By Kang Hyun-kyung
Tokyo strives to retaliate against Seoul regarding President Lee Myung-bak’s trip to Dokdo and his subsequent demands for King Akihito to apologize in the same manner that it was forced to back down by China in 2010.
Back then China halted exports of rare earth minerals days before Japan released Zhang Quxiong, captain of a Chinese trawler in the wake of a boat collision incident near disputed islands in the East China Sea.
Now Japan seeks a financial instrument, which is not directly related to the Dokdo issue, to hurt the Korean economy. On Friday, Japanese Finance Minister Jun Azumi confirmed media reports that Japan is rethinking the currency swap arrangement the two sides had agreed to increase to $70 billion from $13 billion last year.
This stirred up controversy as the Japanese government strove to flex its financial muscles in the diplomatic dispute.
Governments have relied on financial sanctions to counter “rogue states” such as North Korea when it tossed common threats such as nuclear bombs in violation of international regulations. Their sanctions target individuals or firms that are directly related to proliferation.
Tensions, which erupt between governments in normal relations such as Korea and Japan, are supposed to be resolved through diplomatic efforts.
Japan has also drawn criticism as it is resorting to the same, inappropriate tactics that China applied in 2010 to put pressure on Japan to release the Chinese crew members.
Zhang was detained after a clash with Japanese Coast Guard ships near the disputed islands known as Senkaku in Japanese and Daioyu in Chinese in the East China Sea.
Initially, Japan was going to take the Chinese captain to trial in accordance with its domestic law as the maritime clash occurred in territory controlled by its government.
But it was forced to release him as Japanese commerce and tourism suffered and some cautiously predicted a possible armed clash in the East China Sea if Japan brought the Chinese crew to justice.
Among several measures, China’s suspension of exports of rare earth minerals that are used in high-tech products such as mobile phones and televisions panicked Japanese traders.
Beijing denied media reports that it was behind the suspension of exports of rare earth minerals. But unnamed Japanese traders were quoted as saying that they heard that the Chinese government ordered the measure.
The nickname “an assertive China” was earned, as the rising power was viewed as a nation that would do anything necessary to fulfill its interests.
Japan’s reaction to Lee’s Dokdo visit and following his toughened stance on the former colonizer is no different from what China did to Japan.
Japan seeks to retaliate by announcing the plan to rethink the currency swap deal aimed at protecting the relatively vulnerable Korean won from outside economic shocks.
To some degree, Japan’s motives can be regarded as worse than those of China when it handled the territory dispute with Japan two years ago.
China’s suspension of rare earth minerals two years ago targeted the high-tech industry of Japan, whereas what Japan is attempting to do is to affect the entire Korean economy.
Officials here have downplayed the possible impact of Japan’s move, saying the Korean economy faces no significant problems without the currency swap with Japan. They say Seoul’s foreign currency reserves are sufficient to protect the local market from external shocks and it also can rely on a currency swap dubbed the Chiang Mai Initiative it signed with ASEAN nations last year.