New American 
Nov 6, 2012
Tensions between Communist China, Free China, and Japan are escalating over ownership of five tiny uninhabited islands in the East China Sea — known as Senkaku in Japanese and Diaoyu in Chinese. Chinese patrol boats have been harassing the Japanese Coast Guard with messages asserting Chinese sovereignty over the islands, which have a combined area of about seven square miles and are east of Communist China, south of Japan, and north of the Republic of China. The archipelago includes three other islands, but the area is so tiny that the three smallest islands are typically left out of the policy discussions.
Two months ago, the Japanese government purchased three of the five islands from a private Japanese citizen. The government had rented three of the islands from the owner since 2003 for the purpose of keeping them unoccupied, specifically to avoid development, which might create tensions with Communist China.
Beijing maintains that it has historical ties to the archipelago and that the Japanese government’s acquisition of the islands is intended to boost counterclaims that Japan actually owns them.
Complicating the issue is the fact that the Republic of China on Taiwan also lays claim to the islands, which are much closer to Taiwan than to either Japan or Communist China. Taipei has maintained a low profile in the current crisis, although when its fishing boats have sailed toward the islands they have been confronted by Japanese naval vessels. But the Free Chinese government has strongly protested Japan’s purchase of the islands, insisting that the archipelago — an area with substantial economic fishing interests — belongs to Taiwan.
Also muddying the waters is the fact that the United States recently began joint exercises with Japan in the region, while Communist Chinese and Japanese diplomats were negotiating over the islands. The Chinese Foreign Ministry said that these military exercises were “not conducive to mutual trust in regional security.” Wang Dong, Director of the Center for Northeast Asian Strategic Studies at Peking University, also stated: “I’m very concerned about the current situation. The possibility of escalation cannot be ruled out.”
Although Communist Chinese military forces are substantially greater than those of Japan, which have been limited since the end of WWII to “self-defense forces,” Japan has increased budgetary funding for its coastal defenses largely in response to Communist China’s actions around the small island chain.
What accounts for the rancor over five tiny, uninhabited islands? The Japanese maltreatment of Chinese during WWII still affects those in China. The Rape of Nanking, for example, resulted in the brutal rape and murder of hundreds of thousands of Chinese, a slaughter which surpassed in killings per day even the worst excesses of Hitler or Stalin. Thus the Chinese reaction to the Japanese government’s purchase of the islands has led to public expressions of anger at Japan in many cities of China, and threats against Japanese citizens living in Communist China. A Japanese executive with Nissan, who declined to be identified, asserted, “I want to leave. Protests near my home were horrifying over the weekend.”
The islands may also be near a sea shelf of substantial reserves of oil and gas, resources which both Communist China and Japan need for their large industrial economies. A 1994 Japanese report suggested that 3.25 billion barrels of oil may be located in the waters near the islands. This estimate was more optimistic than that in the annual report by the China National Offshore Oil Corporations, which placed the proven oil reserves in the East China Sea at 384.6 million barrels and the natural gas reserves at 303.7 billion cubic feet.
What are the prospects of resolving the Senkaku/Diaoyu island problem? Much may depend on how much real energy wealth is at stake. A trade war by boycott of Japanese businesses, which Communist China has already started, will ultimately hurt both nations. The more Communist China flexes its military muscle in a way that humiliates Japan, the more likely that Japan — the third largest economy in the world — will begin a significant arms escalation.