China and Japan close to gas field deal

PUBLISHED : Tuesday, 17 June, 2008, 12:00am
UPDATED : Tuesday, 17 June, 2008, 12:00am

Neighbours to jointly develop disputed energy resources

China and Japan are in the final stages of sealing an agreement on the joint development of gas fields in the disputed East China Sea. Both sides confirmed yesterday that they were sorting out the remaining details.

The agreement would see the two neighbours set aside a long-running maritime territorial conflict and jointly develop areas - including the controversial Chunxiao gas field, known as Shirakaba in Japan - by allowing Japanese investment in the Chinese company exploring in the area, Japan's Kyodo news agency reported early yesterday.

The report quoted sources as saying the two governments could announce the agreement as early as this week.

The Ministry of Foreign Affairs in Beijing would say only that an announcement would be made at 'a suitable time'.

'China and Japan have achieved vital progress in the negotiations on the East China Sea issue, and both sides are now negotiating relevant details,' ministry spokeswoman Jiang Yu said.

The top spokesman for the Japanese government said talks were in their last stages.

'I have heard that they are at the stage of working out final details,' chief cabinet secretary Nobutaka Machimura said in Tokyo.

Expectations of a deal follow a historic trip by President Hu Jintao to Japan last month in an attempt to foster economic ties to rebuild a relationship strained by disputes over territory and history.

In a joint declaration signed during the trip by Mr Hu and Japanese Prime Minister Yasuo Fukuda, both sides agreed to work together to resolve the issue.

No further elaboration was provided, leaving many wondering whether it was just rhetoric.

But if the accord turns out as reported by Kyodo, analysts said yesterday that the significance would be profound.

Describing the move as a compromise, Kyodo said China had agreed to share with Japan the rights to invest in and profit from the gas fields in Chunxiao, Duanqiao and Longjing.

The Chunxiao gas field is controversial because it is the closest to the median line claimed by Japan as the sea boundary between the two countries. China has rejected the idea of a median line.

The Chunxiao gas field was set up by China and is about 4km west of the median line. Japan has been concerned that although Chunxiao is in what it sees as China's territory, it is siphoning gas from Japan's side of the median line.

As part of the agreement, the areas east of the median line which Japan considers part of its exclusive economic zone would also be open for future joint development, the report added.

Mainland critics said such an agreement would be another sign that Sino-Japanese relations were improving, but were concerned about whether China would share the rights with Japan in the disputed areas.

'Chinese leaders have long been trying to solve this issue by setting aside the conflict,' Tsinghua University international relations professor Zhou Yongjiang said. ' ... But it is not possible that China will share the rights with Japan. Even if an agreement is signed, Chunxiao should still be under Chinese sovereignty.'

Mr Hu will visit Japan again next month to attend the G8 summit and for what will be his third meeting with Mr Fukuda since December.