarsk in September 1988 Gorbachev signaled his intention to expand economic relations with South Korea. Both sides have now agreed to set up trade offices in each other's capital. Recently two influential Soviet orientalists, Georgii Kim and Mikhail Titarenko, visited Seoul and indicated that the Soviet Union was now ready to have regular informal exchanges with the R.O.K. In sum, the Soviets, like the Chinese, are pursuing a de facto "two Koreas" policy.

Seoul has responded favorably to Soviet overtures. For domestic reasons, President Roh Tae Woo wants to adopt a policy more in line with growing South Korean nationalism-a policy of avoiding excessive dependence on the United States. There are also economic motives: President Roh has authorized some of his top business leaders to visit Moscow to scout the possibilities for trade, investment and joint ventures. South Korea also hopes to prod North Korea into negotiation; Roh is adopting a more flexible policy toward the North than any previous South Korean leader has ever dared. He is wisely encouraging the United States and other Western countries to be more flexible toward Pyongyang in an effort to end North Korea's long isolation. And Roh has formally proposed a six-power conference including the Soviet Union to help resolve the Korean issue.

Over the longer run, however, Seoul's enthusiasm for its new Moscow connection may wane once South Korean businessmen discover the realities of doing business in the Soviet Union. South Korea's leading firms are already seeking Japanese co-participation in Siberian joint ventures, but receiving only a lukewarm response. This is bound to cool Korean enthusiasm. Moreover, Seoul may soon discover that Moscow's influence in North Korea is limited. Finally, since South Korea is still highly dependent on the American market and surrounded by communist states, including a volatile North Korea, these economic and geopolitical realities will dictate a continuing interest in a strong alliance with the United States. The best that Seoul can hope for-and it is not negligible-is to overcome its past diplomatic isolation by the major communist powers (it is already engaging in substantial trade with China) and to diversify its export markets.

In Southeast Asia, as in Korea, the Soviets are trying to have it both ways. While increasing military and economic assistance to Vietnam, which has now reached a level of $3 billion a year, Moscow is pressuring Vietnam to withdraw from Cambodia in order to improve relations with China and ASEAN. The Vietnamese have promised to withdraw all their troops from Cambodia by 1990 after withdrawing some 50,000 of them in 1988.

The Soviets are courting ASEAN instead of condemning it as an "imperialistic" bloc, as they once did. Mr. Shevardnadze toured Indonesia and Thailand in 1987, the first such visit by a Soviet foreign minister in 20 years. The prime ministers of Malaysia, Australia and Thailand have all visited Moscow with their foreign ministers, and the presidents of the Philippines and Indonesia are expected to follow suit. Moscow is also seeking to become a "dialogue partner" of ASEAN, along with the United States, Japan and the European Economic Community.

There is at least one basic problem with Moscow's new strategy in Korea and Indochina: the Soviets do not control either North Korea or Vietnam. The North Koreans have maintained a militant and uncompromising posture toward South Korea for the last three decades, while insisting on their own solution to the unification issue. On several occasions they have resorted to terror, most recently when two North Korean agents planted a bomb on a South Korean passenger airliner. The North Koreans have adamantly refused any serious discussions with South Korea about defusing their conflict unless the Americans agree to withdraw from Korea. Moreover, while Moscow and Beijing are reforming their economies and opening up to the outside world, North Korea remains a bastion of Stalinism, xenophobia and ideological fanaticism. Whether all this will change after Kim Il Sung passes from the scene remains to be seen.

Similarly, in the case of the Cambodian conflict, the Vietnamese are free agents. Hanoi sees itself threatened in Cambodia by China and its Khmer Rouge allies. It is unlikely that Vietnam, after withdrawing from Cambodia, will allow its P.R.K. protégé to be replaced by a genuinely neutralist government. That is the most plausible reason for Hanoi's continuing refusal to agree to an international peacekeeping force in Cambodia after it withdraws its troops.

Moscow is therefore limited in the amount of pressure it can put on either Pyongyang or Hanoi. Kim Il Sung, the North Korean dictator, does not trust the Russians, and in Vietnam Moscow does not want to risk eviction from strategically important bases in Cam Ranh Bay. Thus despite Moscow's efforts to gain greater flexibility in Korea and Southeast Asia, the scope for expanding its influence may be limited by the recalcitrance of its allies.

V

Improving its bilateral relations with all the countries of the region is one general Soviet objective in East Asia. Another is to increase Soviet trade with, and involvement in, the dynamic Pacific economy. While most of the Asia-Pacific countries, including China, have become increasingly integrated into the Pacific economy, the Soviet Far East has been isolated from it. An important part of the explanation for this is that previous Soviet leaders, especially Leonid Brezhnev, pursued a "guns over growth" development strategy in Siberia. They invested in military assets instead of exploiting the vast economic resources in the eastern regions of the Soviet Union. And because of their obsession with military secrecy, the Soviet leaders closed off the Soviet Far East to outsiders. Now the Soviets say they intend to open up the area and turn parts of it into special economic zones designed to attract foreign investors, joint ventures and tourists. At a recent weekend conference in Vladivostok, the capital of the Maritime Province which had previously been closed to foreigners, the Soviets said they want to triple their Pacific trade in the next 12 years.

Soviet trade with the Pacific in 1986 amounted to only about six percent of total Soviet trade and of this portion, almost 65 percent was with other socialist countries-China, Vietnam, Mongolia and North Korea. (By contrast, U.S. trade with the region exceeds its trade with Europe and constitutes more than one-third of its total trade.) For most of the market economies in the region, trade with the Soviet Union is both minimal and unbalanced. The Soviets import far more than they export because Soviet exports are simply not competitive either in terms of price or quality. In the past six years Soviet trade with the ASEAN countries has declined by half to less than $500 million, and only about 20 percent of that are Soviet exports. And while China's trade with South Korea was more than $2.5 billion last year, Soviet trade with South Korea reached only $200 million.

The basic obstacle to expanded Soviet trade with East Asia is structural. Due to the very nature of the command economy, Soviet enterprises do not have much incentive to export. They are not in competition with each other or with foreign companies. They have little interaction with foreign customers or foreign competitors. They have an assured domestic market for their goods. And they do not have the "survival motive" so important in the Western market economies, because the state has traditionally made sure that Soviet enterprises do not go under. Even if all of these problems were resolved by a dramatic move toward market reforms, the Soviet enterprises would have to start producing high-quality, reasonably priced manufactured goods that could compete on world markets. This is unlikely to occur any time soon.

Moreover, despite a good deal of rhetoric about a new economic policy in the Soviet Far East, economic realities dictate that Siberian development will be put on the back burner because of its enormously high cost and difficulty. Any large increments of new investment will almost certainly go into the European regions of the U.S.S.R., where the cost of labor and capital is much lower and the infrastructure is more highly developed.

There will also be severe obstacles to attracting substantial numbers of foreign investors to participate in joint ventures in the Soviet Far East. The Soviets will have to make the conditions for doing business and repatriating profits more attractive than they are now. They will need to develop the Far East by investing substantially in roads, railways and ports. They will need to open Vladivostok for more than a weekend conference and change it from a port oriented largely to military purposes to one adapted to commerce. And even if they do all of these things, foreign companies will still have to do business in a Soviet economy that remains notorious for its bureaucratic rigidities, shortages of raw materials and general inefficiency.

Finally, in addition to structural problems, the Soviets lack a business culture. Except for some remnants of entrepreneurship in Armenia and the Baltic states, the Soviet system has produced a nation of bureaucrats who fear taking risks and have little desire to market products aggressively. It could take a generation for the Soviets to change this.

In sum, even if all goes exceptionally well with Gorbachev's economic reform efforts, the Soviets will probably remain a marginal player in the Pacific economy for years and probably decades to come.

VI

Yet another professed Soviet objective in East Asia is regional arms control and force reductions. In his speech at Krasnoyarsk, Gorbachev made a seven-point proposal: to freeze the level of nuclear weapons in the region; to invite all naval powers in the region for consultations on freezing naval forces; to have a multilateral discussion on reducing military confrontation in Northeast Asia; to eliminate U.S. military bases in the Philippines in exchange for Soviet withdrawal from Cam Ranh Bay; to discuss ways to prevent incidents in the open sea and in the airspace above it; to have an international conference for turning the Indian Ocean into a peace zone; and to develop a negotiating mechanism to examine these and other proposals.

So far the dominant reaction in the West to Gorbachev's arms control initiatives has been one of skepticism. Two American officials recently observed that the Soviet proposals were one-sided. Capping naval force levels, they said, would inhibit Japan from making greater contributions to its own defense. Freezing naval and air deployments in the region, they argued, makes more sense for the Soviet Union, a land-based power, than it does for the United States, a naval power which relies on a strategy of forward deployment. As they pointed out, "sea lanes are to America what railroad lines are to the Soviet Union. We cannot imagine the Soviets agreeing to constrict their own vital arteries." If the Soviets really want to eliminate tensions in Asia, American officials argue, they must reverse the recent growth in Soviet land, naval and nuclear forces which threaten Asia. One-third of all Soviet forces are stationed in the Pacific region, with particular concentration along the Sino-Soviet border, the Kamchatka Peninsula and the Sea of Okhotsk.

Some Chinese newspapers were also skeptical about Gorbachev's proposals. They suggested that these ideas were designed to weaken American naval superiority in the region and to preempt a Japanese naval buildup.

The Japanese are even less enthusiastic. They insist that the Soviet Union must adopt a more defensive posture in the Soviet Far East, recognize Japan's legitimate security interest in its alliance with the United States and move toward some settlement of the territorial dispute to show that it is really interested in defusing regional tensions. Japanese officials point out that arms control is not an end in itself but merely a means for achieving stability. In Europe a German settlement preceded the Helsinki conference on European security. In Asia, they argue, the first task is not arms control but an effort to resolve the political disputes.

There is a good deal of merit in all of these objections to Gorbachev's proposals. The basic fact is that the Soviet Union seeks to overcome American naval superiority in the Pacific through naval arms control, just as NATO is now seeking to overcome Soviet superiority in Europe through conventional arms control. But the United States has little incentive to rectify the imbalance in the Pacific, any more than the Soviet Union has a great incentive to rectify it in Europe. Moreover, the United States has a vital interest in maintaining a robust naval presence in the Pacific in order to reassure its allies of its credibility and to help maintain regional stability. So long as the Soviet Union, North Korea and Vietnam retain huge land armies in Asia, the latter two with Soviet support, the United States will be under pressure from its allies in the region to continue to maintain visible naval and air superiority.

Nor will the Japanese or Chinese have any interest in freezing naval deployments, since they both perceive themselves to be at a great disadvantage to the Soviet Union.

An appropriate Western response to Gorbachev's Krasnoyarsk proposals would be to point out precisely why his proposals are one-sided and then go on to suggest some ways of reducing tension in the Pacific that are in everyone's interest. It is to this that I now turn.

VII

Because of several new factors, especially economic development, international relations in East Asia are undergoing a substantial change. First, the region's extraordinary economic growth, which has now been sustained over several decades, is leading to the rise of many new sources of power, including Japan, China and such middle powers as the Republic of Korea. As a result, the old bipolar world is eroding and a new multipolar system is emerging. By the end of the century Japan could have a GNP of $4 trillion, comparable to that of the United States today; China could have a GNP close to $1 trillion; and the R.O.K. could have a GNP of some $400-$500 billion. East Asia already produces close to 20 percent of world GNP, not far behind North America, which now produces 27 percent. By the end of this decade East Asia will probably contribute as much as North America to world GNP. This change in relative economic power does not mean an end to the postwar structure in which the United States has occupied the central role. But it does mean that the United States will have to treat its allies in East Asia as partners rather than clients.

Second, the vigorous expansion of trade, investment and other economic ties within the Pacific region is contributing to a new type of "positive sum" international relations in which all the players benefit from a growing pie, develop a stake in maintaining an open trading system and, in the process, create a set of peaceful and friendly relations among themselves.

The more moderate post-Mao China, which has given up support of revolutionary violence in favor of concentrating on economic development at home, is already being integrated into the Pacific economy and developing an interest in peaceful relations with all the countries of the region. Provided Gorbachev's market reforms go far enough, and the Soviet Union begins to reallocate resources away from the military and toward the civilian sector-as the Chinese have done-the Soviet Far East may also be integrated eventually into the Pacific economy. Looking further into the future, North Korea and Vietnam could also be absorbed.

A third prominent feature of East Asian international relations is that, for the first time in postwar history, a major reduction of tensions among all four major powers in the region is now taking place. There is no "odd man out." The United States and the Soviet Union, after four summits, an accord on intermediate-range missiles and the beginning of a Soviet withdrawal from Afghanistan, are at the foothills of a new détente. Sino-Soviet relations are improving rapidly and Soviet-Japanese relations will probably also improve in the near future.

This positive change in the pattern of relations among the four powers is not occurring at the expense of other relationships. The U.S.-Japanese alliance, despite many problems, remains firm. Both American and Chinese leaders describe their relationship as stable and mutually beneficial. Chinese-Japanese relations are developing a strong economic momentum, particularly now that Japanese Prime Minister Noboru Takeshita has promised Beijing some $6 billion in soft loans and an increase in Japanese investment in China.

To be sure, there are many uncertainties in the rapidly changing strategic situation in East Asia and there will be many barriers on the road toward a more peaceful and stable environment. After 40 years of cold war between the two superpowers, several decades of Sino-Soviet hostility and a century of mistrust between Russia and Japan, suspicions among all the major powers are still strong.

Nevertheless, the prospects for a breakthrough in easing tensions have not been better since the end of World War II. And the opportunities now unfolding-particularly the new Soviet diplomacy in the region-need to be explored.

If the Gorbachev leadership is serious about cooperating with the United States in reducing tensions in the Pacific and in joining the Pacific economy, it must stop pursuing policies that threaten American vital interests. In particular, it needs to engage in some "new thinking" about the role of American alliances. A Japan freed from the American embrace might become more, not less, dangerous to Moscow.

Furthermore, the Soviet Union must also be told to stop making arms control proposals so one-sided that they increase suspicions of its intentions. For example, Gorbachev promotes nuclear-free zones in Korea and Southeast Asia. Such proposals, if implemented, would constrict only U.S. forces.

If the Soviet Union wants to join international economic organizations in Asia, it should first be required to furnish much more data about its own economy than is presently available. It should also indicate what specific contributions it is prepared to make to such organizations. Will it, for example, become a contributor to Asian Development Bank projects? And, once it joins, will it use such organizations to exploit economic frictions between the United States and its allies, or will it seek to play a constructive role in the region?

The Western governments also need to discourage untied bank loans to the East bloc and to decide under what conditions they will grant government-backed loans to the Soviet Union and lift various restrictions on trade. There should be some effort to link these loans to Western political objectives-progress in arms control, ameliorating regional conflicts, improving the human rights situation in the Soviet Union and cutting back Soviet arms sales abroad.

On the security front, there should be few if any reductions in the American conventional or nuclear presence in Asia and no change in the strategy of forward deployment that the United States has successfully pursued for more than 40 years. There should, however, be a five-part agenda for creating a more peaceful situation: reducing regional tensions; engaging in reciprocal unilateral restraint; holding a dialogue on naval doctrine at the highest levels; exchanging data on defense budgets and force projections; and establishing an effective crisis-management regime.

First, reducing regional tensions should be given the highest priority because it is the one issue on which the major powers have a strong common interest. In Korea, all four of the major powers want to avoid a new Korean war, to help bring about a détente between North and South Korea, to open up Pyongyang to the global community and to improve their own relations with the two Koreas. Now that Moscow and Beijing are both improving their relations with South Korea, the United States and Japan, with Seoul's approval, can try to improve their relations with Pyongyang. The immediate objective of all four powers should be to get the two Koreas into a new dialogue which eventually leads to a substantial drawdown of forces along the 38th parallel, family reunification, the beginning of trade, and a variety of contacts between Seoul and Pyongyang. Ultimately, both Koreas should sign a peace treaty and enter the United Nations.

In Cambodia, all four powers should press the Vietnamese to withdraw soon and to allow the formation of a four-party coalition under Prince Sihanouk. The transition to the new government should take place under international supervision. Steps must also be taken to prevent the Khmer Rouge from returning to power alone after the Vietnamese leave.

Second, the two superpowers could begin to take unilateral steps to reduce their military confrontation in the Pacific. Gorbachev told the U.N. that the Soviet Union would begin to make substantial unilateral reductions of troops stationed along the Sino-Soviet border. Naval and air power directed against Japan and the United States should also be reduced. Washington, in turn, might cut back on military exercises.

Third, high-ranking Soviet and American naval officials should enter into regular exchanges to discuss their respective naval doctrines and future force projections in the Pacific. Such a dialogue in itself would be a major confidence-building measure. The American navy ought to be prepared to discuss its "maritime strategy," and the Soviet admirals should discuss their own "ocean bastion" strategy while making available data about their own forces and force projections in the Pacific. At present, all data on Soviet forces come from Western sources.

Fourth, the superpowers ought to exchange data on their respective defense budgets and plans. Soviet officials say they themselves do not know how much the Soviet Union is spending on defense and that they will be able to make such information available only after they have made price reforms scheduled for the early 1990s. But many knowledgeable Americans are skeptical of such contentions. At the very least, the Soviet military could furnish data on conscripts, military manpower, numbers of divisions and their readiness, numbers of airplanes and combat ships planned in coming years, and so forth.

Fifth, the incidents-at-sea talks, which have been going on for more than a decade-and which have been among the most successful of the various Soviet-American dialogues-could be expanded in an effort to institute a better system for crisis management in the Northwest Pacific.

The new American administration, while remaining cautious about Soviet intentions, needs to respond constructively and not defensively to Gorbachev's offers to lower tension. A measured response, as sketched above, would be appropriate.

There are two basic advantages to be derived from such an approach. First, in terms of public diplomacy, we should not allow Gorbachev to pose as the peacemaker in Asia and the United States to appear rigid and unimaginative. It should be made clear how and why the Pacific became such a source of tension in the first place. From Stalin's occupation of Japan's northern territories in 1945 and the unleashing of North Korea against South Korea in 1950 to Brezhnev's aggressive policies in the 1970s, culminating in the Soviet invasion of Afghanistan, it has been the Soviet Union that has been largely responsible for the existing cold war in Asia. Moreover, we should also make clear that the Soviet Union and its Asian allies are presiding over failed, overmilitarized and isolated economies due to policies of their own choosing while the liberal trading system we brought into being has led to an unparalleled burst of economic growth among our allies in East Asia.

Second, we need to test Gorbachev to find out whether his peace proposals are simply one-sided and self-serving or whether he is ready to address the legitimate security interests of the United States and its allies in the region. In Europe, the West has correctly made conventional and asymmetrical force reductions the key test of Soviet intentions. We need a similar test in Asia, one that focuses on ending the regional conflicts on terms that are satisfactory to the Western coalition.