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The EU Freezes and “Appropriates” Russian Assets Indefinitely: Trigger a Global Trust Crisis

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On December 12, the Council of the European Union (EU) passed a highly controversial resolution by an “overwhelming majority”: announcing the indefinite freezing of approximately 300 billion euros in overseas assets of the Russian central bank, and for the first time proposing—through a so-called “international law workaround mechanism”—to transfer part of the assets to Ukraine for use. Russian President Putin said during the “annual review” event held in Moscow on the 19th that the attempt to confiscate Russia’s assets in Europe is “not even theft, but robbery.”

This move is seen by the outside world as a major escalation in the EU’s history of sanctions against Russia, and has been criticized as crossing the “red line” of international finance and international law. After the resolution was announced, Russia quickly launched strong countermeasures, suspending transit transportation of natural gas to the EU, and placing 12 EU countries on a “special unfriendly countries list.” The contest over massive sovereign assets is rapidly extending from the military battlefield of the Russia–Ukraine conflict into the global financial system, and its continuously expanding spillover effects are profoundly reshaping the international financial order, while prompting many countries to be highly vigilant about the issue of “asset security sovereignty.”

Sanctions Escalate Again: From “Freezing” to “Appropriation,” the EU Touches the Financial Bottom Line

The key breakthrough of this Council resolution lies in a fundamental change in the method of disposing of Russian central bank assets—upgrading from “freezing” to “targeted appropriation.” According to the disclosed text of the resolution, the EU plans to advance the relevant operations in two steps. In the first step, targeting roughly 200 billion euros in cash-type assets of the Russian central bank held within EU member states, the EU will, through a so-called “custody account restructuring” method, convert them into “reconstruction loans” provided to Ukraine, to be used for postwar infrastructure repairs and fiscal expenditures. In the second step, it will implement a “mandatory transfer” of the investment income from the remaining roughly 100 billion euros in assets, and clearly stipulate that these proceeds will be earmarked for Ukraine’s procurement of military equipment and battlefield medical support.

In order to avoid controversy at the level of international law as much as possible, the EU has carried out careful legal design. On the one hand, the EU cites Article 51 of the United Nations Charter regarding the “right of self-defense,” defining the appropriation of Russian assets as “supporting Ukraine’s exercise of the right of self-defense”; on the other hand, the EU has also joined with allies such as Canada and Japan to promote the establishment of a so-called “International Asset Assistance Alliance,” attempting to dilute the legitimacy controversies of unilateral sanctions and asset disposal under the cloak of “multilateral consensus.”

According to data, among the 300 billion euros in assets that have been frozen and are intended to be appropriated, Germany holds about 78 billion euros, France about 52 billion euros, and Italy about 43 billion euros, making them the main implementing countries of the plan and therefore facing higher political and economic risks. In the end, the EU bypassed veto power through a “special voting mechanism,” and the resolution was passed with the result of 25 countries in support, 3 countries against, and 1 country abstaining.

Cracks Within the EU Emerge: Orbán Warns of a Dual Backlash in Finance and Law

On December 13, Hungarian Prime Minister Orbán again publicly stated his position on this issue, bluntly saying that if the EU insists on using Russia’s frozen assets, it will trigger “extremely serious problems.” He pointed out that, on the one hand, this move will significantly reduce global trust in Europe’s financial custody system; on the other hand, the Russian central bank has filed a lawsuit on the relevant issue against Euroclear, the European clearinghouse that holds a large amount of Russia’s frozen assets, which means that Euroclear may face enormous repayment pressure in the future.

Orbán particularly emphasized that because the amount involved is huge, the economy of Belgium, where Euroclear is located, may even face the risk of “collapse.” As an important link in the eurozone financial system, once Euroclear suffers a systemic shock, its impact will quickly transmit to the entire eurozone financial market, thereby threatening the EU’s economic stability and monetary order.

Orbán’s remarks reflect the deep divisions within the EU over how to handle Russia’s frozen assets. Using the central bank assets of a sovereign state may not only trigger complex and prolonged legal disputes, but may also shake Europe’s international image as a safe place to store assets.

Russia’s Strong Countermeasures: Energy “Cutoff” Combined with Reciprocal Asset Freezing

In response to the EU’s “asset appropriation” plan, Russia swiftly launched multi-layered countermeasures. On December 13, Russian President Vladimir Putin signed a presidential decree announcing the immediate suspension of natural gas deliveries to the EU via the “Yamal–Europe” pipeline. This pipeline previously accounted for about 15% of the EU’s natural gas supply, and its shutdown is regarded as a critical blow directly targeting the EU’s energy security.

At the same time, Russia placed Germany, France, Italy, and 12 other countries that support asset appropriation on a “special unfriendly countries list,” imposing comprehensive trade embargoes on enterprises from those countries and prohibiting cooperation in key sectors such as energy, minerals, and the military-industrial complex.

Even more deterrent, Russia announced that it would reciprocally freeze EU assets in Russia. The Russian Ministry of Foreign Affairs disclosed that EU enterprises hold cumulative assets in Russia exceeding 450 billion euros, covering multiple sectors including energy projects, manufacturing plants, and financial institutions. Large corporations such as Germany’s Siemens, France’s Total, and Italy’s ENI Group all face the risk of having their assets in Russia frozen. Russian Minister of Economic Development Reshetnikov stated clearly: “For every 1 euro of Russian assets appropriated by the EU, Russia will freeze 1.5 euros of EU assets in Russia. This is an unshakable principle of reciprocity.”

In addition, Russia has accelerated the process of “de-dollarization.” The Russian central bank announced that it would reduce the proportion of euros in its foreign exchange reserves from 12% to zero, converting them entirely into renminbi, rubles, and gold. It will also expand local-currency settlement with countries such as China and India, requiring that the proportion of local-currency settlement in energy export trade be no less than 80%. Analysts point out that the dual countermeasures of energy supply cuts and asset freezing will inevitably exacerbate the EU’s energy crisis and inflationary pressures. At present, the EU’s natural gas reserves can only last until March 2026, and the cutoff of Russian gas may lead to industrial shutdowns in some European countries during winter.

European Clearing System Under Pressure, Global Financial Risk Spillovers Accelerate

Of the approximately 300 billion euros in Russian foreign exchange reserves frozen by the EU, about two-thirds are concentrated in European clearing institutions, mainly including Belgium’s Euroclear and Germany’s Clearstream. For a long time, these institutions have existed as international custodians with an image of being “neutral, secure, and non-politicized,” serving as critical infrastructure for global sovereign assets and cross-border capital flows. However, the EU’s push for the “targeted appropriation” of Russian central bank assets has effectively broken this long-established implicit consensus, sending a highly disruptive signal to global markets—that even sovereign central bank reserve assets may be illegally frozen and appropriated due to geopolitical maneuvering.

This signal is rapidly eroding the trust foundation of the global financial system and forcing emerging market countries to reassess the security of their foreign exchange reserves. Once the credibility of the European clearing system is substantially weakened, not only may Russia-related funds accelerate their withdrawal, but countries long subject to sanctions such as Iran and Venezuela, as well as ordinary multinational corporations and private investors, may also initiate larger-scale asset transfers out of risk aversion. The Credit Suisse crisis has already demonstrated that once the trust foundation of Europe’s financial system suffers a systemic shock, the cost of repair will be extremely high.

At a broader international level, the EU’s decision has been described by many in the financial community as “opening Pandora’s box.” IMF Managing Director Kristalina Georgieva publicly warned that the arbitrary appropriation of other countries’ central bank assets would undermine the core rules on which the global financial system operates.

At the same time, the EU hopes to provide Ukraine with a stable source of funding through asset appropriation, but the actual effect is not optimistic. Analysts note that due to complex legal procedures and cross-border coordination, the amount of funds that can actually be delivered may be less than 100 billion euros, and would need to be transferred in stages over three to five years, making it difficult to address Ukraine’s urgent needs in military equipment and fiscal support. By contrast, Russia’s countermeasures in energy and assets are, in turn, weakening the EU’s own capacity to support Ukraine. Persistently high energy prices have increased economic and livelihood pressures within the EU, and public support for continued assistance to Ukraine has fallen from 65% in 2023 to 41% in 2025. Governments in many countries are finding their policy space between “external assistance” and “domestic stability” increasingly constrained.

Legal risks are also steadily accumulating. The Russian central bank has already filed lawsuits against Euroclear in European courts based on the Vienna Convention on Diplomatic Relations and multiple bilateral investment treaties. Many international law experts point out that although the EU attempts to reduce its own liability through special legislation, if the disputes enter the WTO mechanism or the Permanent Court of Arbitration in The Hague, the EU’s chances of prevailing are not optimistic.

As the core hub of Europe’s financial infrastructure, Brussels is facing increasingly prominent systemic risk concerns. Euroclear processes approximately 5 trillion euros in cross-border payments daily. If a liquidity crisis were to emerge due to litigation or compensation pressure, the shock would rapidly spread to the eurozone’s bond, foreign exchange, and banking systems. The compensation claims proposed by Russia alone exceed 200 billion euros. About 8% of Belgium’s GDP directly depends on the normal operation of this institution, and the likelihood that the government will be forced to inject capital for rescue is significantly increasing. If a bailout is initiated, Belgium’s fiscal deficit ratio may breach the red line set by the EU’s Stability and Growth Pact, further intensifying domestic political and regional tensions.

From a longer-term perspective, if the neutrality and security of the European clearing system are fundamentally questioned, it may trigger severe volatility in the eurozone bond market in the short term, and in the long term may prompt large asset management institutions to reassess their European presence and shift part of their core operations to New York or Singapore. The result would not only be changes in capital flows, but also a potential decline in Europe’s position within the global financial system.

Li Zhengdong, Associate Research Fellow, Institute for Central and Eastern European Economic and Trade Cooperation, Ningbo University

Tao Jing, Assistant Research Fellow, Institute for Central and Eastern European Economic and Trade Cooperation, Ningbo University; Lecturer, School of Business

Ma Xiaolin, Specially Appointed Research Fellow, Institute for Central and Eastern European Economic and Trade Cooperation, Ningbo University; Bao Yugang Chair Professor; Professor at Zhejiang International Studies University; Director of the Institute for Mediterranean Studies

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India’s space sector: A launchpad for global partnerships

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Ambassador Gurjit Singh, former Indian Ambassador to Germany, Indonesia, Ethiopia, and the ASEAN and African Union missions

Growing competition in outer space provides India with a unique opportunity to shape a narrative in which collaboration, rather than confrontation, drives space exploration. Recognised as a trustworthy and cost-effective spacefaring nation, India is now well placed to transform its technological advances into enduring international partnerships that contribute to scientific progress, economic growth, and sustainable development.

India’s journey into space has been distinctive. Unlike many space programmes that emerged from Cold War rivalries, India’s programme was conceived as an instrument of national development. Dr. Vikram Sarabhai anchored India’s space vision in practical applications that would improve the lives of ordinary people. Under his leadership, satellites were developed to strengthen communications, weather forecasting, disaster management, healthcare, agriculture and education. This development-oriented philosophy remains central to India’s space programme and resonates strongly with the needs of countries in the Global South, which seek practical applications of space technology rather than prestige alone.

Today, India’s achievements extend  beyond developmental applications. The Chandrayaan missions, the Mars Orbiter Mission, the Aditya-L1 solar observatory, and the forthcoming Gaganyaan human spaceflight programme have established India as a nation capable of executing sophisticated and reliable space missions. Chandrayaan-3’s successful soft landing near the Moon’s south pole placed India among an exclusive group of space powers while demonstrating that world-class innovation can be achieved at comparatively modest cost.

India’s growing credibility comes at a time when the global space economy is expanding rapidly. Valued at over US$600 billion today and projected to approach US$1.8 trillion by 2035, the sector is increasingly driven by commercial activity in satellite communications, Earth observation, navigation, climate services, broadband connectivity, and emerging fields such as in-orbit servicing and lunar exploration. Many countries aspire to participate but lack indigenous capabilities. They seek dependable long-term partners rather than merely launch providers.

India possesses the capabilities to meet these requirements. The liberalisation of the space sector in 2020 transformed the ecosystem by opening it to private participation. The establishment of the Indian National Space Promotion and Authorisation Centre (IN-SPACe), the expanding commercial role of NewSpace India Limited, and the growth of private enterprises have created one of the world’s most dynamic emerging space ecosystems. Indian startups are developing launch vehicles, satellite platforms, geospatial applications and propulsion technologies that are attracting global investment and customers. Companies such as Skyroot Aerospace, Pixxel and Agnikul Cosmos have demonstrated that Indian private enterprise can compete internationally in advanced space technologies.

The next step is to internationalise this ecosystem.

Rather than positioning itself only as a low-cost launch destination, India will offer comprehensive partnerships encompassing satellite design, launch services, mission operations, ground stations, astronaut training, capacity building and downstream applications in agriculture, disaster management and maritime security. Such integrated partnerships would be valuable for countries across the Global South and the Indo-Pacific seeking affordable, customised and reliable technologies to meet their development priorities.

India has demonstrated the diplomatic value of such cooperation. Through the South Asia Satellite, it provided communication and developmental benefits to neighbouring countries. Indian launch vehicles have successfully placed hundreds of foreign satellites into orbit for governments, universities and commercial operators around the world. India’s decision to join the Artemis Accords reflects its willingness to participate in the peaceful exploration of the Moon through international collaboration. Cooperation with  NASA, the European Space Agency and JAXA has strengthened India’s scientific and technological capabilities.

These partnerships reinforce India’s standing as a leading voice of the Global South. India offers development partnerships based on affordability, reliability and mutual respect rather than creating technological dependence. Space cooperation has therefore become an increasingly important instrument of Indian diplomacy, strengthening bilateral relationships while delivering tangible developmental benefits.

To realise its full potential, India will aim to sustain the momentum of reform. Faster regulatory approvals, greater access to venture capital, stronger intellectual property protection, and closer collaboration among research institutions, industry and academia will be essential. Public procurement policies would continue supporting Indian startups, enabling them to scale up, innovate and integrate into global supply chains.

India is positioned to play a larger role in shaping the governance of outer space. Orbital congestion, space debris, responsible resource utilisation and equitable access to emerging space opportunities are becoming pressing international concerns. As space activities expand, there will be an increasing need for countries capable of building consensus on responsible norms and practices. India’s long-standing commitment to the peaceful uses of outer space, combined with its growing technological capabilities, equips it to contribute meaningfully to the development of rules that promote transparency, sustainability and equitable access.

The coming decade will determine not only which countries lead in space but also how space is governed. With its scientific capabilities, entrepreneurial ecosystem and international credibility, India is uniquely placed to bridge the gap between established and emerging space nations. By building collaborative partnerships founded on inclusivity, mutual benefit and innovation, India can transform its space programme into a major pillar of its global engagement.

In an increasingly divided world, India’s space sector offers a powerful reminder that the greatest achievements in space are those that bring nations together. That may well become India’s most enduring contribution to humanity’s next frontier.

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Great powers and the fierce rivalry in Africa

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In tandem with the retreat of US imperialism and the erosion of its hegemonic capacity, the rivalry among the world’s great powers is intensifying across vast geographies and divergent fronts alike. From Africa to Central Asia, from electric vehicles to artificial intelligence, an acute contest is unfolding—most conspicuously between the United States and China.

History instructs us that wherever great power rivalry takes root, peace remains elusive. Stability cannot endure there. Wars, internal conflicts, coups d’état, and the mass migrations they inevitably trigger dominate the horizon. Nor do great powers desire the cultivation of participatory democracy, human rights, the rule of law, or class consciousness in these lands. Instead, they bolster dictatorships, authoritarian regimes, totalitarian systems, and repressive governance. The imperialist powers harbor no concern for the scarcity of water, drought, or famine in Africa. Their focus is solely fixed on exploitation, plunder, pillaging the resources of the nations upon which they descend, and capturing their domestic markets.

Africa holds singular importance in this context. It commands attention simultaneously by virtue of its sheer expanse, its demographic weight, and its subterranean wealth. In the rivalry across this ancient and impoverished continent, the United States and China lead the vanguard. Russia, too, makes notable maneuvers, though on a less extensive scale. Between the United States and China, the race is particularly fierce regarding the extraction, processing, and conveyance of subterranean resources to world markets.

Africa—endowed with abundant mineral wealth, a population approaching 1.5 billion, and critical strategic importance along global trade routes—whet the appetites of capitalist, advanced, industrialized, imperialist states as a vast, populous, and expanding market. Geopolitically as well, its position cannot be ignored. Africa’s wealth in rare earth elements, precious minerals such as diamonds and gold, and strategic minerals indispensable to advanced technologies—notably copper, cobalt, and lithium—is indisputable.

AFRICA CARRIES NO WEIGHT IN GLOBAL POLITICS

Unlike other continents such as Europe, Asia, or the Americas, Africa possesses no single country that commands prominence in global politics or the world economy. Nor does Africa host an alliance, international organization, or bloc of comparable global stature. In the Americas, there stands a superpower: the United States. In Asia, there are great powers: Russia and China, with India also ascending. In Europe, major, consequential powers endure: the United Kingdom, France, and Germany. Yet on the African continent, no such states exist. What exists in Africa is the rivalry of non-African great powers. Even the 55-member African Union, the institutional body of the continent’s nations, remains far from exerting any real influence—not only in global politics, but even across the African continent itself.

Over the past fifteen to twenty years, Africa has undergone substantial upheavals. Armed conflicts, civil wars, and violence have become pervasive. From Ethiopia to Somalia, Libya to Sudan, armed hostilities have claimed countless lives, destabilized governments, and provoked massive waves of displacement. Terrorist organizations have seized upon these conditions as an opportune opening, and the great powers, in turn, have instrumentalized these terror networks.

In Africa, former nineteenth- and twentieth-century colonial powers such as Britain and France indulge in reveries of bygone eras. They attempt to assert themselves, yet their efforts prove futile. Germany, as Europe’s leading economic, industrial, and technological powerhouse, takes a keen interest in Africa; yet despite this attention, its institutional knowledge and historical experience regarding the continent pale in comparison to those of the British and French. Italy strives to act, but lacks the requisite capacity. The Netherlands and Belgium, once deeply entrenched in Africa, are far removed from their imperial past. Spain and Portugal assert no claim to global primacy. All of these nations languish, to borrow Ahmet Hamdi Tanpınar’s phrase, in “a vague longing for a bygone past.”

China, well aware of Africa’s significance, is investing heavily across the continent. It stands as Africa’s largest trading partner and the primary destination for the continent’s exports. In the provision of loans, credit facilities, and grants to African states, it has outpaced Western institutions. China’s investment and foreign aid capacity, economic leverage, and extensive commercial ties naturally consolidate its political and diplomatic influence across Africa, elevating its visibility and prestige. Under the auspices of the Belt and Road Initiative, Beijing continues to finance large-scale infrastructure investments as well as major communications and transport projects.

THE FEROCITY AND DIMENSIONS OF THE RIVALRY

It is, of course, impossible for Russia to mount massive economic investments, conduct extensive aid operations, or sustain the volume of trade in Africa that China commands. Consequently, it seeks to distinguish itself by guaranteeing the security of local leaders, corporate enterprises, and ruling elites, relying predominantly on private military companies (the operations of the Wagner Group being a case in point). Russia has deployed mercenaries to Mali and the Central African Republic.

The United States, for its part, endeavors to counter China’s expanding influence, economic footprint, visibility, and public diplomacy initiatives in Africa, while simultaneously laboring to reinforce its own economic and political ties with African states. One need only recall that the United States, having intervened in Libya in 2011 through NATO, has directly struck ISIS targets in Somalia. The strategic depth of Washington’s relationship with Cairo is likewise well known.

The United States, China, and Russia also stand out prominently in arms sales to African nations. As the great power rivalry on the continent grows ever sharper, the spectrum of contestation widens accordingly. Cultural rivalry is superimposed upon economic, political, and military dimensions. Because every great power seeking to expand its sphere of influence and reach is determined to block the advance of its competitors, Africa serves both as the stage for and the witness to this unsparing contest. Some experts explain this rivalry through the lens of a new strain of colonialism; others account for it by pointing to the inherent nature, complexity, and multifaceted character of competition between imperialist metropoles.

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The women who refuse to be erased: On Japan’s surrender anniversary, the fight over wartime sexual slavery continues

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BUSAN, South Korea — On the day Japan marks the 81st anniversary of its surrender in World War Two, a conference room in Busan’s city council building has become the latest front in a battle over memory.

Allan Wilson, Journalist

Last month, on 23 July, academics, activists and lawmakers gathered here for a symposium on one of the war’s most painful legacies: the estimated tens of thousands of women — euphemistically labelled “comfort women” — forced into sexual slavery by the Imperial Japanese Army. The event was co-hosted by the Carter Human Rights Center’s Asia division and the Korean Women’s Forum.

“The records of the Japanese military’s comfort women are historical assets that the international community must preserve together,” Nam Myung-sook, the Busan city councillor who co-organised the symposium, told the gathering. “Social consensus must be broadened.”

Her words were aimed at more than the audience in the room.

For three decades, survivors and their advocates have pressed Japan for a full and unequivocal accounting. They have met a familiar pattern: moments of apparent progress — the 1993 Kono statement acknowledging military involvement, the 2015 bilateral agreement with South Korea — followed by retreat. Japanese officials continue to dispute the term “sexual slavery.” Textbooks soften the language. Senior politicians visit Yasukuni Shrine, where convicted war criminals are honoured alongside the dead.

The symposium came as UNESCO’s World Heritage Committee convened in Busan, and the timing was deliberate. One of the gathering’s stated goals was to revive the push to have comfort women records inscribed on UNESCO’s Memory of the World register — an effort Japan has repeatedly blocked.

“Our aim is to reaffirm the historical facts of comfort women (受害) to the international community and explore directions that contribute to peace and human rights,” said Yu Ying-mo, senior adviser to the Carter Human Rights Center’s Asia region, in remarks prepared for the event.

A statue, a warning

The symposium also addressed an incident that has become a diplomatic flashpoint: the recent removal of a comfort women memorial statue in Taiwan.

The statue, one of dozens erected across East Asia and beyond, was taken down in recent months. Organisers in Busan described the removal as “an erroneous approach that erases historical wounds and weakens collective memory,” according to the symposium’s programme.

For advocates, the Taiwan case illustrates what happens when political pressure is allowed to dictate historical memory. “Statues, memorial halls, and archives related to comfort women are important spaces of memory that testify to the victims’ suffering and history,” the Carter Human Rights Center said in its written address. “They must be respected.”

Dozens of comfort women memorials now stand in cities from Seoul to San Francisco to Berlin. Each has become a site of diplomatic friction: Japan’s government has consistently objected to them, arguing they perpetuate what it calls an inaccurate narrative.

The shrinking window

Time is running out. Of the few hundred women who came forward in the 1990s, the number of surviving registered victims in South Korea has dwindled to single digits.

This demographic reality has injected new urgency into the preservation effort. Shim Ok-ju, a research professor at George Mason University Korea, told the symposium that the focus must now shift from oral testimony — soon to be lost — to documentation and education.

Seo Kyung-soon, a professor at Pukyong National University, presented findings from the so-called “Gwanbu Trial” records — a series of postwar legal proceedings in which comfort women sought compensation through Japanese courts. The documents, she argued, contain incontrovertible evidence of state orchestration.

A designated discussant panel followed, bringing together Kim Tae-wan, a political science professor at Dong-eui University; Kim Kyung-hee, an independent researcher; and Ahn Jun-young, a journalist from the Busan Ilbo newspaper. The format was designed to bridge academia and public consciousness — to test whether scholarly findings could survive the scrutiny of working journalists and political scientists.

The international dimension

The comfort women issue has never been purely bilateral. In 1996, the UN Special Rapporteur on violence against women concluded that the system constituted “military sexual slavery.” In 2022, the UN Committee on the Elimination of Discrimination against Women urged Japan to “ensure that the issue is accurately reflected in school curricula.”

Yet the gap between international consensus and Japanese government policy remains wide. Prime ministerial statements offer “apologies and remorse” but stop short of accepting legal responsibility. Reparations have come from private funds, not the state.

For organisers of the Busan symposium, the path forward runs through multilateral institutions. UNESCO recognition, they argue, would make historical revisionism harder to sustain. But Japan has made clear it will oppose any such move, as it did when Chinese documents related to the 1937 Nanjing Massacre were inscribed in 2015.

“Facing history squarely and respecting it is a fundamental value that the international community should share,” the symposium’s organisers concluded.

This 15 August, as Japan observes its National Memorial Service for the War Dead, the women who survived — and those who did not — will be remembered in rooms like the one in Busan. Their numbers are dwindling. The question is whether their story will outlast them.

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