PRC ON EAST CHINA SEA TALKS

C O N F I D E N T I A L BEIJING 014514 SIPDIS SIPDIS E.O. 12958: DECL: 07/11/2016 TAGS: PREL JA CH SUBJECT: PRC ON EAST CHINA SEA TALKS Classified By: Acting Political Minister Counselor Robert Griffiths. Reasons 1.4 (b/d). ¶1. (C) China and Japan agreed to continue the process of consultations on the East China Sea dispute, to establish a panel of technical experts and to set up a hotline, MFA Asian Affairs Department Japan Division Deputy Director Lu Guijun told poloff during a July 11 briefing on the July 8-9 talks in Beijing. Characterizing the talks between Japan's MOFA Asian and Oceanian Affairs Director General Kenichiro Sasae and China's MFA Asian Affairs Director General Hu Zhengyue as friendly and pragmatic, Lu admitted that there was no real progress in solving the dispute. Although both sides were able to fully explain their positions, they each concluded that it would be too hard to accept the opposing side's proposals for joint development. ¶2. (C) Lu said the two-day meeting did yield results, citing the agreement to maintain the process of consultations as important for stability in the East China Sea. China and Japan will meet again for the next round "at an appropriate time." When pressed, Lu admitted that the possibility of Prime Minister Koizumi visiting the Yasukuni Shrine on August 15 and the September LDP elections were discussed by Sasae and Hu as factors preventing the setting of a specific date for the next round at this point. ¶3. (C) In the meantime, the two governments will gather technical experts on subterranean ocean resources to sit on a panel, Lu reported. The panel's purpose will be to discuss ways to cooperate and determine whether the four natural gas and oil fields extend into the area Japan claims as part of its exclusive economic zone (EEZ). If the bilateral panel determines the fields are wholly in Chinese economic waters, Lu continued, then this dispute could be put to rest. He admitted that the larger and more difficult underlying issues of the opposing territorial claims on the Senkaku Islands and demarcation of the EEZ would remain. ¶4. (C) Lu said the two sides also agreed to set-up a hotline between the PRC Ministry of Communication Maritime Safety Bureau and Japanese Coast Guard to prevent any incident in the East China Sea from escalating into a crisis. RANDT