China vs Japan: FTAs,
Oil and Taiwan
Last of four parts
The growing
competition for oil particularly in East Asia between China and Japan is
dragging Taiwan leading to saber-rattling by both countries. The role of
Taiwan in this equation adds heat into this growing rivalry that also
has military implications.
By
Bobby Tuazon
Bulatlat
China and Japan
account for nearly three-quarters of the region's economic activity and
more than half of the region's military spending. Despite their deep
economic ties and a doubling of their bilateral trade in the past five
years, their relationship is increasingly strained, with dangerous
implications for the United States and the world at large.
China and Japan are
locked in a rivalry over at least three flashpoints: Free Trade
Agreements particularly in the region; oil energy; and over Taiwan.
Free Trade Agreement rivalry
China was the first
country to have a free trade agreement (FTA) with the 10-member
Association of Southeast Asian (ASEAN) bloc with both sides agreeing in
2002 to establish a free-trade area creating a market of 1.8 billion
consumers and a projected economic activity totaling more than $2
trillion. At present, trade between China and ASEAN is growing at nearly
40 percent a year and is predicted to exceed $200 billion a year by
2008.
There is a growing
rhetoric among Southeast Asian leaders that China’s rise presents a
historic economic opportunity rather than a security threat.
Japan, on the other
hand, is revving up its drive toward FTAs with trading partners, largely
fueled by an intensifying rivalry with China. The competition in FTAs
shows the two countries’ increasing economic rivalry in East Asia
particularly in Southeast Asia – traditional trade markets and
investment areas of Japan and the U.S.
Japan joined the
FTA competition, concluding its first FTA, with Singapore, in 2002. It
signed its second FTA, with Mexico, in 2004, and a third one, with
Malaysia, in December 2005. Japan has also been negotiating FTAs with
South Korea and Indonesia. It signed an FTA with the Philippines on
Sept. 10, 2006.
In mid-February
2005, Japan and Vietnam held preparatory talks in Hanoi for formal FTA
negotiations, which are expected to start as early as this summer.
Oil and military deployments
China and Japan,
major trading countries, are also big oil consumers (China is No. 2 in
the world, after the U.S.) but are highly dependent on oil imports. Many
contentious issues related to the search for oil confront China and
Japan. Japan depends on imports for 99 percent of its oil and natural
gas; coastal China is similarly bereft of energy resources.
Furthermore, both
countries have lobbied hard for alternative routes for a pipeline from
eastern Siberia’s oilfields to Pacific Rim nations. The Sino-Japan
rivalry over energy resources shows signs of spreading to the Middle
East.
With Japan
importing almost all of its oil, and the GCC, the customs union
comprised of Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United
Arab Emirates, accounts for more than 70% of Japanese oil imports. Japan
plans to seek the inclusion in the proposed FTA a GCC pledge to
preferentially supply crude oil to Japan, even in emergencies, like war.
The Uzbek deals follow CNPC`s acquisition of a 12-percent stake in
PetroKazkhstan last year for $4.18 billion, thereby extending the
Chinese energy group`s commitment to secure energy sources from central
Asia.
Dependence on oil
imports is driving Japan in competition over scarce energy resources
with China with both energy-hungry countries locked in a simmering
dispute over gas reserves in the East China Sea. The offshore oil and
gas fields under the East China Sea are attractive "domestic" sources of
energy for both Beijing and Tokyo -- and both have laid claim to them.
China argues that the entire East China Sea continental shelf, extending
eastward nearly all the way to Okinawa, is a "natural prolongation" of
the Chinese mainland. Japan has declared its boundary to be a median
line between its undisputed territory and China -- a line that runs
roughly 100 miles west of the Okinawa Trough, which lies undersea just
west of Okinawa and is where the richest petroleum deposits in the area
are believed to be concentrated.
In a muscular
display of its rising military and economic might, China deployed a
fleet of five warships September 2005 near a gas field in the East China
Sea.
Taiwan in the China-Japan equation: ‘A Matter of Life or Death’
The growing
competition for oil particularly in East Asia between China and Japan is
dragging Taiwan leading to saber-rattling by both countries. The role of
Taiwan in this equation adds heat into this growing rivalry that also
has military implications.
There are reasons
why Taiwan represents a strategic determinant in Sino-Japanese
relations. Taiwan is a critical gateway to Japan for Chinese blue-water
naval advances from the south. Hence, the island represents a defensive
imperative for Japan – one that China acknowledges in its own strategic
calculations. According to Japan's Institute of International Affairs (JIIA),
China's blue water navy has been sounding out access channels around
Japan and on its Pacific coast – from the Sakhalin Islands in the north
to the Ryuku Islands in the south, as far west as Taiwan and as far east
as the Philippines. These access channels are of crucial importance
should Chinese submarines seek to attack Japan in times of conflict.
This "China threat"
has recently been analyzed in a Japanese White Paper and was embedded
into the U.S.-Japan Joint Security Agreement. Losing Taiwan could allow
Chinese submarines into Japanese waters from the south, thus
facilitating a naval encirclement of Japan from the South China Sea.
Taiwan thus stands guard as a natural gateway to Japanese waters.
Furthermore, Taiwan
represents an important part of the American strategic security umbrella
that includes Japan, South Korea, the Philippines and Australia – which
Japan seeks to maintain against its big emerging neighbor. Obviously,
China perceives this as hostile to its own strategic interests in Asia.
Okinawa, just miles north of Taiwan, is a strategic American deployment
point which Tokyo views as a crucial counter-balance to Beijing's
encroachment on the Asian stage.
It is for this
reason that Tokyo has supported American arms sales to Taiwan (which
also involves submarines and defense radar systems). Taiwan's (and
Japan's) support for the American Theater Missile Defense (TMD) has
further heightened Beijing's fear that it is being targeted. Clearly,
Taiwan remains at the intersection of much of the geopolitical wrangling
between China, Japan and the United States.
But more
importantly, Beijing links Taiwanese "separatists" with Japanese
"military-rightists" in Tokyo. Beijing has consistently accused Taiwan
President Lee Teng-hui of being an ally of Japanese rightists and forces
in the military, whom the Chinese believe have never abandoned their
dream of conquering the mainland.
Meantime, the Bush
administration, clearly more suspicious of China than its predecessor,
has pushed Japan to take a more assertive stance. It has called for
closer cooperation between the countries' militaries and defense
industries and has encouraged conservative Japanese politicians who have
long wanted to change the Self-Defense Forces into a full-fledged
military and revise Japan's Constitution.
But what has
clearly changed Sino-Japanese ties lately was the joint U.S.-Japan
declaration on February 19, 2005, the first fundamental revision to the
1966 U.S.-Japan Security Alliance. The declaration has been perceived as
Tokyo's willingness to confront Beijing's rising might in the region, as
well as a new-found Japanese assertiveness on the Asian and world
stages. While underscoring Tokyo's alliance with Washington, it also
highlights how Taiwan and cross-Straits relations have become a
fundamental determinant in the increasing Sino-Japanese rivalry in the
region.
Lately, China has
moved swiftly to warn Japan – and, obliquely, the U.S. - in unusually
blunt terms that any interference with Beijing's designs over Taiwan
would be dealt with forcefully.
"I would like to
say calmly to Japan, the Taiwan issue is a domestic affair and a matter
of life or death to us," China's foreign minister, Li Zhaoxing, told his
Japanese counterpart recently. "It is dangerous to touch China's matter
of life or death."
Conclusion
The November 2006
defeat of Bush’s Republican Party in the congressional polls was said to
be a show of the American electorate’s disappointment over the incumbent
president’s military setbacks in Iraq and was expected to open an
assessment of U.S.’ aggressive unilateralist foreign policy. While any
expected shift in U.S. foreign policy particularly for the Middle East
remains to be seen, no such indication is seen in East Asia at this
writing.
The point is, U.S.
imperialism’s aggressive and belligerent foreign policy in East Asia is
fueling more tensions particularly in the Korean Peninsula and North
Korea’s defensive posture is drawing unfounded fears and even
counter-threats not only from the U.S. but also Japan and members of the
United Nations Security Council. Even as it continues to increase its
military presence in this vast region through more military access
agreements, war exercises and military aid for its vassal states, the
U.S. is also seeking to put “counter terrorism” and “multilateral
defense cooperation” on the main agenda of such regional formations as
APEC and the ASEAN.
China, on the other
hand, appears to be staying on the course of its market economy program
through closer trade and financial ties with the United States while
aggressively promoting similar arrangements with East Asian neighbors
notably those belonging to the ASEAN. It appears to be succeeding as far
as ASEAN is concerned probably as a way of easing tensions in South
China Sea where six ASEAN member-countries have separate territorial
claims in the Spratlys and Paracels that compete with Beijing’s
irredentist claims. Developing vibrant trade and investment ties with
countries in Southeast Asia would open prospects for China to use this
new economic relationship particularly with the U.S.’ military allies as
a means of scaling down their security commitments with the U.S. that
include the military encirclement of China. While appearing to be
moderate and economically cooperative with Southeast Asian countries,
China is emerging to be at loggerheads with Japan in its drive to secure
oil and natural gas reserves in East China Sea and other parts of the
world.
But Beijing’s quest
for market-driven economic modernization pursued with active trade
relations with the U.S. is also driving it closer to cooperate with
Washington’s aggressive foreign policy particularly in “counter
terrorism” not only in the region but in other parts of the world as
well. In the Korean Peninsula, China appears to serve U.S. objectives by
its softening influence over Pyongyang but it is also using North Korea
as a buffer against hostile U.S. military policy on China as indicated
in the Pentagon’s encirclement strategy against that former socialist
country as well as in the TMD. It would be interesting to see what lies
ahead in the Korea Peninsula and China-North Korea relations.
The rise of China
as a potential economic and military power in the region that would
threaten U.S. hegemony in East Asia is being used by rightist or
neo-conservative power circles in the U.S. to justify an aggressive
military posture vis-à-vis Beijing. In the current situation, however,
Washington is using carrots to engage China in active trade relations
while using sticks diplomacy to prevent it from challenging U.S.
military supremacy in East Asia. The so-called China threat animates the
U.S. military posturing and, along with so-called threats of terrorism,
is seen to justify prolonged American military hegemony in the region.
While
there is no clear indication of an imminent hostile confrontation
between the U.S. and China, the other flashpoints in East Asia – the
Korean Peninsula and the Taiwan issue, for instance – remain potential
cauldrons of conflict not only between Washington and Beijing.
Bulatlat
51The submarine
incident in November 1994 simply compounded Japanese anxieties.
Furthermore, Chinese academics from the China Institute of
Contemporary International Relations (CICIR) in Beijing acknowledge
in private this strategic calculation.
U.S.
and China: Harmony Today, Confrontation Tomorrow?
Second of four parts
The
Korean Peninsula: U.S. Military Aggression and Pyongyang’s Response
Third of four parts
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