THE PRC ATTITUDE TOWARD SEABED EXPLORATION IN THE CHINA SEAS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP08C01297R000300180014-7
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 23, 2016
• Document Release Date: October 15, 2012
• Sequence Number: 14
• Publication Date: February 27, 1975
• Content Type: REPORT

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BUREAU OF.INTELLIGENCE AND RESEARCH
THE~~PRC" ~ATT-I~Ti1DE=~?TOWARD ~~~SEABED sEXPLORA=T.IONf~IN"~THE.
CHINASEAS
Summary
Peking in 1958 claimed 12-mile territorial waters, but
since has claimed seabed resources, "living and non-living,"
to. the edge of the continental shelf off its coast. The
territorial and seabed claims include resources in the
waters surrounding territories that the PRC now physically
possesses--the Chinese mainland, Hainan, the Paracels--and
those which it does not but over which it asserts sover-
eignty--Taiwan, the Senkakus, the Spratlys, and other
islands. The Chinese have stated, however, that their
claim to seabed resources of the 'continental shelf is sub-
ject to negotiation with littoral states, leaving unclear
Peking's position on exactly how much of the shelf opposite
Korea, Japan, and Vietnam belongs to China.
Two things are clear, However. One is that until the
PRC and the other littoral states have negotiated seabed
agreements, Peking will not concede that anyone has a
legitimate right to conduct oil exploratory or drilling
operations in the Yellow and East China Seas or parts of
the South China Sea, even if the location of those activi-
ties appears to be comfortably closer to South Korea, for
example, than to the PRC. One consequence is that Peking
denies the validity of oil concession areas drawn from the
Korean coast out to an equidistant line unilaterally
determined by the Koreans.
It is equally clear that Peking has no intention of
soon entering into seabed negotiations with other littoral
states, notwithstanding the fact that it is the PRC which
insists on their eventual necessity. The multiple political
:`ENO FOREIGN DISSEM/CONTROLLED DISSEM
This rspart was produced by the Bureau WAAAIBO NOTIt~ EXEMPT FROM DECLASSIFICATION
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of Intelligence and Research. Aside from SENSITIYE INTELLIGENCE SOURCE8
SCHEDULE E.O. 11652: 5B (2)
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agencies at the working level, it has not
been coordinated elsewhere.
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factors--involvinq Hanoi and Pyongyang no less than Seoul,
Tokyo, and Taipei--.may require long evolution before the
Chinese see the way. cleared for negotiations.
Tlie PP.C.has reacted both to exploratory activities
conducted with he backing of US-oil companies in Korean
and Taiwanese. offshore areas and to the announcement of a
Japanese-South Korean agreement on a joint development zone
in the Fast~China Sea. PRC reaction has consisted of vague
yet ominous statements, for example, that the Japanese and
South I:oreans "must bear full responsibility for all the
consequences arising-therefrom."
Prepared by .G: ~~'. Fox
x2.0510
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THE OVERALL PRC POSITION ON iTNDERSEA RESOURCES
Coastal Boundary
On September 4, 1958, the PRC issued a declaration on
China's territorial sea, claiming 12 miles beyond ri base-
line which it defined. Although in a. 1972 study the
Department of State's Geographer cautioned that the absence
of an official, published PRC map made a comprehensive deter-
mination impossible, he concluded:
"Basically,, Peking appears to have' taken a realistic
and non-expansive attitude in drafting its straight
baselines. Rather than stating that the lines join
the outermost points of the outer islands,-.the decla-
ration notes that mainland points intervene. .This
decision would act to shorten the length of straight
baseline segments and hence~to diminish the claim to
internal waters and to territorial sea."*
Continental Shelf
China's. position on seabed resources, living and non-
living, off its coast was spelled out in a PRC statement at
.the April 1974 Colombo ECAFE Conference:
"All seabed resources in China's coastal sea areas and
those off her islands belong to China. China alone has
'the right to prospect and exploit these seabed resources.
All prospecting and drillinc activities carried out at
will in China's cogs al sea areas and those off her
islands in disregard of China's sovereignty are illegal.
"Division of jurisdiction of the continental shelf
betc~~een China and countries bordering on or :facing
* International Boundary Study, Limits in the Seas No. 43,
"Strai~~ht Baselines: People's Republic of Chinas" July 1,
1972, (UNCLASSIFIED).
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her should be decided by the countries concerned through
consultations on an equal footing. To one-sidedly mark
off a large area of the continental shelf. as a so-called
'joint development zone' behind Chiria's back is an
infringement on China's sovereignty, which the Chinese
Government absolutely cannot accept. Anyone who arbi-
trarily carries out development activities in this area
must bear full responsibility for all the consequences
arising, therefrom."
The PRC's position that shelf resources should be divided
"through consultations on an equal footing" is in line with
international practice in the North Sea and other areas where
several countries share a shelf.. Furthermore,,. it follows the
Geneva Convention on the Continental Shelf (to which Peking
is not a party), which requires consultations between littoral
states.
Oil resources beneath the continental shelf (defined as
the seabed and subsoil of adjacent waters which .are .subject
to exploitation, currently less than 200 meters of water
depth or about 100 fathoms) are commonly considered to belong
to bordering coastal countries. By this standard China might
claim the lion's share of the relatively shallow East China
Sea (see Map A). In the South China. Sea (clap B)--except for
the continental shelf off China and North Vietnam and the
shallow areas around the various island groups--the water is
generally too deep for the seabed to be open to commercial
development of oil. resources under existing technology.
Improved technology, however, could change the picture and
open most of the South China Sea to exploitation try the-end
of the century.
Equidistant Line
Both Peking's 1974 ECAFE statement and its response to
1973 Gulf drilling activities in the Yellow Sea (see below)
demonstrated that Peking does not concede that a equidistant
line drawn without its consent halfway between the territorial
water baselines of littoral countries might constitute an
acceptable interim basis for dividing the China seas.' conti-
nental shelf. Certain precedents exist for unilateral divi-
sion of a continental shelf along an equidistant line. (which
is what the ROK granting of concession zones amounts to--see
Map C).
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But since the PRC has not subscribed to the Geneva
Convention on-.the Continental Shelf, upon which these unilat-
eral delimitations are based, and since China has expressed
its willingness to negotiate with adjacent states as required
by the convention, Peking hasgroLindsfor rejecting the South
Korean equidistant-line. Furthermore, even if the PRC event-
ually accepted the equidistant line concept, the precise loca-
tion of the line could be controversial.
"Exclusive Economic Zone"
The PRC publicly supports th.e right of other countries
to claim territorial sea or an "exclusive economic zone" up
to 200 miles beyond its baseline, provided such a claim is
in conformity. with a country's "geographical and geological
conditions." Oil resources would fall G~ithiri the "all natural
rE~sources, living and non-living" that China defines as belong-
ing "exclusively" to the country claiming the "economic zone."
The PRC itself has based its resource claims on the cpn-
tinental shelf off its coast~not~ or1 a limit of 200 miles.
Peking's insistence that "geographical and geological condi-
tions" be considered in determining economic zones is aimed
at Japan, which supports the 200-mile zone. Japan is separated.
from much of the East China Sea continental shelf by a deep
undersea trench, which runs west of the Ryukyus.
THE PRC VIS-A-VIS OTHER LITTORAL COUNTRIES
Republic of Korea
Peking has twice protested oil-drilling activities in
ROK concession areas. In early 1973, a Gulf-chartered ship
with a non-US crew and registry began test drilling at a
location in Concession Area 2 (Map C) which, though far out
in the Yellow Sea, would fall on the Korean side cif any equi-
distant line. On March 15, 1973, a PRC Foreign Affairs
Ministry statement attacked "intense drilling in the Yellow
Sea and the East China Sea'" undertaken by "United States oil
companies" with the "consent of the South Korean authorities"
as a "new step taken by the international oil monopolies...to
grab China's coastal seabed resources." Reasserting the PRC's
right to ,participate in delimiting-the Yellow and East China
Sea continental, shelf, the prote:;t concluded:
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"The South
Korean
authorities have flagrantly and uni-
laterally
brought
foreign oil companies into the afore-
mentioned
region
for driLli:ng activities. The Chinese
Government
hereby
reserves all rights in connection with
the possible consequences arising therefrom."
The PRC did not respond to a subsequent Republic of Korea
offer to enter into discussions to`negotiate a delimitation
line.
On February 4, 1974, the Chinese protested an ROK-Japan
agreement, signed in Seoul on January 30, that provided for
joint development of a zone of the East China Sea continental
shelf between Korea and-.the Ryukyus (red area on Map C). The
Foreign Affairs Ministry statement called the "so-called agree-
ment" an action '?unilaterally" taken "behind China's back."
Once again asserting China's right to be a party in the divi-
sion of the shelf, the protest concluded:
"This act is an infringement on China's sovereignty which
the Chinese Government absolutely cannot-accept. If the
Japanese Government and the South Korean authorities
arbitrarily carry out developments in this area, they
must bear full responsibility for all. the consequences
arising therefrom."
North Korea..
North Korea has laid claim to its share of the continental
shelf and ha,~ asserted-that the boundary should be settled by
consultation on the basis of a median (equidistant) line..
Pyongyang has. also protested South Korean oil exploration con-
cessions granted to foreign companies., on the unsurprising
basis that the ROK has no "right or competence to strike a
bargain with .anybody about our continental shelf."
Pyongyang's hostile attitude toward Seoul's concession
areas means.`that China can continue to oppose exploration
activities on-the South Korean side of any median line without
complicating PRC relations with North Korea, even though
Pyongyang has expressed general support for-the median-line
principle.- -North Korea's position otherwise parallels that
of the PRC: .the Yellow Sea continental shelf-should not be
open to foreign exploration in the absence of a general agree-
ment among the .littoral countries as to how it should be
divided. ~ -
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Japan
Apart from the Chinese protest over the .Japan-ROK Joint
Development Area agreement--which the Diet has yet to ratify--
Peking and Tokyo have avoided open friction over seabed claims
since their 1972 normalization of relations.
Earlier, however, at the time Okinawa and the Ryukyus
reverted to Japan, the PRC clearly staked its claim to the
Senkakus, uninhabited islets at the southwestern end of the
Ryukyu chain (Map A): -The Senkakus had been considered part
of the Ryukyus by the US occupation authorities, but unlike
the Ryukyus they are situated on the Chinese side of the
trench ,lying between the PRC and Japan. In a May 1971
Peo le's Dail .Commentator article, Peking. accused the
Japanese o working with "the Pak Chong-hui clique" and the
"Chiang Kai-shek bandit gang" to "jointly" develop "the sea-
bed and subsoil resources of this area." The Commentator
warned that such collusion to "plunder" PRC resources could
"only arouse burning wrath among all the patriotic Chinese."
In his March 3, 1972, speech- to the UN Committee on
the Peaceful-Uses of the Seabed, at a time when i:he Sato
government was still in office, PRC representative An
Chin-yuan issued a similar warning. In an apparent refer-
ence to activities in the Senkakus area, he charged Japan
and others (includ.ing the US) with making "frequent .'sub-
marine' explorations in China's coastal seas in an attempt
to further plunder China's coastal seabed resources." An
reiterated Peking's- claim to the Senkakus, adding that:
"The seabed resources of the sea around these islands
and of the shallow seas adjacent to other .parts of
China belong completely to China and it is absolutely
impermissible for any foreign aggressor to poke his
fingers-into them. No one whatsoever is allowed to
.create any pretext to carve off China's territory and
plunder the sea resources. belonging to China. And no
one will ever succeed in doing so."
But at the-Chou-Tanaka normalization summit of late
1972, and in current negotiations looking toward a Sino-
Japanes~ peace treaty, both sides have chosen to shelve the
Senkakus problem. Nonetheless, it may be a significant
portent of PRC seabed claims. Peking's claim to the islets
,apparently rests in part on their_ location on the Chinese
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side of the ,Ryukyu trench, and it would be consistent with
that position to contend that the entire East China Sea
continental shelf--running down almost to the Ryukyus--
rightfully belongs to the PRC.- Japan, however, could counter
that it is also located on the East China Sea continental shelf.
Taiwan
Peking claims. Taiwan and all its undersea resources.
The PRC formulation (as restated at the April 1974 ECAFE
Conference) .absolutely rejects the Republic of China's
right to award oil concessions:
"All agreements and contracts concerning prospecting
and exploration of .China's seabed resources concluded
by the Chiang Kai-shek clique in Taiwan with any coun-
try, international organization, or foreign state or
private enterprise are illegal and null and void. None
of them will be recognized by the Chinese Government."
Foreign-registered rigs, operating under an exploration
agreement between the ROC's Chinese Petroleum Company (CPC.),
Continental Oil Company, and American Oil Company, discovered
natural gas off Taiwan's southwest coast last summer (CONOCO
concession on D4ap C) .
Peking indicated displeasure in a November 1,, 1974,
broadcast to Taiwan labeling the CPC "a joint organization
of six US petroleum companies" to which "the .Chiang gang"
had "sold out the natural resources and rights and interest
of the motherland in the name of China." The broadcast
noted that ROC actions allowed foreigners to put up a
Chinese signboard to do prospecting in our,,land and terri-
torial waters" but stopped-short of threatening to interfere
with such efforts.
Southeast Asia
The PRC has laid claim to the continental shelf of, and
all island groupings in, the South China Sea, (Map B).* Peking
occupies the Paracels and, like the ROC, has laid claim to
adjacent Macclesfield Bank, which does not rise above the-.high
See a so INR Research Study RGES-5, "South China Sear Up
-for Grabs," September 14, 1971 (SECRET/NO FOREIGN nISSEM/
CONTROLLED DISSEM).
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water line and thus cannot be formally occupied. Macclesfield
Bank has geologic structures that hint that. it may contain
potentially valuable ,petroleum resources, possibly the richest
in the South China Sea. The PRC also claims Pratas Reef,
which the ROC now occupies.
The PRC (and ROC) claim to the islets known as the Spratlys
dates from the~l5th century and from the Sino-French Convention
of 1887, which delimited territory between Tonkin and China.
The Philippine Government has never formally claimed the
Spratlys, but has informally suggested that: its geographical
proximity to islands that the Japanese formally relinquished
(to nobody in particular) in 1951 entitles it to-claim the
islands on behalf of the Allied Forces. -.The Philippines (as
well as the ROC) has occupied certain of tl-.e islets. South
Vietnam also claims the Spratlys, claiming successor rights
to a 1933 French assertion of sovereignty aver the islands.
Peking's. claims to all the island groupings in the South
China Sea are included within a dotted ling (marked "Limit of
Chinese Claim" on Map B) that has appeared on,unof-ficial PRC
maps since the early 1950's but has never 'peen mentioned in
official PRC statements. The line may amount to no more than
a pictorial depiction of PRC claims to the South China Sea
islands. Should it prove to have greater significance, the
fact that the line runs east of the South ~~ietnamese and west
of the Philippine continental shelf (100-fathom line on Map B)
would suggest that-the PRC would not be likely to contest GVN
or Philippine offshore drilling activity. To the south, how-
ever, the PRC claim line reaches all the gay to the Malaysian
continental shelf, in order to encompass the southernmost
Spratly.
The PRC. claims to the island groupings are significant
for the seabed because:
--as the Geographer points out,* if precedents from the
North and Adriatic Seas and the Persian Gulf are fol-
lowed, the whole of the South China Sea is "most likely"
to be treated, as a semi-enclosed sea with "jurisdiction
over the resources to be assigned to bordering states";
--the PRC's size and strength, demonstrated in the 1974
Paracels operation, suggest an eventual capability of
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overriding its smaller neighbors' claims to the sea's
various island groupings.
Chinese control over the Spratlys would presumably provide
the basis for-a PRC claim to accessible seabed-oil in all
parts of the central South China :,ea.
Peking's views may be affectE~d by North Vietnamese con-
siderations..--.The dotted line on the unofficial-PRC maps,
apparently out of deference to Hanoi's sensitivities, does
not. extend north of the 17th parallel boundary between North
anG. South Vietnam. Hanoi has not openly claimed any of the
disputed South China Sea islands and stood by while the PRC
drove South Vietnamese forces off the Paracels last January.
Hoti~ever, a DRV diplomat recently revealed that his government
had privately protested the PRC's Paracels actions, and still
considers ownership of the islands a Vietnamese."family affair."
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-- Map A
YELLOW SEA and EAST CHINA SEA: 100 FATHOM ISOBATH
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