The East China Sea Issue: Japan-China Talks

for Oil and Gas

Kung-wing Au
Received: 23 January 2008 / Accepted: 21 April 2008 /
Published online: 1 July 2008
#
Springer Science + Business Media B.V. 2008
Abstract Japan and China argued for oil and gas in the East China Sea. The issue
flared up in 2003. Between 2004 and 2007 the two sides held 11 rounds of official
talks in order to resolve the issue. They sought demarcation of the sea and joint
development in the disputed area. The gap between positions remained wide. China
claims its continental shelf; Japan proposes a median line. By closely monitoring
different rounds of talks, remarks, developments, maneuvers, negotiators and dates,
it is possible to construct a broad picture of the issue to measure progress and predict
outcomes. It is found that improving relations not only facilitate negotiations but
somehow exert pressure for a settlement. The general relationship did affect the pace
of talks, which could produce a partial solution.
Keywords East China Sea
.
Japan-China talks
.
Median line
.
Oil and gas dispute
.
Sino-Japanese relations
Observers were holding their breaths when Chinese Premier Wen Jiabao landed in
Tokyo on April 11, 2007, wondering what statement Japan and China would make
for joint development of the oil and gas fields in the East China Sea. The same
happened when Japanese Prime Minister Fukuda Yasuo landed in Beijing on
December 27, 2007. These two occasions failed to produce concrete results. Much
hope is now placed on Chinese President Hu Jintaos scheduled visit to Tokyo in
2008. The expectation for good news during such visits shows that improving
relations necessitate, not just facilitate, a settlement of the issue. In light of the
pressure generated for good neighborliness, how close is an agreement and how
would it look like?
This article ponders these questions by describing the issue and examining
different rounds of talks that have been held so far. In doing so it shows that
East Asia (2008) 25:223241
DOI 10.1007/s12140-008-9051-2
K. Au (*)
Department of Political Science, Fordham University, Lowenstein Building (9th Floor),
113 West 60th Street, New York, NY 10023, USA
e-mail: au33@hotmail.com
although the meetings are kept confidential, by carefully looking at the develop-
ments, remarks and maneuvers involved, a lot of information can be gathered to
construct a broad picture, to gauge the distance between the two sides, and to predict
likely outcomes. By looking at the participants in talks, the government agencies
they come from, and the dates when talks are held, it is possible to find clues on how
close the two sides have moved toward an agreement.
Furthermore, in spite of the hard work by the technical experts from both sides
and negotiations between foreign ministry officials, the impetus for breakthrough
rests with the will of the political leaderships of the two countries; only they can
explain to their people the need for striking a deal involving gains and concessions
framed in terms of the interests of their own countries. Alongside recent research
interests that focus on the negotiating behavior of the two nations [1, 6], it is perhaps
also necessary to examine the role of the overall atmosphere in influencing progress.
How do political ties correlate with the pace of talks?
Development of the Oil and Gas Dispute
In August 2003, the state-owned China National Offshore Oil Corporation
(CNOOC) and China Petroleum and Chemical Corporation (Sinopec) concluded
contracts with two foreign oil companies, Shell and Unocal, to jointly explore for oil
and gas in the East China Sea. The two Chinese companies each hold a 30 percent
share in the project and the two foreign companies each hold a 20 percent stake. The
project covers 22,000 square kilometers in an area known as the Xihu Trough. There
was a formal signing ceremony in the Great Hall of the People, and Premier Wen
Jiabao met with the representatives of the four partners, causing a great deal of
international attention, especially those from Japan [8].
In mid-2004, drillings were apparently underway in several offshore sites [7].
Actually, there are at least seven existing or developing sites in the area, but three
sites irked Japan because they are located just a few kilometers west of a median
line proposed by Japan. These are Chunxiao (Early Spring), Duanqiao (Broken
Bridge), and Tianwaitian (Sky Beyond Sky), known in Japan as Shirakaba,
Kusunoki, and Kashi. All these fields are situated on the Chinese side of the
median line, but their proximity to the median line caused concerns in Japan because
the oil and gas reserves in the seabed on the Japanese side of the median line may be
tapped by Chinese operations.
The median line is a concept proposed by Japan. It runs from north to south and
separates the sea with equal distance from the shores of the two countries. China
does not accept this median line, citing the reason that it was unilaterally drawn by
Japan without consulting with China. Instead, China claimed its right to develop the
subterranean resources on its continental shelf, the edge of which crosses the median
line and extends further eastward toward the Okinawa Trough. As a result, there is
an area of overlapping claims, with the western boundary being the median line
proposed by Japan, and the eastern boundary being the edge of Chinas continental
shelf. From satellite images of the continental shelf, this area of overlapping claims
is about 150 kilometers in width.
224 East Asia (2008) 25:223241
Under the UN Convention on the Law of the Sea, coastal countries can claim 200
nautical miles (370.4 km) from their shores as their exclusive economic zones
(EEZ). The East China Sea is hardly wide enough to allow Japan and China to do
that without conflicting claims. In the north, the distance from Kagoshima to
Shanghai is 862 kilometers; in the south, the distance from Naha in Okinawa
Prefecture to Wenzhou in Zhejiang Province is 726 kilometers. If one wants to
measure the distance from the smaller islands in the Ryukyu chain, the sea is even
narrower. From Japans perspective, an EEZ based on the Japan-controlled Senkaku
Islands (the Chinese Diaoyutai Islands) would not only extend to Chinas coastal
waters but also cut across a portion of Chinese land.
Japanese media seem to believe that, in order to avoid antagonizing China, in the
past several decades Japan refrained from oil and gas exploration in the East China
Sea even though it was technologically mature to do so. Tokyo waited for some sort
of agreement or understanding with Beijing before making the move. Thus, the
recent move by China to find oil and gas in that area has been viewed by Tokyo as a
unilateral move. Referring to Chunxiao gas field, Japanese Foreign Ministrys
assistant press secretary Akira Chiba said that Japan does not welcome any
unilateral move and that it is the Chinese side that has suddenly decided not to
keep its word and to start exploiting that area.
1
Japan demanded a halt of the
Chinese operation, but China said that the three controversial sites are not in any
disputed area. As Japan protested, China continued its drilling activities.
Shell and Unocal pulled out of the project in September 2004, citing unexplained
commercial reasons. Analysts said their move cast doubt on the potential of the Xihu
Trough. This development resulted in CNOOC and Sinopec becoming the only
players in the project. In their joint statement, CNOOC and Sinopec said Shell and
Unocal had pulled out since both sides have failed to agree on the existing
development plan.
2
But it is also possible that Shell and Unocal had pulled out
because they did not want to antagonize Japan. Meanwhile, the Chinese companies
said they remained confident in the project and the Chunxiao field would begin
production in the middle of 2005.
In April 2004, the then Japanese Foreign Minister Kawaguchi Yoriko visited
China and demanded for geological data on the drilling sites. In response, the then
Chinese Foreign Minister Li Zhaoxing proposed joint development in the East China
Sea. But Lis offer was not readily accepted by the Japanese side, prompting the
Japanese media to call for joint development.
3
During subsequent talks, Tokyo
modified its position and became more receptive to the idea of joint development,
but the two sides could not agree on which area to develop and what form of
cooperation should take place.
1
Chinas CNOOC says disputed gas field work on track. (2006, April 6). Reuter. Retrieved from http://
asia.news.yahoo.com/060406/3/2imm2.html.
2
Oil giants pull out of East China Sea gas fields project. (2004, September 30). Peoples Daily. Retrieved
from http://english.people.com.cn/200409/30/eng20040930_158788.html.
3
See, for example, Asahi Shimbuns editorial, Japan Must Listen to Beijings Call for Joint
Development, June 24, 2004.
East Asia (2008) 25:223241 225
Media reports on subsequent consultations revealed that Tokyo wanted to
participate in developing the three Chinese sites through capital investment and/or
technological assistance. But Beijing rejected the idea because these sites had
already begun or were about to begin production. In fact, a China-supported, Hong
Kong-based newspaper reported in January 2007 that Chunxiao gas field had begun
to supply Ningpo and Shaoxing of Zhejiang Province with natural gas since
September 2006. The report caused concern in Japan and inquiries at several press
conferences in the Chinese Foreign Ministry. The ministrys spokesperson first said
she did not know the specifics,
4
and later said the report was not true,
5
presumably
to calm the nerve of Japan.
Prime Minister Koizumi Junichiro said the sea of confrontation should be
turned into the sea of cooperation, but Tokyos response was tit for tat. In mid-
2005, the Japanese government granted Teikoku Oil Company the right to explore for
oil and gas in the East China Sea. Teikoku and several other Japanese oil companies
applied for drilling rights in the late 1960s,
6
but Tokyo did not give the green light,
presumably because it did not want to antagonize China, as mentioned above.
With government approval, by July 2005 Teikoku had drafted plans to develop
three fields along the Japanese side of the median line (see Map. 1). Since China did
not recognize the median line, such a move was viewed as a violation of Chinese
territorial sovereignty because the sites were situated on Chinas continental shelf.
Besides, the positioning of these sites was provocative because they were just a few
kilometers from the Chinese fields and could, if they were developed, siphon off the
oil and gas in the seabed on the Chinese side. Beijings response was swift and
strong. Huang Xingyuan, a spokesman for the Chinese Embassy in Tokyo, said that
any move by Japan to explore for oil and gas in that area would be viewed by
Beijing as an invasion of Chinese territory and be viewed as a highly provocative
act.[2] Beijing lodged a strong protest and Qin Gang, a Chinese Foreign Ministry
spokesman, said that China reserves the right to take further action against the
Japanese move. Amid heightened tensions, Teikoku refrained from exploration
activities. Masaki Akasaka, the companys spokesman, said that we want to go out
soon butsafety is of the utmost importance and we will need the governments
support. [5]
Levels of Officials in Talks
At present, the dispute is being negotiated by the middle-level career officials from
the foreign ministries of the two countries, and they are aided by the officials
responsible for natural resources. The Chinese team is headed by Hu Zhengyue,
director-general of the Department of Asian Affairs in the Chinese Foreign Ministry;
the Japanese team is headed by Sasae Kenichiro, director-general of the Asian and
Oceanian Affairs Bureau in the Japanese Foreign Ministry. Actually, up to the third
4
Chinese Foreign Ministry press conference, February 2, 2007.
5
Chinese Foreign Ministry press conference, February 6, 2007.
6
China, Japan Resume Talks on Disputed Gas Drilling. (2005, September 30). China Daily. Retrieved
from http://www.chinadaily.com.cn/english/doc/200509/30/content_482203.htm.
226 East Asia (2008) 25:223241
round of talks, the Chinese team was headed by Cui Tiankai, who amid the talks was
promoted to the position of Assistant Minister of Foreign Affairs and was succeeded
by Hu Zhengyue. Cui Tiankai himself became the Chinese Ambassador to Japan in
late 2007. On the Japanese side, the first round of negotiation was conducted by
Yabunaka Mitoji, who was soon succeeded by Sasae Kenichiro; and Kodaira
Nobuyori, director-general of the Agency for Natural Resources and Energy under
the Ministry of Economy, Trade and Industry (METI), always attended the talks as a
prominent member of the Japanese team, seemingly in no way less important than
Sasae Kenichiro. After the fifth round of talks, Kodaira Nobuyori was replaced by
Mochizuki Harufumi, the new director-general of the Agency for Natural Resources
and Energy, who continued to occupy a prominent position in the Japanese team.
Map 1 Teikokus Exploration Plan. This map was posted on Teikokus website in July 2005. Note the
median line dividing the sea. The three small circles on the right of the median line represent the three sites
Teikoku wants to develop, and they are facing the three Chinese sites on the left of the median line. The
shaded area represents the area of exploration rights granted to Teikoku by the Japanese government. The
area not shaded is the Japan-Korea joint development zone, which has not been recognized by China. On
the Chinese side of the median line are, from top to bottom, Pinghu, Duanqiao, and Chunxiao gas and oil
fields. The Chinese continental shelf would extend across the median line toward Okinawa. Source: http://
www.teikokuoil.co.jp/press/050714/ (Retrieved July 15, 2005)
East Asia (2008) 25:223241 227
Conspicuously, when Prime Minister Fukuda Yasuo visited Beijing in December
2007, Mochizuki was a member of his entourage; this indicates the importance of
energy talks between the two sides.
In general, the negotiation teams from both sides have 1718 persons. For
example, during the third round of talks, the Japanese team has 18 officials from the
Ministry of Foreign Affairs, the Agency for Natural Resources and Energy, the
Cabinet Secretariat and the Coast Guard. The Chinese team has 17 officials from
the Ministry of Foreign Affairs, the National Development and Reform Commission,
the State Oceanic Administration, and the Chinese Embassy in Tokyo.
7
Although the negotiators are not top officials; they are not junior ones. The
Chinese Foreign Ministry has seven region-based departments plus one department
dealing with regional organizations and issues. The Department of Asian Affairs is
one of the seven region-based departments and oversees affairs with 23 Asian
countries, including such great powers as Japan and India. The Chinese team is led by
the head of this department. On the Japanese side, METI, the successor of the elitist
MITI described by Chalmers Johnson [4] is a powerful ministry with 13 bureaus and
agencies, and the Agency for Natural Resources and Energy is one of them. The head
of this Agency participates in the talks as a co-head of the Japanese team.
Different Rounds of Talks
See Table 1.
Round 1: October 25, 2004, Beijing
Although no details were revealed about the talks, the intensity of the talks and the
widely differing views can be sensed from the angry words of Nakagawa Shoichi,
7
Japanese Foreign Ministry announcement, October 1, 2005.
Table 1 Date and venue of talks
Talks Date Venue
1st 25 October 2004 Beijing
2nd 3031 May 2005 Beijing
3rd 30 September1 October 2005 Tokyo
4th 67 March 2006 Beijing
5th 18 May 2006 Tokyo
6th 89 July 2006 Beijing
7th 29 March 2007 Tokyo
Experts meeting 6 April 2007 Beijing
Tokyo summit 11 April 2007 Tokyo
8th 25 May 2007 Beijing
9th 26 June 2007 Tokyo
10th 11 October 2007 Beijing
11th 14 November 2007 Tokyo
Beijing summit 28 December 2007 Beijing
Source: compiled by the author
228 East Asia (2008) 25:223241
the then Japanese Trade and Industry Minister, who said after the talks that I dont
know why these discussions were even heldI dont plan to get involved in further
talks that end without resolution. [9] These words perhaps revealed Japanese
expectation for a quick solution, which subsequently turned out not to be the case.
During this round of talks, there was little indication that Japan had seriously
pondered Chinas idea of joint development, probably because it was so determined
to adhere to its position on the median line, citing international conventions to
explain the appropriateness of that position.
8
Round 2: May 3031, 2005, Beijing
China proposed joint development as a provisional measure pending an agreement
on the line of separation of the East China Sea. But the proposed joint development
would take place only in the areas east of the median line. From Beijings
perspective, this is a concession because these areas belong to Chinas continental
shelf. Japan rejected the idea and demanded China to stop work in the Chunxiao
field and hand over geological data. From Tokyos perspective, the Chinese proposal
was exactly in line with the Chinese claim to the continental shelf that extends to the
Okinawa Trough, and it would allow Chinese involvement on the Japanese side of
the median line without allowing Japanese involvement on the Chinese side of the
median line.
9
Based on the median-line concept, Japan would have everything to
lose and nothing to gain by accepting this proposal. At the end, both sides could
only agree to set up a working group of foreign affairs officials to work on the issue.
Round 3: September 30 October 1, 2005, Tokyo
During this round of talks, Japan demanded China suspend development work in
the disputed areas.
10
Japan also proposed joint development of oil and gas fields
close to the median line. In other words, Japan wanted joint development of
Chunxiao, Duanqiao and Tianwaitian oil and gas fields. It seems that Beijing wanted
to limit joint development to the areas east of the median line, areas it considers its
continental shelf. Tokyo, on the other hand, wanted to cross the median line into
Chinese areas while also opening up the Japanese side of the median line for
Chinese involvement. This position of Japan could have been mentioned during the
second round of talks,
11
but it became all the more explicit during the third round of
talks as judged by Japans post-talks statement.
12
The Chinese side agreed to respond
8
Yoichi Funabashi, an influential Japanese scholar, said shortly before the meeting: First of all, I think,
the two sides should agree to respect the median line. Asahi Shimbun, October 13, 2004. Japanese media
supported the median line concept, Yomiuri Shimbun, for example, said in its editorial on May 30, 2005
that the government should not compromise its basic stand on the issue of the median line.
9
Yomiuri Shimbun editorial, June 2, 2005.
10
Japanese Foreign Ministry statement, October 1, 2005.
11
Yomiuri Shimbun editorial on June 2, 2005 (i.e., after the second round of talks) explains that Japans
basic policy is that joint development projects should cover both Chinese and Japanese sides of the median
line with benefits from such projects evenly shared. This is naturally what joint development is for.
12
Japanese Foreign Ministry statement, October 1, 2005.
East Asia (2008) 25:223241 229
to Japans proposal at the next round of talks, which they hoped to hold in Beijing at
the end of the month.
13
However, China postponed the talks indefinitely because Koizumi visited the
Yasukuni Shrine again on October 17, 2005. It was his fifth annual visit to the shrine
since he became prime minister in 2001. Beijing showed its displeasure by
suspending high-level talks between the two countries, including the China-Japan-
Korea trilateral meeting on the sidelines of the Association of Southeast Asian
Nations (ASEAN) summit meeting, as well as the oil and gas talks.
Round 4: March 6 7, 2006, Beijing
In early 2006, Japanese Economy, Trade and Industry Minister Nikai Toshihiro
visited Beijing and urged China to resume official talks on oil and gas. Nikai was
well received in Beijing because he was viewed as not supportive of Koizumis
shrine visits. As a result, the talks were reopened, and Sasae Kenichiro led the
Japanese delegation to Beijing. Upon arrival in Beijing, he said Japans position
remained unchanged. At the same time, Kodaira Nobuyori, who was also in the
delegation, said Japan made a new proposal during the third round of talks
possibly Japans involvement in Chunxiaoand he expected a response from China
to that proposal and was prepared to discuss any counterproposal from China.
14
After the fourth round of talks, Japanese Foreign Minister Aso Taro told the
foreign affairs committee in the Lower House of the Japanese Diet that Japan
absolutely cannot accept Chinas latest proposal on joint development and that if
China proceeds with its oil and gas exploration Japan would adopt confrontational
measures. In response, Chinese Foreign Ministry spokesman Qin Gang warned
Japan against any unilateral move; Qin reiterated that the Chinese drilling activities
were carried out in an undisputed offshore area of China.
15
Round 5: May 18, 2006, Tokyo
Again there was no breakthrough. Sasae said after the meeting that both sides have
gained further understanding of each others position but there still remains a gulf.
He also said that no new proposals were made at the meeting. Meanwhile, Japanese
Foreign Minister Aso Taro said that the two countries could reach an understanding
over at least one of the two areas under discussion for development. Aso said that
we could find common ground over the north side. [3] This revealed that the two
countries did attempt to carve out specific areas of the East China Sea for joint
development, including an area in the north and one in the south. The exact locations
were not known but both sides seemed to be pinned down by their controversy over
the south area. Since there was no new proposal at this meeting, what both sides
did during the meeting was probably responding to the proposals made during
13
Call to Jointly Develop East China Sea Gas and Oil Fields. (2005, October 3). Asahi Shimbun.
14
Japan, China to discuss East China Sea issue. (2006, March 6). China Daily. Retrieved from http://
www.chinadaily.com.cn/.
15
Qin warns against unilateral move (March 17, 2006). World Journal.
230 East Asia (2008) 25:223241
previous meetings. Apparently, the talks were picking up momentum and both sides
agreed to hold the next round of talks as soon as possible.
Round 6: July 8 9, 2006, Beijing
About 50 days from the last meeting, a new round of talks was held. The momentum
itself was a cause for optimism because it pointed to the possibility that both sides
had found a common ground on which they could work out an agreement.
Unfortunately, this round of talks ended with no concrete result; instead, the two
sides agreed to set up a panel of technical experts and a hotline to prevent
contingencies in the disputed area. The plan would allow for close liaison between
Japans Coast Guard and Chinas State Oceanic Administration. After the meeting,
Sasae refused to say if Beijing had fully explained its draft of a joint development
plan for two separate areas north and south of the Chunxiao field.
16
But it became
clearer that one of the areas under discussion was an area north of the Chunxiao
field; while the south area was still unknown, it could be an area close to the
Diaoyutai/Senkakus islands.
Amazingly, three rounds of talks were clustered within four months in 2006. This
frequency shows that both sides tried to work out something as they put forward
proposals and counterproposals. The precautionary measures agreed upon by the
negotiators at this meeting can hardly be considered the ultimate goal pursued by
both sides; rather, they caused a great deal of disappointment among observers and
well-wishers.
At this meeting, both sides also stressed the importance of maintaining stability in
the region. Paradoxically, this meeting did not achieve as much as people had
expected, but participants in the meeting revealed more details of the meeting than
they had done before. There was a weird atmosphere pointing to the possibility that
both sides had run into an impasse given the fact that the above-mentioned contents
were what they could agree after working frenetically in a short period of time, and
then no date was set for the next round of talks. An analysis of the intervals between
talks indicates that the talks did pick up momentum in a certain period of time but
reached a logjam because they were not quickly resumed (see Table 1).
Round 7: March 29, 2007, Tokyo
The seventh round of talks was held in Tokyo on March 29, 2007, almost nine
months after the previous round. It was an important round because it was held when
Premier Wen Jiabao was preparing for his ice-melting trip to Japan, scheduled for
April 1113, 2007. Much hope was placed on this round of talks because everyone
thought the Chinese and Japanese officials would like to have something for their
leaders to announce and sign in Tokyo.
Negotiators emerged from the meeting with no details to reveal, but that was not
totally unexpected because, if there was any agreement, it would have to wait until
the Wen-Abe summit which would then announce it as a bonus to the improvement
16
Japan, China fail to resolve dispute over gas fields. (2006, July 10). Asahi Shimbun.
East Asia (2008) 25:223241 231
of Sino-Japanese relations resulting from Wens visit to Japan to reciprocate Abes
ice-breaking trip to China in the previous year. Wens visit would be the first by a
Chinese head of state in seven years. What boosted confidence was that the
delegates from both sides, after meeting in Tokyo, agreed to hold a technical experts
meeting in Beijing, a week before Wens scheduled visit. Ostensibly, the technical
experts meeting, scheduled for April 6, 2007, would finalize details of an agreement
for the leaders of both countries to announce.
The Technical Experts Meeting, April 6, 2007
The technical experts meeting could be considered as an ancillary part of the seventh
round of talks. Looking at the participants in the meeting, analysts had a cause for
optimism because the meeting was no longer dominated by foreign ministry
officials. The Japanese team was headed by Hosaka Shin, director of the Petroleum
and Natural Gas Division under the Agency for Natural Resources and Energy; and
on the Chinese side by officials from the State Development and Reform
Commission.
17
The Japanese side also included people from Japan Oil, Gas and
Metals National Corporation (JOGMEC), a sign that the talks had moved from the
political level to down-to-earth discussion by the technocrats who knew the actual
practice of oil and gas exploration. There is reason to believe that if technical experts
rather than political officials take the center stage, an agreement is close. After all,
after the governments reach some kind of consensus, the actual drilling will still
have to be done by such companies as CNOOC and Teikoku. The more those people
are represented in talks, the closer an agreement is in hands.
JOGMEC is a new organization, established in February 2004. It evolved from
the Japan Petroleum Development Corporation (JPDC), which was founded in 1967
to ensure a stable, inexpensive supply of oil and to explore overseas oil resources. In
1972, JPDC added natural gas to its scope of business. In 1978, it became Japan
National Oil Corporation (JNOC) and started oil stockpiling. In 2004, it merged with
the Metal Mining Agency of Japan (MMAJ) to become JOGMEC. Its self-
proclaimed function is to provide financial assistance to support Japanese private
companies exploration, production and stockpiling activities in the fields of oil,
natural gas and metals. Staff members in JOGMEC develop advanced technol-
ogies and supply technical support to Japanese companies. They collect and
analyze information about the energy industry and natural resources in the world and
disseminate such information to Japanese companies. JOGMEC describes itself as
an independent administrative institution, a group of specialists conducting joint
surveys and technical collaborations with overseas partners.
18
In other words, these
are technical people who would look into the details of joint development plans.
Regarding the technical experts, the Japanese team was headed by Hosaka Shin,
director of the Petroleum and Gas Division, a division that is one among six under
the Natural Resources and Fuel Department, which is one among four under the
Agency for Natural Resources and Energy. In other words, he is a junior official, but
17
Japanese Foreign Ministry press release, April 5, 2007.
18
See JOGMECs website at http://www.jogmec.go.jp/english/.
232 East Asia (2008) 25:223241
also a technocrat who would likely discuss concrete plans of oil and gas exploration
rather than broad principles of friendship and cooperation.
Almost at the same time when the technical experts meeting was held in Beijing,
Japanese Senior Vice-Minister for Foreign Affairs Asano Katsuhito claimed that the
issue of oil and gas fields in the East China Sea would be the biggest topic during
the talks between Abe and Wen; and Yasuhisa Shiozaki, chief cabinet secretary, said
that joint development of the oil fields is a consensus between the two countries and
that the Japan-China summit meeting on April 11 would also be launched on this
basis.
19
On the same day, a major Japanese news agency cited foreign ministry
officials as saying that Beijing demanded Tokyo leaves out the Chunxiao field in the
dispute and both sides look for other marine areas for joint development, only to be
refused by Tokyo, which insisted on including the Chunxiao field for discussion.
20
In hindsight, all signs indicate that the Chunxiao field had become a sticky point,
which might have prevented an agreement from being reached.
The Tokyo Summit Meeting, April 11, 2007
Shortly before his trip to Tokyo, Premier Wen Jiabao met with a group of Japanese
journalists, and Prime Minister Abe Shinzo met with a group of Chinese journalists.
These are customary diplomatic practices. Both leaders stressed the importance of
bilateral ties. On the issue of oil and gas exploration in the East China Sea, Wen said
it was an important issue involving the vital interests of the two countries, and he
hoped a way acceptable to both sides could be found to realize joint development.
21
Abe said he hoped to make the East China Sea a Sea of Peace, Cooperation, and
Friendship.
22
The joint statement of Japan and China made during the Tokyo summit contains a
section on the East China Sea issue. This section has five points which said both
sides would:
(1) persist in the effort of making the East China Sea a Sea of Peace, Cooperation
and Friendship;
(2) conduct joint development as a provisional arrangement until final delimitation
based on the principle of mutual benefit is completed, on the premise that it
does not prejudice the position of either side on various issues concerning the
law of the sea;
(3) hold consultation at higher levels when necessary;
(4) conduct joint development in larger sea areas that are acceptable to both sides;
(5) accelerate the process of consultation and aim to report concrete measures on
joint development to the leaders in fall 2007.
23
19
Abe considers visiting China again within this year. (2007, April 7). Ming Pao.
20
China Demands Japan Accommodate Chinas Lone Operation of Gas Field. (2007, April 6). Kyodo
News.
21
Wen Jiabao in Beijing meets Japanese journalists. (2007, April 5). Ming Pao.
22
Abe on East China Sea. (April 4, 2007). Yomiuri Shimbun.
23
Japan-China Joint Press Statement at http://www.mofa.go.jp/mofaj/area/china/visit/0704_kh.html; for
Chinese version see Peoples Daily on April 11, 2007.
East Asia (2008) 25:223241 233
The content of this statement shows that the technical experts meeting had failed
to produce a concrete plan for joint development. What the statement did was this:
both sides reassured the other side that they would remain friendly and cooperative,
pursue joint development as previously proclaimed, move the consultation to a
higher level when it gets stalled, find agreeable larger waters for joint development,
and produce a concrete plan for joint development by late 2007. But these are broad
principles and guidelines belonging to the political domain; they do not require
technical experts to work out. Along this line of reasoning, the hastily arranged
technical experts meeting in Beijing is a mystery. Were they trying to hammer out
something for the Tokyo summit but failed to do so in the last minute?
Round 8: May 25, 2007, Beijing
Hu Zhengyue and Sasae Kenichiro continued to head their respective teams. It was a
fresh round of meeting after the Tokyo summit, which set the timeframe for finding a
plan for joint development by fall 2007. Although the meeting was described by Hu
Zhengyue as a new starting point,
24
it was not expected to produce much result in
light of the fact that even Premier Wens visit to Japan had fallen short as an
occasion to bring about a concrete agreement. As expected, the talks ended with no
breakthrough. Both sides agreed to talk again in late June, and to facilitate dialogue
between Japans Coast Guard and Chinas State Oceanic Administration so that they
can set up some kind of liaison mechanism to prevent contingencies. Sasae said the
Chinese had not made any new proposal during this round of talks.
25
However, liaison between Japans Coast Guard and Chinas State Oceanic
Administration was an idea suggested at Round 6; it was nothing new.
26
In familiar
rhetoric, the Chinese Foreign Ministry said after the talks that both parties
expounded on their respective views and held in-depth formal consultation and
informal discussions. The talks are helpful.
27
At the same time, Sasae said the talks
had allowed both sides to deepen their understanding of the other sides ideas. He
had made similar remarks after each round of talks.
Round 9: June 26, 2007, Tokyo
This meeting was convened one month after the previous round of talks. The same
delegations met again but there was no breakthrough. Japanese officials said there
was no new proposal from the Chinese side during this round of talks. After the
talks, Sasae said that through the debate, both sides increased understanding but
had not reached a consensus on the basic points. Also, no date was set for the next
round of talks.
28
24
CCTV. (2007, May 25). At http://news.cctv.com/special/C17274/01/20070525/103701.shtml.
25
China, Japan plan East China Sea liaison mechanism. (2007, May 26). Wen Hui Po. Retrieved from
http://paper.wenweipo.com/2007/05/26/CH0705260001.htm.
26
In low profile, representatives from Japans Coast Guard and Chinas Oceanic Administration met on
July 20, 2007. The Chinese team was headed by a woman; no details were revealed.
27
Chinese Foreign Ministry statement. Retrieved from http://www.fmprc.gov.cn/eng/zxxx/t322852.htm.
28
Kyodo News. (2007, June 26).
234 East Asia (2008) 25:223241
Round 10: October 11, 2007, Beijing
Almost 3.5 months passed when talks restarted in Beijing. In light of the guidelines
requiring both sides to find concrete measures for joint development by fall 2007,
the lack of momentum and urgency is strange. It all points to the difficulty of the
issue and the hesitation on both sides to yield. Again, Hu and Sasae ended their
meeting with no breakthrough.
Round 11: November 14, 2007, Tokyo
Abe Shinzo stepped down as prime minister in September 2007 and was succeeded
by Fukuda Yasuo, a leader who was widely viewed as pro-China in Japan and
favorably viewed in China as such because his father, Fukuda Takeo, a former
Japanese prime minister, signed the Treaty of Peace and Friendship with China in
1978. After taking office, Fukuda vowed to follow Abes friendly policy toward
China and expressed his wish to visit China as soon as possible. Like Wens visit to
Japan in April 2007, there was much hope that Fukudas visit to China would bring
about an opportune occasion on which good news about joint development could be
announced. It was in this atmosphere that the 11th round of talks was earnestly
watched by anxious observers. Time was running out for 2007 and everyone knew
that both sides had set and announced the goal of finding concrete measures for joint
development by the end of that year.
Despite the stated goal, Hu and Sasae ended their talks with little to announce.
Two weeks after the talks, Japanese Foreign Minister Koumura Masahiko met with
Chinese Foreign Minister Yang Jiechi in Beijing, apparently to pave the way for
Fukudas visit. Koumura asked Beijing to make concession on the East China Sea
issue and said Tokyo did not support Taiwans bid for UN membershipa reference
to its referendum; and Yang reiterated Beijings position on shelving the dispute for
joint development.
29
Both sides have no problem in shelving the dispute; they have
problem in the form and location for joint development. It became clear that a
breakthrough was not forthcoming.
Announcement was finally made that Fukuda would visit China from December
2730, 2007. The fact that his visit could represent a window of opportunity to solve
the joint development issue was shown by the increasing interest in the issue as
reflected by the questions raised about it during the press conferences at the Chinese
Foreign Ministry. The spokesman resorted to familiar script, urging Japan to
cooperate, a hint that the no agreement had been made. In fact, METI minister Akira
Amari said 10 days before Fukudas trip to China that it would be unlikely for Tokyo
and Beijing to reach a gas accord during the trip, but he also said that such an accord
was not a precondition for Fukudas visit.
30
29
Chinese and Japanese foreign ministers on East China Sea issue. (2007, December 2). Ming Pao.
30
Japan, China unlikely to reach gas accord during Fukuda trip: Amari. (2007, December 18). Kyodo
News.
East Asia (2008) 25:223241 235
Fukudas Beijing Trip: December 27 30, 2007
Fukuda landed in Beijing on December 27, 2007. While in Beijing, he met with
Chinese President Hu Jintao, Premier Wen Jiabao, and National Peoples Congress
Chairman Wu Bangguo; he also toured Tianjin and Qufu, the birthplace of
Confucius. On December 28, Fukuda and Wen held a summit meeting and, among
other things, they reached the following consensus on the East China Sea issue:
(1) continue to uphold the spirit of the five points of consensus reached by the
leaders of both countries in April 2007, and make the East China Sea a Sea of
Peace, Cooperation and Friendship;
(2) both sides have upgraded the level of consultation, carried out serious and
substantive discussions on concrete measures for solving the East China Sea
issue, and have obtained positive progress;
(3) both sides agree, while maintaining the framework of consultation at the
director-general level, to continue consultation at the vice-minister level when
need arises and, proceeding from the overall situation of Sino-Japanese
relations and from international law and on the basis of the progress obtained
so far, to make joint efforts to reach a consensus on a method of solution as
soon as possible;
(4) it is in the interest of both China and Japan to properly settle the East China Sea
issue, and both sides agree to strive to settle the issue as soon as possible in the
process of developing relations between the two countries.
31
Comparing these four points of consensus with the five points reached in April
2007, one sees nothing new. There is no doubt that little progress has been made.
Although Fukuda said during the joint press conference with Wen after their summit
meeting that concerning the East China Sea issue we have made some progress, and
through dialogue we have deepened our mutual understanding and built a
relationship of mutual trust, and we are determined to settle the issue as soon as
possible, he did not reveal the details of the progress.
32
His words look more like
courteous responses than anything else. In fact, had there been any significant
progress in the negotiation on the issue, he would have mentioned it in his speech at
Peking University and praised it as a sign of cooperation. He did not mention the
issue, but mentioned the word oil once.
Japans Publicity Campaign for the Median Line
Japan has a campaign to publicize the fairness of the median line. This campaign is
aimed at the Chinese populace rather than the Chinese negotiators. The median line
appeals to the human sense of equality, and Tokyo figures that the more the Chinese
31
Ma, Wenbo & Li, Huizi. (December 28, 2007). Leaders of China and Japan reach new consensus on the
East China Sea issue. Xinhua News Agency.
32
Progress made in talks on East China Sea issue: Fukuda. (2007, December 28).Ming Pao.
236 East Asia (2008) 25:223241
populace is convinced, the shakier the Chinese position would resemble. The
Japanese Embassy in Beijing provides different languages for viewers of its website,
but posts explanations on the issue of the median line only in Chinese language,
apparently for Chinese viewers.
For example, one statement explains that according to the UN Convention on the
Law of the Sea, both Japan and China have rights to their respective exclusive
economic zones (EEZ) 200 nautical miles from the baselines from which the breadth
of the territorial seas (12 nautical miles) of the two states is measured. Since the
distance between these baselines on both sides of the East China Sea is less than 400
nautical miles, there is an area of overlapping claims, which necessitate consultation
between two states for the purpose of delimitation. According to the UN Convention
on the Law of the Sea, as well as relevant examples of international ruling,
delimitation in this kind of waters based on a median line would result in a fair
resolution.
The statement goes on to say that Chinas stance on natural prolongation of
continental shelf is an outdated theory that was used in the 1960s, a thing that
belongs to the last century. According to the provisions of the 1982 UN Convention
on the Law of the Sea, and to the examples of international adjudication thereafter, if
the distance between two coastal states is less than 400 nautical miles, then the
delimitation should not apply the theory of natural prolongation. The statement says
that, according to the contemporary international law, the idea that such natural
prolongation can reach all the way to the Okinawa Trough is groundless.
The statement says that because the marine areas have yet to be demarcated,
Japan should at least have sovereignty and jurisdiction over the waters east of the
median line. This does not mean Japan has abandoned its rights to the waters west of
the median line, but is Japans interim exercise of sovereignty and jurisdiction over
the waters east of the median line pending the demarcation. When Japan and China
have yet to demarcate the sea and as China does not recognize Japans idea of the
median line, the fact that Japan has rights over its EEZ and continental shelf 200
nautical miles from the baselines of the breadth of its territorial sea remains
unchanged.
33
The embassy not only publicizes Japans position on the issue, but also carries
articles from the Chinese media that are neutral or sympathetic to Japans position.
For example, it carried an article from the Economic Observer, which not only
described Chinas position but also cited the words of a Flinders University scholar
that support Japans position that the Okinawa Trough is only an accidental hollow
in the closely connected continental shelves of the two countries.
34
When Tokyo attacked the concept of continental shelf, Australia and East Timor
were engaged in a very similar dispute over the gas and oil fields in the Timor Sea,
with Australia insisting on the continental shelf principle and East Timor arguing for
the median line concept. That dispute intensified in 2004 and was not settled until
33
Embassy of Japan in China, Our Countrys Legal Opinion on Development of Resources in the East
China Sea Retrieved March 4, 2007 from http://www.cn.emb-japan.go.jp/fpolicy/seisaku061116.htm.
34
See article at http://www.cn.emb-japan.go.jp/media/media040712.htm.
East Asia (2008) 25:223241 237
2006 when both sides agreed to put aside their dispute for 50 years and rearranged
the shares of revenue from development of the gas and oil fields to be received by
the two sides. This article is not intended to discuss the Australian-Timorese dispute;
on the other hand, the continental shelf principle is apparently not an outdated
reference in international negotiation.
In fact, the UN Convention on the Law of the Sea is a long and complicated treaty
with 320 articles in 17 parts. However, despite Japans tendency to cite the
Convention to support its median line position, the term median line appears only
once in such a huge document of more than 200 pages, and it appears in Article 15,
which deals with delimitation of the territorial sea between States with opposite or
adjacent coasts, not exclusive economic zone (EEZ), which is dealt with in Article
57. Article 15 says that where the coasts of two States are opposite or adjacent to
each other, neither of the two States is entitled, failing agreement between them to
the contrary, to extend its territorial sea beyond the median line every point of which
is equidistant from the nearest points on the baselines from which the breadth of the
territorial seas of each of the two States is measured. Regarding territorial sea, the
limit is 12 nautical miles (Article 3); concerning EEZ, the limit is 200 nautical miles.
In other words, these are two different things, and Japan has applied the median line
concept to EEZ. Although the legal experts in talks should have no problem in
recognizing the details, the general public could be easily misled by Japans portrait
of the issue.
However, Japans publicity campaign did not seem to have much effect on the
Chinese populace. The English-language China Daily, an official newspaper
published in China, allows it readers to air their views on news reports. So far,
few readers have supported a compromise, let alone concession, and many were
against joint development with Japan. For example, shortly before the seventh round
of talks, one reader said in a comment that international and maritime laws are on
Chinas side and asked why should China settle for joint venture which will give
Japan what it does not own and deserve? One said that the motive behind this joint
venture on Chinas part is generosity and being nice, but Japan would take
advantage of Chinas generosity. One said if you give the Japanese an inch now,
they will want a foot next. And one described Japan as a greedy snake that wanted
to swallow up an elephant.
35
Chinas Rejection of the Median Line Proposal
On July 7, 2004, Deputy Chinese Foreign Minister Wang Yi summoned Japanese
Ambassador Koreshige Anami to make a solemn protest. Beijing was responding to
Japans launching of its prospecting activities for energy resources in the seabed in
35
China, Japan to start 7th round of E. China Sea talks. (2007, March 27). China Daily. Retrieved June
27, 2007, from http://www.chinadaily.com.cn/china/200703/27/content_837804.htm, click on comments
of the story to see comments. Of all the comments, only one supports joint development, and it is from
this author, who wanted to test whether readers can freely put their comments there; it proved they can, in
a matter of seconds.
238 East Asia (2008) 25:223241
the disputed waters east of the median line unilaterally drawn up by Japan. Wang
pointed out that the East China Sea has yet to be demarcated, and China and Japan
have a dispute on the issue. Wang said that the so-called median line is only a
unilateral idea from Japan, and China has never recognized it and cannot recognize
it. This kind of method of imposing its own idea on others by the Japanese side will
not be accepted by the Chinese side. This kind of provocative behavior is very
dangerous and the Chinese side resolutely opposes it.
36
Wang stressed that demarcation of the East China Sea can only be accomplished
through negotiations and that this is the only correct choice. China strongly
demanded Japan observe standards of international law and immediately stop
activities that infringe upon Chinas sovereignty and interests in the disputed
waters.
37
Given such a strong, clearly stated, and persistent position, it is doubtful whether
Beijing has any room to back down to do so it will lose face and credibility. It
seems likely that even if future cooperation between China and Japan is possible in
the East China Sea, both sides will have to find a way to get around the median line
concept, which is not likely to be officially accepted by Beijing, although some form
of tacit acknowledge of that concept cannot be ruled out.
Conclusion
Both China and Japan need oil and gas to sustain their economic growth. What is at
stake is perhaps 7 trillion cubic feet of natural gas and 100 billion barrels of oil in the
disputed area.
38
The price of oil has skyrocketed in the past few years and in early
2008 it hit $100 per barrel. Natural gas too is important to China as the country seeks
to move from coal-fired power to cleaner energy. In 2003, as far as electricity is
concerned, 79% of Chinas electricity was generated by coal, 15% by hydropower
stations, and 3% by oil. During the same year, 23% of Japans electricity was
generated by nuclear power plants, 24% by gas, 13% by oil, 28% by coal, and 10%
by hydropower stations.
39
Not only was Japan using less coal for power generation,
but its proportion of power sources was more balanced. Having polluted its way to
industrial prosperity, China understands the benefit of clean energy and will not
easily back down from chances to obtain gas. Pudong in Shanghai, a newly
developed district, is being supplied with gas from Pinghu gas field, about 300
kilometers off the shore of China, near the disputed area.
Although the talks did not produce concrete results, the pace at which they were
held indicates that the overall Japan-China relationship did have an impact on
progress. When Koizumi was in office, only six rounds of talks were held within the
36
Chinese Foreign Ministry statement, July 8, 2004. Retrieved July 9, 2004 from http://www.fmprc.gov.
cn/chn/wjb/zzjg/yzs/gjlb/1281/1302/t142352.htm.
37
Ibid.
38
Faiola. See also International Herald Tribune. (2005, February 24).
39
Calculation based on data from the International Energy Agency, Key World Energy Statistics, 2005.
East Asia (2008) 25:223241 239
nearly two-year period from October 24, 2004 to July 8, 2006 (see Table 1). It seems
that from March to July 2006 both sides tried to hammer out a deal, but to no avail.
Thereafter the momentum was lost. Abe took office in September 2006, and five
rounds of talks were rapidly held in a three-month period from March 29, 2007 to
June 26, 2007, including the technical experts meeting and the Tokyo summit. After
Fukuda took office, another three rounds of talksincluding the Beijing summit
were held before 2007 drew to an end. In other words, eight rounds of talks occurred
in nine months in 2007 after Sino-Japanese relations had improved. The fact that
talks were not resumed immediately after Abe took office could be explained by the
sign that round 6 obviously ended in a disheartening logjam. Viewed from the pace
of talks, it is clear that the general relationship between the two countries did play a
role. More talks mean more chances for a breakthrough.
However, the rigid positions on both sides resulted in many rounds of fruitless
talks. One can even assume that after all these talks and other informal
communications both sides should have fully understood each others position.
Concessions seem to be the way out, and can be more easily made and explained
amid warming ties. Shortly before Fukudas visit to Beijing, unconfirmed reports
from Japanese sources said Tokyo would forego Chunxiao in order to begin joint
development in areas near the median line. Cui Tiankai, the Chinese ambassador
to Japan, said at the Foreign Correspondents Club of Japan on January 18, 2008 that
the current focus for consultation is how to realize joint development and the staff
from both sides are looking for a practical, effective plan. I believe that with the joint
effort from both sides, a consensus on joint development can be reached as soon as
possible. As for the legal issues such as demarcation, they can be left for the future
to resolve (emphasis mine).
40
His words strongly hinted at the possibility that if
anything should happen, joint development would come first, demarcation would
follow. This would be a partial solution, or there would be other forms of partial
solution, which would likely be announced during high-profile visits or occasions.
Acknowledgements The author would like to thank Professor Howard H. Lentner for commenting on
an earlier draft, an anonymous reviewer for advice on re-fining the focus of research, and Teikoku Oil
Company for permission to use its exploration map from 2005.
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Kung-wing Au holds a Ph.D. degree in Political Science from the City University of New York. He has
worked as a journalist for a number of newspapers and taught at Drew University in New Jersey, USA. He is
adjunct assistant professor of political science, FordhamCollege at Lincoln Center. Email: au33@hotmail.com.
East Asia (2008) 25:223241 241