Asia's three giants will shape its and the world's strategic destiny. India has a rugged and resilient democracy; Japan is a stable and mature democracy; China is seeking to promote marketed economic growth within tight political centralism under Communist Party control.

India's legitimacy is rooted in a political model unique in human history in scale and poverty, China's in economic success without precedent in scale and pace, and Japan's in the combination of political democracy and wealth creation that is unique in Asia. China uses political control and the heavy hand of the state to forestall and suppress challenges and uprisings, India uses procrastination and indecisiveness to ride out and exhaust most insurgencies along with an oppressive security presence in some cases, and Japan is free of such challenges.

India, conquered and colonised by the West, was humiliated militarily by China; China, neither defeated nor colonised, was attacked, invaded and humiliated by Japan as well as Western powers; and Japan is a nonnuclear power that was defeated by being atombombed. Japan is the wealthiest of the three but its economic future seemingly lies in the past; China is the most vibrantly growing economy; but, provided governance and policy issues are handled right, demographic trends of a growing working and consumer cohort favour India as tomorrow's economic success story.

China is said to act on the adage that one mountain cannot accommodate two tigers: its policy is to restrain Japan and constrain India. Beijing opposes both for permanent membership of the UN Security Council. A healthy alliance with the US is insurance for Japan against a future China threat. Good relations with China are a hedge against an unreliable US ally.

Three possible scenarios may be postulated for East Asia: Sino-Japanese rivalry, with the US as the balancer which deters China and restrains Japan; Sino-US bipolarity, with China dominating the mainland, the US controlling the seas and Japan essentially playing second fiddle; or Sino-US rivalry, with Japan acting as the conciliator.

The future of American troops and bases in Japan has become unexpectedly contentious. Around 20,000 US troops are stationed in Okinawa and another 20,000 elsewhere in or off the coast of Japan. In 2006, after a decade of negotiations, the two countries agreed to relocate 8000 US marines from Okinawa to Guam, and another 2000 marines from the Futenma airbase near the crowded city of Ginowan to less-populated Nago on Okinawa's northern coast. The Liberal Democratic Party lost last August's election. The new Prime Minister, Yukio Hatoyama of the Democratic Party of Japan, campaigned on the promise of removing the base from Okinawa and perhaps from Japan. He has resisted honouring the previous government's commitment to reduce and reposition US troops in Okinawa and Nago's new mayor says they are not welcome in his city.

The remarkable postwar recovery of Japan was underwritten by the US security guarantee. Must gratitude for the past translate into a willingness to host US bases and soldiers permanently? They are resented for the symbolism of the victorious power occupying the defeated one, for the continuing dilution of Japanese sovereignty that keeps US soldiers outside the reach of Japanese law, and for periodic incidents involving (often drunken) US soldiers and Japanese civilians (especially women).

By insisting on the base agreement as a test of Japan's commitment to the alliance, Washington risks a rupture of the latter along with an end to a resident military presence in Japan: a mistake it made with New Zealand in the 1980s over nuclear ship visits. If the alliance and its manifestation in base arrangements are in the security interests of both countries, the partnership is worth preserving through mutual accommodation and adjustment. If Washington believes it is the provider and the Japanese the consumers of security, an essential balancer against a fast rising China and a still threatening North Korea, the occupation mentality will continue to corrode the relationship.

The generation in power in Tokyo now has dimmed memories of the Second World War, diminished guilt for it, and no internalised sense of dependence on the US after the war. Temperamentally no longer submissive, they are unmoved by US demands that fealty to Washington should take priority over promises to Japanese voters. Their efforts to recalibrate the alliance reflect the loosening of these familiar emotional moorings in postwar Japanese foreign policy and an effort to free Tokyo of a competing historical guilt over what happened in and to Okinawa.

Demographics will drive Japan's social and security policy. Its declining population will shrink by a third to under 90 million by 2055. Those aged 65 and over will double to over 40 per cent. Still rich, Japan will live off its wealth but not create new wealth. Over the next 15 years household wealth will return to levels 15 years ago. Inevitably, this will cut into Japan's ability to pursue a muscular military or an aggressive foreign policy and cost it relative status in Asia and the world. But by the same token, it should lessen the demonisation of Japan and diminish regional tensions.

Americans unsettled by Tokyo's questioning of the operationalisation of the alliance should brush up on the history of the storm of protests unleashed across Japan when the treaty was put before the Japanese Diet for ratification in 1960. Tokyo's proposal for an East Asian community around China and Japan that excludes the US has also ruffled US sensibility. Washington should not conclude the problems are due to an inexperienced, immature and populist government in need of a few sharp lessons in realism. The base dispute is a lightning rod for differences over how to manage a political landscape in Japan and geostrategic landscape in East Asia that are both changing. Tokyo is recalibrating its historical relationships with its traditional protector and rival. China seems intent on making that extra effort to present the friendlier face to nudge the process along of counterbalancing enduring US influence. Yet there is also lingering suspicion of China and a resistance-cumresentment to ceding alpha status to China.

The most technologically advanced, richest and best educated country in Asia cannot be written out. If Asia turns to cooperation, Japanese money will be required to underwrite the institutional arrangements and agreed deliverables. If Asia turns to confrontation and conflict between China and the US, Japan will anchor any US forward strategy for East Asia. If Japan is ignored, if Washington attempts to use its relationship with China to shape the environment into which Japan fades quietly into the sunset, Tokyo can play spoiler for most regional initiatives and even embrace the bomb.

Can Japan achieve political reforms and economic recovery? Will it become a normal country whose industrial muscle translates into power and influence? A nuclear power? Can it say no sometimes to Washington or will it remain an ATM serving US global policy?

Many question marks, many drags, an ageing and shrinking population, a stagnant contracting economy and a political culture that puts governments in office but not in power: these are not ingredients to instill confidence in a revived Japan. Yet history offers a caution against writing off Japan too hastily. It has shown superhuman ability to emerge triumphant from grave crises through mass mobilisation of the collective identity, at extraordinary personal and national cost and effort, in astonishingly short bursts of time.