Under the waterline between China and Japan

He stresses Japan is not taking sides in the territorial disputes in the South China Sea. However, he argues Japan and other nations are stakeholders given the broader principles of maritime law and the sea's importance for trade - a crucial issue for Australia.

"Whether or not we can maintain rules-based order there, freedom of navigation, freedom of over flight there, is an issue of serious concern for Japan,” he says.

“Japan insists on solving this issue based on international law through negotiation or some international legal mechanisms like arbitration."

Takagi closely follows the day to day maritime jockeying but also ponders what will happen later in 2017 when China is expected to choose a new line-up for the seven-member Politburo Standing Committee, the Chinese Communist Party's top leadership group.

If past practice is followed, five members of the Standing Committee will retire, while President Xi Jinping and Premier Li Keqiang will remain.

Takagi detects rumblings about possible broader changes, which will be crucial to Australia and the emerging global power play between China and the US.

Interviewed before a speech to the Australian Institute of International Affairs in Melbourne, Takagi says the retirement of Chinese leaders of the Politburo Standing Committee at age 67 was customary rather than compulsory.

"It's so uncertain at this point … I don’t feel like predicting anything," Takagi told BlueNotes.

"There are voices coming from China saying that it is not a written rule, which means some people are really thinking of putting it aside."

Takagi says there is even "wild speculation" China might abolish the Standing committee, centralising power in the hands of President Xi.

"Of course this is not simply because of his own power ambitions,” he says. “I think there is thinking among those who surround him that kind of system would be more effective. Chinese strategic intellectuals, they think very highly of Putin."

"They envy Putin's success in concentrating power in his hands. So I think they are thinking of replicating that in the Chinese context. But of course there is a lot of opposition."

As things stand, China has established military bases in the west of the South China Sea (in the Spratly Islands) and in the south (the Paracel Islands).

It has announced plans to build "monitoring stations" in Scarborough Shoal off the Philippines but the US and Japan expect something bigger over time, possibly a deep-water port and airstrip.

Takagi says building up Scarborough Shoal as a military installation would give China a strategic "triangle" in the South China Sea which could include establishing an air defence identification zone.

"China would be in a very superior position then,” he says. “It basically takes the commanding heights in the western Pacific."

UNDERLYING DETAIL

While the more-colourful commentary from the US President Donald Trump attracts much attention, Takagi says the underlying detail can often be different.

For example, the joint declaration from the first official meeting between Abe and Trump in February states the US would defend an attack on the Senkaku Islands, controlled by Japan and are located due east of mainland China.

Takagi says former US secretary of State Hillary Clinton made a verbal commitment to defend the Senkaku Islands in 2011, which was repeated when President Barack Obama visited Tokyo in 2014.

"That had been the official position of the United State for a long time, so it wasn't a surprise,” he says. “The content itself is nothing new, but it was the first time for that clause to be written in the joint statement."

"This time it is written on paper, [a] joint statement, so naturally it is quite reassuring from a Japanese point of view."

While Japan has recently shifted the interpretation of its post-World War II pacifist constitution, Takagi says the Japanese armed forces can still only be used for the defence.

"According to this new law, if the situation in the South China Sea threatens security of Japan, Japanese armed forces can be employed for some kind of operations in assistance of other countries involved in the operation there,” he says.

“But if it is considered to be an event unconnected to Japanese security, even though it might be very serious for the United States or Australia, it’s very difficult to involve Japanese arms forces.

GREY ZONES

Then there are so-called ‘grey zones’ near Japan, which are between the white of peace and the black of outright war. They deal with significant conflict short of outright war with another country.

"That's the most difficult question of course because it is grey," Takagi says. "It’s not black or white and I think current thinking is that in the contingency which belongs to the grey zone, Japan basically deals with it by itself.”

“We don’t expect US assistance except in a more deteriorated situation which come very close to being black."

There are similar niceties with the concept of the ‘Indo-Pacific’ which some Australians may be unaware.

Takagi says there is a "rich history" of exchanges between the two oceans before a "division" during the Cold War. Abe used the term (in his first stint as PM) during a speech to the Indian parliament in 2007.

As Secretary of State, Clinton used the term Indo-Pacific in both 2010 and 2011. Importantly, the concept was included in a 2013 Australian defence white paper and used again by Abe in the same year.

Then there was the joint statement issued after Abe made a low-key visit to Australia in January this year, which stressed the importance of the US alliance for both countries as well as in underpinning regional stability and prosperity.

"Japan and Australia will continue to work proactively, alongside the US and other like-minded countries, including India, to maintain the rules-based international order and support a peaceful and stable Indo-Pacific region," the statement says.

"In this context, Prime Minister Turnbull appreciated Prime Minister Abe’s briefing on Japan’s ‘Free and Open Indo-Pacific Strategy’ and welcomed its focus on greater regional engagement by Japan."

According to Takagi, China does not use the term Indo-Pacific in government circles, although it is found in the work of Chinese intellectuals.

"This is increasingly becoming a concept that drives the bilateral cooperation [between Australia and Japan],” he says. “So our cooperation will not be limited just to the South China Sea or western Pacific but covers some of the Indian Ocean.

"The importance of China is reduced as the strategic sphere is increased. In the Asia-Pacific, China is more important."

There is a lot happening under the waterline. But there is plenty to follow on the horizon as well.

Mark Skulley is a regular contributor to BlueNotes. Jim Skulley is an honours student in international relations at La Trobe University who speaks Japanese.