Senkaku / Diaoyutai Islands - Escalation Potential

Beijing is attempting to build a navy able to operate effectively in Asia, where China's most vital maritime interests lie. These include sovereignty claims, including the land features and associated water areas of the Diaoyu Tai (or Senkaku Islands).

A major China-Japan military conflict seems improbable. In 2003 bilateral trade between China and Japan reached an all-time high of $120 billion. However, with continued robust growth in China's economy and resultant energy requirements, the discovery of greater oil reserves than previously thought in the Senkaku (Diaoyu) Islands could enflame the century-old dispute with Japan over sovereignty of these territories. Conservative politics in Japan and a rising nationalist tide in China could further polarize the parties. Both China and Japan would probably realize that their best interests lay in avoiding military conflict, so this should be a limiting factor to a violent resolution.

However, Ian Bremmer, President of the Eurasia Group and a senior fellow at the World Policy Institute., notes the politics of escalation on both sides [International Herald Tribune, May 20, 2005].

"Last year, there were reportedly some 47,000 demonstrations in China. Nearly all took place outside Shanghai and Beijing and were aimed at local - not central - authorities. China's provincial officials therefore have good reason to capitalize on anti-Japanese sentiment and to channel growing social discontent toward Tokyo. ... Local officials are now competing against one another to over-supply China with nationalist fury at Japan.

"The faction within the ruling Liberal Democratic Party loyal to the party's secretary general, Shinzo Abe, is positioning itself for a post-Koizumi era in Japanese politics. They've discovered that reinvigorating Japanese nationalism at China's expense is an effective way of containing the growing popularity of the opposition Democratic Party of Japan and a lot easier than tackling economic reform.

"China-bashing is simply a winning formula in Japanese domestic politics. That's part of why Japan has now expressed a clear interest in Taiwan's security, pushed the envelope on territorial disputes with Beijing, and aligned its position on North Korea's nuclear program more closely with Washington's."

A China-Japan conflict could disrupt the balance of alliances in Northeast Asia. Korea and Taiwan, might side with China in a conflict, while Japan would look to the United States. The US might be called on to defend not only its staunch ally but also the interests of Western oil companies. Thus far the relative calm of the Senkaku dispute -- in contrast to the Spratlys -- may be attributed in part to the presence of US forces nearby.

The US does not take a position on the question of the ultimate sovereignty of the Senkaku Diaoyu Islands. On 14 September 1996, a US State Department spokesman referred to the US's neutral position on the Senkaku Islands issue. On 09 April 1999 US Ambassador to Japan Thomas S. Foley said "The United States notes the Japanese claim to these islands, and we are not, as far as I understand, taking a specific position in the dispute.... We do not believe -that these islands will be the subject of any military conflict, and so consequently, we do not assume that there will be any reason to engage the security treaty in any immediate sense."

The 1960 US-Japan Treaty of Mutual Cooperation and Security applies to territories under the administration of Japan, including the Senkaku Islands. In November 1996, Assistant Secretary of Defense Campbell stated that the basic position of the US is that the Japan-US security treaty would cover the Senkaku Islands. Secretary of Defense William Perry reconfirmed this fact on 03 December 1996.

On March 24, 2004, Adam Ereli, Deputy Spokesman at the US State Deparment said "The Senkaku Islands have been under the administrative control of the Government of Japan since having been returned as part of the reversion of Okinawa in 1972. Article 5 of the 1960 U.S.-Japan Treaty of Mutual Cooperation and Security states that the treaty applies to the territories under the administration of Japan; thus, Article 5 of the Mutual Security Treaty applies to the Senkaku Islands. Sovereignty of the Senkaku Islands is disputed. The U.S. does not take a position on the question of the ultimate sovereignty of the Senkaku Diaoyu Islands. This has been our longstanding view. We expect the claimants will resolve this issue through peaceful means and we urge all claimants to exercise restraint."

On 10 February 2005 U.S. Undersecretary of State John Bolton said that Japan's new assertiveness is in line with the desires of many Japanese politicians to take their country beyond its post-World War Two pacifism. "It's a question of the evolution of Japanese thinking on its own. Japan has made it clear they want to resolve all of the territorial disputes by diplomatic means and that's certainly something that we agree with. Our kind of getting in the middle of it is probably not the most productive way to proceed."

After a November 2004 incursion of a Chinese nuclear submarine into Japanese territorial waters, Japan responded in February 2005 with a declaration of formal possession of the Senkaku Islands. This declaration resulted in China sending a warning for Japan to back off or "take full responsibility" on April 14. The extremely strained relations between China and Japan helped to fuel the anti-Japanese demonstrations in April 2005.

The 26 September 2006 election of Shinzo Abe to the post of Japanese Prime Minister suggested a turn for the better in Sino-Japanese relations. Soon after, he was invited by Chinese Premier Wen Jibao for an official visit and China's state media lauded the meeting as a "turning point." Another meeting is scheduled for Although the Senkaku Islands are still disputed, any rapproachment between Japan and China is a step towards eventually resolving the issue.