East Asia Territorial Disputes: Geopolitical Implications

BMI View: Geopolitical tensions in East Asia will rise over the coming years, as China, Japan, South Korea, and Russia become more assertive in their ongoing territorial disputes. Present-day animosities reflect both the legacy of World War II and more contemporary rivalries. Although military conflict is unlikely in the near term, Japan will become more nationalistic in orientation, leading to greater tensions with China in particular. However, Japan's geopolitical manoeuvrability will be constrained by the country's colossal debt burden and unfavourable demographics over the longer term.

Geopolitical tensions are rising in East Asia, as China, Japan, South Korea, and Russia become more assertive in their claims to numerous disputed islands. Japan is the common element in all these disputes, and is thus facing the greatest amount of pressure. Anti-Japanese sentiment is especially powerful in China and South Korea, owing to widespread perceptions that Tokyo has not atoned sufficiently or sincerely enough for the Imperial Japanese Army's atrocities in Asia in the 1930s and 1940s. This anti-Japanese sentiment is a major factor stirring nationalist sentiment in territorial disputes over small islands. The other main factor is contemporary military power considerations, as China's influence rises, Japan seeks to balance it, South Korea pursues its own independent path, and Russia attempts to remain a player in the Far East.


Japan and South Korea dispute the ownership of Takeshima (in Japanese)/Dokdo (in Korean), which lies in the sea separating the two countries but is administered by South Korea. Even the name of the sea is disputed, with Japanese referring to it as the Sea of Japan and Koreans calling it the East Sea. (For many years, Seoul has campaigned to have the name of the sea formally recognised internationally as the East Sea.) Dokdo/Takeshima's main importance for Seoul and Tokyo, other than national prestige, stems from rich fishing waters and potential gas deposits.

South Korean President Lee Myung-bak visited the islets in August 2012, raising Japanese ire. Lee also used the occasion of Korea's independence from Japan (August 15) to criticise Tokyo's perceived failure to address atrocities committed in Korea during its occupation of the peninsula in 1910-1945. More broadly, South Korean hostility towards Japan has already affected government policy. In June 2012, Lee's administration was forced to postpone the adoption of a military and intelligence cooperation pact with Japan, owing to a public backlash among Koreans.

Diaoyutai/Senkaku Islands

China, Taiwan and Japan dispute the ownership of the Diaoyutai (in Chinese)/Senkaku (in Japanese) islands, which are in the East China Sea but are formally administered by Japan. As with Dokdo/Takeshima, prestige and potential gas deposits mean that all parties view the islands as important. Japan and China also dispute their exclusive economic zones (EEZs), that is, territorial waters stretching 200 nautical miles from the coast. A stark reminder of the sensitivity of Sino-Japanese maritime disputes emerged in September 2010, when the Japanese authorities detained a Chinese captain for two weeks after his fishing boat collided with two Japanese coast guard vessels in the disputed waters. Tokyo swiftly released the captain after China suspended ministerial-level contacts and allegedly threatened to cut off exports of rare earth metals to Japan. The incident highlighted Japan's weakness in the face of China's rising power in the region. At the end of August 2011, China's official news agency called upon newly inaugurated Japanese Prime Minister Yoshihiko Noda to respect China's 'core interests', especially the Diaoyu islands. Beijing was evidently warning Noda, who had previously criticised China's rapid military build-up, not to adopt a nationalistic policy.

In April 2012, China reacted angrily to a proposal by Tokyo's prefectural governor, Shintaro Ishihara (arguably Japan's most prominent nationalist politician), that the Tokyo Metropolitan Government purchase the islands from their private Japanese owners. In July 2012, the Japanese government made a counter-proposal that it purchase the islands instead. It would appear that Noda hopes that bringing the islands under Japanese (as opposed to Tokyo's) jurisdiction would reduce bilateral tensions, as Ishihara is known for making inflammatory (and anti-Chinese) remarks. Nonetheless, China warned that any moves by the Tokyo metropolitan authorities or Japanese government would not change China's perceived ownership of the islands. Tensions re-emerged in August, when a group of Chinese activists travelled to a disputed isle to plant a Chinese flag there.

Kuril Islands

Japan and Russia dispute the ownership of the four southernmost Kuril Islands, which Tokyo refers to as its Northern Territories. The four islands were seized from Japan by the Soviet Union in 1945 and remain the sole obstacle to Tokyo and Moscow signing a peace treaty formally ending World War II. Public opinion in Russia opposes returning the islands to Japan. The Kuril Islands' strategic importance stems from the fact that control of them by Japan could theoretically interfere with Russian naval projection from the Sea of Okhotsk and Russian access to the Pacific Ocean. In practice, Japan would probably never do this, and so the Kremlin's position is determined by its desire not to lose any more Russian territory, no matter how small. Russian President Dmitry Medvedev visited the Kuril Islands on November 1 2010, becoming the first Kremlin leader to do so. The incident raised diplomatic protests by Japan, and coming so soon after the September 2010 maritime dispute with China, reinforced a sense of geopolitical vulnerability on Tokyo's part. In February 2011, Japan once again criticised Russia for inviting Chinese and South Korean firms to invest in the islands. More recently, in mid-August 2012, Russia announced that it would send navy vessels to the Kurils in late August-September to honour Soviet soldiers who died there at the end of World War II.

Japan's Sense Of Vulnerability Boosting Nationalist Forces

To some degree, China and South Korea have an interest in stirring up anti-Japanese sentiment at the moment. China is preparing for a once-in-a-decade leadership transition at a time of slowing economic growth, and knows that nationalism is a useful political tool. Meanwhile, the Chinese People's Liberation Army (PLA), which holds a more assertive stance on foreign policy issues than the Communist Party of China (CPC), is reportedly seeking to increase its political influence ahead of the leadership transition. Thus, a certain amount of sabre-rattling is unsurprising.

At the same time, South Korea is gearing up for a presidential election in December 2012, and although Lee is ineligible for a second term, his conservative New Frontier Party is seeking to retain the presidency. In any case, anti-Japanese sentiment plays well with both conservatives and liberals in South Korea. Elsewhere, Russia has an interest in shoring up its position in its Far Eastern region, in light of the territory's declining population and perceptions in Moscow that China's influence there is rising.

The problem is that nationalist moves by China, South Korea, and Russia are leading to rising nationalism in Japan, too, which Prime Minister Noda has an interest in tapping as he prepares for a possible early general election this autumn. More broadly, as Japan's economy has underperformed its rivals for the last 20 years, many Japanese have come to feel that the government needs to do more to counterbalance China's rise.

The most firmly established nationalist politician in Japan is Tokyo governor Shintaro Ishihara, who is reportedly planning to launch a new party. However, he is far from alone. Former air force chief of staff Toshio Tamogami has established a nationalist organisation, and there are significant right-wing voices in both the ruling Democratic Party of Japan (DPJ) and the main opposition Liberal Democratic Party (LDP). Meanwhile, Osaka mayor Toru Hashimoto, the leader of the regional Osaka Ishin no Kai political movement and a rising star in Japanese politics, has also adopted a nationalist stance on several issues.

Although there is no single nationalist standard bearer, Japan's avowedly patriotic voices have several common goals:

  • Adopting a more assertive stance towards China

  • Bolstering Japan's military forces

  • Revising Japan's constitution, so that Article 9 (which renounces the right to wage war) is dropped or heavily diluted

  • Developing nuclear weapons (this is still controversial, even among nationalists)

Although none of Japan's minor exclusively nationalist parties look set to make significant gains in the Diet, they can still steer the national political discourse further to the right. This could lead to greater tensions with China and South Korea, and ultimately stand-offs or even skirmishes at sea.

Debt And Demography To Curb Japanese Power Over The Longer Term

Going forward, while Japan may well see a more nationalist discourse over the next few years, we have doubts about Tokyo's ability to increase its power over the long term. Firstly, Japan's colossal debt burden (already in excess of 200% of GDP) precludes a significant increase in the defence budget. Secondly, Japan's growing economic dependency on China means that Tokyo can ill afford to alienate its giant neighbour. Thirdly, although Japan could still rely on the US as its security guarantor, Tokyo-Washington relations are not always smooth, and many American politicians ignore Japan nowadays, preferring to court India, Indonesia, and Australia as emerging Pacific powers. Finally, Japan's ageing and shrinking population means that the country will lack the manpower to field a large military. These adverse demographics are also likely to lead to greater risk aversion on Japan's part.

Overall, any moves to make Japan a more militarily powerful and nationalistic country are thus unsustainable, at least until the debt burden is reined in substantially and the population stabilises or is topped up through higher birth rates or immigration. Neither is likely for a long time.

This article is tagged to:
Sector: Country Risk, Oil & Gas
Geography: China, Asia, China, Japan, South Korea, Russia, Asia, Asia, Asia, Asia

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