`General, what do you expect next of the Chinese?' asked Hyashi.
`We expect them to secure their hold over the oil-production facilities,' he replied. `There is one new facility in the Paracel Islands that has not yet reached full commercial production and three fully operational facilities in the Spratly Islands. There is a possibility that they will blockade access to the South China Sea for a period to validate their claim to the sea.'
`Thank you, General, you may be excused,' the Prime Minister said. `Naito-san, what is the assessment of the Ministry of International Trade and Industry?'
`Profound concern, Hyashi-san,' his Trade Minister said. `My telephone has not stopped ringing all morning, the Chairman of the Keidanren said industry expects a firm response. I couldn't get Tanaka from Nippon Oil off the telephone. His company is a big investor in the Paracel oil production facility.
`As you know we import 99.6 per cent of our petroleum products. Nearly 80 per cent of our crude oil imports comes from the Middle East l traverse the South China Sea. We import oil from Brunei, Indonesia, and Australia. It all passes through the South China Sea, although Australian crude (which is a light crude good for making only gasoline) can be diverted. I am informed that our strategic stockpile will meet all our needs — gasoline and petrochemical — for two to three months. A similar situation obtains for liquefied natural gas or LNG. We import all our considerable LNG needs me 60,000,000,000 cubic metres d 90 per cent of those imports traverse the South China Sea. I highlight energy because that goes to the heart of our national survival. But Japan is nothing if it cannot trade.'
`Wada-san, what does the Finance Ministry have to say?' the Prime Minister asked. `We think there will be considerable instability in financial markets when they open for trading tomorrow morning,' Wada said. `The Bank of Japan will be prepared to step into foreign exchange markets to stabilize the yen against the dollar. Officials will be in touch with the Bundesbank, the Bank of England, and the US Fed, if they are not already, to talk about a coordinated response to this conflict. In closing, my officials expect a quite large fall in the stock market. The oil market will be unsettled, but there is little we can do about that.'
`Thank you. Ishihara-san, what is the state of our military preparedness?'
`Hyashi-san, we have been monitoring this situation closely and especially since relations between China and Vietnam deteriorated at the end of last year,' Ishihara began. `We currently have a battle group on manoeuvres in the waters around Okinawa. We also have two submarines in the area, but, for operational reasons, I would rather leave that vague. We are in constant contact with the Americans. They have a number of naval deployments in the region. The USS Harry S. Truman is currently in the Sea of Japan, and the USS Nimitz battle group is in the Sulu Sea. The British also have a Commonwealth naval group performing exercises with the Ark Royal off Brunei. Since the Chinese attack began we have had long-range AWACS in the air from our bases in Okinawa. From these we have a detailed picture of the deployment of Chinese forces.'
`Foreign Minister, what is your assessment? What will the Americans do?'
`We have all of us, I think, expected this,' Kimura said.
`It was only a matter of time. The UN Security Council will meet, although we have little hope that it can do much. China will exercise its veto. Our best hope lies in our security treaty with the United States. I am, at best, ambivalent about this. Their economic relations with China have gone deeper and are spread wider than even ours which are considerable enough at total investment of $120 billion. Moreover, ever since the Americans withdrew from Okinawa and Yokosuka I have felt that their commitment to the security treaty was more one of form than substance.
`I will be seeing separately the US and Chinese Ambassadors after this meeting.'
The Prime Minister gathered his papers. `Very good, Kimura-san. Keep me informed.' He cleared his throat. `Gentlemen, I do not think our nation has faced so great a threat to its survival since the Pacific War. But adversity often presents opportunities. China is pushing us, and the Americans, to the limit. Maybe the time has come for Japan to stand up.
`Of one thing I am certain, it is high time we put our treaty with the US to the test. Tell the American Ambassador that we expect to see the treaty honoured in full. A threat to Japan's national interests used to be a threat to America's. Is that still so, and what do they plan to do about it? As for the Chinese Ambassador, I think we need to be more subtle. Explain to him our interests in China and the region and the need to minimize conflict. And if we are to have difficulties with the Americans, perhaps we should massage the European Union round to our way of thinking.
`Gentlemen, I suggest we be prepared to reconvene at a moment's notice. Thank you for your attendance.'
President Bradlay said he would take no more calls unless in extreme emergency. Any Vietnamese or Chinese leader should be put through without delay. He then formally convened an extraordinary meeting of the National Security Council and asked the Secretary of State to begin his assessment.
Mr Newton Fischer, the Secretary of State, described China's attacks as having an element of military surprise, but not unexpected. The threat, and the stated claim to the South China Sea, had been made public for years. Since the end of Deng Xiaoping's leadership the shift had been irretrievably towards nationalism. With restructuring of the military and the purchasing of new weapons, it was inevitable that sooner or later the People's Liberation Army would do something to justify its role.
Fischer stressed that President Wang was not a mad dictator. He was a shrewd strategist determined to project China's power. For years, China had flexed its muscles. As far back as 1989, the People's Daily observed: `For a country to shake off foreign enslavement and to become independent and self-reliant is the premiss for its development… Once people lose their sense of country, of national defence, and of nation, total collapse of the spirit will inevitably follow.'
`What do they want?' interjected the President Bradlay.
`They want us out of Asia, sir,' was the reply. `It's been a long time coming. We have to face the fact that America will be dealing with a quasi-military government during this crisis. I have their most authoritative statement on the South China Sea and the islands which they claim as theirs. You get a feeling for the regime by the language they use.
`"Since Vietnamese warships were dealt stunning blows after encroaching on China's territorial waters in March this year, an upsurge of war preparations has been whipped up in Vietnam. "Vietnam will simply be seeking its own destruction if it really wants a major confrontation with the Chinese navy. A major factor in boosting the Chinese navy's combat capabilities in recent years is its combined blue-water training to protect our sovereignty against aggression.
"According to the provisions of the `UN Convention on the Law of the Sea' adopted by the world conference on the Law of the Sea, China has several million square kilometres of territorial sea including its continental shelf and associated economic zones, plus our original territorial waters. This vast sea area is extremely abundant in biological, mineral, and energy resources. Protecting and cherishing China's territorial seas and defending the country's maritime interests is the people's navy's unshirkable task… This strong concept of territorial seas is deeply imprinted in the mind of every cadre and fighter."'