Progress in the East China Sea

The big story of the day is that the Japanese and Chinese governments released the details of their agreement on contested gas fields in the East China Sea, over which the two governments have feuded for more than five years.

Under the terms of the deal — which the Chinese government has publicly accepted — Japanese companies will invest in the development of two of the four contested gas fields. The agreement does not settle the question of where China’s EEZ stops and where Japan’s begins, which is probably for the best.

The current deal, according to Yomiuri, applies only to the Shirakaba and Asunaro fields; the two governments will continue to negotiate over the status of the two remaining fields.

It’s important to note that as Okumura Jun wrote Tuesday, “it’s the legal framework for the joint development activities including jurisdiction that matters, not the economics of the deal” — the amount of energy and money involved is relatively miniscule. Okumura-san’s earlier post on the negotiations is also essential reading. (And they keep coming: this post on the aftermath of the agreement is also excellent.)

Meanwhile, as MTC argued today, Japan has little choice but to develop the fields jointly with the Chinese because “it is impossible to send even one cubic meter of the natural gas under the East China Sea to Japan (there is a trough in the way) without sending the gas first to the coast of China via a seabed pipeline.”

I don’t have much to add to MTC’s and Okumura-san’s analysis of the agreement.

The agreement is undoubtedly positive, but its impact should not be overstated. There will be significant sectors of the population in both China and Japan that will be unhappy with the agreement. Japanese conservatives will undoubtedly be displeased by the decision to shelve the sovereignty question and focus on how to best to divide the energy supplies. Chinese nationalists will be displeased that the Chinese government gave in to Japan.

Ultimately Prime Minister Fukuda probably needed an agreement more than Beijing did. The Chinese government has the luxury of ignoring the public’s desires — to a certain extent, anyway. Mr. Fukuda, however, has to make the case for why Japan should pursue deeper cooperation with China. To do that, he needs China’s help. He needs to be able to show the Japanese people that his efforts to build a constructive relationship are yielding tangible, positive results. Judging by the tone of Chinese President Hu Jintao’s visit to Japan last month, it is clear that the Chinese government recognizes that Mr. Fukuda cannot sell the new relationship without Beijing’s help. And so this agreement should at least help the prime minister make a public case for his China policy.

Now if only he had more help from the Japanese media and academia…

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