Jun 18

Has the Chinese government sold out China?

Written by Buxi on Wednesday, June 18th, 2008 at 5:44 pm
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The news this morning is of a new resource-sharing agreement in the East China Sea that represents the start of a new era in east Asia. Japan and China has agreed to ignore territorial demarcation for now, and instead focus on extracting oil and gas from fields in the area.

Many Chinese see in the agreement a government desperate to buy international peace before the Olympics, at any price. One post (原贴) from Tianya:

The Olympics is only a game, how can it be used to kidnap China; how can it lead to such a heavy loss in Chinese interests?

China has 100% sovereignty over the East China Sea continental shelf, this is our most fundamental principle. Once China makes a mistake on this basic principle, then the consequences are long-lasting and severe. This naturally implies China will fall into the hopeless situation of having to negotiate. Once China accepts Japan’s demand for “joint development”, it inevitably dilutes China’s sovereignty over the East China Sea continental shelf.

The Chunxiao natural gas fields have already been fully developed by mainland China, why is there any talk of joint development? Japan’s is using its claims of sovereignty to request a taste of Chunxiao’s rewards. I absolutely can not accept this perspective.

If China agrees to sharing the East China Sea oil and gas fields, this is equivalent to recognizing Japan’s sovereignty over the continental shelf. This is a very serious strategic mistake, with unimaginable consequences.

There is similar talk is on various Chinese chat boards, and IHT mentions a protest in Beijing (… but it might be talking about an earlier approved Diaoyutai protest). Many have accused the government and Hu Jintao specifically of selling out Chinese interests. Some have even said its time for a new May Fourth movement, a series of protests that erupted in response to a Chinese government giving up Chinese territory due to foreign pressure, and the birth of modern Chinese nationalism.

Many are especially angry at this announcement because it comes at the same time as continuing Japan-Taiwan tensions over the boat-sinking at Diaoyutai. Many were already calling for the PLAN to join the Taiwanese navy in patrolling around Diaoyutai; others were calling for a Japanese ship making a historic port-call in China to be turned away.

So, what’s really happening? Here’s one amateur map linked on MITBBS (文章,I can’t vouch for its accuracy) which shows what’s involved:

The blue line along the very right side is the extent of China’s continental shelf, and the basis of China’s claims. The yellow line to its left represents Japan’s claims, on the basis of a “middle line” between the two countries. The red box between the two lines shows the specific area (listed by coordinates) that are to be “jointly developed”. The Chunxiao fields are lower and to the left; they are basically straddled by Japan’s middle line, with China’s existing mining operation in undisputed Chinese territory in the western portion.

The actual agreement (原文) in part reads like this:

1. Regarding cooperation between China and Japan in the Eastern Sea
In order to make the still undemarcated Eastern Sea a sea of peace, cooperation, and friendship, and on the basis of consensus positions formed by the senior leadership in the two countries, China and Japan agree to compromise during this transition period before demarcation is complete. The two sides will cooperate on the terms that the legal positions of both sides are not diminished. Both sides have taken the first step, and consultations will continue.

2. China-Japan’s understanding on joint development
(In the area shown by the red box above), both sides will start joint development on the basis of joint exploration and shared profits. Details to be negotiated later.

Both sides agree to consult further in order to realize joint development in the East Sea as soon as possible.

3. Understanding on Japanese involvement in Chunxiao Gas Fields development
Chinese enterprises welcome the participation of Japanese parties in the development of Chunxiao’s gas fields, on the basis of existing Chinese laws on exploiting ocean resources with foreign cooperation.

One can only assume the Chinese government understands the sensitivity here. The involvement in Chunxiao has been described in such a way that it makes it clear a Chinese enterprise retains ownership and jurisdiction over the fields, but a Japanese company will be allowed to invest and share in the subsequent profit. However, it’s the repeated mentions of “joint development” that will lead to cries of outrage from many Chinese.

The Chinese government is handling a domestic land-mine here, and I hope it treads very carefully.

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20 Responses to “Has the Chinese government sold out China?”

  1. Buxi Says:

    After doing a little more reading, I should clarify the history here more.

    China first officially proposed joint development back in 2004 (and has been calling for it since the 1960s), and both governments have had mutual rounds of negotiations since then. In 2005, a more hostile Japanese government signed off on the idea of “joint development”, but insisted that China must stop drilling at the Chunxiao gas fields first.

    So, seen in that light, it looks like all that has really changed this year is a friendlier Japanese government, and better Sino-Japan relations in general. It’s clear unfair to claim that any of this development is in response to the Beijing Olympics. China has clearly not compromised on sovereignty issues.

  2. FOARP Says:

    This move should be welcomed for its sheer sanity, the usual mindless commitment to maintaining ‘sovereignty’ over uninhabited bits of land the area of which is best measured in square feet is somewhat tiring and causes both sides to lose out.

    As for local disapproval, I’m pretty sure the government will stomp on it the same way they have stomped on every movement which has ever questioned their decisions or right to rule. Decisions like this show that the Chinese government is in reality only exploiting Chinese nationalism for their own aims – they do not share it. If the extremists had their way, China would probably now been engaged in simultaneous warfare with Vietnam over the Spratlies, India over Arunachal Pradesh, and Russia over ‘the sixty-four villages’.

  3. AC Says:

    This agreement didn’t touch the sovereignty issue at all. It only agrees to joint development of the area. Well, we have many mining joint ventures inside China, so what’s the big deal?

  4. FOARP Says:

    @AC – The big deal is the warnings that have been issued against previous Japanese attempts at explotation of the area, and the fact that this is a state-to-state arrangement.

  5. yo Says:

    This looks like a good move. My interpretation is that they are overlooking sovereignty in order to get to the resources. I can only guess that the Japanese Nationalist are pissed as well. But oil and gas isn’t good to anyone unless it’s extracted.


    I agree and I’m not sure what the fuss is about “joint ventures”. This seems like a good agreement that will produce tangible results in the near future.

  6. Buxi Says:

    yo’s right, I’ve seen translations of Yahoo Japan’s chatboards, and the Japanese nationalists are indeed pissed.

    FOARP, previous warnings were against Japanese attempts to actually explore and drill in the area *unilaterally*. This type of specific sharing arrangement is something that the Chinese government has formally requested for at least 4 years. I see nothing significant in a “state-to-state” arrangement. This isn’t Taiwan; this is Japan and China.

    As far as whether the Chinese government is exploiting Chinese nationalism, that doesn’t hold much water.

    Clearly it modulates nationalism depending on what it believes is best for the Chinese nation… but if “exploiting” was the only goal, why accommodate the pan-Blues on Taiwan at all? What’s to gained from giving ground on Taiwan over the past 8 years, especially with a charismatic democratically-elected president who demands a re-assessment of 6/4? Is the Chinese government really that stupid?

    Speaking of exploiting nationalism, it’s interesting that dissident websites like Boxun are now berating the Communist Party for not being hard-line and selling out the country. Who would’ve thought the dissidents would turn into fenqing so quickly?

  7. FOARP Says:

    @Buxi –

    “Who would’ve thought the dissidents would turn into fenqing so quickly?”

    Me. Especially given the origin of the term fenqing.
    Hell, check out Eduard Limonov leader of the Russian National-Bolshevik party – the party that makes up the ‘other’ half of the ‘Other Russia’. To put things in an incredibly over-simplified way: The people who are most likely to oppose a government are the radicals, Chinese liberals are mostly busy making money right now.

    “if “exploiting” was the only goal, why accommodate the pan-Blues on Taiwan at all?”

    Because the pan-blues are handing it to them – Ma isn’t even going to insist on being called President (or even “President”) even in Taiwan. Anyway – care to elaborate on how the CCP has been making concessions on Taiwan? As far as I can see, the whole 1991 thing happened in the post-cold war, post-改革开放 relaxation. What’s happened then except a big song and dance about very little?

    Like I said, the big thing is that the two states are working today in an area that had previously been ‘sensitive’.

  8. yo Says:

    This is slightly off topic, but are the KMT “similar” to say the democrats or republicans in the U.S? Like in regards to their positions on the role of the government in day to day life, fiscal spending, social issues like gay marriage, etc.

    Or is it like comparing apples to oranges?

  9. Buxi Says:

    This is slightly off topic, but are the KMT “similar” to say the democrats or republicans in the U.S? Like in regards to their positions on the role of the government in day to day life, fiscal spending, social issues like gay marriage, etc.

    Or is it like comparing apples to oranges?

    Not quite apples to oranges… but oranges to grapefruit? A lot of issues that matter in Taiwan don’t matter in the US, and vice versa.

    Traditionally, the DPP was very much the “liberal” or progressive party. It was (in very rough terms) against big business, against nuclear power, in favor of labor… this is primarily because the KMT ran Taiwan as a one-party state, so *anything* progressive was going to be opposed to it.

    But over the last 8 years, many of the DPP’s former social progressives have gradually drifted away… several former chairmen of the DPP aren’t even members of the party any longer… because the DPP has really become dominated by the independence issue.

    So for now at least, the DPP and KMT are more divided by this issue than anything else. Of course, people in the cities, people in the north, people working in government/military, people in big business tend to oppose independence… while those living in rural areas, in the south, working as farmers/blue-collar jobs tend to favor independence… so there are other factors tied in to this.

  10. Buxi Says:


    The people who are most likely to oppose a government are the radicals, Chinese liberals are mostly busy making money right now.

    No, you missed the point. Boxun and other liberal dissidents spent all spring criticizing the fenqing, and the Communist Party for “fanning nationalism” after Tibet and during the Olympic Torch relay. They also criticized Beijing for taking nationalistic tones with Taiwan, for example. Now, all of a sudden, they’re the ones fanning nationalism (at least so far)… rather than applauding what you called “sheer sanity”.

    Anyway – care to elaborate on how the CCP has been making concessions on Taiwan? As far as I can see, the whole 1991 thing happened in the post-cold war, post-改革开放 relaxation. What’s happened then except a big song and dance about very little?

    Huge concessions.

    Up until 8 years ago, the question as posed by Beijing was if/when Taiwan would return to the mainland *as a province* (or a Hong Kong-style “region”), with Beijing remaining as the central government. The underlying debate behind the “1992 consensus” back then isn’t what it is today; back then, it was a question of whether the ROC government would be the central government, or whether the PRC government would be the central government.

    The kind of things that Ma Yingjiu said in his inauguration speech would’ve been dangerous no-go territory 10 years ago; his insistence that the future of Taiwan should be “decided by the Taiwanese” alone would’ve sounded dangerously like the formulas that Li Donghui once advocated. But now, it’s taken for granted on both sides that whatever Republic of China (Taiwan) is or will be, it isn’t a province or “special region” of the People’s Republic of China.

  11. Buxi Says:

    Many people are still doubtful. Here’s what some people are saying:

    I think the Communist Party’s greatest source of legitimacy is that it has never sold out the country before. A weak democracy will often end up selling out the country. So, a weak country requires an authoritarian government.

    But if the Communist Party really begins to sell out our country.. then that legitimacy to rule will be completely gone.

    And in reply:

    No, it’s both not selling out the country, and guaranteeing growing wealth and strength. As long as it can guarantee these two points, then the cost of changing governments is too high; but if it can’t do these two things, then opportunity cost will be much less.

  12. sun bin Says:

    well, a few comments (which I discussed in my blog)

    1. this is near longjin, which had been explored by Chinese but not pursued (probably less strategic or the quality/yield is not good)
    2. this is as far away from Diaoyu as it could. avoiding the touching issue of Diaoyu
    3. the issue of Diaoyu is likely to impact the argument of okinawa trench. there is risk on chinese claim as well. that is the main reason for defering the sovereignty dispute (fro the japanese perspective, there is also major risk arguing against the continental shelf argument)

  13. sun bin Says:

    4. as discussed by many, it was clearly stated that sovereignty was set aside.
    5. the co-investment is nothing unlike that of other JV (and those in South China Sea with US companies). But since this si regulated industry, China has agreed to open the right to investment to Japan (i.e. unlike the way US treated Unocal to CNOOC). in short, in Japan’s investment, the value of the gas field is counted as Chinese capital, Japan would only contribute cash (and technology, which is likely not counted as capital).

  14. FOARP Says:

    @Yo – The KMT was, of course, originally a Leninist party, but is now pretty similar to a lot of the Christian Democrat parties you see in mainland Europe. The DPP’s policies aren’t actually all that different – I suppose you could say that some of their policies (privitising state-owned industry etc.) fit into what would traditionally be called Conservatism. But Buxi’s right – the main thing which divides them is the independence issue, which distorts Taiwanese politics into the warped shape it is today. The factors that Buxi mentioned matter, but many of them are merely proxies for the most important factor – the 大陆人/本省人 split. Thankfully this split is slowly being worn away by a more localised culture. Hell, even some of the staunchly pro-KMT “If everyone on the mainland spits on Taiwan they would all drown” young Taiwanese I know think nothing of refering to mainlanders as ‘4-2-6’ and themselves as ‘台客’.

    @Buxi – I hadn’t heard that the central government had dropped its requirement that any referendum should be put to the entire Chinese people. As far as I know, Taiwan is still regarded as a province of China – has the PRC decided to dismiss the Taiwan ‘representatives’ (AKA a single Taiwan-born defector and a bunch of people of ‘Taiwanese ancestry’)? Do they recognise Ma Yingjiu as having any legitimate position of power from which to negotiate with them?

    As for Boxun, I think they might criticise the CCP whatever they did.

  15. Buxi Says:


    I don’t think Taiwan is really divided along 本省人/外省人(mainlanders and hoklo) fault lines. Only hard-core independence seekers wish this was the case (and work to make it so), since they’d have such an obvious numerical advantage (75-25).

    But the truth is the KMT is filled with hoklo/Taiwanese power-brokers. Lian Zhan, Wang Jinping, and even the much hated (by deep green) Qiu Yi… all 本省人.

    As far as Beijing’s position on Taiwan, c’mon, modifying the NPC will be one of the *last* steps in a negotiated settlement, not the first. The point is the much, much more relaxed approach towards the definition of “China” and Taiwan that has made negotiations possible. Beijing hasn’t said Taiwan isn’t a province, but it has proven through its actions that it doesn’t care.

    If Beijing had its current position towards Taiwan in the mid ’90s, negotiations would’ve moved forward even with Li Denghui in office.

  16. FOARP Says:

    @Buxi – I don’t think you have to be deep green to lack appreciation for a man who makes random accusations and then hides behind political immunity – Qiu Yi is quite a piece of work. The guys you mention all joined the KMT back when it was the only way to get into power – and wasn’t Lian Zhan born and raised on the mainland?

    But you have to admit that mainlanders are much more likely to support the KMT than benshengren, maybe Ma can turn that around.

  17. yingying Says:

    Well, since the water and land lays between China and Japan. The best way is to working together fairly.

  18. DJ Says:

    There is an interesting blog entry at http://son-of-gadfly-on-the-wall.blogspot.com/2008/06/interpreting-pending-deal-on-east-china.html on this very topic.

    Note that the Japanese participation on the Chinese side of the median line comes in the form of an equity investment in a Chinese company. Unless the Chinese government is constitutionally barred from conferring any mineral rights to an entity with foreign shareholders, it is not making any legal concessions with regard to jurisdiction over its EEZ. The joint exploration in the disputed areas is a different animal. Unless the exploration is conducted under the exclusive jurisdiction of the Japanese Mining Law, for all practical purposes, the result will be to effectively share joint jurisdiction over the disputed area. This will become even more obvious if and when production activities commence in the disputed area. The Chinese government may have yielded on the economics, but has not budged on the legal end.

    In recent years, international law has favored the median line, and the Japanese government has offered to subject the dispute to over the International Court of Justice or the International Tribunal for the Law of the Sea. The Chinese government understandably has refused to do so. Given these recent trends in international case law, nationalists and other elements that want Japan to stand up to China no end will be displeased with the compromise and will insist that Japan continue to uphold its legal claim.

    I am quite interested to read more about the part on international law favoring median lines, which I marked above. Does anyone know more about this?

  19. Oli Says:

    LOL I agree that this is a smart move on China’s part and Chinese nationalists/patriots should chill. there are other ways besides outright arms or brute force.


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