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Potential exploitation of the energy reserves has transformed the Ryukyu island chain issue into a flashpoint for nationalist sensitivities in Japan and China. In the context of leadership transitions in China and possibly Japan, this could escalate into a significant regional issue.
Tensions have flared recently in the East China Sea over the disputed ownership of a small group of islands, known as Senkaku in Japan and the Diaoyu in China and Taiwan. Situated at the south western end of the Ryukyu island chain, the islands are currently uninhabited (a small Japanese settlement was abandoned in the 1930s), although their location has a significant impact on the potential Exclusive Economic Zone (EEZ) that their owner can claim.
Tension rose this year after the nationalist governor of Tokyo, Shintaro Ishihara, proposed to buy the islands from their owner and develop them, using funds from public subscription. This would breach a longstanding bilateral understanding between Japan and China not to allow either habitation or commercial use. The Japanese government decided to nationalise the islands, in an attempt to stave off Ishihara's plan, but China has reacted strongly; anti-Japanese riots in China have caused alarm and both sides have vociferously restated their positions in the margins of the recent UN General Assembly. Activists from Hong Kong managed to land in August, followed by similar landings from nationalists in Japan. A flotilla of coastguard and fishing vessels from Taiwan entered the surrounding waters for a few hours in September before being dispersed by the Japanese coastguard.
The Islands' History
The dispute has its origins in the 1890s. The Japanese government of the time annexed the islands in 1895 on the grounds that they were unoccupied and belonged to no one, in response to a commercial request from a Japanese national that had been lodged some years earlier. The annexation took place during the ongoing Sino-Japanese war, but had been completed before the Treaty of Shimoneseki ceded Formosa (later Taiwan) to Japan. The islands have remained under Japanese control ever since, except during the US occupation of Japan after World War Two, and the period of US administration over the Ryukyu islands, which ended in 1972 with transfer of all territory under administrative control back to Japan.
The Chinese and Taiwanese governments claimed sovereignty in the early 1970s, close to the time when diplomatic relations between Japan and the PRC were restored in 1972. Japan believes that these claims were prompted by the discovery of minerals and energy in the surrounding waters in the late 1970s; the Chinese line is that the islands were illegal war gains and should have been returned after World War Two. Further, both China and Taiwan maintain that the islands were under traditional Chinese control for centuries and should not have been annexed by Japan in 1895. Japan and China agreed to shelve the issue in the early 1970s, and a number of protocols addressing concerns such as fishing were developed over the following years, with a general aim of not disturbing the status quo. Formally, Japan maintains that the islands are legitimately Japanese and there is no sovereignty dispute.
Tensions last flared in 2010, when a Chinese fishing boat rammed a Japanese coastguard vessel in the surrounding waters. The Chinese captain's subsequent arrest and investigation in Okinawa led to rapid escalation of the issue on the Chinese side, again with representation at the United Nations. Chinese trade related responses caused considerable international alarm, particularly restrictions on the export of rare earth minerals. Tensions subsided after the captain was returned to China but the underlying issues were not addressed.
The Political Context
With power transitions taking place shortly in China and potentially in Japan over the next few months, nationalist sensitivities have been inflamed, making positions ever more firmly entrenched. Any immediate compromise may be perceived internally as backing down. Neither side has shown a willingness to refer the matter to the International Court of Justice. The US is also unwillingly involved, as it passed the islands back to Japan in 1972 and has openly confirmed that Japan has administrative rights. If the islands were taken by force, this is expected to be covered by the US/Japan Mutual Security Treaty. Furthermore, there are significant US bases on Okinawa, just over a couple of hundred miles away.
In the short term, all sides seem to be trying to avoid escalation, and to prevent their nationalist elements from raising the temperature further. There is hope that, once the Chinese leadership transition has taken place at the end of this month, there will be room for discussions that acknowledge that at least there is a problem to be addressed. With Japan recently stressing that there is no sovereignty issue that won't be easy. A change of Japanese government later this year, if elections take place, may create an opportunity to negotiate; but it will not be much in the short term.
For the longer term the issue is worrying. Both sides have entrenched ews and seem unwilling to consider compromise. They have other bilateral territorial disputes, most notably over exploitation of a gas field to the west of the Ryukyus, where each claims different EEZs. The current pattern of intermittent escalation followed by short but uneasy truces could lead to more serious clashes in the future. Unlike similar disputes in the South China Sea, the direct involvement of the US through obligations under their security treaty with Japan raises the stakes. Increased Chinese military capability in the region which has already fuelled concerns in Japan and the US means that the potential for an incident involving military forces has increased. Given the substantial economic interdependence of the three countries, the impact could be very significant and have global consequences. With US elections also being held within the next month, much rests on the capabilities of all new leaders within the region to find ways of providing a longer term framework for dispute resolution.
The views expressed here are the author's own and do not necessarily reflect those of RUSI.
Simon Chelton is Managing Director of Cheltons Consulting. A graduate of Tokyo's National Institute of Defense Studies, he was the UK's Defence Attaché in Tokyo between 2003 and 2007.