Japan, China seal deal on gas fields

Japan and China on Wednesday announced the specifics of a landmark agreement to jointly develop gas fields in the East China Sea, ending a five-year dispute.

The two sides also agreed to set aside arguments about the boundary of their respective exclusive economic zones.

The key points of the agreement are: that a Japanese corporation will contribute capital to the Chinese entity that has already begun to develop the Shirakaba gas field; and that a joint development zone will be established in waters south of the Asunaro gas field, with actual exploitation beginning at a site agreed to by the two nations.

The two gas fields are known in Chinese as Chunxiao and Longjing, respectively.

The row started when China began to develop the Shirakaba gas field five years ago.

In announcing the agreement, Foreign Minister Masahiko Komura said: "The contents are mutually beneficial as both sides will gain. This is a good example of how even the most difficult issue can be resolved between Japan and China through negotiations."

China's state-run Xinhua news agency reported Wednesday that China and Japan had reached consensus on the issue.

Further talks will decide how much capital the Japanese company will contribute to the Chinese entity, and the distribution of mining rights.

The two sides have vastly different views on where to set the demarcation separating their respective EEZs. Japan has argued the border should be the median line between the coastlines of Japan and China.

China has said the border should be the Okinawa Trough because that is the edge of China's continental shelf.

The agreement stated that in order to turn the East China Sea, where a border has not yet been established, into a sea of peace, cooperation and friendship, the two sides have agreed to cooperate by not infringing on the legal positions of the two sides during the transition period before the establishment of a border.

Two other gas fields called Kusunoki and Kashi straddle the median line. These are known as Duanqiao and Tianwaitian, respectively, in Chinese.

Discussions will continue on possible joint development of those two gas fields. Negotiations will now begin on a formal treaty that covers the points of the latest agreement. Actual joint development work will begin once both sides ratify the treaty.

Japan and China have been discussing development of gas fields in the East China Sea since 2004. A total of 11 meetings between directors-general of ministerial bureaus in the two nations went nowhere. It took a meeting in May in Tokyo between Prime Minister Yasuo Fukuda and visiting Chinese President Hu Jintao to reach an agreement in principle on joint development.(IHT/Asahi: June 19,2008)