The document summarizes the territorial dispute between China and Japan in the East China Sea over the Senkaku/Diaoyutai Islands. It notes that the islands are located in overlapping exclusive economic zones that have potential oil, gas, fishing, and shipping resources. While neither country wants open war, there is tension as domestic interest groups in both countries seek to exploit the contested natural resources, leading to increased economic and military aggression in recent years. The dispute has important implications for regional stability and U.S. interests in the Pacific.

1. Territorial Disputes in the
East China Sea
Patrick McCann

2. Where are we?
• China’s population: 1.389B
• 59.2% urban – 839 .5M living in
cities
• 2.6x the U.S. population
• Japan’s population: 126.8M
• 91.6% urban – 115.4M living in
cities.
• These massive population
centers require massive
amounts of resources

3. Why Study Chinese-Japanese Relations?
• China maintains an aggressive economic and military
posture around the world.
• Second largest economy by Nominal GDP
• One Belt One Road Initiative
• Territory disputes in East and South China Seas
• Japan is expanding its military and revitalizing its economy.
• Third largest economy by Nominal GDP
• Defense treaty with U.S.
• Abenomics
• Both countries world powers tied to the U.S.

4. Overlapping Interests
• Heart of the dispute are the Senkaku /
Diaoyutai Islands.
• The islands lie in the two country’s
overlapping EEZs.
• Control of the Islands grants the owner
rights to oil and natural gas, rich fishing
waters, and shipping lanes.
• China and Japan have disputed over
ownership of the islands for centuries, it
has become an issue in the last decade.

5. Decision Makers
• China: Xi Jinping
• President of China
• Socialist market economic reforms and strengthening
legal institutions
• Japan: Shinzo Abe
• Prime minister of Japan
• Abenomics
• Nationalist rhetoric

6. International Environment
• China
• Not in China’s strategic interest to start a war
• Economic priorities elsewhere, OBOR, and developing
captured territory in the South China Sea
• Japan
• Treaty of Mutual Cooperation with U.S.
• Japan doesn't want to jeopardize a alliance with the
U.S.
• Not enough military capacity to fight a war on its own
• Despite tension over the islands, China and Japan
still remain top trading partners.

7. Domestic Determinants
• China
• Chinese state run fishing firms and coast guard have steamed into
contested waters, bullying Japanese ships.
• State run drilling firms advancing into contested waters, despite
agreements
• State run firms desire the benefits of the EEZ
• Japan
• Postwar emphasis on economic and social development
• Recent surge of nationalism in Japan calls for repealing military
constraints, sizing up military.
• Most probable cause of conflict: accidental military
engagements, particularly as a result of merchant vessel
incursions.
Hypothesis: If domestic interest groups have strong interest in exploiting contested natural resources,
then there will be a greater degree of economic and military aggression.

8. Conclusions
• The dispute between China and Japan over the islands is
motivated by the economic benefits that the
accompanying EEZ has to offer.
• Since 2012 there has been an increase in economic and
military aggression on both sides
• Chinese pursuit of socialist market economic reforms
• Japanese aggressive revitalizing of economy
• Situation described as having a critical impact on U.S.
interests.