While China and Japan have shared a heavy history of hostility and slow progression towards mutually beneficial ventures, both the countries seem to have focused more on token gestures than concrete measures to secure healthy bilateral economic relations. By virtue of being flourishing economies, and having regional interests coinciding, it was only rational for the China and Japan to address their problems, to fix their attitudes towards each other. The zenith of Sino-Japan departure lies around the East China Sea controversy. Both states claim right to ownership of the islands on this sea. The Diaoyu/ Senkaku Islands have brought China and Japan into a bitter dispute over decades.
The Diaoyu in Chinese and Senkaku in Japanese are a tiny group islands 6.3 km² in total, consisting of eight insular formations, of which the largest is 4.3 km². None of these are inhabited without any trace of human or economic activity, and five are completely barren. Yet, despite the insignificant area, and economic worth, these islands have brought Sino-Japan ties to turbulent points, owing to strategic geographical location. Midway Taiwan and Japan, these islands are key to both China's and Japan's national defense. If either one secures sovereignty, the owner will enjoy military security advantage with prolonged and enlarged frontier.
Hence, given the crucial nature of the land, would either one wish to resolve this issue? We know the steps towards reconciliation. A basic understanding of international law, United Nations Convention on the Law of the Sea (UNCLOS), which came into effect in 1994, and some historical knowledge can allow resolve the conflict. Key questions need to be addressed. In 1895 when Japan claimed sovereignty were the Senkaku islands terra nullius? After Japan's epic defeat in WWII were they returned to China? How should China's and Japan's boundaries of the East China Sea be demarcated under international law? But will either state want to cooperate with an external entity if losing out becomes a possibility?
Economically speaking, a continental shelf, or exclusive economic zone (EEZ), of 40,000 km² is attached to these islets. The claimant will have rights over all natural resources in this vicinity, and what is more tempting than the possibility of oil and gas reserves in the region? United Nations Economic Commission for Asia in a report released in 1968 suggested the possibility of large oil reserves in the Diaoyu/Senkaku waters. Given China's and Japan's insatiable thirst for energy and resources, the islands have become the source of possible military conflict. The potential defense and economic gains from their ownership have surfaced the ugly reality behind staged diplomacy.
Moreover, domestic and international politics for both will be impacted by the outcome, as both governments are involved in other island disputes. A loss here will damage credibility and may act as a negative domino effect on all other fronts.
Annexed in 1895 by Japan, till the 1960s and early '70s when the promising prediction of hydrocarbon deposits was released, Japan and the US signed the Ryuku Reversion Agreement in 1971 to officially bestow ownership to Japan. This backdoor diplomacy was not welcome by China and Taiwan. While the US warned against any exploitation of resources, both countries decided to visit the island prop up their flags shortly after. Despite China labeling the territory sacred, Nixon in 1972 decided to 'return' South-Western Islands to Japan. US' pro-Japan stance over the years has seen a neutral shift with their need to improve relations with China as a growing economy. A 'hand-off' policy introduced by America has kept the conflict from escalating, but has also promoted no resolution, but a mutual decision to shelve it for the future, unsuccessfully so.
A Japanese lighthouse, Chinese activists landing, renovating the lighthouse, Taiwanese boats to block renovation attempts; the islands seem to have attracted an entertaining saga of events from all three stakeholders. Japan's decision to arrest the Chinese protestors from the no-man's land generated criticism and concern from Beijing. Japan's right wing group, responsible for the lighthouse (1978) rammed a bus into the Chinese consulate to protest their China's claims.
Japan continues to protect the lighthouse in 2004 that has caused much unnecessary stir, as a remnant of their right to the islands. Tokyo's move, according to Chinese Foreign Minister was "a serious provocation and violation of Chinese territorial sovereignty. To make matters worse Japan started exploring for natural gas in its self alleged EEZ, an area east of the median line between the two countries that China disputes Japan's right to. But in 2005 Japan Petroleum Exploration Co. and Teikoku Oil Co began talks with the Japanese government to drill areas falling under disputed territories.
Japan and China with the island dispute have justified their respective claims to justify their own standpoints. For Japan, the sovereignty claim is premised on international law's clause that terra nullis becomes a specific state's territory. This is an established principal in international law, but the question is whether or not the islands were terra nullius in 1895. This claim has been contested by China, and no evidence so far has overridden Beijing's concern. According to China certain surveys were carried out by them in the territory in 1885, proving that they were not unclaimed, but were discovered and incorporated in 1895.
While Japan argues that the dispute came to the front burner just because of the discovery of potential energy resources in the seabed around the islands, China emphasizes that the issue came to the front burner because of the U.S.-Japan Joint Statement and the Ryukyu Reversion Agreement, which illegally include China's Diaoyu Islands in the territory to be returned to Japanese sovereignty. And Japan continuously refers to its reversion agreement with the United States to validate its sovereignty. So far the islands have been placed under the supervision of the United States, in accordance with the San Francisco Peace Treaty, giving some administrative rights to Japan under the 1971 agreement. China challenges the legitimacy of the San Francisco Treaty because neither China nor Taiwan were not signatories.
The multifaceted nature of the Diaoyu/Senkaku island dispute has complicated relations between all three states. The problems are not only defense or economy related, but the fragile mesh both states are entangled in with respect to domestic political landscape, and other island disputes. For Japan's aggressive right giving the Senkaku up is not an option. And Chinese feel strongly about the territory in question, as it is 'sacred'. Perhaps the initial motive by the governments to politicize the matter was to have a stronger case. But this can also backfire, as failure to secure the EEZ now will result in a negative domino effect, as the government who failed its people. The matter is politicized to the point that it has become personal.
Both governments have been at pains to downplay the issue, as neither can afford confrontation, but domestic and international political factors are beyond their immediate control. Extremists in both Japan and China are hurting the delicate diplomatic tango both countries had orchestrated successfully over the decades. While military conflict seems unlikely, despite the recent escalation of news suggesting a showdown, it is also equally unlikely for any form of resolution to be reached. For both states shelving the problem keeps their boat afloat and hence both are delaying the possibility of facing this issue. While political deadlock is difficult to break, two disputants could jointly exploit the economic resources following a model of cooperation that already exists in East Asia in the Republic of Korea-Japan Joint Development Area, for example.