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Relevance of an East China Sea dispute to India

Bijoy Das was Research Associate at the Institute for Defence Studies and Analyses, New Delhi. Click here for detailed profile.
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  • March 24, 2011

    Chunxiao (Japanese name Shirakaba) is one of the four oil and gas fields in the Xihu Trough in East China Sea. It is located approximately 400 kilometres east off the Chinese cities of Shanghai and Ningbo. Since 2004 there has been a dispute between China and Japan about the right to explore oil/gas in this field. In 2008, the two countries signed an agreement on joint exploration. Yet, China has begun to unilaterally extract oil from this field, and the Japanese are a concerned lot.

    On 8 March 2011, Song Enlai, chairman of the board of supervisors of the Chinese state controlled oil company, China National Offshore Oil Corporation (CNOOC), disclosed that CNOOC is extracting oil from this field. An already suspicious Japan took up the issue with China through the diplomatic channel. When, on 10 March, the Chinese Foreign Ministry spokesperson, Jiang Yu, was asked about this issue, she initially stressed that Chunxiao is located in an undisputed area under Chinese territorial waters but later asserted that China has absolute sovereignty over Chunxiao and that all its actions there are legitimate and right. Finally, she “personally” rejected the veracity of recent reports by saying, “According to me, they are not true.”1

    In the Japan-China diplomatic communication, Japan was assured in the same manner. The new Japanese foreign minister, Takeaki Matsumoto, stated on 10 March that China had denied Song Enlai's comments, that Song Enlai has already retired from CNOOC and his comments do not represent the position of the Chinese government. Thus, Japan seems to be relying more on China’s diplomatic statements rather than on any ground survey.

    Chinese estimates put the size of Chunxiao at 22,000 square km2 and its net reserves at 70 billion cubic metres3 of oil and natural gas. Other, more liberal, estimates provide a much higher range. Nonetheless, both estimates indicate that Chunxiao is capable of becoming a major production centre in coming years.

    The Sino-Japanese dispute over Chunxiao has been lingering since 2004 because of non-agreement on a demarcated boundary.4 Both sides have tried to extract oil/gas from it: Japan in 2005 and China in 2006, not considering the latest incident. The first show of military force happened in September 2005 when the PLA Navy appeared on the scene and effectively blocked Japan’s exploration plans. Both sides thereafter started took steps to cooperate, which culminated in the 2008 agreement on joint exploration.5 However, it is noteworthy that China has already laid a seabed pipeline connecting a CNOOC exploration site at Chunxiao, and that CNOOC maintains an extraction platform above that. So, though the dispute over Chunxiao seems to be contained as of now by Chinese diplomacy and the tsunami, it has the potential for escalation in the future.

    Disputes abound in the East China Sea and the South China Sea, many of which have China as a party. One major reason for so many disputes in these seas is that numerous countries share these two seas, though often there is less than 200 nautical miles of territorial waters left for each country as mandated by UNCLOS. Naturally, none is eager to gift away precious oil, gas, minerals and fishing rights lying therein.

    What is of consequence to India is how China is conducting itself on such a territorial dispute in which it has high stakes. Stakes are high especially for China on two counts. First, Chunxiao can quench its energy demand in a significant way. The “China National Energy Strategy and Policy 2020” issued in 2004, China’s 11th Five Year Plan (2006-2010), its proposed energy law and the recently adopted 12th five year plan, all talk of aggressively exploiting domestic oil and gas reserves. This is essential for materializing China’s strategic goal of quadrupling its GDP between 2000 and 2020. Secondly, China is also trying to secure its maritime neighbourhood from the US military presence.

    China’s conduct indicates that it is, firstly, extracting oil/gas from Chunxiao unilaterally despite the 2008 joint exploration agreement. This can be surmised from the statements of CNOOC both in its 2006 annual report6 and from Song Enlai’s faux pas on 8 March 2011. China seems to be doing so based on its concrete energy strategies, plans and the project mentioned earlier. Secondly, China’s official denial cannot be presumed on the basis of the Chinese spokesperson’s “personal” rejection of Song Enlai’s statement. Simultaneously, China is repeatedly asserting its total right over Chunxiao. Thirdly, China has also been the first party to use military force, albeit as a threat, to bring the situation in its favour. Meanwhile, Song Enlai might just as well have lost his job! Thus, there is no agency other than the Chinese government to assess the actual ground situation.

    India has a much more complex territorial dispute with China. There are also some other disputes of varying magnitude that have a bearing on not only India’s interests but also on other countries of the subcontinent. Together, if these disputes are resolved, they can prove to be a watershed in bilateral, regional and world history. Nonetheless, China has undertaken some strategies, policies, projects and actions which at times keep the disputes unresolved or at times even accentuate them. The Chunxiao experience indicates that China may go ahead with its plans regardless of a pending dispute when it has a vital strategic goal to achieve. It seems that when there is a concrete Chinese strategy and functional plans/projects in place, there is little space for consideration for others’ interests in the Chinese mind. In the Indian experience, the case of damming the distributaries of the Brahmaputra might be based on the same Chinese energy strategies and plans mentioned earlier. The show of military force is also an oft applied Chinese tool. However, when there is will and understanding at the highest political levels, even long-standing disputes are resolved with promptness. An example is the resolution of the China-Russia border dispute.

    Inversely, it can be said that China might have substantial plans and projects which cause disputes to remain pending. It is compelling to draw such an inference in the light of China’s response to India on the damming of the Brahmaputra, on India’s security concerns about the Parichoo Lake, on the presence of Chinese troops in PoK, on the issue of the status of J&K and Arunachal Pradesh as integral parts of India, and on the India-China border dispute.

    It can thus be argued that China probably has long term strategies, policies, plans and projects that come in the way of addressing India’s concerns on some of these issues. India must keep its policy and negotiation options open while dealing with China on all issues present or future. It has to be borne in mind that when an issue is already part of China’s strategy, options will have to be generated to extract a favourable outcome. Strengthening tools to track strategy formulation, monitoring plan/project conceptualization and putting Indian views and concerns across to the Chinese at an early stage might work better than attempting to negotiate on a strategy or project already in the process. In short, the game starts before the strategy.