MOL Ship Caught in Japan-China Tensions

By The Maritime Executive 04-21-2014 07:01:00

Japanese Prime Minister Shinzo Abe has sent a ritual offering to the Yasukuni Shrine, seen by critics as a symbol of Japan's past militarism, angering both South Korea and China on Monday and putting regional ties under further strain.

Adding to unease in the region, a Chinese maritime court in Shanghai seized a ship on Saturday owned by Japanese shipping firm Mitsui O.S.K. Lines, a move that Japan warned could have an adverse impact on its businesses in China.

The court said the company had failed to pay compensation stemming from a wartime contractual obligation. China's Foreign Ministry said the disagreement was a normal commercial dispute.

Japan said the ship seizure, apparently the first time the assets of a Japanese company have been seized in a lawsuit concerning compensation for World War Two, was "extremely regrettable".

"It is inevitable that this will have an adverse impact on Japanese companies in China," said Chief Cabinet Secretary Yoshihide Suga. "We strongly urge the Chinese government to make the proper response."

The spat over the ship was a "regular business contract dispute", China's Foreign Ministry spokesman Qin Gang said, adding that the government would safeguard the rights of foreign investors.

"This case has nothing to do with compensation from the Chinese-Japanese war (World War Two)," Qin told a regular news briefing.

"Nothing has changed in the Chinese government's position on adhering to, and defending every principle in, the Sino-Japanese Joint Statement," he added, referring to an announcement in 1972 that the two countries were establishing official ties.

At the time, Japan also recognized the government in Beijing as the sole government of China and China gave up claims to Japanese war reparations.

"China will continue to protect the interests and rights of foreign investors in China according to law," Qin said.

"MISTAKEN ATTITUDE"

The offering by Abe, who visited the shrine in December but did not go in person this time, was sent just before U.S. President Barack Obama begins a three-day visit to Japan on Wednesday.

The United States has said it was "disappointed" with Abe's shrine visit last year, which infuriated Beijing and Seoul.

China protested on April 12 after internal affairs minister Yoshitaka Shindo visited the shrine, where 14 Japanese leaders convicted as war criminals by an Allied tribunal after World War Two are honoured, along with Japan's war dead.

Abe made his latest offering to the shrine as a private individual so it was not the government's place to comment, Suga, the chief government spokesman, told a news conference.

"It will not have an impact on the U.S.-Japan leaders meeting," he said.

Qin, China's foreign ministry spokesman, said Beijing had already lodged a protest with Tokyo, adding that Abe's move reflected Japan's "mistaken attitude towards history".

"SLAP IN THE FACE"

China's official Xinhua news agency condemned Abe's offering as a provocative move that threatened regional stability and was a "slap in the face of the leader of Japan's closest ally".

South Korea's Foreign Ministry also responded angrily.

"We deplore the fact that Prime Minister Shinzo Abe has romanticized Japanese colonialism and its war of aggression by paying tribute to the Yasukuni Shrine," it said in a statement, noting it had happened despite expressions of concern from the international community.

Abe has said that, like predecessors such as former premier Yasuhiro Nakasone who visited the shrine, he had high regard for Japan's ties with China and South Korea, which suffered under Japanese occupation and colonisation in the 20th century.

A group of lawmakers is also expected to visit the shrine during its spring festival this week.

Several court cases demanding compensation for forced wartime labour have arisen in China and South Korea. In February, two Japanese firms were sued in what media said was the first time a Chinese court had accepted such a case.

A spokesman for Mitsui O.S.K. said the company had been informed of the seizure order but was still trying to assess what was happening at the port. It did not confirm that the vessel was in the hands of the court.

The ship, "Baosteel Emotion", is a 226,434 deadweight-tonne ore carrier.

Despite Tokyo's protest, one analyst said the impact of the seizure was likely to be limited, and noted that it seemed to be another case of China putting pressure on Japan, adding it was also unclear if this represented the policy of China's leaders.

"Companies that are currently involved with such issues will likely think twice about Chinese businesses, but I believe most Japanese companies have nothing to do with these problems," said Akio Takahara, a professor at the University of Tokyo.

"They might take this development as one factor when they think about investments in China, but I don't think this is a decisive factor at the moment."

In addition, a senior executive with Toyota Motor Corp said on Monday the company was considering expanding capacity in China significantly in its efforts to catch up with global rivals.

Obama's visit to Asia, which kicks off in Japan, will also take him to South Korea, Malaysia and the Philippines.

Copyright Reuters 2014.