By Xu Lifan

A 15-minute press conference on September 1 announced the end of Yasuo Fukuda's short period of office as Prime Minister of Japan. Having promised, and failed, to construct a cabinet that would ensure the Japanese people a "life without burdens", Yasuo Fukuda nevertheless contributed to the warming of relations between China and Japan, and encouraged the Japanese public to feel more at ease with their neighbor. His 11 months in power will be seen as of great significance to Sino-Japan relations.

As we enter the post-Fukuda era, the key political question is not the choice of his successor – Taro Aso has solid support in Liberal Democratic Party (LDP) and among the public – but the composition of the cabinet the successor will appoint. Just a month ago Yasuo Fukuda appointed Taro Aso secretary general of the faction-ridden LDP, and intended eventually to hand over power to him; he just didn't expect it to happen so quickly.

The cabinet appointed by Taro Aso, assuming he is elected prime minister, is the real issue at stake. Fukuda attached great importance to preserving the balance between party factions. The leaders of 5 of the 8 factions of the LDP were given seats in the cabinet, and factional leaders were also appointed to important positions inside the party. Taro Aso will also have to consider the factional balance, paying especial attention to the support of Fukuda's faction, which foiled him when he stood against Fukuda last year. Keeping the balance is even more necessary considering the political difficulties the Liberal Democratic Party faces. Relations with the Komei (Clean Government) Party are strained, and the LDP is also facing a challenge from the Democratic Party. It is likely the party will face more severe trials in the run-up to its congress this month, and the election campaign in September next year, if it fails to quickly pull itself together.

If Aso Taro assumes the premiership, there will be limited room, at least initially for him to pursue his "values oriented diplomacy", which might have disturbed and even provoked neighboring countries, because his power will be held in check by the conflicting LDP clans. Unless he is able to integrate the political resources of the Liberal Democratic Party – as Koizumi did –, it will be difficult for Aso to revive the Koizumi-Abe neo-conservative governing philosophy. More importantly, Japan's external environment has also seen great changes. Among the main foreign relations partners of Japan, the United States is facing a presidential election; China's economy has continued to grow strongly and it has improved relations with Japan, narrowing the room for maneuver of Japan's conservatives. Political changes in Taiwan have also been conducive to peace. Despite continuing uncertainty on the Korean Peninsula, good habits of resolving problems through dialogue have become entrenched. The new situation has left Japanese conservatives weaker than ever before. So the ascension of Aso will, in all likelihood, not bring about a major change in Japan's foreign policy, such as happened when Fukuda took over, but merely to different actions and different emphases within the same basic policy framework.

Japan in the post-Fukuda era will concentrate much of its attention on the economy. Inflation linked to soaring international commodity prices, although lower than in other developed economies, is still in stark contrast to Japan's previous deflation. And after ten-years of slow recovery, Japan's economy is heading for another downturn. The combination of inflation and downturn will be a huge challenge for Taro Aso, who lacks economic experience.

On August 29, three days before Yasuo Fukuda's resignation, the Japanese government barely passed a 100 billion US dollar economic recovery plan. The money will provide loans and credit guarantees to medium and small-scale enterprises, concentrating on those worst hit by the energy price hike; and delivering subsidies to senior citizens. Apart from the senior citizen subsidy, the measures are controversial. Will they simply benefit inefficient enterprises, or will they pull the country back from recession? The answer may well decide Taro Aso's political future as well was Japan's economic prospects.

In the post-Fukuda era Japan will stick to its policy of expanding its influence in the international arena. This will be a priority for Aso. Japan will intensify its diplomatic efforts to press for a bigger international role, especially on the issue of permanent membership of the UN Security Council. A more pressing foreign policy issue is whether to extend the Special Anti-Terrorism Measures Law which currently legalizes Japan's supply of oil to US forces in the Indian Ocean. It will be difficult for Aso to extend the law, even with the full backing of the LDP who hold the majority in the House of Representatives. The opposition alliance is uncompromising in its opposition to the law and occupies the majority of seats in the House of Councilors. If Aso is defeated twice, he would have no choice but to dissolve the House of Representatives and call an election, a risky move with the Japan's economic prospects deteriorating.

Japan in the post-Fukuda era, will, in all likelihood, initially concentrate on its many troubling domestic issues and the new government may find it difficult to make an impact in foreign affairs. No matter how smooth the transition to Taro Aso, political battles and economic uncertainty ensure that Japan is entering troubled times. If the underlying conditions do not change we can look forward to another short-lived cabinet.

(China.org.cn September 2, 2008)