(* This is a provisional translation by an external company for reference purpose only. The original text is in Japanese.)

Joint Press Conference by Minister for Foreign Affairs Masahiko Koumura and Minister of Economy, Trade and Industry Akira Amari (Regarding Cooperation between Japan and China in the East China Sea)

Date: Wednesday, June 18, 2008, 6:25 p.m.
Place: Briefing Room, Ministry of Foreign Affairs


Foreign Minister Koumura:
Regarding the issue of resource development in the East China Sea, on the occasion of the visit to Japan by Chinese President Hu Jintao in May, an outlook for resolving this issue was reached during the Japan-China Summit Meeting. After that, an agreement was made to work out the minor details as quickly as possible. Furthermore, at the Japan-China Foreign Ministers' Meeting held on 14 June, we also came to a common view with Chinese Foreign Minister Yang Jiechi to the effect that we would advance efforts on working out the finer details. Following that, working-level efforts were undertaken and concluded, and just recently a political agreement has been reached between Japan and China on cooperation in the East China Sea. Please take a look at the agreement which has been handed out to you for the details. I believe this content is mutually beneficial to both sides. This agreement is the first step toward realizing the common understanding between leaders of the two countries that the East China Sea should be a "Sea of Peace, Cooperation and Friendship." It is an agreement for cooperation on the premise of not prejudicing the legal positions of both countries during the transitional period pending agreement on the delimitation. In concrete terms, we will undertake joint development in the northern part of the East China Sea and on the Chinese side of the mdian line at Shirakaba, Japanese corporations will participate in the development at the location where China has already undertaken development. This agreement is a positive example showing that Japan and China can resolve even the most difficult issues at stake through talking out. As a concrete outcome of "strategic mutually beneficial relations," this is a welcome event and good for the development of Japan-China relations.

Going forward, as we implement political agreements with China, we will enter into negotiations to conclude the necessary international treaty and we are aiming to move to an implementation phase at the earliest time possible.

Minister of Economy, Trade and Industry Amari:
For its part, the Ministry of Economy, Trade and Industry (METI), in cooperation with the Ministry of Foreign Affairs, has engaged in sincere and severe consultations with China for more than three and a half years. As a result, Japan and China have both overcome our difficulties with each other and we have been able to reach a mutually beneficial agreement. Based on the relations of trust that have been developed through these Japan-China consultations, Japan intends to move ahead with preparations for the steady development at the northern region of the East China Sea and at the Shirakaba oil and gas fields. This agreement represents the first step toward cooperation in the East China Sea and, aiming to undertake even further consultations in the future, we expect that the East China Sea will be not only a sea of peace, cooperation and friendship, but will also be an important source of energy supply both for Japan and China.

Question:
I would like to direct my question to both Ministers. In the Joint Press Statement, it is stated that, "during the transitional period pending agreement on the delimitation." Furthermore, there is a statement that, "Both countries will continue consultations further." It would appear from these statements that Japan and China intend to continue consultations on defining the delimitation line. I assume that this would be a rather difficult issue, but can you describe what type of consultations will be held? Furthermore regarding the treatment of Shirakaba, Japanese corporations will participate in accordance with Chinese laws but it could be said that Japan will be investing in Shirakaba. It appears to me that this will not be a case of Japan and China jointly developing Shirakaba. What is your view on that?

Foreign Minister Koumura:
Drawing the delimitation line will likely require extremely long negotiations because our basic standpoints are different. I do not think we will be able to quickly draw the line even though we were able to reach an agreement this time should lead one to believe that. Still, this is an issue that must be solved at some point. Furthermore, regarding the topic of Shirakaba, this will involve allowing Japanese corporations to invest in the location where China has already undertaken development on the Chinese side of the median line that Japan draws. Therefore it is really simply a question of the definition of "joint development." Given that the Japanese side will invest in a development that the Chinese side has already undertaken, one could not say that it will truly be a 50-50 joint development exactly along the lines of that which will take place in the northern part of the East China Sea, but I think that whether or not you use the term "joint development" it really is just a matter of the definition of a word.

Question:
I assume that working-level negotiations will be held with a view toward concluding a treaty in the future. Generally speaking, when do you think it will be possible to sign the treaty?

Foreign Minister Koumura:
All I can say is that we want it to happen as quickly as possible, but given that a political agreement has already been achieved I do not think it will take all that long.

Question:
I assume that in the future President Hu Jintao will have opportunities to visit Japan. Is there a possibility that some time during this year, a signing of the treaty could take place between the two leaders?

Foreign Minister Koumura:
One could not say that that absolutely won't happen, but this is not a matter of specifying a particular time for it to happen. Rather we will proceed with this as quickly as possible and calmly.

Question:
A little earlier, Minister Amari said, "An important source of energy supply both for Japan and China." What are your views regarding the maritime territory around this issue.

Minister of Economy, Trade and Industry Amari:
We will go forward now with joint development or with capital participation and I can tell you that in particular in the northern part of the Sea, there is a need for a detailed survey to be conducted. Based on the data that we have currently in our possession, it is without doubt, an area with promising subterranean layers. However, whether or not what lies beneath that is gas or oil or water can only be determined by conducting a detailed survey and test drilling. We do know that the geological formation there suggests good potential and I believe that having that type of maritime region near our country contributes to the energy security of Japan.

Question:
A conceptual drawing indicates the range of cooperation in the northern region of the East China Sea. On this chart, no median line is drawn. Which part of the northern portion of the sea does the median line traverse? And in the event that that median line cuts across this portion of the Sea, is it correct to understand that the area to be assigned to Japan and the area to be assigned to China are roughly equal in size?

Foreign Minister Koumura:
It is unquestionable that the median line goes through inside. From the outset, China does not recognize the median line but stated that in the event that a median line is to be drawn, it would be a different line than the line that Japan draws. Although it does not recognize the median line, there is the case where that can happen too. As such, we see that there are many ways in which the median line can be drawn. Therefore, within the maritime areas subject to joint development, I do not think there is a whole lot of meaning in an attempt to calculate the respective volumes of the area that has been assigned on either side of that median line drawn by Japan, and therefore we have not made such calculations. Moreover, in this portion of the Sea, which one could describe as being just a little larger than Kanagawa Prefecture, we will not be conducting development throughout the area, but what has been agreed upon is that Japan and China would be conducting development in a certain designated area. As such, there really is not much meaning in discussing which side is wider or more narrows on either side of the median line in the joint development region.

Question:
Regarding the agreement that was reached this time, it would appear that this agreement effectively reflects the positions put forward by Japan and concessions made by the Chinese side. What are your thoughts on that?

Foreign Minister Koumura:
Given that it is a negotiation, I think that naturally speaking, it would not be possible for either side to achieve 100% of what it has sought. However, I do believe that this agreement is something that both sides are happy about. Indeed, we were able to make an agreement because this is good for Japan, and at the same time, since China thought it overall is good, the Chinese side agreed it; that is my understanding.

Question:
I would like to once again ask what is the significance of this agreement in terms of its relevance for supplying a stable source of natural resources for Japan. I have one more point as well. Please tell me what you think is the significance of this agreement in terms of advancing energy cooperation between Japan and China.

Minister of Economy, Trade and Industry Amari:
Regarding the energy security of Japan, to be perfectly honest, until we actually conduct test drilling, I cannot really say how much of an influence it will have on Japan's overall situation. However, we were able to resolve some certain issues of concern and although this is a transitional period response, the fact that we are going to undertake joint development, I think, is of extreme significance. Of course it has significance for national security reasons, but on top of that, I think it has an even larger meaning in terms of the political realm. Furthermore, there are various aspects to energy cooperation between Japan and China and I think that this will certainly serve as a very large outcome in that regard.

Question:
There are some reports that in fact the reserves of gas in the East China Sea are quite low and that even if Japan conducts test drilling it will not be able to realize much benefit. What is your view on this matter, Minister Amari?

Minister of Economy, Trade and Industry Amari:
Given the subterranean data currently available, it is possible to assume that a sufficient amount of reserves exists there. However, we will not know the detailed facts until we conduct a survey going forward. Naturally, this will be held with the private sector taking the lead, but at the current point in time, I do have expectations that potentially there will certainly be enough to make it worthwhile.

Question:
I suppose that other gas fields have been discovered near the median line. Can you explain why only Shirakaba and Asunaro were selected? Can you explain why other regions were not selected? Yesterday, Deputy Press Secretary of the Ministry of Foreign Affairs of the People's Republic of China stated that regarding Shirakaba, it remains within the sovereign territory of China and that this has absolutely nothing to do with joint development. What are your thoughts regarding that?

Foreign Minister Koumura:
The northern region of the East China Sea is not Asunaro. In fact, that lies somewhat to the south of Asunaro. It is in fact correct that there are several oil and gas fields that have been the focus of issues until now, but regarding Shirakaba, although the development that will take place is on the Chinese side of the median line that Japan claims, given the straw effect, there is the possibility that some of the reserves on the Japanese side are also being taken out and that was the largest problem. We decided to solve that largest problem and also I would like everyone to understand that we have separately stipulated a new joint development region which will be a new symbol of that as a "Sea of Peace, Cooperation and Friendship." Regarding the remaining regions, we will continue to hold consultations. Regarding any statement that was made by the Chinese side to the effect that this is not a joint development, I for my part would say that this is a question of how the definition is drawn and in the event that the Chinese side would make the statement that this is not joint development, I certainly do not intend to raise a complaint and tell them that is wrong. In any event, we have already won through these negotiations the right to participate in capital to a certain degree by Japanese corporations in the development on the Chinese side of the median line where China has already been undertaking. Whether or not that is going to be referred to as joint development or not is a matter that I think lacks any importance.

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