Japanese Prime Minister Yasuo Fukuda (Left) walks with Chinese Deputy Foreign Minister Wu Dawei (Right) upon his arrival at Beijing's Capital Airport for a four-day visit to China.
Japanese Prime Minister Yasuo Fukuda (Left) walks with Chinese Deputy Foreign Minister Wu Dawei (Right) upon his arrival at Beijing's Capital Airport for a four-day visit to China. - 
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Lisa Napoli: Japan's new prime minister visits China today. There will be lots of talk about warming relations. But one of the stickiest issues remains -- a territorial dispute over boundary waters, and who owns the natural gas that lies beneath. From Shanghai, Marketplace's Scott Tong reports.


Scott Tong: Where is the ocean boundary? That's the dispute between Japan and China. Japan says it's more toward the China side, and it wants to drill for natural gas near its version of the line.

David Zweig is with the Hong Kong University of Science and Technology:

David Zweig: If it drills at that point, China is concerned that the gas that it will be sucking out actually lies on China's side.

In fact, each side thinks the other is pilfering -- or will be.

Japan and China have met 11 times on this dispute; 11 times they have failed to cut a deal.

Zweig: When there is no progress, then both sides sort of play around with each other militarily.

Which gets dangerous, he says, because both countries now have pretty good navies.

It's not clear how much natural gas lies beneath the disputed waters. But any amount is critical -- Japan is the world's number two leading importer of oil and gas. China is number three.

In Shanghai, I'm Scott Tong for Marketplace.

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Follow Scott Tong at @tongscott