Pouring oil on troubled waters

A long-simmering disagreement between China and Japan over territorial and energy rights in the East China Sea appears to be coming to a head. It could hardly be happening at a worse time, as political relations between Beijing and Tokyo are badly frayed and talks to resolve the sea dispute have stalled.

China last week abruptly cancelled a visit by Japanese Foreign Minister Nobutaka Machimura after Prime Minister Junichiro Koizumi defied repeated objections from China, South Korea and other Asian countries by paying another visit to the Yasukuni shrine. Critics say the shrine glorifies Japan's militaristic past.

As a result, the East China Sea talks seem unlikely to be resumed soon, even though both sides agree they are urgently needed. Joint development could be the best way forward.

The dispute centres on where the maritime boundary lies between China and Japan. Tokyo says it should be at the halfway mark between the Japanese and Chinese shorelines, but Beijing insists on a line drawn much closer to Japan.

For several years, China has been developing two big oil and gas fields in the area. Beijing is adamant that the fields, Chunxiao and Tianwaitian, are on its side of the median line preferred by Japan. But Tokyo claims the fields extend into its zone, and should either be jointly developed or frozen until the boundary is agreed.

Much is at stake for Asia's two largest energy importers, apart from national pride. According to official Japanese surveys, the disputed fields contain an estimated 7 trillion cubic feet of natural gas and up to 100 billion barrels of oil, worth billions of dollars. Each country is searching for ways to reduce reliance on petroleum imports.