The year 2005 is likely to be remembered as the year when rivalry between Japan and China over how to create a new international order reached a high point.

Japan's bid to become a permanent member of the U.N. Security Council failed in the face of China's persistent moves to rally Asian and African countries against that attempt.

The two Asian giants, aiming to take the leadership position in an East Asian community, conducted an aggressive diplomatic campaign last December to win over the 10-member Association of Southeast Asian Nations. The campaign caused concerns over regional cooperation within ASEAN, which would form the core of the community.

Lurking in the background were two underlying factors: Strong opposition by China and South Korea to Prime Minister Junichiro Koizumi's annual visits to Yasukuni Shrine, and the rise of nationalism in the two countries sparked by the issue of Japan's wartime history.

The Japanese government posits the Japan-U.S. alliance and international cooperation as the two pillars of its foreign policy. The Foreign Ministry's annual diplomatic report (the Blue Book) says that Japan "has made consistent diplomatic efforts to create an international order desirable for Japan." But things are not developing in a "desirable" direction for Japan. In order to put the policy of international cooperation on track, the government faces a compelling need to re-examine its diplomatic strategy.

A major challenge for East Asia is to deepen and expand regional cooperation. In fact, the region has achieved dramatic results in terms of economic development as well as the deepening of economic interdependence. In the past decade, trade between Japan and China has increased fourfold, while that between China and ASEAN has multiplied six times.

Regional trade involving ASEAN, the three countries of Japan, China and South Korea, and the two areas of Hong Kong and Taiwan expanded 53 percent in 2003. Although the figure was lower than 60 percent for the European Union, it exceeded 44 percent for the North American Free Trade Agreement region.

Cooperation in East Asia has gained momentum as regional trade grows, making it likely that dynamic economic development in the region will continue. However, East Asia appears a long way off from an EU-type community where member states cede some sovereignty.

The first difficulty lies in the ethnic, religious and cultural diversity of Asian nations. Wide disparities also exist in economic development, as evidenced by differences in gross domestic product and gaps between the rich and the poor.

The second difficulty is that it may take an unpredictably long time before member states can share universal values that are essential to political unification, such as liberalism, democratic systems that make multiparty politics possible, basic human rights, and governance based on the rule of law.

East Asia includes countries like China, which maintains a communist party dictatorship, and Myanmar, which continues to suppress human rights under a military government. At present, there are no conditions in the region that help it to become a community like the EU.

Therefore, a realistic approach for East Asia would be to make step by step efforts to promote functional cooperation with the focus on economic relations in areas such as trade, investment and finance.

The Japanese government has called for the creation of a 16-member East Asian community comprising ASEAN-Plus-Three (Japan, China and South Korea) as well as India, Australia and New Zealand. This is partly because the United States has expressed concern that ASEAN-Plus-Three would become an "exclusive regional organization," and partly because Japan believes that the ASEAN-Plus-Three framework proposed by China would strengthen Chinese influence in East Asia.

The Japan-China rivalry for regional leadership played out in Malaysia in December. The Kuala Lumpur Declaration on the ASEAN Plus Three Summit stated that "the ASEAN Plus Three process will continue to be the main vehicle" in building an East Asian community. Moreover, the summit agreed to issue a new joint statement on East Asian cooperation in 2007, the 10th anniversary of the founding of ASEAN Plus Three.

On the other hand, the Kuala Lumpur Declaration on the East Asia Summit, which was attended by leaders of 16 countries, stated only that the summit "could play a significant role" in building a community in this region. The statement also said, reflecting a Japanese position, that "the East Asia Summit will be an open, inclusive, transparent and outward-looking forum."

At these two summits, ASEAN -- the "driving force" to establish an East Asian community -- wavered over the very concept of the community.

Chinese leaders, trying to win sympathy in East Asia, said that "Japan is hurting the feelings of Asians." Leaders of Malaysia, the Philippines and Singapore expressed concern that the Japan-China dispute had been brought into this region. Former Malaysian Prime Minister Mahathir Mohamad is said to have told Japanese reporters that he had asked Koizumi to stop visiting Yasukuni Shrine because his homage to the war memorial was standing in the way of regional collaboration.

Indeed, the history issue exists widely in Asia, not just in China and South Korea. Japanese military incursions around 1942 covered the entire area of what is now ASEAN.

Diplomacy requires partnership. It is impossible to establish a relationship of mutual trust when one nation views another as "dogmatic." "Self-righteousness" leads to international isolation. This can be true for any nation, including China.

According to an opinion poll by the Cabinet Office, the Japanese feeling toward China last year reached the lowest level ever. As long as Japan-China relations remain as they are, an East Asian community will likely end up as a dream.

With the rise of China and India, the power balance in Asia faces a turning point. The basic task for Japan is to translate into action the spirit of international cooperation, which is a guiding principle of Japanese foreign policy. To that end, the nation should play a more positive role in shaping a new international order.