Economic Implications Will Force Better Relations Between Big Powers In Asia Pacific – Analysis


By K V Kesavan

Maritime security has assumed great importance in recent years in view of mankind’s increasing dependence on the seas. Historically, countries sought to boost their power by seeking to control the oceans. During the Cold War years, rivalry between the two power blocs was also extended to the oceans when the US and the Soviet Union tried to establish their supremacy. Though the Super Power rivalry created an uneasy balance of power situation in the oceans, there was at least a semblance of stability in the maintenance of sea lanes, freedom of navigation and so on. The collapse of the Cold War structures removed the earlier uneasy balance, but introduced a great deal of fluidity in the maritime situation. From then on, non-military and non-traditional aspects of maritime security came to be increasingly emphasised.

China claims to South China Sea
China claims to South China Sea

Two more developments soon followed which had a great bearing on the maritime landscape in the Asia-Pacific region. After gaining freedom, most countries of the region became preoccupied with the tasks of economic reconstruction. In the initial years, they adopted inward-looking economic strategies in their approaches to nation-building. But after the end of the Cold War, there was a major shift in their economic strategies and they began to adopt economic liberalisation programmes based on free market economy. What followed was an unprecedented surge in the economic activities across the seas covering the South and East China Seas and the Indian Ocean. Countries like China, Japan, South Korea, the ASEAN nations and India have started the process of entering into a wide network of free trade and economic partnership agreements and the whole region is already witnessing massive flows of trade, technology and investment. The consistently rising growth trajectories of these countries are predicated on the steady energy supplies from the West Asian region. Any disturbance in these supplies will have serious adverse impact on their economies. It is in this context that they attach utmost importance to the safety of the sea lanes that pass through Southeast Asia such as the Malacca Strait which alone witnesses more than 60 thousand ships plying annually through the narrow choke point. The Strait provides a crucial link between the Indian Ocean and South China Sea. Japan, China, South Korea and ASEAN countries depend upon West Asia for more than 70-75 per cent of their energy needs. As their demands for energy grow in the coming years, the pressure on the West Asian countries will also increase correspondingly. It is therefore imperative for them to ensure peace and political stability in the West Asian region and maintain the security of the sea lanes.

The second development relates to the extensive changes in the maritime jurisdiction under the UN Convention on the Law of the Sea (UNCLOS) which came into force in 1994. Countries, which had earlier conducted their maritime activities without much concern for their neighbours, have now come under many restrictions. The UNCLOS has recognized the right of a country to claim: a) a twelve nautical mile territorial sea measured from baseline; b) an additional twelve nautical mile contiguous zone in which countries can punish violation of their customs, immigration, etc., laws within their territory or territorial zone; c) a continental shelf to a maximum of 350 nautical miles and d) an exclusive economic zone (EEZ) extending 200 nautical miles from baseline and in which countries have rights over resources and all related activities as well as jurisdiction over artificial structures, marine scientific research and protection of the marine environment. Many of the present problems between countries arise from their interpretation of EEZ boundaries, territorial claims to islands in South and East China Sea regions.

South China Sea

South China Sea region has become a centre of great tension due to territorial disputes between China and several ASEAN countries on Spratly and Paracel islands. During the 1990s, China pursued its territorial claims in the region with great assertiveness and this created a good deal of suspicion and distrust among ASEAN countries. After 2000, however, China seemed to have mellowed a little and this resulted in the signing of the Declaration on the conduct of parties in South China Sea in 2002. By this Declaration, China agreed to desist from using force, respect freedom of navigation of other countries and stay away from taking over unoccupied islands. The improved atmospherics helped China, Vietnam and the Philippines to undertake joint surveys of ocean resources around the Spratly islands. Unfortunately, this trend proved to be rather temporary and soon China reverted to its earlier assertive policies in the region. In recent years, China has intensified its patrolling activities to oversee its EEZ, protect its fishermen and observe the activities of the foreign fishing boats. Further, there has been a marked increase in its naval exercises in the area inviting strong protests from countries like Malaysia and Indonesia. The People’s Liberation Army’s fleets have deployed warships to South China Sea.

Both the US and China have also exchanged strong protests against each other’s naval operations. In every meeting of the ASEAN Regional Forum (ARF) since 2010, US Secretary of State Hillary Clinton has spoken strongly on the need for ensuring the freedom of navigation in the South China Sea region. She has also urged both China and ASEAN to work towards framing a code of conduct for the South China Sea. The US, Japan and other allies have pressed China to make its territorial claims in the South China Sea on the basis of international law and not on the basis of historical events or threats. Clinton called upon both China and ASEAN countries to work out a code of conduct consistent with international law. The building of a new naval base on the Hainan Island from where China can deploy most advanced missile submarines and the launching of its aircraft carrier have further heightened the concerns of ASEAN countries who would like to see American naval presence in the region as a shield against the Chinese ’threat’. But China considers American presence as an unwarranted interference and strongly prefers to deal with the concerned ASEAN countries bilaterally. In this connection, it is useful to note the proactive attitude of Japan on this question. Although Japan does not have a territorial issue in this region, the sea lanes of the region that carry 90 per cent of Japan’s crude oil, are a key factor for its economy. Japan has offered to cooperate with the coast guards of the ASEAN countries. It deserves to be noted that Japan has agreed to provide several patrol boats to the Philippines and improve its maritime surveillance capacity. In addition, Japan has also agreed to promote defence relations with Vietnam, Singapore, Malaysia and Indonesia. Japan is also keen to see that ASEAN countries remain cohesive and approach their regional maritime issues collectively as a unit instead of dealing with China individually. Further, Japan fears that if China succeeds in establishing its sovereignty over some islands through bullying, it may adopt the same tactics in its claim over the disputed Senkaku islands in the East China Sea region. There is a strong convergence of strategic interests of the US, Japan and ASEAN and how they will leverage it to bring China to the negotiating table for a long-term understanding remains to be seen. Tokyo is also keen to convene a special Japan-ASEAN meeting focused on maritime security in 2013.

East China Sea

In the previous article, we have seen a report on how the territorial question on the Takeshima Islands has strained relations between Japan and South Korea. With both countries sticking stubbornly to their respective positions, there is very little prospect of any movement towards a solution to the issue. Even before the political outcry subsided in South Korea, Japan is now faced with a more complex territorial issue with China and to a lesser extent with Taiwan. It relates to the Senkaku Islands which are under the administrative control of Japan, but China and Taiwan contest the Japanese sovereignty over the islands. The Senkaku chain consists of five islands -Uotsurijima. Kita-Kojima, Minam-Kojima, Kubashima and Taishoto located at the eastern edge of the East China Sea with a total area of 7 sq km. Clustered around the biggest island, Uotsuri, the islands chain lies 170 km northeast of Taiwan and 410 km west of Okinawa. There is no human habitation in these islands.

Neither China nor Taiwan seriously contested Japanese ownership of the islands until the 1970s when the U.N. Economic Commission for Asia and the Far East came out with findings of undersea oil, gas and other natural resources around the Senkaku Islands. According to Japan, after 1885 onwards, the Government of Japan had made regular surveys of the Islands through official agencies of the Okinawa prefecture. These surveys testified that there was no human habitation in these islands and that there was no indication of Chinese control over them at any point. Whereas China traces its ownership of the islands to the fifteenth century, Japan’s position is that the Senkakus did not belong to any country when it formally incorporated the islands in January 1895. A private entrepreneur set up a fisheries processing plant on Uotsurjima at the turn of 1900, and when the business failed, the islands were virtually deserted until they were sold to Kunioki Kurihara of Saitama prefecture in the 1970s. Following the defeat of Japan in the Second World War, the Senkakus came under the control of the US administration as part of the US Civil Administration of the Ryukyu Islands until 1972 when the Islands were reverted to Japan as part of the Okinawa Prefecture.

Though China had always claimed the Senkakus, it did not rake up a controversy as its leader Deng Xiaoping cautioned that China’s economic development could take place unhindered only in a peaceful neighbourhood. He also believed that a settlement to the dispute could be best left to the next generation which would be wiser than the present one. But the fact that both China and Japan had not fixed the borders of their new EEZs in the East China Sea, created tension and led to mutual accusations of violating each other’s maritime jurisdiction. Japan had deep suspicion that China was illegally exploiting the ocean resources belonging to its EEZs. In 2008 they reached a temporary agreement which would have enabled them to work out joint cooperation in exploiting the natural resources until a permanent agreement was signed. But it was not put to successful operation due to lack of domestic consensus in both countries. Since then China has increased its maritime activities in the East China Sea contributing to serious deterioration in the bilateral relations. The September 2010 incident in which a Chinese ship collided with a Japanese coast guard vessel near the Senkaku islands caused a major diplomatic row between the two countries. The arrest of a Chinese naval captain by Japan added further fuel to the fire. Ultimately, the crisis situation was defused by the release of the Chinese captain, but it left a deep trail of bitterness in both countries.

More recently, in the middle of September 2012, relations once again became more seriously strained following the nationalization of the Senkaku Islands by the Japanese Government. China’s reaction to this was seen in different forms. First, violent demonstrations all across the country broke out attacking Japanese people and properties. Japanese companies, plants and department stores were closed. China cancelled several important events commemorating the fortieth year of their diplomatic relations. Second, several Chinese nationalists from Hong Kong and the mainland forcibly landed on the Senkaku islands and were removed by the Japanese navy. China sent scores of its surveillance ships to the waters close to the Senkakus generating heat and tension in the region. Relations between the two had never sunk so low and some voices were heard in China on the need to ’regain’ the islands even by force. In the midst of these developments the US has made it known that without going into the merits of the dispute, it has a treaty obligation to stand by Japan since the Senkaku Islands are under the Japanese effective control. China does not agree with this stand. The official People’s Daily editorially stated “The US-Japan Security Treaty is a by-product of the Cold War era and should not damage the interests of third parties including China. Any nation that seeks to interfere in the Daioyu islands issue will experience a loss of their interest.”

Though the bilateral relations have deteriorated to an extent not witnessed since normalisation, there is a realization that both countries have to pay heavily for this. Their trade volume amounting to about $350 billion will seriously suffer if the current downward trend is not checked in time. So is the case with Japanese investment in China. Already there are reports that Japanese investors are looking for alternative options for their investments. Realising the implications, China allowed a delegation of business, cultural and political groups led by former speaker of the Japanese House of Representatives Yohei Kono to visit China and they were met by a senior member of China’s powerful Politburo Standing Committee. Though the talks between the two sides were marked by considerable tension, there was an underlying hope that relations would improve in the coming days.

(K.V. Kesavan is a Distinguished Fellow at Observer Research Foundation, New Delhi)

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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