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David Caploe PhD

David Caploe PhD

David is a writer for the popular economic news site Economywatch.

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China – Japan Relations at Low Following Dispute Over Natural Gas Fields

Because China’s economic growth has been so spectacular over the past 15 or so years, many people have forgotten its pre-condition has been a general political calm in East Asia.

This basic stability in the region - occasionally broken by North Korean outbursts, and unnecessary roils with Taiwan has allowed China to direct its energies on its extraordinary drive towards prosperity and increasing its people’s standard of living.

In structural terms, this relatively tranquil atmosphere has been made possible, believe it or not, by the post-WWII presence of the US military which, whatever its problems in the Muslim world, and the idiotic and destructive Vietnam war aside, of course has played an essentially constructive role in maintaining peace and order in the western Pacific.

Put bluntly, the US has played the role of “regional balancer”: keeping potentially destructive tensions among the key East Asian nations – above all, China / Japan / Korea – from getting out of control.

Unfortunately, the combination of America’s self-created/-assumed messes in the Middle East, and, more deeply, the country’s own larger multi-faceted crisis financial / economic / ideological / political / intellectual-academic / media – has opened up space all over the world for long-standing tensions to begin to creep ever closer to the surface.

The current tensions between Japan and China is, sadly, an example of how the absence of a strong US – a weakness basically resulting from the self-destructive policies that began in the Reagan era, but were multiplied exponentially by the utterly disastrous Cheney / Bush regime – can create the possibility of explosive confrontations that can harm ALL concerned.

We have neither the time nor the inclination to go into the FULL history of Sino/Japanese relations. As usual, neither side is blameless in this particular situation which, of course, only makes its resolution all the more difficult.

But we will make two overall remarks about each of the participants.

While we don’t think of China as in any way an imperial power – that is, concerned with projecting its military power long distances from its borders, economic influence, of course, being something quite different – there is little doubt it can be extremely touchy about its immediate territorial prerogatives.

And while Japan has been fundamentally concerned since the two Lost Decades that began in 1989 with regaining its own economic strength and vitality, it has been significantly remiss in never really confronting its responsibilities for crimes committed before and during World War II – unlike Germany, which, through sheer force of vision and will, has managed to transform itself at a base level into a country far different than the one whose historical trajectory ended up creating the Third Reich.

These key points noted, the spectre of an active confrontation between China and Japan is utterly frightening and it is one that must be avoided at all costs, not just for their own good, but the peace and stability of the entire region and world.

The incident itself seems relatively minor, albeit not too intelligent on either side:

It took place in the East China Sea, near islands known as Senkaku by Japan and Diaoyu or Diaoyutai in Chinese. The captain and crew of a Chinese fishing trawler were seized earlier this month by Japanese naval vessels, which claimed the boat rammed them near several uninhabited islands controlled by Japan.

The boat and 14 crew members were released last week, but the captain was detained by Japan, possibly facing charges of obstructing officials from performing their duty.

China is incensed Japan would apply its laws to Chinese nationals and argues the issue is one for diplomacy, not another country’s legal system. Some people would like to think this whole issue will be over in a week, September 29, by which time Japan must by its own laws, which, of course, is part of the anger of the Chinese, who argue such a situation needs to be handled in an international framework– either charge or release the captain.

But even if the captain is released by, or before, then, this confrontation is indicative of a Chinese / Japanese relationship that has some serious structural problems and these will NOT go away even if the captain is released.

There are long-term reasons, of course. But the most immediate issue – in the area where the incident, whatever it was, took place has to do with potentially lucrative undersea natural gas fields that lie directly between the two Asian giants.

The fields are in the East China Sea, some 310 kilometers (190 miles) northeast of the islands, where the incident took place. Access to gas fields so close to their shores would be a boon for energy-hungry China as well as resource-poor Japan.

A thorny issue for some time, the two sides agreed in 2008 to jointly develop the deposits. Under that deal, Japanese will be allowed to invest and share in the profits of existing Chinese operations in the Chunxiao fields, which Japan calls Shirakaba, that run closer to China, while the two countries will jointly develop other fields farther out.

The agreement marked a real breakthrough in Japan-China relations, which had struggled to improve for years. While it could have easily bogged down in territorial disputes, the decision to shelve such claims in favor of progress is something almost unprecedented for the sides, particularly China, which, as we noted above, generally takes a hard line on issues relating to immediate territorial sovereignty.

''The gas fields question has always been part and parcel of the Sino-Japanse relationship,'' said Sheila Smith, a senior fellow at the Council on Foreign Relations in Washington. But if this territorial dispute ''goes on the rocks, it could derail their ability to negotiate a common approach on the gas field reserves,'' she said.

And this is precisely why it is so critical that any kind of process that could end up in a mutually self-defeating explosion be stopped as soon as possible.

Unfortunately, things are escalating rather quickly – and disturbingly.

Already, Beijing has suspended ministerial-level contacts with Tokyo, and postponed a second round of talks on the natural gas deposits. China also said Tuesday that Premier Wen Jiabao won't be meeting with Japanese Prime Minister Naoto Kan at a U.N. conference in New York this week.

''The atmosphere is obviously not suitable for such a meeting,'' Foreign Ministry spokeswoman Jiang Yu told reporters. Anti-Japanese protests have flared in numerous locations around China, and the dispute has spilled into the cultural arena as well.

Beijing abruptly canceled invitations to 1,000 Japanese youth to the on-going Shanghai World Expo, and the Japanese pop group SMAP has called off a concert in the same Chinese city. Relations are at their worst since the 2001-2006 term of former Prime Minister Junichiro Koizumi, whose repeated official visits to the infamous Yasukuni shrine – where several Japanese “heroes” from World War II are buried –consistently enraged China, Korea and other victims of Japanese militarism during the 30s and 40s.

Anger toward Japan for its wartime aggression in China was on display during this past weekend in protests marking the anniversary of Japan's invasion of China in 1931. All these difficulties fully noted, economically, China and Japan have become deeply intertwined, and neither has an interest in letting any dispute undermine vital trade and investment ties.

So far, tensions haven't risen as high as they were in 2005, when Japanese shops and restaurants were attacked in China. But there have been calls for boycotts of Japanese products – many of which are actually made in China.

Beijing has demanded that Tokyo release the captain, threatening countermeasures if Japan continues ''making mistake after mistake.'' Japan, meanwhile, shows no sign of backing down, while warning Chinese of fanning nationalism which anyone with a knowledge of East Asian history has got to find at least mildly ironic – and urging that the problem be resolved calmly.

''We should be careful not to stir up narrow-minded, extreme nationalism,'' Chief Cabinet Secretary Yoshito Sengoku said Tuesday.


The U.S. also has urged the two sides to work out the matter through appropriate diplomatic means. But neither country wants to appear soft, which is going to make it tough to resolve without one side or the other losing face.

Since the collision incident, Japan has spotted Chinese ships bringing equipment to one of the gas fields, raising concerns that Beijing may start drilling unilaterally, which, unfortunately, has been a characteristic Chinese tactic in these kinds of disputes.

Responding to Tokyo's inquiry about the move, China said it had brought in equipment for ''repairs'' of a platform out at sea. Jiang, the Foreign Ministry spokeswoman, said Tuesday that China possesses sovereign rights over the Chunxiao fields and that its activities there were ''lawful and reasonable.''

But she did not directly link the issue to the islands dispute, which she again blamed on Japan, and did not indicate any change in China's attitude toward development of the fields.

Some analysts speculate that Beijing may be testing the resolve of the relatively new Democratic Party-led Japanese government, perceived by some to be less hardline than the previous conservatives who ruled Japan for most of the post-World War II era.

If so, this would be a grievous mis-reading of Japanese politics, since it would only support the arguments of hard-liners there that the Democratic Party is “too soft”, thereby undercutting its legitimacy as a defender of national interests.

Indeed, the smart thing for China would be to welcome and show support for the Democratic Party government, to show the Japanese it’s in their interest not to be so unbending in admitting and taking responsibility for their country’s past militarism.

Despite the tough talk, both side are likely to be cautious about further escalating tension, said Liang Yunxiang of Peking University's School of International Studies.

''Before they take any further steps, both governments must ask themselves, do we have any measures to deal with the possible consequences?'' Liang was quoted in this article from the New York Times.

Which is, indeed, exactly correct. Sino/Japanese relations have come a long way in the past few years, both in general and with specific regard to these crucial natural gas fields, whose exploitation can benefit both countries. The last thing in the world they or the rest of East Asia, or the world – needs is an explosion over, basically, nothing.

Let’s hope everyone calms down and restrains themselves, before something really bad could, literally, erupt out of nowhere.

David Caploe PhD
Chief Political Economist
Economy Watch

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  • Anonymous on September 23 2010 said:
    Guys...hey, I don't want to be all anti-Chinese or anti-Japanese, but you all have to remember something: Millions of Chinese were brutally killed in the Second World War. I'm guessing the Japanese are to the Chinese what the Germans are, even now, to the Jews. Just saying...

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