Behind The Times

Kari Travis | Managing Editor

Japan and China are having a figurative fist fight. And it's all about eight little islands in the East China Sea.

You might've noticed something about it while checking your Twitter. The situation is a tension-filled territorial dispute, complete with rowdy and sometimes violent protests. (Most of them are made up of Chinese citizens protesting Japan, the country that recently tried to sell the territory in question to Tokyo's governor.)

But the question at the bottom of it all remains, why is China so desperate to hang onto a freckled portion of uninhabited isles?

Let's take a row around the issue, and the islands, to find out.

On one side of the landmarker, Japan claims it played fair before declaring the islands up for grabs. Reports from Japanese officials say that the country kept an eye on the area for a decade before staking its claim on the territory in January 1895. The Diaoyu islands, then called Ryukyu, became Japan's digs.

Then came a little complication in the form of World War II. As history has it, Japan wasn't a very friendly player in that affair and was forced to relinquish possession of the islands under the Treaty of San Francisco. The U.S. kept the territory until 1971, when it gave the islands back to their original owner.

Japan says China didn't throw a fit about the exchange.

But on the other side of the landmarker, China claims the Japanese version of the story is just a little fishy. According to the Chinese Ministry of Foreign Affairs, the islands go way back in ancient Chinese history. The story is that they served as some important fishing grounds.

See how this situation might serve up a stench under China's nose?

Okay, so we've sailed partway around the situation's history, but we haven't yet discovered why these islands are the object of so much envy. Certainly, Japan and China don't need the islands to remain as the seafood center from years past.

Of course not. However, like most international relations disputes, this particular political brawl can be directly linked to a competition over valuable energy resources. In other words, the Diaoyu islands are sitting atop some oil.

Correction. Lots and lots of oil.

According to statistics from the U.S. Energy Information Administration, the East China Sea region (the body of water adjacent to the Diaoyu islands) contains an oil deposit of somewhere between 60 million and 100 million barrels. A Chinese estimate is even more generous, projecting a total untapped reserve of 213 billion barrels, according to a CNN report. If this number is correct, it would be the largest oil reserve in the world outside Saudi Arabia.

And if that alone isn't enough to cause China to clamp its fist around the region, the area also contains massive reserves of natural gas.

What makes the situation even less convenient for China is its ever expanding energy demand due to a population that keeps . . . well, populating, according to an in-depth report from the BBC.

All in all, Japan has created a very inconvenient situation for the Chinese government.

Only time will tell who comes out the top fighter in this land battle, but for now it's an increasing force of turmoil that may assist in continuing to push Asia's trade economy toward yet another crash on the rocks, according to CNN.

There you have it. Monetary motivations make for a conflict that has the two countries pulling no punches over some pebbly little islands in the East China Sea. And as the issue continues to make waves, the tide may begin to affect the shores of other global markets.

So here's just one word of advice. Keep an eye on the issue as it pops up in your news feed, because behind this headline is a whole lot of residual, global effect that may very well crash in on an economy near you.