Senkaku Island Dispute

by Yu-Shan Wu



Senkaku island-is composed of eight small, uninhabited islands, also
known as Diaoyu island, located around east of Mainland China, west of
Okinawa Island and northeast of Taiwan. This Senkaku island dispute
has been a controversial topic due to its sensitive location. A brief
introduction of this island, it has been claimed the control right
from Chinese in14th century, Japan (1985 til end of World War II), now
this island has control between the United States and Japan under the
Okinawa Reversion Treaty. The reason why this island has been in hot
topic is because there is said to have oil reserve under this island.

, Senkaku Islands have become the epicenter of dispute between the two
Asian giants- China and Japan which both tries to lay claim to the
outcrops. This is not a new information anymore but more consequences
have happened this year. Japan has agreed to buy disputed East China
Sea islets, claimed by both Tokyo and Beijing, from their private
Japanese owners. This creates large reaction among Chinese people.
What’s more, this dispute could actually spill over from the regional
level to undermine the global economy. This emotionally charged issue
also affects business in China that it has sparked a boycotting of
Japanese products there and extensive anti-Japanese riots across the
country. The significant industry that could easily be influenced
through this event is automobile industry. As we known, Southern China
especially in SEZs have deep relationship with Japanese auto maker.


Auto maker Ford, Nissan and Honda are three of most famous
Japanese auto maker, continue to lose ground in the promising Chinese
market. The following graph is the. As we can see from this graph,
these three auto company have downward sales sequentially decline in
2012. Auto makers now are forced to cut down their production as well
as cut down labor cost in China. This means Chinese worker in the
factory could lose their job.”It’s difficult to underestimate the
impact of Japanese auto makers on the Chinese automotive industry and
economy at large” by Stephen Dyer, partner with Shanghai based
management consulting firm A.T. Kearney making planet have quiet
Not only car industry, there are also many industry that could be
affected. Hotel, restaurants, service sector surround Southern area
near car manufacturing planet. Other non Japanese sector could also be
affected. China has pulled out its IMF annual fund meeting held in
Japan on an agenda of how to interact with the continuing euro-zone
crisis. China has always played an important role in IMF meeting due
to its central bank relationship with Euro. Its central bank is a
large purchaser of euro-zone bonds.  The cancel of attending this
meeting also make those involved Chinese investing banks cancel its
presentation in the meeting.
  Corporate Japan is anxious to resume business back to the days.
Chinese market is now the business trend, it is necessary to have a
close relationship with Chinese government as well as firms due to its
huge market potential. Furthermore, Japan has huge economic
devastation ever since the earthquake and tsunami in 2011; it is of
great importance for them to consider their future economic
development instead of trying to get the island back. It is well known
that China is an authoritarian intensive country. China’s gradually
more aggressive rising power is a foretaste of more tension to come to
Japan. Consider the reality situation and China’s increasingly
position in the world market, it is of great importance for Japan to
slow down the process of acquiring Senkaku Island and really have a
good talk with Chinese government.


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