AS 2013 draws to a close, relations between Asia's strongest powers are more difficult, and pose bigger dangers to the rest of Asia, than at any time in the past 40 years. The key question for 2014 is whether, and if so how, those difficulties and dangers can be reduced, or whether they will intensify still further. This may well be the most important issue for the whole region in the year ahead.
Tensions in North-east Asia around the disputed Senkaku/ Diaoyu islands have steadily mounted all year but they took an alarming lurch upwards in the last few weeks. China added a new military edge to its claim over the islands when it declared an air defence identification zone (ADIZ) requiring other powers, including Japan and the United States, to submit to Chinese authority in a large slice of airspace covering much of the East China Sea.
Japan has responded very robustly to China's moves. It has denounced the ADIZ and announced new defence and national security plans that expand Tokyo's military capabilities and seem to presage a drift towards greater nationalism.
The US, meanwhile, has been sending mixed messages. After much tough talk a year or two ago, domestic distractions have raised questions about the durability of President Barack Obama's "rebalancing" to Asia. Strong initial responses to China's ADIZ declaration were followed by softer messages during Vice-President Joe Biden's early December tour of the region.
So it is an explosive mix, with an assertive China, an uncertain US and an anxious Japan. How will it all play out in the coming year? A clearer idea can be obtained by looking more deeply at the perspectives of the three key players.
LET'S start in Beijing. For China's leaders, the Senkaku-Diaoyu dispute is not really about these uninhabited islands, or even about the resources that may lie in the waters around them. It would make no sense for Beijing - nor indeed for Tokyo - to risk a military clash with a vital trading partner for such a meagre prize.
Rather, the dispute is really about what kind of relationship they will have in future, as China grows steadily more powerful than Japan, and approaches more closely the power of the US.
China today seeks a bigger leadership role in Asia. It wants to put an end to what it sees as the era of victimhood and grievance that it suffered for over a century, during which Western and Japanese power dominated Asia. It seeks, as President Xi Jinping so often says, to replace this painful era with a "new model" of great power relations.
Redefining power relationships
THAT means redefining its relations with both Japan and the US, which in turn means challenging the whole strategic status quo in Asia. So, China's actions in the East China Sea are not aimed at simply forcing Japan to concede the ownership of disputed islands. China is using the dispute quite deliberately to put pressure on Asia's long-established US-led order.
Here is how that works. Chinese moves like the ADIZ clearly aim to raise fears in Tokyo of a military clash if it does not give way over the disputed islands. Under the alliance with the US, Tokyo must rely heavily on US forces if such a clash occurs, so its confidence in standing up to Beijing's implied threat depends on its confidence in US promises of military support.
China's ADIZ, therefore, poses a test for the US' willingness to support Japan militarily. If the US fails that test, the whole US-Japan alliance would be fatally weakened. And that would weaken the US' entire strategic position in Asia, because the US-Japan alliance is the foundation of that position. That in turn would strike a big blow to the regional order which the US leads.
Beijing clearly understands and intends all this. Moreover, the bold policy implies that China expects the US to back off from supporting Japan. So far, this gamble appears to have paid off. The first US responses to China's ADIZ - including high-profile B-52 flights through the zone - were quite tough. But the tone softened markedly during Vice-President Biden's visit to the region in early December. The US now seems to accept the ADIZ as a fait accompli.
Since that is a definite win for China, we can expect more of the same next year. Beijing will continue to step up the pressure on Japan, and perhaps also on the US' other allies in Asia.
The US response
SO WHAT is going on in Washington? If China becomes even more assertive in the coming year, how will the US respond? That depends on how it sees China's aims. Perhaps the strangest element of the strategic turmoil in North-east Asia is that Washington still doesn't take China's challenge very seriously.
In dozens of conversations with senior US officials this year, I have a found a remarkably broad consensus that China remains too weak, too internally preoccupied, and too reliant on the stability that the US leadership provides to really challenge the US in Asia. They see assertive Chinese actions like the ADIZ declaration as mostly shadow play, aimed at placating rising nationalism at home rather than challenging US power in Asia.
These officials are mistaken. China's ambitions are perfectly serious, and it is already powerful enough to pose by far the biggest challenge to US power since at least the end of the Cold War. Washington is simply in denial. Perhaps that is because the reality of Chinese power and ambition seems to demand a deeply troubling choice between stepping back and surrendering Asia to Beijing or stepping up to confront China in a new Cold War.
The US may well face that choice in 2014, as more actions like the ADIZ declaration make the seriousness of China's challenge inescapably clear. If so, which path will it take?
The same Americans who believe that China is not really challenging the US in Asia also assume that if it ever did, Washington would be sure to fight back rather than walk away. They may be right. Quite apart from more tangible issues, deep questions of national pride and identity would drive the Americans towards confrontation. China would be unwise to underestimate them.
But sober reflection would urge caution. The costs and risks to the US of escalating rivalry with China would be very high.
AND that brings us to Tokyo. Will 2014 be the year Japan remerges as a "normal" military power? Many people blame Japan's tough position on the Senkakus and its increasingly strident defence pronouncements on Prime Minister Shinzo Abe's ultra-nationalist tendencies. That would be a big mistake.
They reflect real and very serious challenges to Japan's whole post-war strategic posture. It is fear of China, not nostalgia for the old empire, that drives Japan's new focus on defence.
Tokyo worries that China, as its power grows, will increasingly treat Japan as a subordinate power, subject to Beijing's whims. Currently, Japan relies on the US to stop this from happening. But the stronger China becomes, the higher the costs and risks to the US of siding with Japan against China, and so the less Japan can rely on the US to fulfil its part of the deal.
That is exactly what is happening over the Senkakus right now. If tensions there do not ease in the coming year, Tokyo may well feel that it has no choice but do more to look after itself. But that doesn't make it any less destabilising for its neighbours.
These are the ingredients which make the year ahead so risky. But a deepening crisis is not inevitable. The year 2014 could be when we lay the foundations for a new era of peace and stability in Asia by creating a new basis for relations among Asia's great powers. That would not be easy.
The US would have to start taking China's ambitions for a bigger role in the region seriously, and accept the need to meet China halfway. China would have to understand that asserting its ambitions too forcefully risks escalating a rivalry which it cannot win. Everyone would have to accept that Japan's security can no longer be guaranteed by the arrangements made in the shadow of defeat nearly 70 years ago.
There is no doubt that a new order in Asia could be built on this basis. But equally there is no doubt that it will require real statesmanship from leaders throughout Asia to make that happen. And there is also no doubt that if that doesn't happen in 2014, Asia's future will look even darker a year from now than it does today.
The writer is professor of strategic studies at the Australian National University's Strategic and Defence Studies Centre. His book, The China Choice: Why We Should Share Power, was published this year by Oxford University Press.