China calls Japan drilling plan a 'provocation'

BEIJING/TOKYO (Reuters) - China reacted angrily on Thursday to Japan's plan to allow gas exploration in disputed waters, calling the move a "serious provocation" at a time when ties are at rock-bottom in a dispute over Tokyo's wartime past.

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"This move by Japan is a serious provocation of China's rights and international norms," Foreign Ministry spokesman Qin Gang said in remarks on the ministry's Web site.

"China has already made a protest to Japan, and reserves the right to take further reaction," Qin said, without elaborating.

A senior Chinese official, calling the energy dispute one of the main problems plaguing Sino-Japanese ties, had warned Tokyo on Tuesday not to award the test drilling rights in the East China Sea because that would "fundamentally change the issue."

Simmering tensions between the two Asian giants over a range of topics, especially what Beijing sees as Japan's failure to own up to wartime atrocities, erupted in China at the weekend, with thousands taking part in protests that turned violent.

Some concerns have arisen about a Japanese backlash. In Tokyo on Wednesday, members of a right-wing group shouted slogans at the Chinese embassy, where security has been tightened, and dragged Chinese flags behind two vans, a witness said.

Some Japanese media said officials had pressed for a decision on gas exploration before Foreign Minister Nobutaka Machimura goes to Beijing for a planned two-day visit from Sunday to seek a solution to the broader diplomatic impasse.

But Japanese government spokesman Hiroyuki Hosoda said the timing of the decision was coincidental, and Prime Minister Junichiro Koizumi said Japan was not trying to be confrontational.

"The aim is to turn a sea of confrontation into a sea of cooperation," Koizumi told reporters on Wednesday.

Qin said Beijing hoped to settle the dispute through negotiations, but could never accept Tokyo's view of the demarcation line for the East China Sea.

CLAIMS AND DISPUTES

China and Japan, respectively the world's second and third biggest oil consumers, are also at odds over China's own exploration for natural gas near an area Japan claims as its exclusive economic zone.

China overtook the United States as Japan's biggest trading partner in 2004 with about $178 billion in trade. Japanese corporations sank about $9.2 billion into China that year.

On April 1, Tokyo reiterated its demand that China halt its exploration and provide data on its gas development projects in the area.

Unless China provided the data, it would be hard for Japan to consider the possibility of joint development of gas fields, a senior Japanese Foreign Ministry official told reporters.

Japan considers waters east of the midway point between its coastline and that of China to be its exclusive economic zone. It has voiced concern that nearby gas field development by China would draw reserves from geological structures that stretch under the seabed into its economic zone.

The process of creating and awarding the rights is likely to take several months.

Teikoku Oil Co. and Japan Petroleum Exploration Co. said earlier this year that they would like to start exploring for oil and gas in the East China Sea as soon as possible if they got the government go-ahead.

WARTIME PAST

The decision on drilling rights follows Japan's approval last week of school history books that critics say gloss over Japanese wartime atrocities.

The move ignited passions in China and both North and South Korea, where resentment runs deep over Japan's brutal 1910-1945 colonization of the peninsula. Pyongyang late on Tuesday denounced the history texts, calling Tokyo a "political dwarf."

Machimura tried to ease the anger, telling a group of visiting South Korean lawmakers on Wednesday that Japan regretted having caused pain to South Koreans during its colonial rule.

Hosoda said Japan had apologized in the past for the suffering caused by its wartime aggression. But many in countries that were victims of Japan's World War II-era expansion feel past apologies have been insincere.

Thousands took part in the violent weekend protests in China which also targeted Tokyo's bid for a permanent seat on the U.N. Security Council.

Chinese Premier Wen Jiabao told reporters in New Delhi on Tuesday that Japan must "face up to history squarely" and that the protests should give Tokyo reason to rethink its bid for a permanent council seat.

At the United Nations, diplomats said they were watching the feud closely.

A State Department spokesman sidestepped a question on the drilling rights spat, but urged the two sides to resolve their differences peacefully.

"We have always encouraged them to resolve bilateral differences in a harmonious and peaceful fashion, together, and we continue to encourage that," spokesman Richard Boucher said.

Tokyo has demanded an apology and compensation for damage caused to Japanese property in the protests. Beijing has not apologized.

(Additional reporting by Elaine Lies, Isabel Reynolds and Teruaki Ueno in Tokyo, Evelyn Leopold at the United Nations, and the Washington bureau. Editing by Emma Batha)