The situation in the Asia-Pacific is precarious. Japan and China are neither willing to back down from a peaking military build-up nor a worsening diplomatic standoff. Though going to war might seem unlikely, China is apprehensive about a reinforced alliance between Japan and the US.

What kind of impact will the Japan-US alliance and the shift in US focus toward regional geopolitics in the Asia-Pacific have on Beijing’s bilateral strategy vis-à-vis Tokyo? Is there room for China to compromise on the Diaoyu/Senkaku Islands dispute in the East China Sea?

Downward Spiral of the China-Japan-US 'Triangle'
Similar to South Korea and Taiwan, the US is treaty-bound (1960) to assist Japan in defending its territory if a hostile third party attacks. While this dramatically enlarges the scope of Sino-Japanese conflict over the Diaoyu/Senkaku Islands, it is also visibly, the most significant impediment to a Chinese first attempt at taking over the islands by force. Nonetheless, both China and the US have not made much about these possible eventualities and both have been inclined to manage rather than escalate the situation.

However, there has been a fresh spike in Japan’s recent rhetoric on sovereignty over the islands and in anti-Japan protests in China. Assured support and retaliatory response by the US grants Japan a great degree of impunity and space to delay unfavourable outcomes through prolonged stand-offs. It emboldens the hard-line in Japanese foreign policy and projects a willingness to risk war at a time of internal political fragility and economic slowdown. The perceived benefits of the alliance in terms of external balancing take the edge off the costs of escalation for Japan.

But, the uncertainty of whether the US will ultimately and unequivocally side with Japan against China, drives Tokyo to pursue hedging. Japan’s deliberate shift towards an assertive foreign policy and active defence measures is to satisfy the alliance’s dilemma. 

These dynamics sharpen and bring into contrast China’s image of a rising and dissatisfied power seeking immediate revision of rights and claims with little regard to the dividends of regional peace and stability. Arguably, the Japan-US alliance has precluded a negotiated settlement of the dispute between China and Japan. It has reduced the chances of furthering a diplomatic understanding between the actors toward non-aggression at the minimum.

The Liabilities of 'Rebalancing' 
To some, the US’s geostrategic rebalancing in favour of its stakes in the western Pacific will seem much too delayed, if not altogether headed into a potential minefield. Its role as the offshore balancer and keeper of regional peace is expected to transform into that of an urgent power-player, one that is much more conscious of self-interest and active in its pursuit.

The US’s allies in the region now sense the opportunity to redirect the energy, which comes with the apparent pivot, into consolidating territorial claims that have failed to take off against China. Understandably, the maximum that this can hope to achieve is to safely stave off punishing military responses from Beijing. China itself does not have a pressing need to antagonise the US at a time when it is far from clear if the rebalancing would seriously hinder China’s external engines of growth and influence.

Japan, however, is in physical possession of the territory it claims and is considering a military ‘rejuvenation’ of its own. Its extensive bilateral engagements with the US constantly reinforce the latter’s alliance commitments and sustain a strong pro-Japan constituency in Washington DC. A greater tilt toward the Pacific in US foreign policy signifies even greater emphasis on Japan, its most reliable ally and partner in East Asia. Conversely, Japan may count upon an unstable political situation that endangers the US assets to force the latter’s hand. This appears to be an imminent threat to regional stability, something China places a high premium on.

Can the Alliance 'Contain' Forever? 
China would perceive these tilts in the balance of power politics as a resurgence of the Cold War containment strategy which the US successfully employed against the Soviet Union. No one in China’s neighbourhood is placing any bets on its ‘peaceful rise’ and therefore, all existing alliances are expected to flex more muscle as their biggest guarantor, the US, pivots. To make matters worse, China sees the US as unreliably neutral on the issue of the islands and unwilling to persuade Japan into exercising self-restraint. There is little certainty of how much Beijing will be able to gain, in case armed conflict breaks out, before the US intervenes. On the other hand, China can negotiate, commit, or even concede in principle but to give up on the claims so well entrenched in nationalist rhetoric would be none too probable.

Japan’s present dispensation compounded by the domestic impression and international projection of US’s rebalancing makes it difficult for China to backtrack from the spiral of escalation. Beijing increasing its naval and air activity in the neighbouring seas is a sure sign of pre-empting containment manoeuvres in the near future. But, breaking the deadlock and reverting back to status quo are outcomes precariously moored on how far the Japan-US alliance ultimately pushes China to the brink.