Senkaku Vs. Diaoyu: An Asian Crisis

When global news organizations address concerns about the global economy, they often focus on extremely sophisticated technological or financial risks. From time to time, however, simple geographical border disputes and other geopolitical conflicts actually pose the greatest threats to our fiscal stability.

For instance, the ongoing split within the European Union between the fiscally conservative northern nations and the debt ridden Mediterranean states may lead to the collapse of the common Euro currency. And several countries that share access to the South China Sea continue to argue over their rights to exploit the natural resources of that body of water.

Other geopolitical crises have flared up periodically as well. South Sudan, for instance, remains locked in a tense stand-off with Sudan over a variety of territorial arguments. And the Arab Spring has produced tensions that extend from political disputes in Egypt to an outright civil war in Syria.

All of these conflicts, though, may pale in comparison to one that unexpectedly flared last week between China and Japan, the second and third largest nations (economically speaking) in the world. It concerns a tiny, undeveloped cluster of islands in the western Pacific Ocean.

A Territorial Dispute

The dispute involves a region known as the Diaoyu Islands in China, the Senkaku Islands in Japan, and the Diaoyutai Islands in Taiwan. The three nations do not agree on a common name for the islands and, in fact, each claims territorial rights over the land itself.

The Diaoyu (or Diaoyutai) Islands were considered Chinese territory until 1895, when the Imperial Japanese government annexed the land and renamed it Senkaku. The islands were then administered by the United States from the end of the second world war until 1972, when America agreed to return them to Japanese control.

But the mainland Chinese government, as well as the Taiwanese government, continue to claim ownership of the territory. And during the past two months, national activists from all three Asian countries took turns staging protests at sea, on the islands themselves, and at home.

Last week, in fact, violent anti-Japanese protests broke out in mainland China over the ownership rights to the island chain. Might China and Japan actually go to war over the land?

Historical Precedents

Major nations have fought armed conflicts over relatively small areas of land throughout modern history. Great Britain, for instance, repelled an Argentinian invasion of the Falkland Islands in 1982, a war in which Prince Andrew (the second in line to the throne, behind Price Charles) served as a helicopter co-pilot. And one year later, President Ronald Reagan authorized the United States Marines to invade and overthrow the government of the Caribbean island of Grenada, a group of military rulers that had recently seized power in a bloody coup d’etat.

At other times, similar disputes have been settled through far more peaceful methods instead. During the Carter administration, for instance, the United States agreed to transfer ownership of the Panama Canal Zone to the Panamanian government after more than seven decades of American control. But the debate stirred much angry debate in the American press, with Senator S.I. Hayakawa mocking the arguments of opponents of the transfer by describing their position with the phrase “We Stole It, Fair and Square.”

All of these disputes, though, lasted for relatively brief periods of time, and thus none caused significant damage the global economy. Nevertheless, there are many other examples of geopolitical disputes that wreaked tremendous economic damage over many years.

The political assassination of the Archduke Franz Ferdinand of Austria, for instance, triggered a series of catastrophic events that cascaded into the first world war. And Adolph Hitler’s Nazi invasion of Poland likewise intensified from a local dispute into the second world war. Both conflicts decimated the economies of the European nations, and greatly damaged those of other regions as well.

Who Can Help?

So what can the international community do to help prevent a potentially devastating conflict between the Chinese and Japanese nations? Are there any institutions that can employ diplomacy to resolve the dispute before it ignites into a full-fledged war with devastating consequences?

Indeed, after the conclusion of the second world war, the United Nations was created to serve such a purpose. But the organization has failed to resolve several major conflicts during the past decade; its track record in places like Afghanistan, Iraq, and Syria is mixed at best. Some human rights advocates, in fact, even accuse the U.N.’s blue-helmeted peace keepers of standing by and not intervening while atrocities have been committed in war zones.

Outside of U.N. auspices, other diplomatic initiatives, such as the Bush Administration’s “Coalition of the Willing” in Iraq and the “Six Party Talks” addressing the Korean Conflict, have made little or no progress in resolving global conflicts. It thus appears that the Chinese and Japanese may need to take matters into their own hands to reach a peaceful resolution to the Diaoyu / Senkaku dispute.