The visit of the South Korean president, Lee-Myung-bak, to the disputed Dokdo islands in August 2012 sparked angry reactions in Japan. But both sides know it is in their interests to retain good relations. This report looks at the changing nature of geopolitics in the region and why economic and political needs outweigh quarrels over disputed territory.

SOUTH Korea is Japan’s third largest export market, after China and the United States.

Japan’s exports to South Korea in 2011 were US$66 billion, accounting for eight per cent of its total exports. Japan’s imports from South Korea were US$40 billion, or 4.6 per cent of total imports.

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Dr. Stefan Lippert
The visit to the disputed islands was particularly surprising by President Lee because the focus of his presidency has been on economic growth and the future, rather than disputes rooted in the past
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