China, Japan spar over small islands

Rob Schmitz Sep 20, 2010
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China, Japan spar over small islands

Rob Schmitz Sep 20, 2010
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STEVE CHIOTAKIS: Relations between China and Japan are at
their lowest level in years, less than a month after China surpassed Japan to become the world’s second biggest economy. China’s threatened “strong countermeasures” if Japan doesn’t release a Chinese boat captain detained by the Japanese nearly two weeks ago for sailing near a chain of islands in the East China Sea. Both nations lay claim to the islands. What’s the big fuss?

Here’s Marketplace’s China Bureau Chief Rob Schmitz.


ROB SCHMITZ: The islands at the center of this fight are too remote to live on, so why all the heat between China and Japan over who owns them? The flame is being fueled by what’s underneath them, says China Political Scientist Zhou Yong Shen.

ZHOU YONG SHEN: If Japan gains ownership of these islands, it means a great deal of natural gas will suddenly fall into Japan’s possession. This is the heart of the problem.

Ranked by GDP, world economy number three, Japan, has virtually no reserves of natural gas — yet relies on that resource for 14 percent of its total energy consumption. It has to import all of it. World economy number two — that would be China — has domestic reserves, but is also a net importer of natural gas, and is on track to double its consumption within five years. These islands would be a nice addition to either country. Oh yeah, I almost forgot Taiwan. It lays claims to the islands, too. But with its economy ranked at number 25, it’s having a harder time getting a word in.

In Shanghai, I’m Rob Schmitz for Marketplace.

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