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The Times (UK): Tokyo and Beijing at odds over oil-rich islands: “Two months ago Royal Dutch Shell and Unocal pulled out of the project but the Chinese insist it is going ahead as planned.” (


From Leo Lewis in Tokyo

October 26, 2004


CHINA and Japan failed to resolve a bitter territorial dispute last night, prompting fears that the row could escalate.


Senior officials from both countries met in Beijing for crunch talks aimed at settling the feud over energy rights in the East China Sea. The discussions, scheduled to last only a few hours, extended well into the night before ending in stalemate.


Japan and China have clashed several times this year over the issue and the talks served only to entrench existing positions.


The problem centres on a cluster of tiny uninhabited islands and rocks in the East China Sea, more than 600 miles from the Japanese mainland.


Known as Senkaku to the Japanese and Diaoyu to the Chinese, the tiny islands themselves offer little value. But the territorial limits they imply and the possible resources beneath them give them untold importance to both sides.


Japan and China have also become intense rivals on energy issues. China edged ahead of Japan this year to become the world’s second-biggest consumer of oil, as its economy surges ahead. Japan, which imports almost 100 per cent of its fuel, has meanwhile started looking away from Middle Eastern producers as its chief suppliers. The search for alternative sources has created a hotly contested land grab for a gas pipeline in eastern Russia and oil in seas between China and Japan.


Political analysts say that the Senkaku dispute could turn nasty. China has done exploratory work in an area near the islands — known as the Chinxiao field — and only a few miles from the line dividing Japanese and Chinese waters. Tokyo, believing that the resources — mainly gas — will partly come from its side of the line, yesterday asked for early seismic data from the project but its request was refused. Two months ago Royal Dutch Shell and Unocal pulled out of the project but the Chinese insist it is going ahead as planned.


Efforts to form bilateral agreements over energy projects in the area have failed. For a long time Japan resisted undertaking research in the region for fear of raising tensions but the Ministry for Economy, Trade and Industry ordered research to begin in June.


Japanese officials are believed to have used yesterday’s talks to confront their counterparts over recent revelations that China is already well into planning another oil-drilling project near the islands. If this is confirmed, Japan will file an official request that the project be abandoned immediately.


Yesterday’s meeting also covered the fundamental question of who owns what in the high seas. The ownership of the islands makes a crucial difference to the location of lines demarking each country’s “exclusive economic zones”. China is proposing to redraw the lines along the boundary of the continental shelf, giving it more territory. Japan has countered with a plan for a median line halfway through the disputed area.


Raising the stakes are recent military incidents surrounding the two countries’ conflicting survey projects. Earlier this summer Chinese naval ships interfered with a Japanese research vessel and Japan replied by moving its self-defence boats into the area.

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