The looming danger of an Asian cold war

Posted on October 10, 2012


The roiling dispute over a remote set of rocks in the East China Sea, known to the Japanese as the Senkaku Islands and to the Chinese as the Diaoyus, is more than a mere diplomatic spat between two of the world’s largest economies. It has stripped away the thin veneer of cooperation between the two Asian giants that most observers assumed would ripen as the two countries became increasingly economically intertwined.

It also serves as yet another reminder of just how potent territorial disputes remain in Asia and how little trust there is between countries where the wounds of previous conflicts are still fresh. Although the probability of actual conflict between China and Japan over the Senkakus is negligible, the current crisis is the herald of a new cold war that will persist for years, if not decades.

The result will be an Asia that remains fragmented, unable to overcome the baggage of the past and one in which the spectre of accidental conflict is ever present. This is not how Asia’s most important tandem was supposed to turn out. Perhaps even without the conscious understanding of both countries’ leaders, the two became ever more economically interdependent once China embarked on its market liberalisation and reform period in the late 1970s. Japanese investment in China reached $6.5 billion (Dh23.9 billion) in 2005, despite poor diplomatic relations, leading a senior official of the Japan External Trade Organisation to claim that Japan and China’s economic relationship is sufficiently compelling and mature to overcome occasional political flare-ups.

Such optimism is the same that propelled English politician and journalist Norman Angell to claim in 1909 that economic integration among the European countries was such as to make war between them impossible. Angell was proved tragically wrong just five years later, and the Japanese trade official’s confidence from 2005 must similarly be seen in a more sober light in the recent wake of massive anti-Japanese protests that grew so violent that the Chinese government had to shut them down. The danger, clearly, is that politics will trump economics in the new Asian cold war.

The reverberations from the latest clash over the Senkakus continue to widen. Ever since Japanese Prime Minister Yoshihiko Noda’s government announced in September that it was buying three of the five islands from their private Japanese owner, anti-Japanese protests have rocked China. The danger was great enough to force Honda and Toyota to suspend manufacturing operations inside China and the Aeon department store chain closed its stores. (The three companies have since resumed operations.) All Nippon Airways announced in late September that 40,000 seats on China-Japan flights have been cancelled, despite the upcoming Chinese holiday that usually draws thousands of tourists to Japan.

As the economic fallout became clearer and as Chinese commentators called openly for war with Japan, Noda doubled down on his rhetoric, publicly refusing to entertain the idea of compromise after Yang Jiechi, China’s Foreign Minister, claimed the islands were “sacred territory”. The war of words seemed for a while likely to become an actual shooting war, as up to 70 maritime patrol vessels and coast guard ships from both counties tensely confronted each other in the waters off the Senkakus.

How much worse will the crisis get and what can be done to defuse the tension?

There are tentative signs that leaders are trying to cool things down. On October 1, Noda reshuffled his cabinet, giving a post to former foreign minister, Makiko Tanaka, who has close ties with Beijing. The Chinese leadership, for its part, appears to be forestalling further public protests. Yet, even as each side continues to harden its rhetoric, Noda made a departure last week from the normal pattern of contentious dispute with China. The prime minister bluntly warned Beijing that it had more to lose than Japan from a continued conflict or war and he prophesied that foreign investors would be scared away from a China that is seen as a bullying threat to its neighbours. The statement came on the heels of nine out of 10 months of decline in foreign direct investment in China, darkening an already dim economic picture. Noda’s threat might provide leaders in Beijing with an excuse to try to climb down from the position they have taken on the Senkakus.

With the leadership transition scheduled for November already upended by the expulsion of Chongqing Communist Party boss Bo Xilai from the Chinese Communist Party and the mysterious disappearance of heir apparent Xi Jinping in early September, further uncertainty and instability is the last thing the leadership needs. Using Japan as a bogeyman to stoke nationalism and let off domestic steam is a time-honoured tactic in China. Yet, the current crisis shows how it can cause a chain reaction that could prove uncontrollable.

So far, no lives have been lost in the waters off the Senkakus or on the streets of Beijing.

But one casualty or one miscalculation and the crisis could indeed become far more serious, plunging the world’s second and third-largest economies into actual conflict. This would harm both economies, destabilise world markets and force the US into excruciatingly difficult choices over whether to uphold its mutual defence treaty with Japan and put at risk its entire relationship with China.

China’s numerous maritime disputes with neighbours make it harder to claim that it is the aggrieved party. Thus, while it seems evident to all outside observers that a shooting war over uninhabited, but strategically placed, islets is not in China’s best interests, it may have taken the events of the past few weeks to make this clear to China’s beleaguered leadership. Fresh from months of territorial disputes in the South China Sea, Beijing could outmanoeuvre Tokyo by making a grand gesture for stability in Asia and announce it will accept the status quo and no longer protest Japan’s administrative control over the islands.

Whether that is a pipe dream or not depends on two factors: How calculating China’s leaders actually are and whether they are ridden by the tiger of Chinese nationalism or ride it themselves. Whatever course China’s leadership chooses, it will continue to believe itself to be wronged and that Japan precipitated this crisis by unilaterally trying to change the islands’ status. Japan asserts that its 40 years of administrative control simply reflect its rightful ownership of the islands, dating back a century. Shots may be avoided, but the cold war between Beijing and Tokyo is real and on display for all to see. However the current crisis gets resolved, it seems a safe bet that relations will only grow chillier with time.

Michael Auslin

South China Sea: Giants jostle for ‘hidden’ reserves

Shifting focus outside the middle east, reigning power ‘USA’ and emerging power ‘China’ jostle for space in South China Sea causing tensions to rise where the latter asks big brother to ‘Shut Up’ over area of influence and sovereignty matters.

“We are entirely entitled to shout at the United States, ‘Shut up’ ” said an article in the overseas edition of the People’s Daily, an offshoot of the Chinese Communist Party’s newspaper as it protested against USA meddling in matters that are under Chinese sovereignty. Well, it’s nothing new on USA’s part, but it’s the first time that the Chinese media has raised its voice against the Western power openly.

The reason for this disagreement: the contested waters in the South China Sea.

The countries bordering the South China Sea are Vietnam, Brunei, Philippines, Taiwan, Malaysia, Indonesia, Singapore and China. The abundant fish had given rise to a large fisheries industry and this also lead to rising tensions between Philippines and China concerning the Exclusive Economic Zones (EEZ). Disputing claimants regularly report clashes between naval vessels.

The sea is also dotted with hundreds on uninhabited islands which are subject to competing claims of sovereignty by several countries. After World War II, the Chinese government exercised sovereignty over the entire area and it remained largely uncontested until 1970’s when the Philippines, Malaysia, Vietnam and other countries began referring to some of the islands as theirs and renamed them.

The United Nations Convention on the Law of the Sea (UNCLOS) which came into effect on November 16th, 1994 resulted in more intense territorial disputes between the parties. The UNCLOS defines the rights and responsibilities of nations in their use of the world’s oceans and establishes guidelines for the management of marine natural resources.

According to a study (Department of Environment and Natural Resources, Philippines) this water body holds a third of the entire world’s marine biodiversity, thereby making it a very important area for the ecosystem.

However the biodiversity in the area has been damaged due to excessive fishing and countries are now using fishing bans as a means of asserting their sovereignty claims. Now, the reason why USA is intervening is because the region has as estimated oil reserve of 17.7 billion tons (the Ministry of Geological Resources and Mining, China).

In the years following the report, the claims and fights have only intensified.

China, the strongest of the contenders has not only appointed a city to administer the disputed Sansha Islands, they have turned to archaeologists for new evidence to support their claims. They conducted underwater research and found coins and pottery to prove that it has historically ‘owned’ one of the islands in the Sansha Islands area.

Chinese archaeologists also accused non-Chinese forces of stealing the underwater relics so that the evidence could be hidden. In 2010, China communicated to the USA that the South China Sea is ‘an area of core interest that is as non-negotiable’ and on par with Taiwan and Tibet on the national agenda. China is also modernizing its navy at a breakneck speed and this has lead to growing uneasiness.

Barrack Obama reportedly said that international rules were needed to resolve maritime disputes in the South China Sea and in response Washington too will deploy 60% of its warships in the Asia-Pacific region.

“It’s high time somebody told USA to mind its business”, said Dr. Aravind Yelery, a member of Bridging Nations, a think tank that focuses on India-China relationships and adds “The Association of South East Asian Nations (ASEAN) should take the initiative to get all the involved countries together and solve the issue, the USA has no business interfering.”

ASEAN is meanwhile trying to settle all the rival territorial claims. In a meeting held in Phnom Penh in July, 2012, Cambodia, which’s China’s ally, repeatedly refused to raise the issue during the ASEAN meeting as well as the ASEAN Regional Forum. But according to China, ASEAN’s failure to agree on a code of conduct over the maritime dispute was caused by Western interests’ (read USA) “meddling” designed to “smear China’s positive role in maintaining the unity of the regional bloc.”

The South China Sea is south of mainland China and a part of the Pacific Ocean, encompassing an area of around 35,00,000 sq km. It’s bordered by some of the world’s most rapidly developing countries and one third of the world’s shipping transits through its waters, more than half the tonnage of oil transported by sea passes through it. It’s also a valuable repository for natural resources and had huge oil and gas reserves beneath its seabed, the reason for US interest.

The worry, however, is that a small mistake or a miscalculation could trigger a confrontation. The South China Seas can become a potential flashpoint in the South East Asian region as China continues to trample on the weaker countries.

The need of the hour is to let ASEAN come into the picture and solve the issue by holding bilateral talks.

Anugya Chitransh

China, Japan and Taiwan island dispute could lead to war

TENSIONS are high in the East China Sea where Japan, China and Taiwan are at loggerheads over the fate of a chain of tiny islands, which the Japanese government claims to have bought, and there are fears that the row could even lead to military confrontation.

A flotilla of vessels from Taiwan sailed into the waters around the islands this morning but were warned off by the Japanese coastguard, while China chose today to officially launch its first aircraft carrier, which could sail straight into an escalating naval dispute.

The eight uninhabited islands and outcrops in the East China Sea are known as the Senkaku islands in Japan and the Diaoyu in China. They have a total area of only seven square kilometres and lie northeast of Taiwan, east of the Chinese mainland and southwest of Japan’s southern-most prefecture, Okinawa. They are marginally closer to Taiwan than the nearest undisputed Japanese territories.

Japan formally annexed the islands in 1895. In the early 20th century an entrepreneur set up a fish processing plant on one of the islands. According to the LA Times the workers “caught fish and collected albatross feathers to adorn women’s hats in Europe”. The operation was closed in 1940 and the islands have been uninhabited since then, but remained privately owned.

Between 1945 and 1972 the islands were under US government control, and in 1969 potential oil and gas reserves were identified in the region. In 1972 the islands returned to Japanese control, but in the same year the Taiwanese and Chinese governments also began to claim ownership of the islands.

China says the islands have been part of its territory since ancient times and should be administered by Taiwan, over which it claims sovereignty. Taiwan claims that it should control the islands, even though neither Japan or China recognise its existence.

The islands have huge strategic value because they lie close to important shipping lanes through the South China Sea. According to the Wall Street Journal: “Strategic planners in Tokyo have begun to refer to this chain as the ‘southwestern wall’, a string of Japanese-held outposts that could be used to block Chinese maritime access to the western Pacific Ocean.”

There are also valuable fishing grounds in the area and there could be gas and oil below the seabed. Some observers compare them to the Falkland Islands in the South Atlantic.

There have been plenty of stand-offs down the years, with regular clashes between Japanese patrols and fishing boats from China and Taiwan. Chinese activists have also visited the islands and in 2004 Japan arrested seven campaigners who landed on the main island.

Tensions rose this year when it became clear that the Japanese wanted to buy the islands from their private owners and matters came to a head earlier this month when the government paid ¥2.05 billion to purchase several of the islands. That prompted China’s Foreign Ministry to announce that Beijing would not “sit back and watch its territorial sovereignty violated”.

The move led to anti-Japanese street protests in dozens of cities across China. There were attacks on Japanese businesses, flights between the two countries were slashed and some manufacturers, including Honda and Toyota, suspended their operations in China, while retailers closed down their stores.

There were also calls for China, which is Japan’s biggest creditor, to try and cripple the country economically.

In the past few days things have become even more tense as China has postponed a ceremony marking the 40th anniversary of the resumption of diplomatic ties with Japan. The two countries have held “candid and in-depth” talks in Beijing, according to the Xinhua news agency.

The BBC reports that “Chinese surveillance and fishing boats have also been sailing in and out of waters around the islands in recent days,” while a flotilla of 58 ships from Taiwan moved into the waters around the islands this morning. The Japanese coast guard issued warnings to the boats and TV footage showed water being sprayed towards the Taiwanese ships, which left soon afterwards.

China also launched its first aircraft carrier on Tuesday in another show of strength.

“It is naive to assume the two sides will successfully avoid coming to blows,” warns the Wall Street Journal. “The way nationalist passions have been stoked in both countries, particularly China, the possibilities of accident or miscalculation are rising.”

Reuters is more circumspect. “The risks of military confrontation are scant,” it says. “But political tensions between Asia’s two biggest economies could fester and worries persist about an unintended incident at sea.”

The Guardian reported that the launch of the aircraft carrier was “a show of naval ambition that could spur regional worries about territorial rows with Japan”.

The Week

Posted in: Economy, Politics