There have been recent disputes between China and Japan over the territory of islands, known as the Senkaku Islands, and the Diaoyu Islands. They are disputing over the right to explore for potential oil reserves around the islands waters. Sentiment within Japan's business community seems to be that provoking war with China is insane, and the purchase of the islands was an unnecessary irritant, but the Japanese government provoked tensions with the purchase of the Islands, and the political spin in China is that this is about national integrity rather than oil exploration rights. If the Chinese invade the islands, Japan will likely fight for them, and the U.S. would be dragged into the conflict, due to the U.S. being allies with Japan. If Japan would have to fight for them, they would have to go up against growing Chinese forces.
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The Daioyu/Senkaku Islands consist of five uninhabited islets and three barren rocks. Approximately 120 miles southwest of Okinawa, the islands are situated on a continental shelf with the Xihu/Okinawa trough to the south separating them from the nearby Ryukyu Islands. Japan assumed control of Taiwan and the Daioyu/Senkaku islands after the Sino-Japanese War in 1895. After Japan's defeat in World War II, Japan returned Taiwan to China, but made no mention of the disputed islands. For several decades after 1945, the United States administered the islands as part of the post-war occupation of Okinawa. The islands generated little attention during this time, though U.S. oil companies conducted minimal exploration in the area. In 1969, there was indication of possible large hydrocarbon deposits in the waters around the Daioyu/Senkaku islands, reigniting interest in the area. Although China had not previously disputed Japanese claims, the People's Republic of China (PRC) claimed the islands in May 1970 after Japan and Taiwan held talks on joint exploration of energy resources in the East China Sea. When the United States and Japan signed the Okinawa Reversion Treaty returning the disputed islands to Japanese control as part of the Okinawa islands, both the PRC and Taiwan challenged the treaty. China claims the disputed land based on historic use of the islands as navigational aids. In addition, the government links the territory to the 1895 Shimonoseki Peace Treaty that removed Japanese claims to Taiwan and Chinese lands after World War II. Japan claims that it incorporated the islands as vacant territory in 1895 and points to continuous administration of the islands. According to the Japanese, this makes ownership of the islands a separate issue from Taiwan and the Shimonoseki treaty.
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