The catalyst for escalation in this longstanding dispute, which involves
claims to sovereignty between China, Japan, and Taiwan, was the announcement by
Tokyo on September 10 that it had signed a deal to nationalize three of the
islets — Uotsurijima, Kita-Kojima and Minami-Kojima — by purchasing them from a
private owner for 2.05 billion Yen ($26 million USD).
According to reports, the
Japanese government had drawn up multiple plans for its next move, and
nationalization, the one ultimately selected by Prime Minister Yoshihiko Noda,
was regarded as the least likely to anger Beijing and Taipei — with the
exception of Plan A, which was to do nothing. Far more provocative among the
eight options considered was the deployment of the Self-Defense Forces (SDF) to
the islands around the clock.
No sooner had the announcement
been made than protests erupted in various cities across China, and the
following day Beijing ordered the cancellation of a scheduled visit by Japanese
lawmakers, and linked the decision to the dispute. The Japanese consulate in
Shanghai announced on September 14 that four Japanese citizens had been injured
in attacks in China. In Taipei, the Ministry of Foreign Affairs summoned
Japanese representative Sumio Tarui and recalled its envoy to Tokyo, Shen
Ssu-tsun. Around the same time, China announced it had dispatched two China
Marine Surveillance (CMS) ships to conduct patrols “near the islets,” while the
Taiwan’s Coast Guard Administration (CGA) raised its profile with public
demonstrations of escort procedures. Tokyo then announced it would mobilize its
coast guard when the CMS vessels reached the archipelago. On September 14,
media reported that six Chinese surveillance ships had “briefly entered waters”
near the Diaoyutais. By afternoon, all vessels had left following a warning by
the Japanese coast guard.
While Chinese media brought the
rhetoric to fever-pitch levels, with the Beijing Evening News calling for Japan
to be “nuked,” and protesters holding placards calling on the government to
“Declare war on Japan [to] settle new scores and old scores together,”
apprehensions of war remain premature.
This is not to say that the
situation does not have the potential to escalate. After all, amid speculation
of a power struggle within the Chinese Communist Party fueled by the
disappearance of President Hu Jintao’s heir apparent, Xi Jinping, from public
view since September 1, some China watchers will claim that the crisis serves
as a perfect diversion. Talk of settling new and old scores — which go back not
only to the events leading up to World War Two, but to China’s first
humiliation at the hands of the Japanese, the First Sino-Japanese War of
1894-1895 — will immediately appeal to the resentment and rising nationalism
among Chinese, and could be used to direct their energy away from home and
towards an external object.
For his part, Taiwanese President
Ma Ying-jeou, whose public support rate has dropped to its lowest level since
he came into office in 2008, could also be tempted to distract the public by
focusing on external matters, such as the Diaoyutais and the South China Sea
territorial dispute, although both issues are largely perceived as irrelevant
among Taiwanese.
So far, though, it is reasonable
to expect that cool heads will prevail, if only for the fact that trade between
Asia’s two largest economies would suffer tremendously should war erupt between
them. The assumption, therefore, is that the situation remains manageable and
that “rational” leaders will make the right decision, which is to de-escalate.
Furthermore, though the decision to nationalize the islets may have been
controversial, Tokyo is unlikely to have acted without consulting its main
security guarantor and security treaty member, the United States. Had
Washington strongly opposed the move for fear of its destabilizing effect, it
would not have happened, as Tokyo would not want to compromise its alliance
over small islets in the East China Sea.
As part of efforts to mitigate
the backlash, Japan also dispatched Shinsuke Sugiyama, director general of
Asian and Oceanian Affairs Bureau at the Foreign Ministry, to Beijing on
September 11 to explain the decision to Chinese officials, while Chief Cabinet
Secretary Osamu Fujimura explained that Japan had never used the term
“nationalize” to describe the move, and had rather “obtained property we had
been leasing."
While the war of word rages, with
each side maintaining it will not give an inch in the dispute, the greatest
risk — and what is now perhaps keeping investors up at night — is the
possibility of small clashes. We have not, for the time being, entered a phase
where the conflict risks becoming militarized. The fact that the Chinese navy
would have to confront both the largest navy in Asia and the largest navy in
the world also serves as a deterrent to escalation, and compels Beijing to
explore other means by which to retaliate and satisfy domestic calls for a more
muscular response. Therefore, as long as the three claimants limit their
operational use to civilian agencies, as opposed to their naval forces, the
conflict is unlikely to escalate beyond a point where it can no longer be
managed.
Likelier scenarios for the near
future, then, involve the possibility of small clashes resulting from accidents
or miscommunication.
The dispute has entered a phase
where almost every element of the trilateral relationship is perceived through
the prism of the Diaoyutai/Senkaku issue. A perfect example of this was news on
September 13 that Shinichi Nishimiya, Japan’s newly appointed ambassador to
China, had suddenly collapsed in Tokyo. The fact that Japanese police felt it
necessary to publicly rule out foul play highlights the need to preempt
speculation that China may have had a hand in the affair. What this tells us is
that in the current context, minor, even unrelated incidents, can inadvertently
lead to escalation.
Meanwhile, all three countries
are sending people and vessels to the area, and activists in Hong Kong have
indicated they could embark on a second high-profile visit to the islets to
uphold China’s sovereignty claim. The further coast guards and fishermen
operate from home, the more command-and-control suffers. Self-initiative can
aggravate tensions. How the three sides would react if a boat commander decided
to ram a Japanese coast guard vessel, or if a Chinese fisherman drowned after
his small boat overturns in a maneuver to avoid collision with a larger vessel,
is hard to predict.
But as long as the presence is
limited to civilian ships, coast guard vessels equipped with nothing more than
machine guns, or fishermen wielding small arms or machetes, even clashes would
likely remain limited to minor incidents which can still be managed by the
political centers. For the time being, neither claimant will dispatch navy
vessels there, which dramatically limits the chances of major escalation.
Conversely, the deployment of navy ships to the area would be a clear indicator
that the conflict has entered a new, and potentially far more perilous, phase.
The U.S. can also play a calming
role in this. If reports that emerged in August were true, the U.S. military
will use RQ-4 Global Hawk UAVs based in Guam to conduct surveillance over the
area, which could help reduce the risks of accidents and therefore could
de-escalate tensions. As long as the conflict is handled by civilian agencies,
the U.S. is unlikely to extend its assistance to Japan beyond intelligence
sharing, and Washington should endeavor to persuade Beijing, Tokyo and Taipei
to stay away from military escalation.
As the world watches from the
sidelines, we can all hope that rational leaders will prevail over the more
extremist elements within their respective countries so that the dispute over
the islets remains manageable and does not plunge the region into a costly and
unnecessary war. So far, this remains the most likely scenario. However, if we
learned anything from the events leading up to World War I, it is that economic
interdependence and “rational” leadership alone will sometimes be insufficient
to avoid a descent into war.
J. Michael Cole
Business & Investment Opportunities
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