The long-simmering rivalry between Japan and China, triggered by Japan’s purchase of several Senkaku Islands, is a gathering typhoon that threatens the entire region.
The US must take decisive steps to mediate this dispute, or it will paralyse trade in Asia, and by extension, global commerce. As a trade-dependent state, Washington has a major stake in keeping Asia’s maritime trade routes open.
To successfully resolve the dispute, it is essential that the US insist on multilateral mediation. American leadership in diplomacy would demonstrate its commitment to the region’s peaceful development and burnish the US’ position as a leader in Asia.
The purchase of the Senkaku Islands, which the Chinese call the Diaoyu Islands, has sparked the most venomous anti-Japanese protests in China since the two nations normalised diplomatic relations in 1972. Japanese businesses throughout China have been vandalised and looted, prompting Panasonic, Toyota and others to suspend operations in China.
Both nations selectively use regional history and international law to justify their claims on the islands. The nation in possession of the island chain would have bolstered fishing access and exclusive rights to the expansive undersea resources, including large mineral, natural gas and bountiful oil deposits, purportedly matching Iraq’s total reserves.
There are also strategic considerations. Both nations wish to expand the operational reach of their naval and air forces. Defence planners see the barren rocks as potential hubs for runways, docks, and repair and fueling stations.
Leaders on both sides see the islands as a litmus test for national resolve and prestige. Nationalist sentiments are widespread and the belligerence of any one of the numerous naval commanders patrolling both sides could spark a conflagration at sea.
Since the end of World War II the US-led security framework in East Asia, largely enforced by the American Navy, has assured open sea lanes, enabling robust economic growth in the region through unprecedented trade.
As US Secretary of Defence Leon Panetta has said, mediation is essential to peaceful resolution. The US should renew its offer to serve as a third-party multilateral mediator for all of the two dozen East Asian maritime territorial disputes. Multilateral mediation, in addition to promoting regional transparency, reduces the opportunity for one nation to intimidate or coerce another. It would also mitigate the regional insecurity that is fuelling the contemporary naval arms race.
To signal its continued resolve, the US should honour its treaty alliance with Japan through increased vessel patrols, joint military trainings and continued technology sharing. Along with South Korea, Taiwan and Australia, Japan forms the bedrock of America’s East Asian alliance. America’s continued union with Japan influences US relations with important nations throughout the region.
India aims to thwart Chinese influence in South Asia, while the Philippines, Vietnam and Indonesia all seek to avoid Chinese dominion. The latter have hedged their bets with overtures to China rather than entrusting security to promises of American protection.
The US can stem the tide of this typhoon while advancing its commitment to open sea lanes and multilateral mediation, building momentum for a rebalancing of power in Asia that is essential for 21st century American leadership.
*Greg Nance  did an MPhil in Management and is a Shanghai-based entrepreneur. He can be reached at email@example.com. Photo credit: Creative Commons and Jacques de Goldfiem. This is an edited version of Greg’s blog for the Seattle Times.