US Secretary of State Hillary Clinton’s recent four-stop swing through Asia – Japan, Indonesia, South Korea and China – in her first tour as Secretary of State represented a strong new beginning for America’s Asia diplomacy. Relations between the US and China and the US and Japan at the moment are free of any acrimony and generally good. However, the recent global economic meltdown has affected the major Asian economies such as Japan and China to some extent given their heavy dependence for exports on the American market.

Expectations are high in Japan, both in the general public and amongst the elite, after Democrat Barack Obama’s ascendancy to the American Presidency. Japan was clearly uncomfortable with Republican Bush administration’s pursuit of a unilateralist foreign policy as against Obama’s more pronounced multilateral approach. According to Professor Kenji Takita of Chuo University, multilateralism is closely associated with smart power and therefore Obama’s shift towards multilateralism is likely to undo some of the damage that the Bush administration’s unilateralism has done to American standing.

President Bush will host the first ever financial summit of the G-20 on November 15, 2008 in Washington to discuss the current global financial crisis which threatens the economic and political stability through out the world. The crisis comes on the heels of an economic crisis in the global economy in the first half of 2008 which was characterised by a record level of oil prices, global food shortages, high inflation and rising inflation in most countries.

Sino-Japanese relations were in the doldrums for the past decade because of the repeated visits to the Yasukuni Shrine by former Japanese Prime Minister Junichiro Koizumi. One consequence was a complete freeze in mutual visits at the highest political levels between 2001 and 2006. Even exchanges at other levels were affected. The ice was broken in 2006 when Japanese Prime Minster Shinzo Abe visited China, and the ice began to thaw when Chinese Premier Wen Jiabao visited Japan in 2007.