‘Setting Aside Disputes and Pursuing Joint Development’ - A Sophisticated Plot of Beijing to dominat

During the visit to China by the Sultan of Brunei in early April 2013, the two sides issued a Joint Communiqué, pledging support to their businesses to carry out joint exploration and exploitation of maritime oil and gas resources under the principles of ‘mutual respect, equality and mutual benefit’, and affirming that such cooperation shall not prejudice the position of the respective countries in relation to maritime rights and interests.

As a result, the coastal states in the East Sea have been concerned that China would insist on this formula and request ‘joint development’ in their territorial waters.

The idea of ‘setting aside disputes and pursuing joint development’ was originally propounded by Deng Xiaoping in the late 1970s. Deng Xiaoping initiated the idea during his meeting with Japanese leaders on 31 May 1979. China officially proposed ‘joint development’ for resources exploitation with Japan in the vicinity of the Sensaku/Diaoyu Islands, which are now under the latter’s control, but the proposal was turned down. Over the past 30 years, ‘setting aside disputes and pursuing joint development’ has been a major guideline in China’s maritime strategy. Thus, in attempt to impose this formula on its neighbors, China has left no means untapped.

Negotiation on petroleum exploitation in the East China Sea between China and Japan was kick-started in October 2004 with no major progress. In 2007, the two sides decided to upgrade the negotiation to vice-ministerial level. After five rounds of talks, China and Japan reached a Framework Agreement on ‘joint development’ in June 2008. Accordingly, the two sides agreed to conduct joint development in an area of nearly 2,700 km2 that straddled the median line between China’s coast and Japan’s Southern islands. They also agreed on production sharing arrangement at the ChunXiao gas field, which was located on the median line, but more to the West on the Chinese side of the line. Japanese corporations would engage in the development under Chinese law, which would mean the area was recognized as falling under the jurisdiction of China, and would be entitled to proportionate sharing of profits, ranging between 25% to under 50% depending on their ratio of capital contribution and thus, the Chinese side held the remaining larger portion. The two sides also agreed to continue their discussion on joint development of other gas fields located between them. The Framework Agreement was merely one in principle and further negotiations on concrete legal aspects were required to have a formal agreement on implementing the joint development arrangement.

China National Offshore Oil Corporation's (CNOOC) oil rig in China's South Sea is seen in this photograph taken February 2, 2004. REUTERS/China Newsphoto


China and Japan commenced negotiations on a formal treaty to implement the 2008 Framework Agreement in July 2010. The negotiations came to a standstill due to their tensions arisen from issues of the East China Sea. To date, no concrete progress has been made on the implementation of the joint development arrangement.

As far as the East Sea is concerned, China also propounded the idea of ‘setting aside disputes and pursuing joint development’ during the 1980s and 1990s with the Philippines (1988), Indonesia, Singapore and Malaysia (1990). Deputy Prime Minister cum Foreign Minister Qian QiChen officially raised this policy with the ASEAN members during the 25th ASEAN Foreign Ministers’ Meeting in July 1992 in Manila, Philippines. The position of China was put forth in its multiple meetings with countries in the East Sea. After the normalization of relations between Viet Nam and China in November 1991, China also repeatedly proposed ‘setting aside disputes and pursuing joint development in the East Sea’ with Viet Nam in hope that the latter, being another communist state, would subscribe to the idea. Nevertheless, it seems that the countries concerned did not buy into the ‘made in China’ idea since they understood that the idea behind the policy was to turn the undisputed areas of their continental shelves into disputed areas so that China could propose joint development in their seas, which China included in its ‘cow’s tongue’ claim.

To win the support of the countries concerned, China has occasionally revised the wordings of the policy. The original version of ‘sovereignty belonging to China, setting aside disputes and pursuing joint development’ was shortened into ‘setting aside disputes and pursuing joint development’. The latest version has become ‘joint development’. Despite the varied wordings, the implications of the policy remain unchanged, which is the sovereignty of the territories concerned belongs to China. When the conditions are not ripe to bring about a thorough solution to the territorial dispute, the dispute is set aside for joint development in the disputed areas. The policy is undertaken by China alongside stepping up activities in the East Sea to translate its ‘cow’s tongue’ claim into reality.

China also employed the tactic of ‘hitting while comforting’ in promotion of its ‘joint development’ doctrine. On the one hand, China spoke out loud of the need to maintain peace and stability. Chinese never forgot to stress during meetings with other claimant states that ‘joint development’ was the sole workable solution to maintain peace and stability in the East Sea. On the other hand, China has increased pressure on others via bellicose actions in the area. China has conducted multiple provocative actions in the continental shelves of the countries concerned to force them into accepting ‘joint development’ with China within the ‘cow’s tongue’ claim. For instance, Chinese ships repeatedly disrupted the surveys of the Philippines in the Reed Bank area to request joint development in that area. In 2011, China also cut the cables of Vietnamese survey ships two times in the continental shelf of the latter so as to turn the undisputed area into a disputed one. In 2012, Chinese ships also obstructed the operations of Malaysian survey ships within the continental shelf and exclusive economic zone of the latter.

Joint development is totally compatible with the international law and practice in this field. However, the key prerequisite of joint development is in real the disputedly overlaping area. Hence, joint development cannot be carried out in the undisputed areas of others’ maritime boundary. Articles 74 and 83 of the UNCLOS 1982 recommended provisional arrangements when states have not reached agreements on delimitation of their overlaps. Accordingly, the states concerned, pending agreements on delimitation of their continental shelves and exclusive economic zones, shall make every effort to enter into provisional arrangements of practical nature, and such arrangements shall not be prejudice to the final delimitation. In practice, there have been multiple provisional arrangements on joint development under various forms and in different fields such as fishery and oil and gas. In the Asia-Pacific, such examples include the 1974 Japan-Korea Joint Development Agreement and the 1989 Australia-Indonesia Treaty on the Zone of Cooperation in an Area between the Indonesian Province of East Timor and Northern Australia.

While convincing others that the joint development projects shall not prejudice claims of national sovereignty and jurisdiction, China’s true goal was to seek legitimacy for its sovereignty claims and divide the ASEAN members on the East Sea issue via the joint development projects. China in recent years voiced loudly that ‘joint development’ was the only means to maintain peace and stability in the East Sea. Meanwhile, China’s actions always mismatched its words as the country has been exerting constant pressure on other claimant states, coercing the latter into accepting joint development. The United States was fully aware that behind the move was an attempt to prevent it from engaging in the issues of the East Sea. Hence, the United States has, for many times, raised its voice against China’s attempts to threaten and coerce other claimant states in the East Sea issues.

Analysts of international relations point out that the smaller nations are often placed in less advantageous position in joint development projects as against the bigger nations, which hold leverage in terms of capital and know-how. Since China holds ambition for monopoly in the East Sea and upholds its tactic of exploiting resources in others’ seas, countries concerned should stay alerted so as not to fall into the former’s ‘joint development’ trap. It is essential that the claimant states should insist on demanding China to respect their legitimate exclusive economic zones and continental shelves as described in the UNCLOS 1982, and only accept ‘joint development’ with the latter in overlapped or/and disputed areas in accordance with the UNCLOS 1982.

More than 30 years elapsed since the birth of ‘setting aside disputes and pursuing joint development’ policy, China has yet been able to implement the formula with any of its neighbors. Even the China-Japan agreement in principle on joint development failed to progress on substantive issues. Analysts believe that China has probably selected Brunei, a far smaller claimant state, to seek the first breakthrough in its ‘joint development’ policy. China has tapped its leverage of a major power to pressure Brunei into accepting the relevant elements in the Joint Communiqué.

One should not be surprised if China would employ those elements of the China-Brunei to seek endorsement for the ‘joint development’ formula and coerce other claimant states into accepting joint development projects within the scope of the former’s ‘cow’s tongue’ claim so as to assert its sovereignty over the area. China would also attempt to turn the undisputed seas of other claimant states into disputed ones for incremental control and domination of the East Sea.

The fact that China has managed to win Brunei’s agreement on supporting the cooperation of Chinese and Brunei enterprises in joint development of maritime oil and gas resources under the principles of equality, mutual benefit without prejudice to the position of the respective countries on the maritime rights and interest has enabled the former to kill two birds with one stone. One bird was to promote the implementation of the ‘setting aside the disputes and pursuing joint development’ policy propounded by Deng Xiaoping. The other bird was to prove with the international public that China could properly settle disputes bilaterally with its neighboring claimants. Brunei might have underestimated China’s calculations in incorporating those elements into the Joint Communiqué.

In conclusion, China’s formula of ‘setting aside disputes and pursuing joint development’ is by no means a provisional arrangement as provided for in the UNCLOS 1982. The formula is indeed a key component of China’s strategy to encroach on the seas of its neighbors towards domination in the East Sea, turning the country into a ‘maritime power’ to accomplish the ‘China Dream’. There is an extreme sinister side to this sophisticated plot of China that its neighbors should respond with a cool head. It is essential that other claimant states insist on refusing joint development in their exclusive economic zones and 200-nautical mile continental shelves as provided for in the UNCLOS 1982. That would effectively turn China’s irrational ‘cow’s tongue’ claim invalid.