Publication: China Brief Volume: 4 Issue: 23

Another maritime incident in the waters of the East China Sea near Okinawa has once again enflamed Sino-Japanese relations, which have been sensitive of late. On November 10, a Chinese People’s Liberation Navy (PLN) submarine entered Japanese territorial waters near Taramajima Island, part of the Miyako Islands chain in Okinawa Prefecture. Like the incident that occurred in January this year when Japanese Maritime Self-Defense Force (MSDF) ships attacked two Chinese fishing vessels in these same waters, Japan’s reaction to the latest incident was swift and vociferous.

After obtaining approval from Prime Minister Jun’ichiro Koizumi, Japan Defense Agency Director General Yoshinori Ono issued an order for the MSDF to patrol the waters. This is the first invocation of the maritime policing act since March 1999, when a North Korean spy ship was spotted off the Noto Peninsula in northern Japan. Japanese press reports were awash with criticism of the Chinese government and its intentions in the waters, which have been the focus of a territorial dispute for several decades. Just two days before the submarine incident, it became public that the Japan Defense Agency (JDA) had issued a report warning of a potential China threat to Japan. The report described in detail three scenarios that could bring forth the possibility of Japan becoming embroiled in a conflict with China. The JDA report also maintained that the military balance in the Taiwan Strait would tip overwhelmingly toward China after 2009, and that Taiwan would be open for attack.

A week after the incident, sonar recordings made it clear that the intruder in Japanese territorial waters was a Chinese PLN Han-class nuclear submarine with a displacement of 5,550 tons, the first domestically produced nuclear submarine in China. Only a day before, the Chinese government had issued an apology for the incursion. The explanation was that the submarine erred due to a “technical glitch,” prompting Japanese defense officials to say that this was always the excuse when Soviet aircraft and naval vessels violated Japanese territory. Some observers considered the apology a “humiliating move” for the Chinese government, suggesting that the Chinese were anxious not to raise the specter of a “China threat” in Asia, particularly as Japan reviews its defense blueprint (the National Defense Plan Outline – or NDPO), and in the wake of the Bush re-election. What has set off tensions in the waters approximately 200 miles east of China and one hundred miles north of Taiwan, is not only the sovereignty of the Diaoyutai/Senkaku Islands but also the potential (far from proven) for a hydro-carbon bonanza in the seabed of this area.

Yet the emotional outbursts over the territorial dispute and this latest incident are more than just about whatever resources (oil and gas) may lay beneath the seabed in this region. The problems that have dogged Sino-Japanese relations for the last one hundred and fifty years continue to do so today. These include historical issues, and the larger question of East Asian hegemony. Make no mistake, neither nation can challenge the power and political clout of the United States in the region, but the United States is unlikely to remain the dominant power forever. China and Japan have concerns about which of the two nations will be the legitimate leader in East Asia over the next century and beyond. Japanese leaders undoubtedly recognize China’s long-term trajectory, hence the desire to maintain a strong relationship with Washington, and to shore up relations with Moscow. Meanwhile, China has been building positive relations with the nations of Southeast Asia, as well as having dramatically improved relations not only with erstwhile Cold War enemy Russia, but also India. Both nations have also made efforts to increase their diplomatic profile and political presence in Central Asia and with the oil and gas producing states of the Middle East.

Ironically, as political leaders have watched the deterioration of the relationship over the past several years, Sino-Japanese economic ties have never been better. In 2003, two-way trade was $130 billion, a thirty percent increase over 2002. Furthermore, Japanese investment in China registers in the tens of billions. But the close economic ties do not spill over into the energy arena. The two nations have been locked in an intense competition to develop and consume Russian petroleum and gas. The Russian government is expected to make a decision on the terminus of the Angarsk oil pipeline on December 15. The Chinese and Japanese governments have been wooing the Russian government with promises of financing and direct aid and investment in the Russian Far East, in an attempt to assure that the final destination of this pipeline conforms to their own interests (Daqing for China, Nahodka for Japan).

Recently Chinese maritime survey ships have been plying the waters around the disputed Diaoyutai/Senkaku Islands in an attempt to determine the exact nature of whatever oil or gas deposits lie beneath the seabed. Japanese leaders have objected to these surveys and demanded that the Chinese stop. The Chinese have offered to jointly survey the area, but the Japanese have insisted that the waters are Japan’s alone to survey. Some in Japan insist that China’s “aggressive” search for energy (in the East China Sea, Russia, and elsewhere) is creating friction with Japan. Meanwhile, some in China are suspicious about Japan’s motives in Central Asia, following a visit by then-Foreign Minister Yoriko Kawaguchi in late summer. Additionally, China was put off by Japan’s eleventh hour bid to get in on the Russian oil pipeline decision. Two years ago, the Chinese and Russian governments had all but settled on Daqing as the terminus.

An additional irritant is the status of Japanese Overseas Development Assistance (ODA) to China. Conservative Japanese lawmakers have long been clamoring for a reduction, or even an end, of this aid to China. The recent incident gives them even more ammunition. The annual amount of this aid tops $950 million, even though it has been cut back by roughly half over the past several years. Apart from the political dynamics, many Japanese simply feel that China no longer qualifies as a developing nation, and that Japanese aid could be spent better elsewhere. Throw in the talk about China’s growing defense budget and many Japanese wonder whether their tax dollars should be spent on a dynamically growing economic and military giant. Japanese Foreign Minister Nobutaka Machimura, widely seen as one of the lawmakers wary about China’s growth, told a Diet committee panel recently that “We are reaching a stage in which [China] is close to graduating [as a recipient of Japanese aid]…I do not think it is necessary to continue [aid] indefinitely.”

The respective publics’ views toward one another, once warm and fuzzy in the 1980s and early 1990s, are now rife with suspicion, and in some cases intense dislike. Nowhere is this more apparent than in the argument over the historical memory associated with the Second World War, and Japan’s actions in China. This hostility was apparent in the final game of the Asia Cup soccer tournament in August, which pitted China against Japan. The home crowd was vocally hostile toward the Japanese side, and the spill-over of this anger into the streets afterwards suggests that this was more than about football and sports.

Japanese citizens are worried about some of the other threats that China poses to Japan, in the form of environmental degradation and acid rain, the potential for nuclear accidents, and the ever-present demographic threat that so worries Russia, as well.

To make matters worse, the leaders of the two nations have not met since October 2001. This prompted the two governments to hastily arrange a meeting between Chinese President Hu Jintao and Japanese Prime Minister Jun’ichiro Koizumi at the Asia-Pacific Economic Cooperation (APEC) meeting in Santiago, Chile. Koizumi and Hu met for about an hour on the sidelines of the APEC summit on November 21. Although the meeting was cordial, the two sides reached no agreement on an upcoming summit, or on the issues dividing them. Hu asked that Koizumi stop visiting Yasukuni Shrine, but Koizumi gave no ground, suggesting that he would continue to visit to pray for peace. Koizumi meanwhile asked for clarification of the submarine incident, and that Chinese vessels no longer venture into Japanese waters.

The situation between China and Japan is far from dire, but misunderstandings and incidents such as the submarine incursion continue to inhibit the development of healthy bilateral relations, in spite of intense economic interaction. Leaders of both nations need to promote a more regular system of high-level, political interaction to ease the deteriorating situation. It is hard to believe that East Asia’s two greatest economic and political powers have not sat down to a high-level summit since the dramatic sea-change in international relations and the international system that came about with the terror attacks of September 11, 2001.