CHINA: GROWING INTEREST AND PROBLEMS IN EAST ASIAN WATERS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP08C01297R000200130001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 26
• Document Creation Date: December 22, 2016
• Document Release Date: September 12, 2012
• Sequence Number: 1
• Publication Date: January 1, 1980
• Content Type: REPORT

Declassified in Part-Sanitized Copy Approved for Release 2012/09/12: CIA-RDP08C01297R000200130001-7
llillIgAliti , 1.3PV?I Vir-
Foreign
Assessment
Center
?
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China:
Growing Interest and Problems
in East Asian Waters
A Research Paper
?Serret-_
PA 80-10005
GC 80-10002
January 1980
C?PY 300
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0a4t, National Secret
Foreign
Assessment
Center
China:
Growing Interest and Problems
in East Asian Waters
A Research Paper
Research for this report was completed
on 1 November 1979.
The authors of this paper are East
Asia - Pacific Division, Office of Political Analysis,
and Geography Division, Office of
Geographic and Cartographic Research. This paper has
been coordinated with the Office of Strategic Re-
search, the Office of Economic Research, and the Na-
tional Intelligence Officer for China/East Asia Pa-
cific.
Comments and queries are welcome and may be di-
rected to the Chief, Southeast Asia Branch, East
Asia - Pacific Division, OPA or to the
Chief, Asia Branch, Geography Division, OGCR/
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PA 80-10005
GC 80-10002
January 1980
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Overview
China:
Growing Interest and Problems
in East Asian Waters
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The growing demand for oil by East Asian states and the advent of new
technology capable of exploiting ocean resources at greater depths increased
the pressure on the littoral states to assert and defend their jurisdictional
claims and to exploit offshore resources. China in particular has greatly
increased its offshore activities since the early 1970s, and it has broad and
longstanding claims to the continental shelf, the islands, and the archipela-
gos of East Asia. These areas are disputed variously by Japan, South Korea,
the Government on Taiwan, Vietnam, and the Philippines. 25X1
China's growing demands for the resources believed present on the shelf and
its increasing technological capability to exploit them could sharpen
territorial disputes over the next three to five years. Conflict is unlikely,
however, so long as good relations with the United States, Japan, and the
Association of Southeast Asian Nations (ASEAN)' remain Beijing's major
diplomatic objectives. A desire to cultivate friendly relations with these
countries and a need to avoid greater friction with South Korea and the
Government on Taiwan will cause China to take a nonconfrontational
approach to its sweeping claims. Furthermore, China's concern over
increased Soviet naval strength in East Asian waters and the evolving
Soviet-Vietnamese relationship has reinforced Beijing's desire to develop
stronger ties with the United States, Japan, and ASEAN. China's
continuing imbroglio with Vietnam will increase the volatility of the
disputes over the Gulf of Tonkin sea boundary and the South China Sea
islands.
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China has gradually increased its naval, merchant marine, and offshore oil
operations, making East Asian waters and waterways more significant in the
conduct of Chinese foreign trade and in the pursuit of Chinese strategic
goals. China considers the development of its oil industry a top priority,
especially the need to develop its potentially rich offshore petroleum
resources to offset declining rates of production from onshore wells.
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China has built up its international merchant fleet in the last several years.
As this fleet grows, Beijing will become increasingly concerned with
guaranteeing free access through the principal sea lanes in East Asia.
Moreover, other Law-of-the-Sea issues, such as freedom of the high seas,
passage through straits, and secure transit routes will become more
' ASEAN's members are Indonesia, Malaysia, the Philippines, Singapore, and Thailand.
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important to China as its commercial relations with the rest of the world
expand. As China enhances its capabilities to conduct distant fishing
operations, it will become a more important voice in regional fishing
matters. In the past three years, Beijing has begun to modernize its fleet and
fishing practices in order to exploit fishing grounds farther from shore.
In keeping with China's growing interest in offshore resources, the Chinese
Navy is undergoing a transition from a coastal force to a deep water one.
The Navy at present can conduct coastal defense operations up to 300
nautical miles from the eastern edge of the East China Sea, which gives it a
military reach to the Senkaku and Paracel Islands; the Spratly Islands can
only be reached by large combatants and submarines.
China has long championed increased coastal state control over the world's
seas and has instituted a number of measures to maximize its ocean claims.
Indeed, Beijing has participated actively in the Law-of-the-Sea Confer-
ences, strongly supporting the position of the Third World countries on a
variety of issues while denouncing exploitation of ocean resources to the
detriment of the developing countries. As Chinese activities in East Asian
waters grow, however, Beijing may find it difficult to balance its support for
the Third World's position with its desire to safeguard Chinese national
interests.
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VI
Contents
Page
Overview
111
Part I. Political Context
1
China-Japan
1
China-Korea
4
China - Government on Taiwan
5
China-Vietnam
5
China-ASEAN
8
Prospects
9
Part II. Economic Maritime Factors
11
Offshore Oil Development
11
Merchant Fleet
11
Fishing
12
Naval Expansion
12
Part III. Staking and Asserting National Claims
13
Law of the Sea
13
Yellow Sea
14
East China Sea
14
South China Sea
16
Maps
1.
China's Maritime Claims
following page 19
2.
Claims in the Yellow Sea
2
3.
Claims in the East China Sea
3
4.
Claims in the South China Sea
6
5.
Claims in the Gulf of Tonkin
7
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China:
Growing Interest and Problems
in East Asian Waters
Part I
Political Context
China has sweeping territorial and jurisdictional
claims to the East Asian continental shelf as Well as the
islands and archipelagos in East Asian waters (see
foldout map 1, appended). At least five other govern-
ments have claims that overlap China's. Although
China has shown little interest in negotiating a
resolution to these claims, political considerations and
technological constraints have caused Beijing to take a
cautious and cooperative approach in exploiting poten-
tial resources in disputed areas. China's present
emphasis on economic modernization and cultivation
of good relations with countries such as Japan and the
United States assure that, at least over the short term,
Beijing will prefer a nonconfrontation approach to-
ward its territorial claims in East Asia. China's desire
to prevent the Soviet Union from making inroads into
East Asia, and its corollary desire to isolate Moscow's
client state Vietnam, also impel it at present to
cultivate good relations with non-Communist Asian
nations, particularly Japan and those in Southeast
Asia.
At the same time, however, China's growing demands
for the resources believed present on the continental
shelf and its increasing technological capability to
exploit these resources will create the conditions for an
adversary relationship with these same countries,
particularly if significant oil reserves are discovered.
Over the next three to five years, China's naval and
maritime capability, although much improved, will
remain modest, and this will tend to reinforce its
preference for a noncombative approach toward terri-
torial claims. As China's need and capability grow,
however, the conflict between its economic interests
and political goals in East Asia will sharpen. Beijing
will have to decide whether to pursue its national
territorial claims in East Asian waters more aggres-
sively at the risk of jeopardizing its good relations with
the non-Communist states.
1
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China-Japan
China considers the cultivation of cooperative relations
with Japan one of its highest priorities. For at least the
immediate future, this will determine Beijing's ap-
proach to territorial claims not only in the East China
Sea where Japan is a major claimant, but also in the
Yellow Sea where China's claims conflict with those of
an important Japanese partner, South Korea (see maps
2 and 3). 25X1
Japan is China's most important trading partner. Sino-
Japanese trade totaled more than $5 billion in 1978
and, according to the provisions of their Long Term
Agreement, should increase considerably. Japan is the
largest purchaser of Chinese crude oil-60 percent of
China's total exports?but, more important, Tokyo is
the major source for the advanced equipment and
technology Beijing needs for its ambitious moderniza-
tion program. China considers a close relationship the
key to obtaining this technology on preferential terms.
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Japan's political importance to China will increase as25X1
China seeks to counter the expanding Soviet presence
in East Asia. China perceives its developing relation-
ship with Japan as an important counterbalance to
Soviet and Vietnamese ambitions. Beijing believes an
identity of interests based on opposition to the USSR is
proved by Japan's willingness to sign the implicitly
anti-Soviet Peace and Friendship Treaty with China in
August 1978. Chinese leaders undoubtedly hope that
Japan can be further induced to favor Beijing at the
expense of Moscow's interests in East Asia.
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In view of China's substantial equities in maintaining
good relations with Japan, Beijing will probably
continue to try to avoid serious confrontation over
contested claims in the East China Sea, both the area
near the Senkaku Islands north of Taiwan and the 25X1
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avcrei.
Claims in the Yellow Sea
Map 2
?40
118
120
150 Kilometers
122
124
126
Boundary representation is
not necessarily authoritative.
North
Korea
*P'yongyang
Military Warning Zone (China)
Limit of
ocean Patrot,
a.
40?
Sea
of
Japan
tcation Line I
te-
o,
\s\v?c..;-,1
?.
Seoul
38
South
Korea
36-
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626319 1-80 CIA
Secret
Shanghai'
?). East Chiina
1
GULF?
120 122 ? 124 Drilling Site 26
Zr\ 1 (terminated)
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Claims in the East China Sea
Map 3
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3
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Japan - South Korea Joint Development Zone south-
east of the Japanese island of Kyushu. Two different
events indicate the way Beijing's interest in good
relations with Japan influence its handling of territo-
rial claims. In 1972, China made it clear that the US-
Japan reversion agreement transferring the Ryukyus
to Japanese jurisdiction in no way prejudiced China's
longstanding claim to the Senkakus, which are a part
of the Ryukyus. Nonetheless, Beijing did not let the
issue interfere with its diplomatic priority of
normalizing relations with Japan, which occurred later
that year. In April 1978, more than 200 armed Chinese
fishing boats intruded into waters around the
Senkakus in a brief revival of the territorial dispute,
but this did not prevent Beijing and Tokyo from
signing a Peace and Friendship Treaty in August, a
much more important objective from China's
viewpoint because of its importance to China's diplo-
matic competition with the USSR. Chinese Vice
Premier Deng Xiaoping, moreover, assured the Japa-
nese at the time of the signing of the treaty that such an
"incident" would not occur again.
China has, in fact, proposed a joint development
program with Japan for exploiting the presumed oil
and gas deposits offshore near the Senkakus. China
offered to set aside territorial differences, but it did not
offer to negotiate a resolution of them. Tokyo did not
rule out a joint Sino-Japanese venture but countered
with a three-way development project proposal that
would involve Chinese, Japanese, and American oil
companies and would arrange for Taipei, another
claimant to the area, to receive some of the proceeds.
Japan's growing energy needs will probably increase
the pressure to expand exploratory activities near the
Senkakus substantially. China would undoubtedly try
to exert strong diplomatic pressure on Tokyo, but
although it might hint at economic sanctions, Beijing
would be unlikely to jeopardize its important trade
relationship with Tokyo. Military threats would be
even less likely. Beijing's capability at present to take
direct action in the disputed area is limited; to send
Chinese ships to the disputed area would risk creating
a public political issue in Tokyo that could work
against broader Chinese interests.
Secret
China-Korea
China's desire to preserve political stability on the
Korean peninsula as well as its interest in close ties
with Japan greatly influences Beijing's approach to
jurisdictional disputes with South Korea. China pub-
licly supports Pyongyang's basic foreign policy objec-
tives, but privately favors a continued US military
presence in South Korea as a stabilizing force. South
Korea's close relationships with the United States and
Japan minimize the potential for conflict between
China and South Korea. On the other hand, China's
desire to maintain good relations with North Korea
will prevent it from negotiating with South Korea for
demarcation of a sea boundary and/or fishing agree-
ments in the southern Yellow Sea.
China's strong desire to stay on good terms with Japan
works to South Korea's benefit, particularly with
regard to disputes over the area encompassed by the
Japan-Korea Joint Development Zone. A Chinese
challenge against South Korean activity in the zone
would adversely affect Sino-Japanese relations. As
long as China desires to maintain friendly relations
with Japan, it will probably not seriously challenge
Seoul. An oil discovery in the zone would certainly
trigger a Chinese protest against Japanese and Korean
activity, but there is little pressure that China could
bring to bear on either Tokyo or Seoul. Concern about
China's reaction, however, has contributed to Japanese
reluctance to move rapidly in exploiting resources in
the zone.
Farther north, between the Korean and Shandong
peninsulas, the situation is more complex. China
clearly intends to conduct exploratory drilling in the
Yellow Sea, but for the time being it is confining its
operations to China's side of a hypothetical equidistant
line. If this exploration proves fruitful and an oilfield
appears to extend farther east, the Chinese may push
gradually across the line. China probably would do this
cautiously and only after it conducted a number of
tentative probes designed to test US and South Korean
sensitivities. The Koreans are not exploring on their
side of the equidistant line.
4
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The discovery of a considerable amount of oil in the
Joint Development Zone could change the situation in
the Yellow Sea. A discovery in the zone would increase
China's interest in granting concessions in contested
areas of the Yellow Sea, but Seoul probably would be
in a better position to control those waters.
Incidents have occurred between China and South
Korean fishing fleets in the Yellow Sea, although
Seoul has tried to avoid provoking Beijing. It has not
sent armed boats to protest its fishing fleet and has
tried to keep South Korean boats from interfering with
Chinese fishing operations. China has ignored South
Korean calls for joint consultations on fishery matters
and maritime incidents in the southern Yellow Sea will
probably continue. Neither "side, however, is likely to
do anything that will cause serious tension in the area.
China - Government on Taiwan
Both Beijing and Taipei claim to represent the
legitimate Government of China, and it is therefore
virtually impossible to resolve their overlapping territo-
rial and jurisdictional claims. The desire to cultivate
closer relations with the United States inhibits Beijing
from acting aggressively vis-a-vis Taipei, and both
Beijing and Taipei have thus far avoided any develop-
mental operations in areas of particular sensitivity.
Taipei's failure to locate significant quantities of
offshore oil improves the prospect for stability. Despite
many years of exploration by foreign companies and by
Taiwan's state-controlled Chinese Petroleum Corpora-
tion, no significant finds have been made. Much of the
test-drilling has been concentrated off Kao-hsiung, but
during the past year the Chinese Petroleum Company
has also been active northwest of the Pescadores within
a few miles of the hypothetical equidistant line of the
Straits of Taiwan. Extensive seismic studies and some
exploration in waters north of Taiwan have also been
disappointing.
China shows no indication that it intends to prospect
for oil on its side of the Straits or in Taipei-designated
concessions areas to the north or west of the island.
China's general lack of interest has probably been
reinforced by Taiwan's failure to discover commercial
amounts of petroleum. Geologically the strata become
5
thinner closer to the mainland, thereby reducing the
chances of a find. 25X1
Beijing probably will tolerate Taiwanese drilling ac-
tivities as long as they are confined to Taiwan's side of
the hypothetical equidistant line. If oil is discovered, 25X1
however, China certainly would protest and probably
would begin its own exploratory operations in the
waters off Fujian. Beijing would be unlikely to attempt
to cross the de facto division line in the Straits unless it
believed that Taipei would not or could not challenge
its actions. 25X1
China-Vietnam
China sees Vietnam as a rival for influence in
Southeast Asia, and as an ally of the USSR intent
upon pursuing anti-Chinese policies. The deep-rooted
animosity between China and Vietnam led to the 25X1
Chinese invasion of Vietnam in February-March 1979.
Their jurisdictional and territorial disputes in the Gulf
of Tonkin and in the South China Sea thus became
part of the larger conflict (maps 4 and 5).
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Not only are both countries arch enemies, but each has
ambitious offshore development programs intended to
enhance its military power as well as obtain much-
needed resources. As matters now stand, no improve-
ment in Sino-Vietnamese relations is foreseeable, and 25X1
the oil potential and strategic location of the contested
areas heighten the potential for conflict in the Gulf of
Tonkin and the South China Sea. 25X1
The question of who has jurisdiction in the Gulf of 25X1
Tonkin, an area with great oil potential, constitutes the
major dispute between China and Vietnam relating to
offshore activity. China has already conducted seismic
surveys and drilled several test wells)
China withdrew its drilling rigs to safer, but presum-
ably less promising, water near Hainan Island at the
start of the Sino-Vietnamese war in February 1979.
China clearly intends to proceed with its development
plans, however, for it signed contracts with US and
European companies to conduct further seismic studies
in the Tonkin Gulf west and south of Hainan. Hanoi
warned Beijing recently to halt exploratory activities in
the Gulf.
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Claims in the South China Sea
Map 4
Lori
Gulf of
Tonkin
It\China \\\44k\a"
Hainan
Dao
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South
China
Sea
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Spratly Islands?
"t(1 The Spratly Islands are
2 claimed by China, the
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indicate the occupying
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Va
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Spratly ?
(Vietnam)
South China Sea
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120
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Claimed
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(Philippines)Thitu," ',West York (Philippine?s
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(Vietnam..
Sin Cowe (Vietnam)_>
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.Amboyha-(Vietnam)
Kalayaap Claim
(Philippines)
Concession Zones
(Approximate
j alignment)
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(Malaysia)
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1(:Pulau
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(Indonesia)
300 Kilometers
?4
?o
10?
Palawan
Malaysia
Indonesia
110 11
Boundary representation is
entoeonsallitY
120
626321 1-80 CIA
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Claims in the Gulf of Tonkin
108 110
China
Map 5
22
Dao Bach Long Vi
(Nightingale Island)?
20
Gulf
Tonk
Chinese proposed no
prospecting zone
?18
Vietnamese proposed
meridian boundary line
(Southern extent unknown)
Laos
106
South
China
Sea ,
?
100 Kilometers -
108 110
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China's oil prospecting in the Gulf could lead to a
military showdown with Vietnam. At present, Beijing
has two rigs engaged in exploration work positioned
fairly close to the hypothetical equidistant line.2 If
China were to make a significant find in the Gulf near
the line, the potential for conflict would grow. Vietnam
might seek to defend its claims in the Gulf by
deploying greater naval forces. China's reaction would
depend on the general level of tension between the two
countries at the time and on the particular way in
which Hanoi tried to assert its claim. Although conflict
would not be inevitable, both sides undoubtedly would
be hard-nosed.
Unlike China's other offshore disputes, those involving
the Tonkin Gulf bear directly on Chinese security
concerns and lie within an area where China enjoys
military superiority. Vietnam's Navy is no match for
the Chinese forces, and Hanoi would be hard-pressed
to defend militarily its extensive claims. Vietnam,
however, probably would rely on the continuing
presence of Soviet naval ships in the South China Sea
to restrict China's freedom of action against Vietnam-
ese interests.
Vietnam and China are also in conflict over the
Paracel Islands, which China seized from the former
Saigon government in a naval and air attack in early
1974, and the Spratly Islands. Vietnam cannot chal-
lenge Chinese control of the Paracels because its naval
forces are inferior to those of China. Hanoi will not
abandon its claim to them, however, and may hope
somedaybteoenboesie n
in involves
h
n the
ecpohnitleisptpfionres as
siwr well 1.77
ownership. The dispute over the Spratlys is more
complex
China-ASEAN
China considers cultivating friendly relations with
members of the Association of Southeast Asian
Nations 'a major objective of its foreign policy in Asia
and a keystone in its policy efforts to minimize
Vietnamese influence in Southeast Asia. This condi-
2 The determination of an equidistant line will be difficult since
China and Vietnam disagree over the use of Dao Bach Long Vi as a
base point. This could affect a large area in the potentially oil-rich
central part of the Gulf.
ASEAN's members are Indonesia, Malaysia, the Philippines,
Singapore, and Thailand.
Secret
tions China's assertion of its territorial claims in the
Spratly Islands, which Vietnam, the Philippines, and
Taiwan also claim.
Vietnamese troops occupy six of the Spratly Islands,
and Hanoi may expand this presence gradually to
other islets in the next few years in anticipation of or in
response to moves by Beijing and Manila. Beijing
might decide to try to counter moves by Vietnam by a
show of force in the area or perhaps by garrisoning
some unoccupied islets to prevent Vietnamese control
of them. China probably would not threaten areas
claimed by Manila
Despite these apprehensions, Beijing probably would
not be willing to risk military engagement of the
Vietnamese in the Spratlys. The Chinese would be
hard-pressed to provide air support for their naval
ships at such a distance from the mainland. Although
Beijing's naval capability far exceeds that of Hanoi's,
it is doubtful that it could be amassed in sufficient
strength to compensate for a virtual lack of air cover.
China's desire to strengthen bilateral relations with
Manila will decrease the potential for serious Sino-
Philippine conflict over the Spratlys. China has shown
a keen interest in expanding trade with Manila,
particularly in crude oil. Since 1974, the Philippines
has purchased most of China's Shengli crude exports.
Last year, Manila agreed to import 6 million tons of
Chinese crude over the next five years. Although in
absolute terms the total volume is not great, it
nevertheless places Manila second only to Japan as a
market for Chinese oil. No doubt the Chinese also find
the growth potential attractive.
As Beijing renews its efforts to offset Soviet influence
in the region, its relations with Manila are taking on
added importance. A serious confrontation over
disputed claims would not only jeopardize promising
bilateral ties but would heighten suspicions of China
among other ASEAN countries, particularly Singa-
pore and Indonesia, which have yet to respond to
China's efforts to normalize relations. Over the next
few years, Manila will certainly increase its explora-
tory drilling near the Reed Bank and may send
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garrisons to additional islets in the Spratlys.4 These
developments, or a possible oil discovery by the
Philippines off Reed Bank, may spur Beijing to
establish a presence in the area to reinforce its claims.
If Hanoi granted the Soviets some form of base rights
in Vietnam or on a Vietnamese-controlled island in the
Spratlys, China would be doubly concerned. As their
own maritime and naval capability grows, the Chinese
have shown greater interest in the security of Asian sea
lanes.
Over the next five years, Chinese concern about the
future of the Spratlys could strain Sino-Philippine
relations. To what extent this occurs depends largely
on where and how the two sides press competing claims
in that area. The Reed Bank is much more sensitive
from Manila's perspective than the rest of the Spratlys,
and if China sent military patrols to assert its claims,
this would be more discomfiting to Manila than would
be the case if only oceanographic ships visited. Both
sides, however, have good reason to prevent the
competition from escalating into a serious confronta-
tion which could jeopardize growing bilateral ties or
open the door to greater Vietnamese or Soviet influ-
ence.
Prospects
China obviously would like to extend as much as
possible its control over all the areas of the continental
shelf to which it believes it has historic or legal claims.
During the next few years, China will attempt to
enhance its position by sending naval, research, and
fishing vessels into contested areas.
China will probably continue to avoid negotiating its
claims because it believes it does not yet have the
needed leverage. In seeking to assert its position in the
contested waters, China probably will be careful not to
provoke strong reactions from rival claimants, retain-
ing the flexibility to withdraw if necessary. Nonethe-
less, Chinese probes in the offshore areas inevitably
' Manila recently published a presidential decree annexing some of
the Spratly Islands.
will create friction between Beijing and the other
claimants. China probably hopes the close ties being
forged with Japan and the Philippines will keep
irritations from affecting those relationships. Beijing is
not concerned about the effects of disputed claims on
its relations with Taiwan or South Korea, but it will
nonetheless avoid open hostility toward Taipei and
Seoul because of its interest in maintaining good
relations with the United States. The disputed claims
with Vietnam, on the other hand, could lead to military
conflict, particularly in the Gulf of Tonkin, where the
claims have a security as well as an economic aspect for
China.
China's growing economic and military interests in
East Asian waters may eventually undermine Beijing's
present nonconfrontational approach toward most
territorial disputes. A successful economic moderniza-
tion program will not only make the exploitation of
offshore resources more necessary but also will provide
the technological and military capability to exploit and
protect them. Growing demand for oil and the advent
of new technology capable of exploiting ocean re-
sources at greater depths will increase the pressure on
all the littoral states to assert and defend their
jurisdictional claims.
Discovery of major oil reserves offshore in the disputed
areas will add a new dimension to the territorial claims
issue and make resolution of them more urgent?and
also more difficult. As a major Asian power, China's
position as claimant to the shelf inevitably affects the
development programs of the other littoral states,
making them reluctant to proceed too far until they are
certain how China will react. All these states are
energy short, however, and if oil is discovered on the
shelf, China would come under increased pressure to
negotiate demarcation or risk destroying the good
diplomatic relations it has achieved?relations which
are critical to its strategic objectives vis-a-vis the
USSR.
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China:
Growing Interest and Problems
in East Asian Waters
Part II
Economic Maritime Factors
China has greatly increased its offshore activities since
the early 1970s. It has intensified its oil development
program near the coast and has conducted surveys and
exploratory drilling farther from the coast. Growing
naval, fishing, and merchant marine operations have
made East Asian waters and waterways more impor-
tant for China in the conduct of its trade and pursuit of
its strategic goals.
Offshore Oil Development
China considers the development of its oil industry a
top priority, but, in particular, it needs to develop its
potentially rich offshore petroleum resources to offset
declining rates of production from onshore wells. Oil
exports are an important source of foreign exchange to
finance China's economic development. Domestic oil
consumption will grow as industry and agriculture
expand, reducing the amount of exports. China can
enhance its own capabilities for offshore drilling by
purchasing foreign equipment and technology, but it
will also need to cooperate with foreign companies in
joint projects.
China began offshore exploration in the late 1960s in
the shallow waters of the Bo Hai, and by 1978 three
platforms were producing oil. In the early 1970s, the
Chinese began exploring areas in the East China and
South China Seas; they have drilled wells off the
eastern coast of the Leizhou Peninsula, at the mouth of
the Pearl River estuary, and in the Gulf of Tonkin.
China has purchased foreign equipment and technol-
ogy, but technical difficulties, financial constraints,
and shortages of trained personnel have hampered the
offshore program.
Recognizing that it will have to cooperate with foreign
firms to develop potential offshore oil resources, China
has contracted with foreign companies for seismic
studies and will permit open bidding for production
contracts once the geophysical data have been as-
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sessed.5 Except for the work in the Bo Hai, the foreign
companies will have to explore offshore at their own
expense and will be compensated only if they find oil.
This approach allows development without expending
China's scarce capital. China recently signed an
agreement with the Japan National Oil Corporation to
develop oil resources in the Bo Hai?where shallow
depths could be easily drilled by Japanese compan- 25X1
ies?while assigning to US and European companies
areas in the Yellow and South China Seas?where the
technological demands are greater. Even if oil is
discovered in commercial quantities, it would probably
take at least 10 years to attain large-scale production
of offshore crude.
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Merchant Fleet
China has built up its international merchant fleet in
the last several years, and as this fleet grows, Beijing
will become increasingly concerned with guaranteeing
free access through the principal sea lanes in East
Asia. Moreover, other Law-of-the-Sea issues, such as
freedom of the high seas, passage through straits, and 25x1
secure transit routes will become more important to
China as its commercial relations with the rest of the
world expand. 25X1
China's international fleet has grown since the early
1970s, and its composition has changed dramatically.
General purpose dry cargo ships accounted for much of
the fleet in 1973, but subsequently Beijing has shifted
emphasis to bulk carriers. Such ships constituted about
80 percent of total acquisitions in 1978, probably
reflecting China's need to transport large quantities of
grain imports. In coming years, China is likely to 25X1
concentrate on expanding its tanker fleet to handle
growing oil exports. China built two small tankers i25x1
1978 and plans to build 10 more, totaling 225,000
deadweight tons, over the next few years.
China signed agreements with British and French companies to
conduct a seismic study of the Yellow Sea and with six US
companies to do so in the South China Sea and the Gulf of Tonkin.
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Fishing
China has a large offshore fishing fleet but cannot at
present conduct extended fishing operations at sea. As
China acquires this capability, it will become a more
important voice in regional fishing matters. In the past
three years, Beijing has begun to modernize its fleet
and fishing practices to exploit fishing grounds farther
from shore. Since 1976, China has bought more than
25 refrigerated transports and factory ships from
Japan and has begun producing similar ships at home.
China has also markedly increased the size and
sophistication of its fishing boats.
China's distant water fishing fleet not only enables it to
increase its total catch but also allows China to assert a
presence in areas over which it claims jurisdiction. For
example, China has conducted large-scale fishing
operations in the waters around the Paracel and
Spratly Islands in recent months.
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Naval Expansion
In keeping with China's growing interest in offshore
resources, its Navy is changing from a coastal force to
one capable of deep-water operations. The Navy can
now conduct coastal defense operations up to 300
nautical miles 6 from the eastern edge of the continen-
tal shelf, which provides a military reach to the
Senkaku and Paracel Islands.
6 Throughout this paper, distances are reported in nautical miles,
hereafter referred to as miles.
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China:
Growing Interest and Problems
in East Asian Waters
Part III
Staking and Asserting National Claims
China has long championed increased coastal state
control over the world's seas and has instituted a
number of measures to maximize its ocean claims. In
1958, the Chinese Government established a straight
baseline system and claimed a 12-mile territorial sea
(see map 1). The declaration also asserted Chinese
sovereignty over, and established territorial seas
around, Taiwan, the Spratly and Paracel Island
groups, and numerous shoals and underwater reefs
throughout the South China Sea.' Beijing has pub-
lished a number of maps that place its international
boundary line as far south as the continental shelf of
Malaysian Borneo. This line does not delineate a
territorial sea claim but merely encircles all Chinese-
claimed island groups.
The need to maintain a consistent legal basis for its
claims causes the Chinese Government some difficulty
in maximizing its claims to ocean resources. China's
claims to the shelf are based on the natural prolonga-
tion principle?that the continental shelf is the sea-
ward extension of the Chinese mainland and, there-
fore, under the jurisdiction of the Chinese Govern-
ment. Using this principle, China claims rights over
the Yellow and East China Sea shelves up to the
periphery of the Korean peninsula and the Ryukyu
islands
China has never declared a 200-mile exclusive eco-
nomic zone, even though it vigorously supports such
declarations by Third World countries. Declaring such
a zone around its southern coastline and South China
Sea islands would increase potential Chinese control
over the narrow-shelved South China Sea, but it would
undercut its claims to the Yellow and East China Sea
shelves. Fear of prejudicing its shelf claims also
prevents China from declaring even a 200-mile exclu-
sive fishing zone, although China restricts foreign
' The declaration did not specifically include the East China Sea's
Senkaku Islands, called the Diaoyu Tai by China and claimed by
China, Japan, and the Government on Taiwan.
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fishing, particularly by the Japanese, in a large area of
the Yellow and East China Seas. Increased concern
about the depletion of its fishery stocks, however, could
lead Beijing to opt for some form of broad or extended
fishery zone. 25X1
China also imposes navigational restrictions on foreign
ships operating in Chinese waters. Beijing has created
a military warning zone in the Bo Hai, which cannot be
entered without prior permission, and a military
operations zone north of Taiwan where foreign fishing
vessels venture at their own risk. These restrictions,
established solely for security reasons, have no
precedent in international law.
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Law of the Sea
China has participated actively in Law-of-the-Sea
Conferences, strongly supporting the position of the
Third World countries on a variety of issues while
denouncing the superpowers, especially the Soviets, for
exploiting ocean resources to the detriment of the
developing countries. 25X1
China supports measures that will ensure strict control
of all activities, other than navigation and overflight, in
ocean areas beyond the territorial sea. These include:
? Complete coastal state sovereignty and the right of
innocent passage in the territorial sea, including
international straits that lie within the territorial sea.
? Coastal state ownership and management of the
coastal state economic zone, with perhaps some
sharing of management and benefits with adjacent
landlocked and shelf-locked states.
? Maximum international control of the areas beyond
coastal state jurisdiction through an international
system in which all nations have an equal voice and
through which revenues derived from the exploita-
tion of the seabed will be shared equally by all
nations.
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As the range and scope of China's activities in East
Asian waters grow, however, Beijing may find it
difficult to balance its support for the Third World's
position with its desire to safeguard Chinese national
interests.
Yellow Sea
Politically divided Korea creates problems for China in
delimiting its boundary in the Yellow Sea (see map 2).
Although China and North Korea have apparently
agreed on a boundary in the northern Yellow Sea, the
boundary in the southern part will remain in dispute
unless a major change occurs in Beijing's policy toward
South Korea. China claims the continental shelf on the
basis of the natural prolongation principle, but it has
not specified its claims in the Yellow Sea, which is a
semienclosed body of water warranting negotiations
among the involved states in order to divide it on an
equitable basis. China, however, has established a
military warning zone and fishery protection zones in
the Yellow Sea, conducted seismic surveys, and signed
contracts with European companies for oil exploration
predominantly on the Chinese side of a hypothetical
equidistant line.
China's military warning zone does not necessarily
represent the maximum extent of its jurisdictional
claim to the northern Yellow Sea. Such a zone has no
basis in international law, but Beijing and Pyongyang
seemed to have agreed on respective areas of jurisdic-
tion. The western limits of North Korean patrols in the
Yellow Sea correspond closely with the eastern bound-
ary of China's military warning zone.'
The southern Yellow Sea, which is disputed between
China and South Korea, has been the scene of
numerous incidents involving fishing and petroleum
exploration. In 1952, South Korea established the
Rhee Line and claimed sovereignty over all economic
resources in a large area around the entire Korean
peninsula. In 1970, Seoul issued the Submarine
Mineral Resources Development Law and estab-
lished?by presidential decree?a median-line limit
for seven seabed mining blocks in the Yellow and East
China Seas, which superseded the claims based on the
Rhee Line.
In 1977, Pyongyang announced the establishment of a military
warning zone and a 200-mile exclusive economic zone off both coasts
but has not specified the zones' boundaries in the Yellow Sea.
Secret
China protested South Korea's actions and sent lightly
armed Chinese fishing boats into the area to harass
seismic surveying. A Korean-US consortium sus-
pended operations in 1971, but the Gulf Oil Company,
ignoring the Chinese warnings, began drilling in 1973
only 175 miles off the coast of Shanghai. The Chinese
repeated their protest and dispatched Komar-class
gunboats to the area. In response, and at the urging of
Washington, Gulf Oil gradually terminated its oper-
ations.
Since 1975, China has conducted its own seismic
survey in the Yellow Sea to the east and northeast of
Shanghai?areas close to the hypothetical Sino - South
Korean equidistant line. It has also signed agreements
with foreign companies for further exploration. Seoul
has repeatedly offered to negotiate the delimitation of
the continental shelf in the Yellow and East China
Seas, but to no avail. For the time being, both Beijing
and Seoul will probably confine their exploratory
activities to areas falling on their respective sides of a
hypothetical equidistant line.
Numerous incidents have also occurred between China
and South Korean fishing fleets over the years.
Chinese vessels, often armed or escorted by patrol
boats, have seized South Korean boats, detained crews,
and confiscated their catch and equipment. All the
incidents have occurred in China's Fishery Protection
Area 1 between the Korean island of Sohuksan and the
Chinese mainland. This protection area is partially on
the Korean side of a hypothetical equidistant line and
partially within South Korean continental shelf claims
in the East China Sea.
East China Sea
Two divided nations and Japan are competing to
exploit the resources of the East China Sea (see map
3). Oil is the primary impetus behind the dispute. The
extent of the oil reserves beneath the East China Sea
remains unproved, but no significant test-drilling has
occurred in the most geologically promising areas.
China, Japan, North and South Korea, and the
Government on Taiwan all claim parts of the East
China Sea, but the disputes focus on the Senkaku
Islands and the South Korea - Japan Joint Develop-
ment Zone.'
'North Korea, because of its claim to represent the only legitimate
government of Korea, has a theoretical claim to the East China Sea,
although it has not played an important role in the dispute.
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The Senkaku Islands have little intrinsic value, but
their ownership is crucial to determining jurisdiction
over much of the shelf and, hence, the right to exploit
petroleum reserves thought to exist there.' Jurisdiction
over thousands of square kilometers of the shelf may
depend not only on a determination of the ownership of
these islands, but also on the effect given them in a
shelf division. Before the shelf boundary issue can be
settled, the sovereignty issue must be resolved.
Japan claims that the Senkakus are part of the Ryukyu
Island chain. Tokyo points out that the United States
administered the Ryukyu Islands (including the
Senkakus) after World War II, but returned them to
Japanese administration on 15 May 1972. Since
reversion, Japan has been responsible for defense of the
Ryukyus?including the Senkakus. The Japanese Self
Defense Force generally leaves coverage of the
disputed islands to the Civil Maritime Safety Agency,
which makes occasional patrols around them.
Publicly, Tokyo considers the Senkakus issue settled,
but its operations on the shelf near the Senkakus have
been cautious. Japan, South Korea, and the Govern-
ment on Taiwan established a committee in 1970 to
discuss cooperation in developing potential oil and
natural gas resources in the East China Sea, but Tokyo
quickly ended the discussions once Beijing publicly
asserted its claims. Japan has approved no concessions
south of the 29th parallel and holds in abeyance
applications for oil exploratory licenses and other
projects in the immediate vicinity of the islands. Tokyo
recently conducted scientific surveys of the islands and
their surrounding waters and has begun sea patrols in
the area.
The Government on Taiwan and China cite practically
identical historical and legal evidence to support their
contention that the Senkakus never rightfully belonged
to Japan and that reversion did not prejudice their
claims. In December 1970, Beijing reasserted China's
historical claims over the Senkaku Islands. In early
1972, just four months before the planned reversion of
the Ryukyus to Japan, the Chinese Foreign Ministry
said that the US-Japan reversion agreement would not
alter China's claims of sovereignty.
I? The Senkaku Islands are a small group of uninhabited, largely
barren islets on the eastern margin of the East Asian continental
shelf. Until the publicity about possible petroleum deposits in the
East China Sea based on a 1968 UN survey, the Senkakus were
virtually unknown and seldom shown on maps of the area.
Japan and South Korea have created a Joint Develop-
ment Zone in an area of the East China Sea where they
and China have overlapping claims. Tokyo and Seoul
agreed in 1974 to ignore their differences and cooper-
ate in the development of oil and natural gas resources.
Despite Beijing's protests, they established a boundary
in the northern part of the continental shelf and
marked off a joint zone of about 83,000 square
kilometers west of the Japanese island of Kyushu. 25X1
Seoul ratified the agreement soon after the signing, but
Tokyo delayed ratification until June 1977 and did not
pass the enabling legislation until June 1978. The
companies to conduct the operations in the various
subzones were not chosen until March 1979, with
exploratory drilling planned for spring 1980.
Japan's reluctance stems largely from concern about 25X1
the Chinese reaction, even though the zone is on the
Japanese side of a hypothetical equidistant line with
China. When the Japanese Diet ratified the treaty, 25X1
China reiterated its own claims to the area and
threatened to impose economic sanctions against
Japan. China further alarmed the Japanese in May
1978 when it dispatched a marine research ship to the
southern part of the joint development zone to rein-
force its claims. Chinese Vice Premier Li Xiannian
warned, moreover, that China would take "concrete"
action if exploration activities began.
A dispute between Beijing and Taipei over offshore
jurisdiction in the East China Sea flared in 1970
(see map 3). Taipei proclaimed five seabed reserve
areas extending to the Chinese mainland, granted
concessions to foreign oil companies, and actively
promoted drilling activities in sharply contested areas
near the Senkaku Islands and in the Taiwan Straits.
With foreign oil companies exploring the East China
Sea only 40 to 50 miles from China's coast and with
Taipei, Seoul, and Tokyo discussing cooperative ocean
development, Beijing issued the first major statement
of its claims to the East Asian continental shelf since
1958. China warned that activities by others in these
areas constituted an infringement of Chinese sover-
eignty that would not be tolerated and sent a Komar25X1
class missile attack boat to the area to back up the
statements. Washington said it would not protect US
oil companies operating in the disputed waters.
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Despite Beijing's admonition and Washington's hands-
off policy, serveral US companies as well as Taiwan's
Chinese Petroleum Corporation have drilled at least 40
wells off Taiwan's coast since 1973. Although one well
about 55 miles west of Gaoxiung produced a gas flow,
subsequent drilling in that immediate area failed to
provide any evidence of a field. By 1976, increasingly
hostile statements from Beijing, interest in offshore oil
deals with China, and discouraging results from
drilling caused US oil companies to suspend their
contracts with Taipei indefinitely. Only the Taiwan
company continues to conduct exploratory operations,
but it has confined operations to the Taiwan side of a
hypothetical median line in both the East China Sea
and in the Taiwan Straits.
South China Sea
China's search for offshore oil, its strategic goals, and
its regional ambitions have involved it in several
territorial and jurisdictional disputes in the South
China Sea (see map 4). In addition to its disputed
boundary with Vietnam in the Gulf of Tonkin, Chinese
claims to the Pratas, Paracel, and Spratly Islands are a
potential source of conflict with the Government on
Taiwan, Vietnam, the Philippines, and Malaysia.
A longstanding jurisdictional conflict between China
and Vietnam over their sea boundary in the Gulf of
Tonkin (map 5) became a public dispute after Sino-
Vietnamese relations sharply deteriorated in 1978-79.
This dispute is significant because it involves thou-
sands of square kilometers, not only possibly rich in oil,
but also strategically important.
Beijing and Hanoi published their respective positions
on the Gulf of Tonkin sea boundary as well as on the
Paracel and Spratly Islands in Foreign Ministry
memorandums in March 1979. Vietnam's memoran-
dum made public for the first time the extent of
Hanoi's claims in the Gulf. These claims are based on
the 1887 Sino-French boundary convention, which
Hanoi maintains established Greenwich Meridian
108? 03' 18" east as the offshore boundary. The
Vietnamese argued that the extension of this meridian
boundary from the southern part of the Gulf into the
South China Sea is the only segment that needs to be
delineated. Beijing rejected the Vietnamese contention
but offered no counterdocumentation or specific claims
of its own. China called for negotiations to settle the
issue equitably.
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The Vietnamese memorandum tries to put the onus for
the Tonkin Gulf impasse on China. It maintains that
the disputes started in 1973, when Hanoi informed
China that it planned to prospect for oil and proposed
negotiations to delineate the offshore boundary offi-
cially. China evidently agreed to negotiate, but insisted
that pending an agreement, third countries should be
prohibited from exploration activities and neither
China nor Vietnam should prospect in a large area of
the central Gulf. This would effectively prevent
Vietnam from any significant exploitation of its oil
resources. Vietnam claims that the subsequent negoti-
ations in 1973 and 1977 both failed because China
refused to discuss the boundary question seriously.
In fact, Vietnam is more to blame for the Tonkin
impasse than China. Vietnam's claim that the 1887
treaty divided the Gulf is an exaggeration." Indeed,
the concept of extending maritime boundaries great
distances from the coast did not even exist in the 19th
century, so Vietnam's contention that a mutually
acceptable offshore boundary has existed since 1887 is
obviously fallacious.
China, the Government on Taiwan, and Vietnam claim
sovereignty over the Paracel Islands, citing historical
documents and dynastic practices as evidence of their
respective rights to jurisdiction. In 1956, the South
Vietnamese replaced French troops on several of the
Paracels, prompting Beijing to establish a naval base
on another one and garrison some 200 soldiers on two
more. South Vietnam occupied additional islands in
late 1973, but in early 1974 China launched a naval
and air attack against the South Vietnamese and
secured control over the entire archipelago. Since
taking over the Paracel Islands, China has fortified its
positions and drilled an exploratory oil well on one of
the islands.
" According to the treaty, "the islands which are east of the Paris
meridian of 105? 43' east (108? 03' 18" east of Greenwich), that is to
say, the north-south line passing through the eastern point of the
island of Tra-co which forms the boundary, are also allocated to
China. The island of Gotho and other islands west of this meridian
belong to Annam." Although the wording is imprecise, it appears
that the 108? 03' 18" meridian was not intended to divide the entire
Tonkin Gulf but only to serve as a cartographic device for awarding
control over the islands.
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Although Hanoi did not publicly object to China's
takeover of the Paracels at the time, in 1976 it
published maps that showed the Paracels and some
other islands as Vietnamese territory. In 1977, Hanoi
referred to them in its declaration of the limits of
Vietnam's territorial sea. Public assertion of Vietnam-
ese territorial claims and denunciation of Chinese
occupation of the Paracels did not occur until late
1978, when Sino-Vietnamese relations deteriorated. A
Vietnamese Foreign Ministry memorandum of March
1979 reiterated these claims while again denouncing
Beijing's 1974 takeover.
Beijing argues that Hanoi recognized China's claims
to the Paracels and other South China Sea islands
several times in the past. Beijing also has asserted that
Vietnamese Premier Pham Van Dong accepted Chi-
nese dominion over the islands in 1958 when he wrote
Zhou Enlai that "the Government of the Democratic
Republic of Vietnam recognizes and supports the
declaration of the People's Republic of China on
China's territorial sea made on 4 September 1958." 12
Hanoi charges the alleged acquiescence was obtained
under the duress of its conflict with South Vietnam and
the United States.
China, the Government on Taiwan, Vietnam, and the
Philippines each claim sovereignty over the Spratly
Islands?an archipelago of more than a hundred
islands, reefs, and banks scattered over an area of
260,000 square kilometers in the South China Sea.
China has never occupied any of the Spratlys; Vietnam
occupies and has fortified six of them, the Philippines
seven, and Taiwan one. The strategic importance of the
islands?located amid naval and maritime transit
routes?and the potentially valuable offshore petro-
leum resources in the area have intensified the
longstanding dispute over them in recent years."
'2 The declaration said that the territory of China includes the
Chinese mainland and its coastal islands as well as Taiwan and its
surrounding islands?the Penghu Islands (Pescadores), Dongsha
Islands (Pratas Islands), Xisha Islands (Paracel Islands), Zhonghsa
Islands (Macclesfield Bank), and the Nansha Islands (Spratly
Islands).
"The 1968 UN geophysical study of East Asian waters fueled
speculation about the area's potentially rich petroleum resources
prompting claimants to reassert their rights and caution their rivals.
South Vietnam and the Philippines occupied several islands each,
and Manila granted concessionary rights to foreign oil companies to
drill in the waters around the islands. Recent oil discoveries off the
coast of the Philippine island of Palawan, east of the Spratlys, have
further increased Manila's interest and the potential for conflict.
China, Taiwan, South Vietnam, and the Philippines
first made their respective claims to the islands in the
1950s. The Spratlys were included in China's 1958
Territorial Sea Declaration." In the early 1970s, when
speculation about the oil potential of the area was
running high, China warned that any exploratory or
developmental activities on or around the islands
constituted encroachment on its territorial sovereignty.
Beijing initially contested the ownership of the
Spratlys primarily with the former Saigon govern-
ment. Hanoi took over the South Vietnamese?held
islands in 1975 and published maps showing the
islands in 1976, but China did not comment publicly
until relations deteriorated in 1978. That December,
Beijing issued a Foreign Ministry statement denounc-
ing the Vietnamese occupation of some of the Spratlys.
Hanoi responded that the Spratlys were "sacred
Vietnamese territory," citing historical records and
practices as justification of its claim. Beijing and
Hanoi reiterated their claims in March 1979 memo-
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The Philippines " is the only claimant to attempt to
exploit the potentially valuable oil deposits in the
Spratly Islands region. The Philippines' rising oil
import bill and Manila's desire to reduce its
dependence on foreign suppliers spur its search for oil
in the South China Sea. It granted oil-drilling conces-
sions to foreign companies in the early 1970s, but
exploration in the contested area near Reed Bank did
not begin until after a March 1976 discovery northwest
of Palawan. Despite strong protests from Beijing,
Hanoi, and Taipei, a Swedish-led consortium of oil
companies that included the American Oil Company
(Amoco) began drilling operations 50 miles south of
Reed Bank. In 1977, the consortium halted its
activities; drilling has resumed but without Amoco's
participation. In recent months, the US Cities Service
"China's claims to the Spratly archipelago extend southward to
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areas under Malaysia's jurisdiction, but Beijing is unlikely to press
its claims there because its friendly relations with Kuala Lumpur are
"
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The Philippine claim implicitly includes the entire Spratly
archipelago, but since 1974, Manila has differentiated between the
area it calls Kalayaan or Freedomland?an ill-defined group of
islands and reefs in the northeastern Spratlys?and the rest of the 25X1
islands. Manila recently published news of a presidential decree
formally including Kalayaan as part of the Philippines.
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17
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Secret
Company discovered oil 23 miles off the northwestern
coast of Palawan. Commercial production has already
begun from these wells and has reached about 40,000
barrels per day.
Manila has strengthened its military capability to
protect its claims to the Spratly Islands in general and
the so-called Kalayaan Islands in particular. The
Philippine Navy has increased patrols around the
Spratlys, and an airfield has been constructed on one of
the islands. The armed forces also recently created a
Western Command responsible for protecting Philip-
pine claims west of Palawan. An airfield on Palawan
has been renovated and a naval base expanded, and the
number of troops there will be increased. Recently
acquired F-8 jet fighters from the United States also
improve Manila's military capabilities in the South
China Sea.
Manila claims that it has tacit assurance from Beijing
that China will not interfere with Philippine oil
exploration initiatives, but the Chinese periodically
restate their own longstanding claims. Manila's an-
nouncement of an oil strike in early December 1978
prompted China's public reiteration of its claims to the
Spratly Islands on 22 December of that year, although
the statement was also clearly directed at Vietnam.
The Chinese Foreign Ministry statement not only
opposed "any foreign country's invasion or occupation
of any of the Spratly Islands" but also warned that
"any development activities" in the area would consti-
tute an encroachment on Chinese territorial sover-
eignty.
The Government on Taiwan also claims the Spratly
Islands, but has professed no interest in developing
potential offshore oil and natural gas there. Taiwan's
distance from the Spratly Islands and its small Navy
make it difficult for Taipei to defend its claims to the
islands.
China claims sovereignty over several islands, shoals,
and reefs in the South China Sea, as does the
Government on Taiwan. Although the reefs have no
intrinsic economic value, the surrounding area may
have oil resources, and ownership of the reefs would
affect determination of jurisdiction over the South
China Sea.
Secret
Pratas Reef lies in the South China Sea just off the
East Asian continental shelf, approximately 230 miles
southwest of Taiwan and only 135 miles southeast of
the Chinese mainland:6 Japan recognized Chinese
sovereignty over the island in 1909. China adminis-
tered it until 1936, when the Japanese Navy occupied
it. After World War II, the Chinese Nationalist
Government quickly reclaimed Pratas and established
a military presence on the island. The mainland
government officially claimed Pratas in its territorial
sea declaration of 1958, but Beijing has not made the
island an important issue in recent years.
Taiwan also maintains a low-key approach to the
dispute, compared with its more widely publicized
disputes over the Paracel and Spratly Islands. It has
quietly strengthened naval defenses on the island,
howeveri
about 400.
\Current naval manpower is estimated at
The military buildup is strictly defensive in nature.
Naval ships or planes cannot be permanently based on
Pratas, and the only naval operations may have been
associated with resupply or troop rotations. The
airfield is seldom used except for sea rescues or
medical emergencies.
Despite its obvious firm control of the island, Taipei
has been circumspect about using Pratas to claim
greater control of South China Sea waters and
continental shelf. When Taipei delineated five seabed
reserve zones in 1970, the southernmost zone extended
only as far south as the southern tip of Taiwan, some
80 miles north of Pratas. No offshore drilling has
occurred south of the southern tip of Taiwan," an
indication of Taipei's desire to keep the Pratas
ownership question out of the headlines.
16 Called Dongsha by the Chinese, Pratas Reef is a circular, coral
barrier reef about 21 kilometers in diameter with an island on the
western edge. For centuries, the island was used by fishermen from
the mainland, Taiwan, and the Ryukus while fishing and gathering
seaweed, shells, and coral.
" Conoco and Amoco at one time held offshore oil concessions in the
southernmost reserve zone, but the concessions were allowed to
expire and are now held by the government-controlled China
Petroleum Corporation.
18
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In recent months, China signed agreements with
foreign oil companies to conduct geophysical surveys in
the South China Sea. Beijing granted concessionary
rights for exploration to the US Phillips Petroleum
Company in zone 6, where Pratas is located. Although
this suggests a willingness to risk provoking Taiwan,
Beijing privately told the oil company to avoid
operations close to Pratas. Taiwan will undoubtedly
protest but it lacks the naval and air capabilities on
Pratas to respond militarily.
China and Taiwan claim the Macclesfield Bank, about
300 kilometers east of the Paracels, and the
Scarborough Shoal about 135 miles west of Luzon
Island in the Philippines. Macclesfield is completely
submerged, and Scarborough contains only a few rocks
breaking the surface, preventing either claimant from
establishing a presence there.
19 Secret
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China's Maritime Claims
Declassified in Part - Sanitized Copy Approved for Release 2012/09/12 : CIA-RDP08C01297R000200130001-7
Map 1
40 ----
Sea
of
Japan
Military
Warning Zone
YeIIow
Sea
Protection
Area 1
East
China
Sea
NOTE: China has declared a 12-
nautical-mile territorial sea around
its mainland coastline and all
claimed offshore islands. Since the
territorial sea has not been delin-
eated by the Chinese and has
caused no maritime disputes, it is
not shown on this map.
Military
Operations
Zone
Senkalcu-sliot
Tail'
? ace)
ong Ko
Gulf
of
Tonkin
Paracei Islands
aisha Qundao)
Macclesfield
Bank
fZhongsha Qundao)
Scarborough'"
Shoal
flivangyan Dao)
Gulf
of
Thailand
- Sprally Islands
fAlansha Qundaal
South
China
Sea
re
300 Kilometers
Be Retess:1
lit
flee is
uthoritative.,
626318 1-80
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Declassified in Part - Sanitized Copy Approved for Release 2012/09/12 : CIA-RDP08C01297R000200130001-7
Secret
Declassified in Part - Sanitized Copy Approved for Release 2012/09/12 : CIA-RDP08C01297R000200130001-7