An assessment of territorial disputes of Diaoyu Dao (Senkaku) Islands



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An assessment of territorial disputes of Diaoyu Dao (Senkaku) Islands
White paper for Ministry of Foreign Affairs of

the People’s Republic of China: The Department of Asian Affairs


Dragon Consulting Firm

Chung Wen Chen (Jerry), Jules Ottino-Loffler, Xiao Han

PSC 783: Comparative Foreign Policy

Prof. G. Matthew Bonham

December 3, 2012

1. Executive Summary

China’s increasing actions and missions on defending its territorial claims in the past 20 years, supported by its rising state capacity, lead to the growing conflicts between China and its neighbors. Among these territorial disputes, the conflict between China and Japan on Diaoyu Dao (Senkaku) Islands is worthy of more attention. It involves the three great powers in northeast Asia: China, Japan and United States, which undermines the stable present structure and brings new uncertainties to the future of the region. Besides, considering rapid escalation of the conflict and several confrontations between two navies on East China Seas in the past ten years, the possibilities of starting a full-scale war requires rational and cautious strategies for both sides.

After scrutinizing the eight possible options for China, we have three suggestions to China’s government: 1.Getting the United Nations involved with the territorial disputes; 2.Uniting Taiwan when negotiating with Japan; 3.Solving this problem by “Terms Exchange” – giving up some economic as well as other rights to obtain the absolute sovereignty of the islands.

This paper is organized into four parts. In the first part, we will briefly state the conflict and introduce the different interpretation of history from both sides. Then, we will examine the eight possible options presented to the Chinese government by rational choice model. The third part will discuss the conclusion and recommendations, and in the last part we will give our reflections about the whole project.


2. Introduction of the Conflict

a. Background Information

The Diaoyu Dao Islands (Senkaku Islands in Japanese and Tiaoyutai Islands in Taiwan) are the group of islands located in the waters between 123°20’ -124°40’E (East Longitude) and 25°40’-26°00’N (North Latitude), including Diaoyu Dao, Huangwei Yu, Chiwei Yu, Nanxiao Dao, Beixiao Dao, Nan Yu, Bei Yu, Fei Yu and other islands and reefs. The total landmass of these islands is approximately 5.69 square kilometers. Diaoyu Dao, situated in the western tip of the area, covers a landmass of about 3.91 square kilometers and is the largest island in the area. The highest peak on the island stands 362 meters above the sea level.



b. The Statement of the Problem1

The conflict is rooted into two questions about the different justifications of history: who has discovered the islands first and the jurisdiction of the islands. To the first question, both China and Japan individually claim that the island was first discovered by them. To the latter one, China claims that as the affiliated islands of Taiwan, Diaoyu Dao Islands should be returned to China according to declarations during and after World War II, while Japan insists that as part of Nansei Shoto, they could retain the islands according to the Treaty of San Francisco.



(I) The Discovery of the Islands

From China’s aspect, the discovery of the islands could be traced back to the book Voyage with a Tail Wind (Shun Feng Xiang Song in mandarin) in 1943. In the following five centuries until 1866, the record of these islands could be found in the reports written by imperial envoys of Ming and Qing Dynasties who were sent to confer titles on the Ryukyu King, since Diaoyu Dao was exactly located on their route to Ryukyu. Maps published by China, Japan and the West from the 15th century to the middle 19th century supported the claim made by the Chinese.

Japan claims that the Senkaku Islands were first discovered in 1884, and they ascertained in 1885 that the islands were uninhabited and there was no evidence of ownership by China.

(II)Justification of the Islands and the related International Documents

The justification of the islands is significant because it determines what international documents are effective.

To China, Diaoyu Dao Islands are “islands appertaining or belonging to the said island of Formosa”, so it should be returned to China after World War II. They were ceded to Japan together with the Taiwan Island in the Treaty of Shimonoseki (1895). Therefore, the islands are included into “all the territories Japan has stolen from the Chinese” in Cairo Communiqué (1943).2 In the Potsdam Declaration (1945), the requirement was reaffirmed that “The terms of the Cairo Declaration shall be carried out and Japanese sovereignty shall be limited to the islands of Honshu, Hokkaido, Kyushu, Shikoku and such minor islands as we determine.”3 In 1946, the General Headquarters of Supreme Commander for the Allied Powers issued the No.677 instruction (SCAPIN – 677) that “Japan is defined to include the four main islands of Japan (Hokkaido, Honshu, Kyushu and Shikoku) and the approximately 1,000 smaller adjacent islands, including the Tsushima Islands and the Ryukyu (Nansei) Islands north of 30° North Latitude”.4

Japan insists that in 1896, Diaoyu Dao Islands were first leased to Koga Tatsujior who later fully purchased them in 1930. Since then the islands have been claimed as a part of the territory of Nansei Shoto. In that case, it should be noted in the Article 3 of the Treaty of San Francisco that Japan could retain the islands, instead of Article 2 that “Japan renounces all right, title and claim to Formosa and the Pescadores”.5

In 1971, United States returned these territories to Japan according to the Agreement Concerning the Ryukyu Islands and Daito Islands (Okinawa Reversion Agreement). Therefore, the Senkaku Islands are fully and officially part of Japanese territory, up to and including enforcement of legal enforcement and governance from the Japanese perspectives.
3. Current Situation

The Diaoyu Dao Islands have been under the administration of Japan government since US government turned over the islands to Japanese government in 1972. In 2012, both Tokyo Metropolitan and Japanese central governments announced plans to purchase the islands, and on Sept.11, 2012, the Japanese government nationalized the islands,6 which infuriated Chin and exacerbated their relationships. On the contrary, since 2008, China has sent navies and fisheries administrative ships to enforce its presence around the islands and to challenge the control of Japan. Such actions led to several conflicts, such as the 2010 Senkaku Boat Collision Incident and the following confrontation of the two navies.

What makes the conflict more complex is that despite the fact that PRC and Taiwan share a similar perspective of history, and PRC have been making welcoming gestures to invite Taiwan with open arms on working to resolve the territorial disputes, Taiwan has turned down the intriguing offer. The reason for this is the ongoing sovereignty disputes across the Taiwan Strait; therefore it is not a suitable way or approach to work together.
4. Suggestions, Possible Results and Aftermath
a. Negotiation between China and Japan with United States involvement

One possible option is to take is to get the United States involved in the negotiations, by using the United States as means to pressure Japan into attending the meetings on the dispute rather than just ignoring the issue entirely. This option is acceptable in the United States, as a number of governmental officials have expressed concern over the dispute and a wish to see it resolved. In calling the United States over, it would be best to place its roles during the talks in a sort of mediator role or to simply maintain political pressure to keep the talks moving and to keep the talks running to a conclusion.

The benefits of this option is that the Japanese government will have a harder time, ignoring the calls for the talks as doing so will be going against the wishes of one of their own allies. As Japan will not be able to back out of the talks, which so long as China keeps control when it will occur, so they can ensure that their case is at its strongest possible, while Japan will have less time to prepare one.

The dangers are that the United States is likely to be both biased in favor of Japan and will attempt to take a larger role in the negotiations than what they will be offered. The goal is to have the US ensure that Japan sticks with the talks, but to keep the talks as bilateral as possible. Despite a relative lack of US interest in what happens to the islands, but once they become involved they will work towards their own goal which is likely to be more favorable to Japan.


b. Negotiation between China and Japan with United Nations involvement

Getting the UN involved could provide useful, as it can offer a significant amount of normative power that can be used against Japan in order to establish negotiations. By taking the issue to the General Assembly, it is possible to create a large-scale alliance to create international consensus on the ownership of the Diaoyu Dao Islands. While the ruling of the General Assembly is non-binding, it will produce normative weight that Japan has to respond to and adds additional legitimacy in all future dealings between China and Japan when dealing with the issue of ownership. Also the use of normative power will make a stronger impression and argument to the Japanese and the rest of the world, as other countries that wish to see China as more involved in the traditional international forums are likely to encourage and support the debate. China’s own alliances and partnerships with the developing world should turn out a larger number of supporters than Japan as well.

This option primarily offers a strengthening of the preexisting pressures that already exist on Japan. By getting additional countries to support and aid China in attempting to claim the islands, by backing Chinese claims on the islands. However since this will go through the UN it will take a significant amount of time before talks could even begin, and this will not ultimately solve the dispute. Making this solution useful but ultimately can serve as an additional tool to make the case.
c. China and Japan hand over the territorial dispute to the ICJ

One of the solutions we have considered is that China and japan agrees to hand the Diaoyu Dao Islands territorial disputes to the International Court of Justice. Considering the fact that all UN members are parties to the ICJ’s statue, but the statue does not mean that it automatically grant the court jurisdiction over disputes regarding the involved parties. Once the case is submitted over to the ICJ, it would take years for the problem to resolve. This could deter normal relations between China and Japan, as both countries are unwilling to stand down from the already tense Diaoyu Dao Islands dispute issue.

Even if this case is being sent to the ICJ and the ruling is in favor of Japan, it is unlikely that this result will have any change to the status quo. According to the sovereignty principle of international law, no nation is superior or inferior against another. Therefore due to this reason, there is no entity that could force the member states into practice of the law or punish the states in case any violation of international law occurs. Due to the obvious absence of binding force, the members do not have to accept the jurisdiction. Furthermore, article 94 of the ICJ establishes that if UN members do not comply with the court, the issue may be put forward to the Security Council for enforcement action. However as China is one of the permanent members of the Security Council, any resolution made can be vetoed, thus it is useless for Japan to put forward the issue to the SC. This happened before with example of the 1984 ICJ case in which Nicaragua versus United States.

Considering this option, our consulting firm has concluded that this movement is dangerous for China as China does not have large and good human resources on dealing with international law. Without having decent domestic lawyers with an expertise in international law, the possibility of winning in ICJ seems unlikely. China could decide to hire experienced lawyers from other countries, with example of the case of Tanzania and Malawi Lake Nyasa territorial dispute in which Malawi hired British lawyers as part of its preparation of a legal team to back their claims in the ICJ.

Although there are no binding force, however once the ruling is made and favored towards Japan, if China does not comply with the court, then China will have a bad public image in the world. Due to this external factor, if Japan suggests handing over the territorial dispute to the International Court of Justice, we will advise China to decline and refuse to accept this offer.
d. China gives up and stops pursuing the Diaoyu Dao Islands

This option means that China unilaterally gives up the claims of the territory on Diaoyu Dao Islands without any precondition. In this case, the direct benefit of this option is that China could save its economic and military power on defending the Diaoyu Dao Islands. However, it would lead to huge internal and external threats as well as the economic loss of fishing and oil resources.

The internal threats come from nationalism/patriotism and the legitimacy of the Party. First of all, China lost over 1 million km2 territory in the “humiliated century” from 1840 to 1949, so the completeness of the territory is regarded as a feature of the revival of China. Secondly, since the First Sino-Japanese War in 1894, China was invaded by Japan for several times, especially during the Anti-Japanese War (1937-1945), and from the perspective of China, the Japanese government does not have reflection on the war. Therefore, there is a prevalent anti-Japanese motion in the Chinese society. In that case, the social pressure forces the leaders to take a strong position on such issues. Besides, the legitimacy of the Party is based on the economic growth and the history that the Party led the independent movement in the “humiliated century”, so that protecting national interests is an obligation to the Party, and any weak compromises will be regarded as weakness of the leaders and undermine the support of the Party.

The external threats include the direct security threat from Japan and the spillover effect. To begin with, the security threat results from the location of the Islands and the lighthouse on it. The lighthouse was built in 1978 and renovated in 1988. In 2005, the Japan Coast Guard took over the control of the lighthouse. Given that the islands are 200 nautical miles east of the Chinese mainland, the potential military use of the lighthouse and other kinds of facilities. The spillover effect is that the compromise of China on East China Sea will encourage other countries that also have territorial dispute with China to take more aggressive position and hopes that China will do the same compromise. It will definitely worse off the security environment of China, and also cause enormous economic loss.


e. Term Exchange: Dual Control

An interesting proposal to resolve the differences would be to a form a joint ownership over the islands. The proposal is simple: China gains the territorial rights over the islands, while Japan keeps the majority of the economic rights, including fishing and oil rights. This resolves the security issues that the islands pose, while at the same time allowing the Japanese to continue on as normal in the region. Because the terms exchange would allow the Japanese to claim a degree of victory in the dealing, and the government to keep face to their own citizens it will be much more acceptable to them and the Japanese people as a whole, which would make the deal more acceptable to them, and as a result the talks are likely to conclude and end faster in China’s favor.

This option can be legally messy, as the transference of ownership needs first the agreement of Japan to abandon their claims of ownership, so it still requires that the case for the ownership of the islands be strong in the first place and to be able to start the talks in the first place. Also this will take a strong degree of legal working, so it is possible that the Japanese will be able control the details to a much larger degree than China. The deal by its nature also prevents China from gaining access to what might be valuable resources around the island, so nationalists are not going to be completely satisfied, unless clauses are put into the treaties limiting the time in which Japan can operate are put in.
f. China takes military actions against the Japanese for control of the Islands

Military action is always a possible and powerful option when a government is facing a territorial dispute, while its consequences are unpredictable. In this part, we will discuss what Chinese government should do if it is going to start a military mission, combining economic and diplomatic pressure.

Let us talk about the military mission alone first. The first risk of this option is that it is hard to predict the result of the military actions. As a result of the fast development in the past 20 years, the Chinese navy is now capable to commit military actions on East China Sea. However, the Japan Maritime Self-Defense Force, with 44,000 soldiers and 152 ships, is still the most powerful naval force in the northeast Asia except US navy. In that case, if China wants to start a military action to occupy the islands, the Chinese military force needs an exhaustive plan to coordinate all parts of the military force in joint operations, but such ability is a big weakness to PLA.

The second risk is the intervention of US military force. Although US government insists that it does not have position on the dispute, US government is actually support Japan’s claim. In Oct.2010, the State Secretary Hillary Clinton stated that Senkaku Islands were included in the Treaty of Mutual Cooperation and Security between the United States and Japan, and the Bush administration had the same statement. It shows that if China and Japan start a military conflict, US has obligation to help Japan, even using its military forces. In that case, the conflicts between China and Japan might lead to a full-scale war not only between China and Japan, but also between China and Us.

A following action after the military actions might be lowering the official diplomatic relationship, including withdrawal of ambassador, degradation of diplomatic level and the diplomatic cessation. In that case, the Chinese government will face a dilemma that all of these diplomatic actions will definitely harm the weak relationship between two countries, but necessary diplomatic pressure is needed. Besides, since the consequences of the war are unpredictable, maintaining diplomatic negotiations is helpful to end the war. Thus, degradation of diplomatic level might be a useful choice, or open and secret diplomatic negotiations should be maintained in some neutral country, like Switzerland.

The third element of this option is the economic retaliation. Given the huge mutual trade between China and Japan, the economic boycott and retaliation will tremendously hurt both economies. However, after we compare these two economies, it seems that Japan will suffer more. According to Ministry of commerce of the People’s Republic of China, China is the biggest economic partner, the biggest export market, the biggest source of imports and the biggest buy of Japanese national debt. Besides, Chinese tourists account nearly half of the foreign tourists, and China is the main supplier of the rare earth to Japan. For that reason, economic retaliation might be a helpful weapon as long as PRC could endure the huge loss for its own economy.


g. Blockade the Diaoyu Dao Islands from Japanese Control

One of the options we have been considering is that China decides to blockade the Diaoyu Dao Islands. China is able to achieve this with little effort as most of the islands are spread in China’s territorial waters. Once a blockade is achieved, Japan will have to respond to the action made by China, the ball will be in their hands. Although using this method will let China to immediately stop Japanese forces from getting close to the islands, this might trigger Japan to outright accuse China of trying to cause an all-out war. Whether this will generate physical conflict between the two countries depends on Japan’s decision on the matter. In a war, the first country to fire the first shot is usually the loser, as it will be seen as the aggressive attacker, and countries often lies with sympathy with the victim.

Additionally, whether or not a blockade was seen as lawful depends on the laws of the nations which are directly affected by the action. Taking the case of the Brazilian blockade of Rio de la Plata in 1826, the British law considered the blockade to be lawful therefore they did not contest and take any actions. China does not have to take over the islands immediately, as doing so will immediately cause public outcry within the international community as a provocative act of escalated conflict.

The firm suggests implementing a blockade to merely stop the Japanese from getting closer to the islands, once the Japanese are unable to physically control the islands, they are more willing to discuss terms and alternative options with China. Once the Japanese leave the disputed area, China will have more flexibility to exercise their foreign policies on the Diaoyu Dao Islands disputes. By using allies within the international community and its economic and political influence, China can little by little take over the islands.

Different results will occur when using different units to blockade the islands. We have considered three kinds of unites to achieve the blockade, the first is to use the navy and use military vessels and battleships to blockade the Diaoyu Dao Islands. Using military ships to blockade does not seem like a good idea as it will be seen as bringing military power inside the territorial dispute complicating the quarrel.

Second option will be to bring coast guards to enforce the blockade, coast guards are not as sensitive as bringing the navy. Using the claim of enforcing the territorial waters, the Chinese can toughen up and send naval vessels to blockade the islands which are in the Chinese territorial waters and prevent the Japanese from getting near. It will be a violation if the Japanese crosses over to the internal waters of China.

Final option will be to send in hundreds of civilian fishing boats to effectively blockade the islands, if these fishing boats are being harassed by the Japanese, China will have the ability to send in administrative vessels and reinforcements to protect the safety of these civilians. Military ships could appear to escort and accompany these fishing boats. Once again, the Japanese will have to weight its options in what they should do, as attacking these civilians will be seen as attacking innocent people and will cause domestic and public outcry in the Chinese society. It will be a tough dilemma for Japan to figure out their next step.
h. China and Taiwan Forms a United Front

A supplemental solution to reinforce China regardless of which solution to use is that China try to work out its differences and become a united front with Taiwan on this Diaoyu Dao Islands issue. The first thing for both sides to work together is be set aside the political differences and work together. Two heads are better than one; coordinating between each other can strengthen the Chinese claim of the Diaoyu Dao Islands. Taiwan can support the Chinese naval forces in patrolling the contested areas. The complicated claims of the Diaoyu Dao Islands made by Taiwan, Japan and China individually could now be seen as a simple two side conflict.

Although it might be difficult for governments from both sides of the Taiwan Straits to communicate directly, it would be helpful if Non-Governmental organizations could act as a communications liaison or start up talks to build up trust and consensus on the territorial dispute issue. The first thing China and Taiwan have to face when becoming as a united front is to claim upfront that there is no doubt that the islands is a part of their domestic territories, once the united front are able to physically control the island, then both Taiwan and China can discuss the internal politics of the Diaoyu Dao Islands.
5. Recommendations

Going over the options, it seems like the best course of action will be to push Japan through the UN to build up normative power, alongside the later usage of negotiations the term exchange to ensure that the deal goes through as cleanly as possible and with the least resistance from Japan as possible. The United States can be useful as a third party enforcer if the Japanese prove fairly reluctant, but with the use of the UN should be able to start of a round of talks.


6. Implementation

In order to implement this plan the first step to pull up a base of support first amount the friendly nations and then bring up the island dispute to the General Assembly at the UN. This should front load the vote to make it easier to pass the resolution. At the same time the UN is debating the ownership another round of talks should be proposed to Japan to get started on that side. Once the talks begin the case for Chinese ownership should be lain out as clearly as possible and directly afterwards the offer for the terms exchange should be made as compromise. The debate is likely to go back and forth for a while before settling on the deal as a peaceful middle way. This should move the discussion from who owns the islands to working on the exact rights Japan gets to keep.


7. Conclusions

We have tried to brainstorm all kinds of solutions and predict the most possible outcome following implementation of the particular policy. It seems like best option will be to use indirect social pressure rather than legal or military means to gain the islands. From the legal side of things, Japan possesses a very strong legal case and has much more experience with the international court system than China, leaving them at a disadvantage. Taking military action while would claim the islands in the short term, it will cause significant harm for China’s reputation as well making it harder to work with other nations in the future, furthermore it might as well potentially start a war which is not in China’s interests.



Most of the strategies cannot guarantee success, but there are different risks associated with each one and it is possible to minimize risk and make the deal attractive for the other side instead of directly fighting with them. It should be noted that all suggestions should only be undertaken when believing that our client China have a negotiating advantage. This has to be taken into account when deciding how to move forward. As these solutions do not necessarily ensure success rather serve as differences means with different risks to achieve success. By placing pressure carefully on the other side, while constructing a way out, it becomes possible to guide an otherwise reluctant opposition to make favorable agreements.


1 Since PRC and Taiwan share a similar perspective of the history, in this part for simplification, when we use “China”, it refers to both sides of the Taiwan Strait.

2 Japanese National Diet Library, Cairo Communiqué, December 1, 1943, http://www.ndl.go.jp/constitution/e/shiryo/01/002_46shoshi.html.

3 Japanese National Diet Library, Potsdam Declaration, July 26, 1945, http://www.ndl.go.jp/constitution/e/etc/c06.html

4 GENERAL HEADQUARTERS of Supreme Commander for Allied Powers, SCAPIN677, Jan 29, 1946, http://en.wikisource.org/wiki/SCAPIN677

5 Treaty of Peace with Japan, Sept.8,1951, San Francisco, California, USA, http://china.usc.edu/(S(hvmzvbinmivm4055yhpumv45)A(ALlpyi3AzQEkAAAANjc0YTA4MWMtZTczOS00MDk5LTg4MjgtODk5NGY1NjdlZDIz_wuPsWHDK4CTeb7DAqzi7Xq3duw1))/ShowArticle.aspx?articleID=427&AspxAutoDetectCookieSupport=1

6 Kyodo News, "Senkaku purchase bid made official", Japan Times, 11 September 2012, p. 2

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