China’s increasingly assertive diplomatic and security postures present a much tougher challenge than its economic rise, requiring closer cooperation between the United States and its allies such as Japan to manage the situation, scholars from American think tanks said at a recent symposium in Tokyo.

Meanwhile, recent upheavals that have swept countries in the Middle East and North Africa make it more difficult for the U.S. to seek political stability in the region to protect its key interests there, including energy security that is also vital to Japan, they said.

The experts from U.S. think tanks were speaking at the Jan. 28 symposium organized by the Keizai Koho Center under the theme “Japan’s security, economic situation and foreign affairs.” Tsuneo Watanabe, director and senior fellow of the Tokyo Foundation, served as moderator of discussions.

Drew Thompson, senior fellow and director of China studies at the Nixon Center in Washington, said that despite the ups-and-downs, including recent tensions over the relocation of the U.S. Marines’ Futenma air base in Okinawa, bilateral relations between Japan and the United States remain “fundamentally sound.”

But in today’s international relations, it is increasingly difficult to think simply of bilateral relations. “Economic and security interdependencies in the region mean that the U.S. cannot craft a strategy toward a single country without considering the impact it will have on the others,” he noted.

And nowhere do opportunities and challenges for the U.S. and Japan in the region coincide more dramatically than in China, Thompson said.

“We cannot underestimate China’s economic influence and its importance,” he said.

China’s economic rise also poses challenges. Access to cheap capital, rising costs in the domestic market and growing competitiveness is driving Chinese companies abroad, intensifying competition in third-country markets with Japanese and U.S. firms, “but as long as China continues to embrace international norms, competes relatively fairly, I think China’s economic rise is manageable and should be welcomed,” he said.

On the other hand, China’s diplomatic and security policies — particularly over the past year — “caused considerably more unease than its economic rise, and is thus far proving more difficult to manage,” Thompson said. “The conduct of China’s foreign policy has changed perceptively since the onset of the 2008 global financial crisis. China has been increasingly assertive, bullied its neighbors and even made veiled threats against the U.S. presence in the region,” he said.

China’s military modernization is proceeding at a rapid pace “despite the lack of credible external threats and improving cross-straits relations,” Thompson said. The high-profile test flight of China’s stealth fighter jet in January — on the very day U.S. Secretary of Defense Robert Gates was meeting President Hu Jintao in Beijing on a fence-mending visit — “sent a very confusing message and was interpreted by some as a direct challenge to the U.S.,” he added.

Likely causes of such a dramatic shift in China’s postures include “heightened inter-personal political competition in the runup to the 18th Party Congress at the end of next year, lobbying by the military for continued budget increases and a greater say in decision making,” he said.

He also cited “overconfidence incited by censored media, which trumpets Chinese successes and other nations’ shortcomings.” China’s successful hosting of the Olympics, the World Expo, their quick recovery from the global economic crises and sustained rapid growth “contributes to a sense of triumphalism, national pride and positive public opinion that bolsters the legitimacy of the Communist Party,” he said.

At the same time, the rising sense of national confidence and its importance to the government’s legitimacy “create foreign policy challenges for Beijing,” Thompson said. The situation creates “a feedback route for government decisions to increasingly cater to public opinion” shaped by censorship that “excludes moderating perspectives from being freely voiced,” he said. “This often limits the government’s ability to compromise for fear of accusation by the public that their national interests are not being protected by the leadership.”

Thompson added, “Japan knows well how quickly minor disputes can escalate and affect the overall relationship.”

China’s use of economic pressure to gain leverage over Japan during the Senkaku dispute last year — by withholding exports of rare earth minerals — raised concerns about China’s intent but is also “indicative of the intense pressure that the leaders in Beijing are under to ensure that it’s not seen by its own citizens as being weak toward foreign power,” he noted.

The current environment, Thompson said, calls for the strengthening of U.S. alliances in the region, in particular the alliance with Japan. It also requires Japan to solidify its relations with South Korea, he said, noting that Japan “has a vested interest in the strong U.S.-South Korea alliance and continued stationing of forces in the Korean Peninsula.”

The U.S., for its part, “should reassure Japan and South Korea that its commitments to the alliances are unwavering and that (the) improving U.S.-China relationship does not undermine or detract from other U.S. bilateral relationships in the region,” he said. “China has made it clear that it is not seeking to be either No. 1 or No. 2 in a ‘G-2.’ The Obama administration’s offers to give China a right-size seat at the international table has met with suspicion in Beijing and ultimately rejected.”

Michael Auslin, resident scholar of Asian studies at the American Enterprise Institute for Public Policy Research in Washington, also pointed to what he described as rising signs of political competition in the region, including China’s territorial disputes with its neighbors, as posing the most troublesome threat to stability and sustained economic growth in the region.

China’s military modernization and its new assertive foreign policy challenges the Indo-Pacific region’s post-World War II security model based on U.S. alliances in the “hub-and-spoke relationship” with Asian countries, Auslin said.

While the military buildup will enable Beijing to shift the focus of its security strategy from denying U.S. naval and air forces access to the region to maritime projection of its own power, China is trying to build strategic ties with several countries to expand its regional presence in what is often called the “string of pearls” strategy, he said. Concern over these developments have prompted some countries, including India, Indonesia and Vietnam, to beef up their own defense capabilities, which in turn could lead to destabilizing the region’s security base, he added.

These developments and the possibility of future instability threaten to pose more challenges for U.S. and Japanese diplomatic and security interests in the region, Auslin said. The roles of the U.S. Navy and Air Force as regional stabilizers will increase, as does the importance of the Japan-U.S. alliance to maintain order in the Indo-Pacific region, he said.

Meanwhile, Michele Dunne, a senior associate at the Carnegie Endowment for International Peace in Washington, discussed the challenges posed by internal upheavals that shook up several Middle East countries and led to the collapse of long-ruling regimes in Tunisia and Egypt.

Dunne said the upheavals multiply what she called inherent conflicts among Washington’s multiple interests in the region. Securing access to oil for the global market and fighting terrorism require cultivating good relations with Arab countries, which does not necessarily fit well with the U.S. interest in ensuring the security of Israel, she said.

Japan’s core interests in the region are simpler — securing access to oil given its greater dependency than the U.S. on oil supplies from the Middle East, Dunne noted. But for the U.S., there are subsidiary interests linked to its core interests and promoting political stability in the region to protect its other interests there “is increasingly difficult” given the “very serious threats to internal security” in a number of Arab countries, she said.

One of the common features among Arab countries experiencing domestic upheavals, Dunne said, is the bulge in the population of youths and the related problem of youth unemployment and underemployment.

But the protests surging in those countries are not just economic but political, she said. Those nations have had “stagnation in leadership — leaders who refuse to move on. What we’re seeing is youth-led protests in these countries and young people now are making the connections between the fact that they don’t have jobs and the fact that they have political leadership that they believe has not served their interests,” she said.

“There is a growing gap in this region between governments and citizens. It’s very challenging for us as outsiders to manage. It’s increasingly difficult for outsiders to be a friend of both the government and the citizens in these countries,” Dunne said.

For the U.S. and Japan, as outsiders to the region, “we can’t impose our values, we can’t impose our agenda for reform or change on the people or the governments of the Middle East,” she said.

“We have to have relations with the governments in this region to get our business done,” she said. At the same time, “if we are too great a realist and fail to support these rising demands for democracy and greater freedom in this region, then we will eventually suffer real losses to our interest.”