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The East China Sea remains a Sino–U.S. hotspot. The welcome diminishment of the possibility of an East China Sea conflict over Taiwan has been offset by the emergence of the Senkaku/Diaoyu Islands dispute between Japan and China as the new Sino–U.S. flashpoint. The United States could become militarily involved if China and Japan come to blows over sovereignty. Washington officially takes no position on the disputed sovereignty claim but, because the uninhabited islands are under Japanese administrative control, the Mutual Security Treaty with Japan would apply. There is no obvious road to resolution since Tokyo argues that its claim is “indisputable” and, as a result, does not want to discuss the sovereignty question, while China does everything short of actually seizing the islands to demonstrate that sovereignty is, indeed, in dispute. The possibility of an accident between the two countries’ coast guards or air forces is real. [ABSTRACT FROM PUBLISHER]

The East China Sea is one of the last unexplored high-potential resource areas located near large markets. But the development of oil and gas in much of the area has been prevented for decades by conflicting claims to boundaries and islets in the area by China, Taiwan, and Japan. Competition between China and Japan for gas resources in the East China Sea is intensifying and hampering improved relations. However, conflict is not inevitable. A compromise--joint development--is motivated by the realization that a positive China-Japan relationship is simply too important to be destroyed by these disputes. Although both agree in principle on joint development, the two sides have different interpretations of what joint development means or implies, and what area should be jointly developed. The article spells out three basic agreements in principle that are necessary before details of any solution can be negotiated. The alternative to a solution is continued mutual suspicion, unstable relations, unmanaged and undeveloped resources, and an increasing frequency and intensity of incidents, fueling nationalist sentiments and resultant political conflict. [ABSTRACT FROM AUTHOR]