Sino-Japanese relations are set to get rockier moving into 2013, following Japan's Liberal Democratic Party (LDP) landslide victory Dec.16 and Shinzo Abe's appointment as the country's new prime minister.

Abe's return to power he was premier once from 2006 to 2007 has been greeted with trepidation among Beijing leaders, as the prime minister is well-known for his forthright and confident approach towards Beijing. During Abe's campaigning, he had called for a more concerted response to China's claim of the Senkaku Islands, also known as Diaoyu Islands to the Chinese.

"The Senkaku group is Japanese territory and in the eyes of the international community, belongs to Japan and is effectively controlled by us. On this point, there is no room for negotiation," Abe was quoted as telling reporters in a Dec. 17 press conference.

Beijing responded on the same day through a published statement on the Ministry of Foreign Affairs' website, stating that it sees the Diaoyu Island and its affiliated islands as China's inherent territory.

"We hope that the Japanese side could take concrete actions and make due efforts for the proper settlement of relevant issues and improvement of bilateral relations," China's foreign ministry spokesperson Hua Chunying added in a Dec. 17 statement in reference to Abe's comments on the Senkaku Islands.

Similar to the territorial disputes surrounding the Spratly Islands, Japan and China's rival claims of the Senkaku Islands/Diaoyu Islands has much to do with the fact that the waters surrounding the islands hold large amounts of hydrocarbon resources. For both the Japanese and Chinese, oil and natural gas are the coveted prizes for the energy-hungry countries.

From Tokyo's point of view, Beijing ceded the islands to Japan during the Qing Dynasty in Article II of the May 1895 Treaty of Shimonoseki. Though the islands were controlled by Washington as an occupying power between 1945 and 1972, Tokyo has exercised administration over the islands since 1972.

With Tokyo's standpoint in mind, the country sees ownership of the Senkaku Islands, its surrounding islands and the resources under the waters as never in dispute, since the area is already under its sovereignty. China contests Japan's claim, stating that the latter's view is legally void.

Dr. Euan Graham, a senior fellow in the S.Rajaratnam School of International Studies, gave his take on the volatile situation surrounding the Senkaku Islands/ Diaoyu Islands dispute in an emailed response to Rigzone.

"The prospects of taking this to the International Court of Justice (ICJ) or other international bodies with the agreement of both parties are slim. The fact that the political leadership in both China and Japan is facing either transition has tended to reinforce the inflexibility, the entrenchment of nationalism and short-term positions," Graham said in his analysis of the brewing dispute.

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Geography and Natural Resources of the Islands