China-Japan tensions at fever pitch

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By Leith van Onselen

Over the past few months, tensions have been building between China and Japan over a group of disputed islands known as Senkaku, which are currently under Japanese control (see below map).

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The dispute over the islands first erupted in September last year when Japan purchased three of the five islands from a private owner in what it claimed was as a move to stop them from falling into the hands of staunch Japanese nationalist. However, China labelled the purchase a provocative act that essentially denied its territorial claims, leading to violent protests in dozens of Chinese cities.

Since that time, China has sought to demonstrate its claim to the islands by sending government vessels, military ships and aircraft into areas where Japanese Coast Guard ships conduct patrols. In February, China also placed several buoys in waters near the disputed islands, which Japan claimed could be used for tracking Japanese submarines. Then Japan claimed that a Chinese Navy frigate had briefly used missile-directing radar to lock onto a Japanese military ship, which prompted stern condemnation from Japan’s Prime Minister, who likened recent intrusions by China to Argentina’s 1982 invasion of the Falkland Islands, which set off a brief war with Britain.

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After a recent trip to Tokyo, Ambrose Evans-Pritchard has a scoop on the Japanese view of the escalating tensions:

Japan’s national ideology is pacifist, and this is written into Article 9 of its constitution, which states that “the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as means of settling international disputes.”

This peace complex adds a strange twist to events. It inhibits Japan as a muscular China presses its claim on the Diaoyu/Senkaku islands — a cluster of uninhabited rocks near Taiwan — and as Chinese warships push deep into Japanese waters.

Yet there is no doubt that Japan will fight.

“We simply cannot tolerate any challenge now, or in the future. No nation should underestimate the firmness of our resolve,” said Shinzo Abe, the hawkish premier bent on national revival.

After talking to Japanese officials in Tokyo over the last few days, I have the strong impression not only that they are ready to fight, but also that they expect to win, and furthermore that conflict may come at any moment.

“They are sending ships and even aircraft into our territory every day. It is intense provocation. We’re making every effort not to be provoked but they are using fire-control radar. This is one step away from conflict and we are very worried,” said a top government official…

Internal Japanese documents say the situation has become “extremely dangerous” since the Chinese locked their weapons-guiding fire-control radar on a Japanese helicopter and then a destroyer in January, a dramatic escalation. The claim is denied by Beijing…

Over at the revamped Defence Ministry — no longer the meek Self-Defence Force — a top military planner showed me maps detailing the movement of Chinese DDG warships and Yuan-class submarines through Japanese waters. The pressure point is Okinawa, a fresh source of controversy as Chinese academics start laying claim to that island as well. “If they can build a radar site in the Senkakus, it would be major strategic asset,” he said…

I pass these comments on to readers with a health warning since I have not heard the Chinese side of the story, at least not in such intimate detail, but what is clear is that trust between China and Japan has almost completely broken down. The East China Sea has become the most explosive fault-line in the world…

It’s a long article, but one that I recommend reading in full to understand this risk in our neighborhood.

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While war is unlikely, Evans-Pritchard goes to describe how the US could be drawn into any conflict. That would obviously place Australia in an extraordinarily awkward position torn between the ANZUS treaty, which would require us to aid the US in any war effort, and our biggest export market in China.

Let’s hope cool heads prevail.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.