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Diplomatic feint that looks to leave Japan in the cold

How does a new president signal that he sees America's ties with China as the pivotal relationship of his administration's foreign policy? Easy. He bestows upon the prime minister of Japan the honour of being the first foreign leader to be received in Washington.

Such was the diplomatic feint that this week saw a beleaguered Taro Aso steal the prize in the scramble to be first across the threshold of Barack Obama's White House. Britain's Gordon Brown, another weakened leader every bit as eager to cuddle up close to the US president, must wait until next week.

On the face of it, the trip could scarcely have been a more welcome respite for Mr Aso. His standing in the opinion polls mirrors the dire condition of Japan's economy. Last week came news that the economy had shrunk by more than 3 per cent in the fourth quarter of 2008. Then a couple of days ago followed confirmation of a collapse in the country's exports. The carnage on the Tokyo stock exchange has forced the government to consider buying shares to prop up the market.

Mr Aso's premiership is on life support. Chosen only a few months ago to lead the ruling Liberal Democratic party into the election due by this autumn, his ratings have hit single figures. Paralysis is almost too upbeat a description of the country's political condition.

With the opposition Democratic Party of Japan in control of the diet's upper house, a proposed economic stimulus package has yet to be enacted. It is already obvious that further drastic measures will be needed to arrest the slide into slump. Few are optimistic that the politicians will act swiftly.

For all its troubles, Japan still confounds the foreign visitor expecting to find a country ravaged by the decade lost to the economic depression of the 1990s. It remains a visibly prosperous and orderly society. Though a strong yen has made life impossibly expensive for outsiders, everything works.

Last weekend I attended a conference in Odawara held by the UK-Japan 21st Century Group. The conversations and debate among business leaders, diplomats and politicians reminded me that Japan still has many of the world's best companies and the most advanced technologies.

Toyota may be about to lose money for the first time in its history – but compare the products of the Japanese carmaker with those of, say, General Motors or Chrysler. Japan is among the hardest hit by the global crisis because it manufactures much of what, in normal times, the rest of the world wants to buy. We sometimes forget that it remains the world's second largest economy.

Yet back in Tokyo, the angst among the political classes was palpable. Senior figures suggest Mr Aso might not last even until the election. The forced resignation of his finance minister – alleged to have been drunk at a meeting in Rome of the Group of Seven industrial nations – heaped further humiliation on the government. Some speculate the prime minister will be pushed out of office within a month or two – as soon as the budget and stimulus package have been approved by the diet.

Japan, after all, has made something of a habit of changing its leaders. As one shrewd observer reminded me, it has had 10 prime ministers during the past 15 years. If the relatively successful premiership of Junichiro Koizumi is subtracted from the list, the longevity of these leaders has averaged something around a year.

The LPD bears the scars of being in power almost continuously since 1955. The party is fractured and exhausted. Yet few seem confident that Ichiro Ozawa, the leader of the DPJ and favourite to win the election, has the ideas and energy to end the stasis.

In the circumstances then, Mr Obama was generous as well as gracious. Japan, the president said, was a "cornerstone of security as well as one of our strongest economic partners". Pouring on the balm, he added that this "extraordinarily important" friendship was "the reason that the prime minister is the first foreign dignitary to visit me here in the Oval Office".

Hillary Clinton offered the same public reassurance when she made Tokyo the first stop on her inaugural trip as secretary of state. Like Mr Obama, Mrs Clinton said all the right things about Japan as America's staunchest ally in east Asia.

Yet behind this diplomatic flummery was the story that is further feeding Japan's many insecurities. Mr Obama's administration is shuffling the hierarchies of its relationships in the region. Japan remains America's closest friend, sheltered by a US security guarantee. But Washington's most important relationship is now with China.

On the Chinese leg of her Asian trip, Mrs Clinton conspicuously refrained from the criticisms of Beijing's human rights record that have previously infused her assessments of Sino-American relations. Instead, she said that US concerns on these issues must not be allowed to get in the way of closer collaboration with China.

"The global community," Mrs Clinton added, "is counting on China and the US to collaborate to pursue security, peace and prosperity for all." Then again: "We are truly going to rise or fall together." As a consequence, Mrs Clinton announced, the US wants to broaden its strategic dialogue with Beijing to encompass security as well as economic interests.

You could almost feel the pain 1,300 miles away in Tokyo. On one level the shift was inevitable. China's rise is remaking the global geopolitical balance, while the economic crisis has further underlined Sino-American interdependence. It would be irresponsible – bad for the world as much as for the US – were Washington to ignore this reality.

Yet Japan's insecurity about US intent mirrors its own ambivalences and hesitations as much as events beyond its control. Relative economic decline has drained the country's confidence. Political paralysis at home encourages retreat from the world beyond. Japan fears greatly China's rise, but, beyond seeking reassurance from the US, has no answer to it.

The overall impression is of a country that wants the world to be as it was: with Japan, in spite of its geography, swaddled in the embrace of the like-minded democracies of the west. That era has passed. Japan, like everyone else, has eventually to adjust. Not yet. Some time ago I wrote that Japan, lacking a compass, had yet to find its place in the new geopolitical landscape. It seems that it is still looking.

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More columns at www.ft.com/philipstephens

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