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.[1]

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.[2]

There is a growing rhetoric among Southeast Asian leaders that China’s rise presents a historic economic opportunity rather than a security threat.[3]

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.[4]

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.[5] 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.[6]

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.[7]

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.[8]

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.[9]

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.[10]

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.[11]

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.[12]

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