Conflict in the East China Sea

China And Japan Are Not Going To Back Down From Each Other

East Asia is trapped in a vicious cycle of escalating tensions, with China’s rising power giving Japanese hawks legitimacy in their bid to bolster the military — exactly what Beijing says it fears.

Count Down to Zerotime,

7 December, 2013

The United States — rival to one power, ally to the other — finds itself walking a tightrope, with Vice President Joe Biden in China this week urging restraint to “reduce the possibility of crisis or mistake”, according to a US administration official.

But that is hard when relations between Asia’s two biggest economies are so poisoned by history. Every time Beijing summons the demons of Japan’s past aggression, Tokyo plays on fears of Chinese domination to come.

“This is a battle about pride,” said Takehiko Yamamoto, international security professor at Japan’s Waseda University. “I cannot, for now, see there being any compromises.”

Simmering tensions heated up with Japan’s September 2012 purchase of some of the Tokyo-controlled Senkaku islands, in the East China Sea, from their private Japanese owners. China, which calls them the Diaoyus, regards them as its territory.

Since then, China has sent ships and aircraft into the area on scores of occasions, prompting counter-deployments by Japan, and last month Beijing declared an Air Defence Identification Zone (ADIZ) covering a large stretch of the East China Sea.

Japan already has an ADIZ, which now overlaps China’s. In October, a Chinese drone flight prompted Japanese threats to shoot down unmanned aircraft that enter its airspace, something Beijing said would amount to “an act of war”.

Each escalation is blamed on the other side, with Japan claiming China is trying to “forcefully change the status quo”, and China saying it must stand up to a re-emerging militarism it sees in Japan under conservative Prime Minister Shinzo Abe.

Abe’s bid to stoke Japan’s slumbering economy has given him political capital to push his long-cherished aim of also rehabilitating Japan’s military, which under the post-war pacifist constitution is restricted to defence only.

Abe has used the tense diplomatic situation “cleverly” to manage his government, said Tomoaki Iwai of Nihon University, painting each Chinese action as a crisis and promoting policies that might otherwise be unpopular among a populace deeply wedded to peace.

“Mr Abe has not directly provoked China. He has been waiting for the other side to give,” Iwai said.

‘No scope for optimism’

Fears about China have opened the door for Abe to boost Japan’s defence budget for the first time in 11 years — albeit by a small fraction of the double-digit rises enjoyed by China’s armed forces over the past decade.

Abe has also established a US-style National Security Council, which came into operation Wednesday and is expected to bolster the power of the premier and a handful of senior ministers. China plans a similar body, although details remain scant.

Beijing’s declaration of its own air defence zone was largely a response to the way it thinks Japan has “exaggerated the threat of China”, said Jin Canrong, a professor of international relations at Renmin University in Beijing.

China’s ruling Communist Party regularly seeks to bolster public support by tapping into deep-seated resentment of Japan for its brutal invasion of the country in the 1930s.

The island sovereignty row is portrayed in China as righting a historical injustice.

Beijing says the islands — believed to harbour vast natural resources below their seabed — were its possessions for hundreds of years before Japan stole them at the close of the 19th century.

Japan’s nationalisation move was greeted by sometimes-violent protests on Chinese streets, a consumer boycott of Japanese goods, and an outpouring of anti-Japanese sentiment which refuses to fade.

“Little Japan is a mean and shameless country,” wrote one user on a Twitter-style weibo site on Thursday. “Die little Japan,” added another.

These hardened attitudes sometimes play into Beijing’s actions.

Its relatively benign response to initial overflights of the ADIZ by Japan and the US — China said it had “monitored” the incursions — was lambasted by the domestic media and online.

When Japan next flew planes over the area, China sent up fighter jets.

Jin at Renmin University said China, which has blown past once-mighty Japan to become the world’s number-two economy, is proving a point with the new defence zone: it is a force to be reckoned with.

“Now China is really confident about itself,” he said.

A conventional solution for taking the heat out of a geopolitical squabble — one that Biden alluded to while visiting Tokyo this week — is to establish a hotline, like the one that links Beijing and Washington.

But frayed relations mean even talking about such a crisis-management tool is off the table for now.

“The Abe administration will never back down. Neither will China,” said Yamamoto of Waseda University.

“There is no scope for optimism in the immediate future.”

Chinese fund sells off Japanese investments in retaliation

The Chinese government may withdraw investments in Japan as a way to retaliate against the United States and Japan for opposing China's newly established air defense identification zone. A shareholder listed as SSBT OD05 Omnibus China Treaty 808150, which is widely considered a Chinese sovereign fund, has reduced its Japanese investment by 600 billion yen (US$5.8 billion) between March and September this year, according to our Chinese-language sister paper Want Daily and the Tokyo-based Sankei Shimbun.

The sovereign wealth fund had invested around 4.24 trillion yen (US$41.3 billion) in 174 Japanese businesses as of March this year but the figure had dropped by 607.4 billion yen (US$5.9 billion) as of the end of September. It was the ninth largest shareholder of the Toyota Motor Corporation with a 300.1-billion-yen investment in March but by September, it was no longer one of the Japanese carmaker's ten major shareholders, said Japan's Chibagin Securities.

Japanese investor confidence has been thwarted by local media reports suggesting Beijing may sell its Japanese shares to retaliate against Japan's nationalization of three of the disputed islands known as the Senkaku in Japan, the Diaoyu in China and the Diaoyutai in Taiwan, since last year. Rumors of China's economic retaliation have also spread on Japanese-language internet sites.

Rumors of China using its growing economic strength to retaliate against Japan have reemerged after China set up the ADIZ in the East China Sea out of the blue on Nov. 23 this year, heightening tension between the two countries.

China might not have reduced its Japanese investments and shares at all, but might have simply removed its title as a major shareholder, holding the shares through commission or under other names, said a senior analyst with Japanese financial services company Nomura Holdings.

However, Japanese investors remain concerned about the fund since its scale has the potential to shake the ground of the Japanese stock market. The fund owned less than a trillion yen (US$9.7 billion) of Japanese shares in 2008 but its holdings had grown to five trillion yen (US$48 billion) by the first quarter of 2012.

http://www.wantchinatimes.com/news-subclass-cnt.aspx?cid=1102&MainCatID=11&id=20131204000092

China pulls out of UN process over territorial dispute with Philippines

• Move underscores China's tough geopolitical stance in region
• Territorial claims continue to dominate visit by Joe Biden

The Guardian,

6 December, 2013

China is taking the highly unusual step of refusing to participate in a United Nations arbitration process over a territorial conflict with the Philippines, one of five countries challenging Beijing’s claims of ownership over the oil-rich South China Sea.

The legal dispute underscores the tough geopolitical approach China is adopting in the Pacific region. It has adopted an aggressive approach toward neighbours over a 2,000-mile stretch that also includes the East China Sea, over which it recently declared the air defence identification zone that has inflamed tensions with Japan and South Korea.

China sent its only aircraft carrier to the disputed waters off the coast of the Philippines for the first time last week, in a move Manila said raised tensions. China’s military said the carrier Liaoning will conduct drills in the area, accompanied by two destroyers and two frigates.

Dealing with the fallout over China’s territorial claims has become the dominant issue for the US vice-president, Joe Biden, who is currently touring the Asia Pacific region.

Biden arrived in South Korea on Thursday after high-level bilateral meetings in China and Japan that were dominated by the issue of the air defence zone.

The Philippines will submit its formal case to the UN arbitration tribunal of judges, which has agreed to hear the case at The Hague, in March. A preview of their arguments were outlined this week in Washington by Paul Reichler, an expert attorney at Foley Hoag LLP hired by Manila to handle the case.

He said China’s blank refusal to participate in the tribunal process, a move it revealed to the Philippines by way of diplomatic letter in February, marked the first time a state had ever refused to take part in an inter-state arbitration under the 1982 UN Convention on the Law of the Sea.

Under the convention, the panel of senior international judges is still required to issue a ruling in the case, despite China’s non-cooperation, although Reichler conceded there were no way of enforcing any ruling.\

But he added: “There is a price to be paid for branding yourself an international outlaw – a state that does not comply with the rules.” China declined an opportunity to comment on the case.

The dispute concerns China’s declaration of the so-called nine-dash line, which claims jurisdiction over nearly all of the mineral-rich South China Sea, overlapping with large segments of territory claimed by the Philippines as well as of Vietnam, Malaysia, Brunei and Taiwan.

In parts, China’s declared jurisdiction, which enables it to exploit lucrative fishing waters and potential oil and gas reserves, stretch more than 800 miles from its mainland coast. It also comes to within 30 miles of the coast of the Philippines.

Under the convention, states have a right to an exclusive economic zone and continental shelf within 200 miles of their coast. Disputes over the South China Sea are not unlike those over the Japanese-administered Senkaku islands – referred to as the Diaoyu islands in China – which are dominating Biden’s visits to Japan, China and South Korea this week.

Although the ad-hoc tribunal formed to deal with the case cannot rule on the sovereignty of the islands claimed by both China and the Philippines, it can provide rulings about the nature of rock formations, with implications for any territorial claims under the convention. Some of the disputed territories are barely visible at high tide, while others are fully submerged even at low tide.

In a bid to strengthen its claims, China has constructed concrete installations on some underwater formations, complete with basketballs and helipads. “A state cannot transform an underwater feature into an island by building on top of it,” Reichler said at a seminar organised by the Center for Strategic and International Studies

In simple terms, the judges will in part be asked to determine when a rock can be defined as an island. If a rock protruding from the sea cannot sustain human life or economic activity, for example, the associated rights in surrounding waters are, under the convention, dramatically reduced, regardless of which state claims ownership.

Reichler also showed one slideshow of an island that, at high-tide, consisted of rocks that only just protruded out of the water. “It is barely big enough to support the Filipino flag,” he said.