SENKAKU VS. DIAOYU

The two greatest Asian powers - China and Japan - are locked in an uncompromising dispute over five uninhabited islands in the East China Sea with a total area of 7 square kilometres. The Japanese call them the Senkaku Islands, the Chinese - Diaoyu, Taiwanese - Tiaoyutai, and the British, who found them at the end of the 19th century, named them the Pinnacle Islands. However, the problem is, of course, not about the name of the islands, but the fact that each of the parties to the dispute - Beijing and Tokyo - claim jurisdiction over them and are ready for any eventuality in order to control them.

The islands were discovered by Chinese sailors in the 15th century. However, the Japanese believe that the islands have always been an integral part of Okinawa Prefecture. Whatever it is, more than a century ago, at the end of the Sino-Japanese War, they seemed to have been ceded to Japan forever. However, the US took over the islands after the Second World War. In 1972, the US decided to return them to the Land of the Rising Sun. The Chinese, however, say that their triumph in the Second World gives them the right to "restore their sovereignty" over Diaoyu (Senkaku). Taiwan supports the opinion that the islands belong to the Chinese.

Until recently, four of the five islands that make up the disputed archipelago were privately owned and belonged to Japanese citizens. They were rented by the Japanese government, which prohibited any economic activity there to avoid aggravating relations with Beijing. The dispute erupted again after 11 September when the government of Japan bought the islands of Uotsuri-jima, Kita-Kojima and Minami-Kojima from their private owners for 2 billion yen (26 million dollars).

This caused outrage in China. China's Foreign Ministry said that the deal made by the Japanese violates the sovereignty of China. Beijing demanded that the decision be cancelled and sent several warships to the disputed islands or to the area that Japan considers its territorial waters. In Tokyo, crisis headquarters were created at the prime minister's office in connection with the incident. China's ambassador was summoned to the Foreign Ministry of Japan, where he was given a note of protest about the activities of the Chinese ships.

Meanwhile, in protest against the "nationalization" of the disputed islands by the Japanese government, Taiwan sent 75 fishing boats to their area, while anti-Japanese protests began in many big Chinese cities. The protesters burned Japanese flags and cars, looted Japanese factories and restaurants, as well as embassies and consulates of the Land of the Rising Sun.

In connection with the riots, the Japanese corporations operating in China were forced to suspend their work. Among them are electronics makers Canon and Panasonic, auto giants Honda, Nissan and Mazda. All Japanese firms without exception doing business in China suffered tangible losses. Airlines lost tens of thousands of passengers; Japan Airlines, for example, was faced with the need to reduce the number of flights to China.

The decision of China's customs service to hinder the stable importation of Japanese goods also caused a significant impact on Japanese interests in China. Japan's Finance Ministry called China's decision "mortally important" because China is Japan's largest export market.

A measure of political pressure from the Chinese government was the abolition of the previously planned ceremony in Beijing to mark the 40th anniversary of the restoration of diplomatic relations with Japan. China also announced that its patrol ships will permanently sail near the islands and that Beijing will start using unmanned aircraft by 2015 to monitor the surrounding marine areas, including the Diaoyu archipelago.

Japan, for its part, vigilantly guards the disputed archipelago and expresses readiness to defend Senkaku in every possible way. Japan also counts on the support of the United States, which has a security treaty with Japan and will be forced to help its Far Eastern ally in a crisis situation. Actually, Beijing believes that the territorial dispute was fuelled precisely by Washington's statement saying that the US-Japan agreement applies to the disputed islands as well. For this reason, the Chinese side persuaded Pentagon chief Leon Panetta, who visited Beijing and Tokyo, to promise that the United States would not take sides in the unfolding Japanese-Chinese confrontation. This position was also confirmed by the White House press office which somewhat corrected Washington's original position and said that the US had no intention of intervening in the territorial dispute between China and Japan.

"We believe that good relations between China and Japan benefit everyone in the region. The United States does not have a position on the question of who ultimately owns sovereignty over these islands, and we expect the sides themselves to peacefully settle the matter between," said President Barack Obama's press secretary Jay Carney.

Obviously, a conflict between Beijing and Tokyo is of no benefit to US interests. If the latter is a reliable strategic partner of Washington, the former is a major economic partner, a leading Asian country and one of the drivers of the global political and economic process, in quarrelling with which, especially because of disputed uninhabited islands in the East China Sea, the US does not see any sense. In the context of American responsibility for Japanese security, Washington believes, it is enough that the United States is holding a "nuclear umbrella" over Japan. This, in effect, strips China of the possibility to show off its superiority in the nuclear sphere before the Land of the Rising Sun.

Yet what is happening in the Far East seriously raises the question of how far the China-Japan confrontation can go?

First of all, we should keep in mind one important point, which gives an idea of the reason why the long-standing territorial dispute between the major powers of Asia suddenly entered such a tense phase. Both Japan and China became concerned about the five uninhabited islands at a time when assumptions about the presence of oil and natural gas at Senkaku (Diaoyu) were strongly confirmed. For China, which has poor hydrocarbon reserves, and for Japan, which is absolutely devoid of any such reserves and has abandoned nuclear energy since the disaster at the Fukushima nuclear power plant, the oil and gas archipelago represents a very topical interest.

And, of course, we cannot ignore the factor of nationalism in both powers, which provides no grounds to suggest that any of the parties will agree to abandon claims to the disputed islands. Thus, Japanese politicians are exploiting the subject that it is enough that as a result of the Second World War, their country lost its "ancestral lands" on the Korean peninsula, Manchuria, Taiwan, and South Sakhalin and the Kuril Islands. As for Beijing, since the days of Mao Zedong, it has been busy "gathering Chinese lands". Lushun (Port Arthur) and Dalian (Dalniy), Hong Kong, Macau - this is a partial list of the successes of China in "restoring its territorial integrity". And now Chinese politicians anticipate another victory, which from their point of view, will be "the defence of Diaoyu".

With all these circumstances, is it possible to expect that Beijing and Tokyo can agree not to allow the territorial dispute to escalate into a military confrontation?

Statements by officials deny this possibility. Attending the opening of the 67th Session of the UN General Assembly in New York, Japanese Prime Minister Yoshihiko Noda said: "These islands are an integral part of our territory in historical terms and in accordance with international law. Therefore, there can be no compromise implying a departure from this position."

Commenting on the Japanese prime minister's speech, Chinese Foreign Ministry spokesman Qin Gang said that "some countries ignore historical facts and international law and flagrantly violate the sovereignty and territorial integrity of other countries, openly rejecting the fruits of world victory over fascism and seriously challenging the post-war international order". Beijing calls on "the interested countries to recognize historical facts, respect international law and stop undermining the sovereignty and territorial integrity of other countries".

The parties' intransigence was also proved by the meeting of foreign ministers of China and Japan, Koichiro Gemba and Yang Jiechi, held in New York. During the meeting, they expressed "completely opposite opinions". The Japanese foreign minister urged the Chinese to exercise restraint in their territorial claims to Senkaku. Yang Jiechi, in turn, stressed that Beijing considers the Diaoyu Islands "a sacred Chinese territory since ancient times" and called their nationalization "a serious violation of the territorial sovereignty of the PRC".

And yet, despite the fundamental differences in the positions of the parties, there is still hope for a peaceful settlement of the crisis. It is provided, first of all, by the economic factor.

The trade turnover between China and Japan is 300 billion dollars. China is the main market for Japanese goods. In the dispute with China, Tokyo has to consider the fact that the Japanese economy has not yet been able to recover from the global crisis and the tsunami that destroyed the Japanese nuclear power industry.

In turn, Japan, too, is extremely important for China. Japan is the fourth largest market for Chinese manufacturers. The disruption of trade and investment relations with Tokyo may seriously affect China's export capacity, lead to the closure of a number of enterprises and increase unemployment in China.

Furthermore, the use of force against Japan may affect China's geopolitical position in the region and the world, especially as Beijing is not immune from military failure (not least because the possible use of the Chinese "fist method" will certainly force the US to defend Japan). Bellicose Beijing is unlikely to be able to maintain the image of a reliable economic partner, which is so necessary for China's commercial expansion on the global scale.

Thus, Japan and China are well aware that the price of the conflict between them is enormous, and therefore, is unacceptable to both sides. So far, negotiations that may last for years are more likely. It can be assumed that Japan and China will reach an agreement on the joint development of the waters of the disputed islands, especially as the sides almost reached such a decision in 2008. However, the negotiations failed at the time. Returning to the point at which they stopped four years ago is, apparently, the only way to avoid further confrontation between China and Japan, which, given the significant role played by the two powers and by the region they represent in world politics and economy, still have a lot of common interests.