Oil May Be Focal Point of Sino-Japanese Dispute

November 2006
By James C. Bussert

The Japanese Maritime Self Defense Force (JMSDF) Kongou-class Aegis destroyer Myoko sails with the Aegis cruiser USS Shiloh in a joint exercise in the Pacific Ocean. Japan and China are disputing ownership of islands above oil and gas reserves, and the growing number of incursions by ships and aircraft could lead to an encounter between JMSDF ships and those of China’s People’s Liberation Army Navy (PLAN).
A low-key game of naval cat-and-mouse is intensifying.

Two energy-starved Asian economic dynamos may face potential conflict in their quest for access to scarce oil reserves. China and Japan are finding themselves competing for the same undersea oil deposits, and this could lead to armed confrontations between the former antagonists.

China’s growing blue-water fleet increasingly has been venturing into disputed waters that sit atop potentially large oil fields, including some in Japanese economic zone waters. While Japanese Maritime Self Defense Force (JMSDF) and People’s Liberation Army Navy (PLAN) warships have operated in the same waters at different times, it is possible that in the future they could both be in the same area at the same time, and that could ignite the fuse. Two nations with hundreds of years of rivalry and a great need for oil with overlapping oil-field claims can create a highly volatile mix.

When it comes to Chinese seapower, geopolitical observers generally have focused their attention on two of China’s three PLAN fleets. The East Sea Fleet is deployed against Taiwan, and the South Sea Fleet has occupied South China Sea islands in several battles. The third, the North Sea Fleet, apparently has lacked a mission as the Russian Pacific Fleet no longer poses a threat. This changed several years ago with conflicting oil-field claims and numerous intrusions by Chinese vessels into Japanese waters that largely have been unnoticed by the media.

The Ryukyu island group is an unlikely location for a Sino-Japanese naval confrontation. Among them is a cluster of several islands named Senkaku by Japan and Diaoyutai by China, and both nations have ancient claims for them. These eight tiny uninhabited islands lie 200 miles southeast of Okinawa, 120 miles northwest of Taiwan and 200 miles east from the mainland China coast.

The history of possession of these islands involves several treaties. The islands had been considered part of Taiwan and have been used by Chinese fishermen since 1403. Japan claimed possession in the Treaty of Shimonoseki in 1895 after the Sino-Japanese War. After World War II, the United States gained control of the Senkaku Islands until 1971, when Okinawa and southwest islands were returned to Japan. This issue was important because a 1969 United Nations report stated that there was a possibility of oil reserves in the Senkaku/Diaoyutai island area. Japan found the large Chunxiao natural gas field in the Xihu Trough and began drilling. A treaty line demarked the Chinese area to the west from the Japanese waters to the east. Later, China began drilling three miles west of the line.

Japan increased its Exclusive Economic Zone (EEZ) out to 200 miles around its islands in 1996, and it overlapped China’s EEZ in this area. After that began a noticeable increase in Chinese warships, research vessels and oil exploration vessels operating in and around the EEZ. A Chinese coast guard was established in 1998, and the first of three new 1,500-ton Haixun-class cutters was operational in 2004.

A PLAN reconnaissance vessel, Dongdiao (hull number 232), was observed collecting electronic information off the coast of Japan during February 2000. This was a prelude to several PLAN warships exercising in the East China Sea area the following month. The most likely vessels participating probably were 053H frigates, but a Luda guided missile destroyer (DDG) also could have been present depending on how strong a statement the Chinese government wanted to make.

In January 2003 a PLAN Ming-class diesel submarine was detected inside Japan’s waters off the southern tip of the southernmost home island, Kyushu. It apparently was collecting electronic intelligence and other oceanographic data. Exactly one year later, several JMSDF vessels intercepted two Chinese “fishing vessels” in Japanese waters.

On July 21, 2004, two Chinese PLAN noncombatant vessels operated in Japan’s EEZ. They were the 1,040-ton survey vessel Yanlai and the 3,200-ton Yanha-class research ship. Also in 2004, the United States tracked Han-class nuclear attack submarine (SSN) 405 for weeks from China out into open Pacific waters where it circled around Guam, which is the primary forward staging base for the U.S. Navy in the Western Pacific. On its return trip toward China, the submarine veered toward Japanese EEZ waters in the southern Ryukyu Islands at Ishigaki Island. At this point the contact was handed over to the JMSDF to continue tracking. On November 10, 2004, a JMSDF Air Wing Five P-3C based in Naha, Okinawa, and two destroyers tracked the Han 405 inside Japanese waters. Continuous effective sonar and sonobuoy tracking drove it out of Japanese waters.

China escalated its visibility purposefully when it sent a Sovremenny-class ship, the most modern and threatening PLAN warship, into Chunxiao oil-field waters on January 22, 2005. This was further escalated in September 2005 when a task group of five ships cruised into the Japanese EEZ oil-field waters. The flagship was Sovremenny hull 137, and the group included Jianghu frigates 515 and 517, the 23,000-ton replenishment support ship Fuchi hull 886 and the 6,000-ton space event/intelligence ship Dongdiao, which bore hull number 851. This same ship, Dongdiao, was hull number 232 when it intruded in 2000. This may indicate that Dongdiao was moved from the East Sea Fleet to the North Sea Fleet.

These escalations cap a gradual increase in vessels from trawlers to frigates, to a single modern DDG, to a full battle group of five PLAN ships. A similar incremental increase from fishing boats to civilian survey to frigates and then the North Sea Fleet flagship DDG 110 took place before China’s actual invasion of the South China Sea’s Paracel and Spratly islands.

Chinese surveillance of Japanese territory is not limited to ships or submarines, however. On 10 occasions in 2005, Japan observed PLAN Y8 electronic warfare planes collecting information on Japanese radars based in Kyushu and Okinawa. There may have been earlier intrusions that Japan has not announced. Although the model of surveillance radars and locations are not identified, Jane’s Radar and Electronic Warfare Systems 2005-2006 lists the J/FPS3 as an air defense radar. This phased array radar manufactured by Mitsubishi may be in the 1- to 4-gigahertz band. Japan has other surveillance and air traffic control long-range radars that could be monitored by the PLAN snoops.

The Y8 is a Russian An-12 transport aircraft modified with modern Western and Russian radars, electronic countermeasures, navigation and communications equipment. Two variants of the Y8 could have been the aircraft that spied on Japan: the Y8J has a British Searchwater radar internal in the nose, and the Y8DZ electronic intelligence version has an external Litton APSO-504 search radar radome under the nose. Litton also provides the LTN 72 inertial navigation system.

Because Y8 aircraft obviously are seen as military intruders, China recently modified a Tu-154 commercial airliner by adding a sensor pod on the bottom of the fuselage. This aircraft could be assumed to be an airliner by Japanese sensors. During October 2005, this covert reconnaissance aircraft intruded into the Japanese air defense identification zone (ADIZ). Several Japanese F-15 interceptors were scrambled to chase the covert electronic countermeasures plane out of ADIZ airspace.

The naval balance in some areas may be shifting from Japanese dominance to asymmetrical PLAN advantages. Ship air defense is one. A few years back, only a few old converted Luda DDGs and a couple of frigates had very short-range surface-to-air missile (SAM) capability. Now, long-range SAN-6 and SAN-7 systems onboard new PLAN DDGs can outrange Japanese F-15 air-to-surface missiles.

The PLAN destroyer Qingdao sails into Pearl Harbor on a port visit earlier this year. China is modernizing its navy as it establishes a greater presence in oil-rich disputed waters.
New platforms and technologies are influencing confrontations between the two countries. Both nations recently have initiated large ocean-going patrol boats for EEZ protection duties. Japanese craft fall under the Maritime Security Agency, and China’s craft come under its new coast guard. China has two 1,000-ton-class boats, one with a helicopter deck and the other with a crane and range of 6,000 miles. More recently, two 3,000-ton-class boats have appeared. The first, a 98-meter boat, had a helicopter and a crane with a range of 10,000 miles. The most recent, launched in February 2006, appeared in the Chunxiao area within two months. Although the range of the 113-meter Hai Xun 31 is only 6,000 miles, it has more tracking and very high frequency (VHF) communications electronics onboard.

The JMSDF’s mature and well-trained Aegis cruisers are superior to China’s new Aegis Luyang DDGs in all areas except the over-the-horizon supersonic Russian surface-to-surface missiles, which are designed to take out attack aircraft carriers. The Japanese EC-4 and EP-3 reconnaissance aircraft are rated superior to the PLAN Y8 or Tu-154 conversions and outnumber them about 10 to 1.

Japanese diesel submarines always have been quieter, with better trained crews and equipped with more advanced technology. China’s eight new Russian 636 Kilos, modern Song diesel boats and latest Yuang boats are newer designs. The Yuang appears very similar to the prototype Russian Borie class, which is not even in the Russian submarine force yet.

Although the probability of actual naval conflict currently is low, there certainly will be more tests of Japanese antisubmarine warfare because PLAN submarines are China’s most covert reconnaissance platforms. JMSDF destroyers have the OQS-103, licensed copies of U.S. Navy SQS-23 bow sonars or the newer OQS-104 Japanese design probably superior to the SQS-23 in performance. The JMSDF’s antisubmarine warfare skills far outclass the PLAN submarine force. China’s loud Han and equally noisy Ming probably will be replaced by newer 094 SSN and Kilo diesels in future meetings, so the PLAN submarines will be quieter. The PLAN submarine fleet always has far outnumbered the technologically superior JMSDF submarines, but the Japanese technology lead will be reduced with the PLAN’s new very quiet Kilo, Song and Yuan diesel submarines.

Considering the distance from nearest military facilities and bases to the Chunxiao area, the Japanese have a distinct advantage over China. Chinese North Sea Fleet Headquarters at Qingdao has a hard-sheltered nuclear submarine base, naval air station and destroyer base that is 750 miles distant. Previously, the only North Sea Fleet destroyers upgraded with modern communications were two old Ludas. China now is expected to add two new 6,000-ton 051C command DDGs with long-range Russian SAN-6 vertical launch systems to the North Sea Fleet.

The East Sea Fleet Headquarters at Ningbo has a nearby frigate base at Dinghai and hard-sheltered Kilos and Sovremenny support at Xiangshan. But the Japanese have considerable assets at Okinawa only 300 miles away. These include long-range radar, P-3C squadrons 5 and 9, destroyers and Minesweep Division 46 with three coastal minesweepers. Japan is establishing a new P-3C airbase near Ishigaki Island. The southernmost Japanese home island naval group is the Sasebo Regional District. It includes Escort Divisions 23 and 26 and Missile Boat Division 3 based in Sasebo, along with two minesweep divisions based at Shimonoseki and Okinawa.

A photograph taken by a Japanese patrol plane in 2006 shows a Chinese construction vessel a few thousand yards from a Chunxiao oil platform. The four thin black 45-degree stripes on its bow denote Chinese National Marine Bureau registry.

The PLAN and JMSDF activities near Japan, Okinawa and the oil fields may be part of a simmering oil dispute, but Chinese activity in Japanese waters isolated in the open Pacific seems unrelated. Japan possesses the tiny island of Okinotorishima at 136 degrees East longitude and 20 degrees North latitude. China had only a few survey ships inside that EEZ in 2003 and around 20 in 2004. Without oil fields present, the reason that Chinese ocean survey ships purposefully intruded into Japanese EEZ waters at this distant location probably is that China was surveying those waters and bottom topography for future military operations. Because a U.S. Navy carrier task group from bases in San Diego, Hawaii or Guam would have to cross this area on transit to Taiwan, this location could be used by PLAN submarines as a barrier position.

Because China and Japan have such a large flow of trade goods and because China benefits from large Japanese investments and development in China, there are strong economic reasons for this oil-field issue to not result in a shooting war. Trade and technology transfer aids both Japan and China, and although China covets the oil within the Japanese EEZ, the government would be reckless to overtly seize the Ryukyu Islands as it did in the South China Sea islands against weaker nations.

China and Japan are competing head to head for the best agreements for Russian oil trade. China gets Russian oil by train, but Japan is getting pipelines to coastal port tanker loading. China wants Russia to build a 1,500-mile pipeline from Angarsk, Russia, near Lake Baikal, to Daqing, China. Rather than preparing for direct naval attack for total control of the Chunxiao oil field, China probably is gaining necessary intelligence on Japanese assets in the area for future contingency planning.

James C. Bussert is employed at the Naval Surface Warfare Center, Dahlgren, Virginia, where he works on surface-ship antisubmarine fire control systems.



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