Who owns Diaoyu Islands?

Historical documents dating back to the Ming Dynasty establish Diaoyu Islands as Chinese territory. The challenge to Chinese ownership came from Japanese annexation of the islands in 1894-5 following the first Sino-Japanese War.

TENSIONS are rising in the dispute between China and Japan over the Diaoyu Islands — five tiny islands and three rocks covering a mere 7sq km in the East China Sea.

It is a pity that this is happening especially when Chinese-Japanese economic ties have reached a new level since the end of last year with the two countries agreeing to use their respective currencies in their bilateral trade, instead of the US dollar.

To de-escalate tensions, Japan should make the first move. It was the Japanese government’s purchase of three of the islands from the Kurihara family on Sept 11, 2012 that ignited the present crisis. That decision should be rescinded immediately.

In fact, Japan has been upping the ante on Diaoyu — which Japan calls the Senkaku Islands — for some time now. It will be recalled that on Sept 7, 2010 when a Chinese fishing boat collided accidentally with a Japanese patrol vessel near Diaoyu, the captain and the crew of the Chinese boat were detained by the Japanese Coast Guard for a few days.

Though they were all released in the end, the incident revealed a new toughness on the part of the Japanese. The Chinese have been reacting to this and other such incidents.

What explains this new toughness? Some analysts attribute it partly to the growth of the political right in Japanese politics.

Japanese economic stagnation for more than two decades and China’s success in replacing Japan as the world’s second-most important economy have increased the influence of conservative nationalist forces in the country who are now targeting China.

Impending elections within the ruling Democratic Party and the forthcoming general election have also widened the berth for conservative politics.

It is also not a coincidence that the Japanese right-wing has become more vocal — especially vis-a-vis China — at a time when the United States is seeking to re-assert its presence and its power in the Asia-Pacific region. In the last couple of years, US political and military officials have on a number of occasions underscored the significance of US-Japan security ties.

Even on the Diaoyu dispute, the US government, while professing to remain neutral, has through the Pentagon made it clear that the Japan-US Security Treaty would come into force in the event of a military conflict between Japan and China.

This stance has to be viewed in the larger context of the US’ active military alignment with the Philippines in its recent clash with China over the Huangyan Island in the South China Sea and its support for Vietnam in its long-standing tiff with China over parts of the Spratly Islands and the Paracels.

For both Japan and the US there may also be other reasons why the Diaoyu Islands are important.

In 1968-9, a United Nations agency, it is reported, had discovered potential oil and gas reserves near Diaoyu. The US military, it is not widely known, also uses one of the five islands — Kuba — as a practice range for aircraft bombing.

Whatever the reasons for holding on to Diaoyu, Japan’s claim to ownership is weak. There are books, reports and maps from the 15th century, during the period of the Ming Dynasty, that establish in no uncertain terms that Diaoyu is Chinese territory. The books Voyage with a Tail Wind and Record of the Imperial Envoy’s Visit to Ryukyu bear testimony to this.

Even writings by Japanese scholars in the late 19th century acknowledged this fact. The challenge to Chinese ownership of Diaoyu came from Japanese annexation of the Islands in 1894-5 following the first Sino-Japanese War. China under the Ching Dynasty was too weak to fight back and regain lost territory. But annexation through military force does not confer legitimacy upon the act of conquest.

This is why when Japan was defeated in the Second World War the victors who included China and the US recognised that Diaoyu was Chinese territory.

Both the Cairo Declaration and the Potsdam Declaration acknowledged this though for administrative purposes Diaoyu was placed under US control as part of its governance over the Ryukyu Islands. The US was then the occupying power in Japan following the latter’s surrender.

However, when China was taken over by the Chinese Communist Party in 1949, the US changed its position and began to treat the Islands as part of Japan. The Chinese communist leadership protested vehemently.

In 1971, the US Senate returned the Diaoyu Islands, together with Okinawa, to Japan under the Okinawa Reversion Treaty. Again, the Chinese government in Beijing objected, as did the Taiwan government which also regards the islands as part of China.

Since the normalisation of relations between China and Japan in 1972, both sides have agreed to allow their fishermen to operate in the waters surrounding the islands without resolving the issue of ownership.

Of course, neither China nor Japan has relinquished even an iota of its claim in the last 40 years. Recent incidents have, however, forced this unresolved issue into the open.

Apart from taking the first step by abrogating its purchase of the islands, as we have proposed, Japan should also come to terms with undeniable historical, legal and ethical facts. It must accept the irrefutable reality that the Diaoyu Islands belong to China.

We realise that there are powerful vested interests that will not allow Japan to embrace this truth.

Nonetheless, we should all try to persuade the Japanese government and the Japanese people that it would be in their best interest to do so.

Governments in Asia should convey this message to Japanese elites through quiet diplomacy. Citizen groups throughout the continent should speak up in a firm and courteous manner.

The media too should play its role by laying out the arguments for an amicable resolution of the dispute which respects truth and justice.

Comment by CHANDRA MUZAFFAR

>Dr Chandra Muzaffar is the President of the International Movement for a Just World (JUST)

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Asia's wealthy surpass North Americans for first time

The number of rich Asians surpassed North Americans for the first time last year, but their fortunes shrank slightly and still trailed total wealth on the other side of the Pacific, Capgemini and RBC Wealth Management said on Wednesday.

The Asia-Pacific region is now home to 3.37 million high net worth individuals (HNWI) - people with $1 million or more to invest - compared with 3.35 million in North America and 3.17 million in Europe, the firms said in a report.

Asia's wealthy - 54 percent of whom are concentrated in Japan, almost 17 percent in China and more than 5 percent in Australia - saw their total fortunes slip to $10.7 trillion last year from $10.8 trillion in 2010, and lag North America's $11.4 trillion.

The Asia-Pacific Wealth Report, compiled by Capgemini and RBC Wealth Management, is closely watched by wealth managers, high-end property agents, luxury goods retailers and other businesses for signs of how and where the ultra-wealthy are investing and how their fortunes are faring.

Many of Asia's rich made their millions and billions through family businesses and property.

"We don't see massive shifting in the allocations of portfolio management," Claire Sauvanaud, vice president of Capgemini Financial Services, told a news conference.

Wealth fell most significantly last year in Hong Kong (20.1 percent) and India (18 percent) and grew most strongly in Thailand (9.3 percent) and Indonesia (5.3 percent). Growth was more modest in Japan (2.3 percent) and in China (1.8 percent).

Weakness in Europe and other global trends played their part in the slight fall in total Asian wealth, the report said, but the "region grappled with its own economic challenges, including inflation, slowing growth and capital outflows."

"Nevertheless, Asia-Pacific is expected to continue showing stronger growth than other regions going forward, and its HNWI population and wealth are likely to keep expanding," it said.

As part of that, Asia's rich are looking more to offshore wealth centres close to home, such as Singapore and Hong Kong, in search of wider access to products and services, tax advantages and financial confidentiality, the report said.

Challenges for the offshore wealth management industry include a scarcity of skilled talent, lower profitability, and the costs of compliance and restrictions on services due to higher regulatory scrutiny, it said.

Diversity of the backgrounds and expectations of rich clients means there is more demand for tailored products and a greater desire to play an active role in managing their portfolios, the report added.- Reuters

Japan should drop its sense of superiority and tricks over China, Asia

Sept. 18 - Eighty-one years have passed since the Japanese invasion of China's northeast. But now, it is time for Japan to drop its sense of superiority regarding China and Asia in general.

Japan has to recognize that China is no longer weak and poor as it was in the 1930s, when it suffered great disasters brought by Japanese militarism. The balance of power between the two countries has drastically changed.

Sept. 18, 1931 is a day of disgrace in Chinese history, as it marks the day Japan launched an invasion of China's northeast and occupied the whole region four months later. The incident was followed by Japan's invasion of Pacific Asia in 1941, leading to one of the greatest disasters in the region.

The anniversary this year is quite different from before, as it coincides with Japan's "purchase" of part of the Diaoyu Islands, triggering fierce anti-Japan sentiment in China.

Japan's arrogance and provocation regarding the Diaoyu Islands is in line with its complex formed over one century ago, when it proclaimed superiority over China and Asia.

The two countries became rivals over the last 500 years, with Japan catching up with and defeating China in the late 19th century. Even its defeat in World War II could not break its sense of superiority, as Japan considered China's victory to be a present from the United States and the Soviet Union, turning a blind eye to the Chinese people's heroic resistance.

Japan has been heavily influenced by China and learned a great deal from Chinese culture. China enjoyed comprehensive superiority over its neighbor in all fields, including military strength, at that time.

However, China experienced decline since the late Qing Dynasty (1644-1911), while Japan rose as a world power in the late 1860's, when the country completely reformed its political and social structure by using European powers as models.

During the Meiji Restoration, Japan adopted a policy of breaking away from Asia and merging with Europe. It viewed China at that time as an antiquated and decaying country.

Its fear of China died with Japan's overwhelming victory in the First Sino-Japanese War (1894-1895). The defeat also obliterated China's first attempt to modernize.

Japan subsequently established its superiority over China, both in actual strength and in mentality, as it no longer viewed China as a teacher.

During its expansion, Japan forced China to cede Taiwan in 1895 and annexed the Korean Peninsula in 1910. In the early 1940s, Japanese aggression saw little resistance in Asia and reached its peak after the attack on Pearl Harbor in December 1941.

Japanese militarists called for a "Greater East Asia Co-Prosperity Sphere" in the 1930s, attempting to create a bloc led by the Japanese and free of Western powers.

Although Japanese militarists and war criminals' pipe dreams ended with the country's unconditional surrender to Allied powers, Japan's sense of superiority continued due to the U.S. desire to contain the Soviet Union and China.

But 60 years after World War II, the situation has completely changed. China has maintained rapid economic development and in 2010 surpassed Japan to become the world's second-largest economy. The strength of China's national defense has grown accordingly.

Japan is now suffering from a long-term economic downturn, along with an aging population.

China's rise has touched the nerves of some Japanese, who have resorted to tricks to disturb China's peaceful development. This may be the cause of the tension experienced after a short friendly period in the 1980s.

The present China is not the same as the China of years past. Japan should face the situation, drop its obsolete sense of superiority and take a constructive attitude to solve disputes.

This is the only way to achieve common development in both countries and Asia as a whole.

 By Xinhua writer Ren Ke