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C H A P T E R F I V E Resource Development in the East China Sea, 2005–2008 IN 2 0 0 4 C H I N A A N D J A P A N became embroiled in a dispute over hydrocarbon resource development in the East China Sea. The Chunxiao gas field lies approximately 5 kilometers west of Japan’s median line in China’s claimed waters. It was discovered in 2001 and is operated by the China National Offshore Oil Company (CNOOC). In many ways the field is a symbol in China of its concerted effort to develop its offshore areas and a symbol in Japan of its failure to use its maritime space. Both sides claim the right to exploit the natural gas in the field, but the MVM reveals that the Chunxiao dispute is about much more than offshore resources. As a function of their competing maritime claims, China and Japan disagree on the location of the ‘‘disputed area’’ in the East China Sea, and by extension the area subject to joint development. The Chinese argue that the disputed area in the East China Sea lies between the Japanese-claimed median line and the Okinawa Trough, the limit of the Chinese continental shelf claim. Furthermore, because the Chunxiao gas field lies west of the median line, even according to the Japanese interpretation of international law, the field is Chinese. Japan claims that the Chunxiao field—as well as the neighboring Tianwaitian, Duanqiao, and Longjing fields—extend onto the east side of the median line into its EEZ and that, consequently, Japan is entitled to a share of the resources produced. Further ambiguity exists as to whether or not Japan claims a full 200-nautical-mile EEZ, which would extend beyond the median line, and include claims to these fields. Tensions arose after Japan detected a Chinese drilling installation at the Chunxiao gas field in May 2004, and they escalated in 2005, when Tokyo commissioned surveys of the median-line area. In July 2005, Tokyo granted 1 2 2 R E S O U R C E D E V E L O P M E N T I N T H E E A S T C H I N A S E A , 2 0 0 5 – 2 0 0 8 1 2 3 Teikoku Oil the right to conduct exploratory drilling on the east side of the median line, which triggered a period of posturing by both sides between April and October 2005. Nevertheless, the two sides held eleven rounds of talks between 2004 and 2007, which led to the consensus on resource exploitation in the East China Sea announced on June 18, 2008. This chapter traces the shift from the tense diplomatic climate in 2004–5 to the cooperative one in 2008. Consistent with the fisheries case, the chapter reveals that the consensus on resource exploitation fulfilled economic aspects of both parties’ objectives; it provides a framework for cooperation on resource development, without prejudicing maritime claims. Consistent with the previous case, however, strategic issues remain unresolved. Furthermore , in addition to the growing awareness in both countries of the tangible importance of maritime space, the issue became enmeshed in the contestedsymbolic aspects of the bilateral relationship. To date, the consensus on resource development has not been implemented. The Value of East China Sea Resources The discussion that follows reveals that despite the fact that China and Japan shared an interest in the exploitation of hydrocarbons in the East China, strategic and contested-symbolic issues militated against cooperation . These relational values fostered a climate in which cooperation with the other was not possible—precisely because of who the other was. Economic Value: Proximate Energy Security Both parties perceived the resources of the East China Sea to be salient for economic reasons. Contrary to the onset of the East China Sea dispute in 1969, both parties felt a heightened sense of energy insecurity in 2004. Persistent Chinese exploration throughout the 1990s, at times in partnership with Japanese firms, yielded little in the way of commercial resources until the late 1990s. China’s offshore production quadrupled between mid1994 and mid-1996, reaching 380,000 barrels per day, but a drop in oil prices led to exodus of foreign partners.1 CNOOC is quite bullish in its estimates and thus claimed that the total reserve base of all the East China Sea fields in development was 363.9 billion cubic feet.2 CNOOC claimed that...

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