China impounds Japanese ship as compensation for WWII debt

On Saturday, April 19, 2014, China’s Shanghai Maritime Court seized a Japanese cargo ship, the Baosteel Emotion owned by Mitsui OSK Lines, over a pre-war debt.

Baosteel Emotion was seized over unpaid compensation for two Chinese ships that, in 1936, had been leased to Mitsui’s predecessor Daido Kaiun from Chung Wei (Zhongwei) Steamship Co. The two ships were promptly appropriated by the Japanese government and later lost at sea.

Kyodo News Agency said this appears to be the first time that a Japanese company asset had been confiscated as war-linked compensation.

Zhongwei Shipping had sought compensation after World War Two and the case was reopened at a Shanghai court in 1988. The court ruled in 2007 that Mitsui had to pay 190 million yuan ($30.5m) as compensation for the two ships leased to Daido. Mitsui appealed against the decision, but it was upheld in 2012.

Yesterday, April 21, Chief Cabinet Secretary Yoshihide Suga said the Japanese government considers China’s sudden seizure of the cargo ship “extremely regrettable,” which “is likely to have, in general, a detrimental effect on Japanese businesses working in China.”

The seizure comes with ties between Tokyo and Beijing severely strained amid rows over the Senkaku or Diaoyu islands in the East China Sea which both claim and other rumbling historical issues.

Earlier this year, a court in China for the first time accepted a case filed by Chinese citizens seeking compensation from Japanese firms over forced labor during World War Two. Japan has always held that the issue of war-related compensation was settled by a 1972 agreement between the two sides when relations between China and Japan were normalized.

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Note: The 1972 China-Japan Joint Communiqué that preceded the 1972 Treaty of Peace and Friendship Between Japan and the People’s Republic of China, states:

“The Japanese side is keenly conscious of the responsibility for the serious damage that Japan caused in the past to the Chinese people through war, and deeply reproaches itself. […] The Government of the People’s Republic of China declares that in the interest of the friendship between the Chinese and the Japanese peoples, it renounces its demand for war reparation from Japan.“

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But now for the first time, a Chinese court has ignored that 1972 agreement – and the Chinese government appears to be giving full support, says the BBC’s Rupert Wingfield-Hayes in Tokyo. It is another sign of just how low relations between China and Japan have sunk.

Shogo Suzuki, a senior lecturer at the University of Manchester in the U.K. who studies China-Japan relations, said, “Many of the major Japanese companies like Mitsubishi or Mitsui have existed through back to the pre-war era and could all be implicated in one way or another. Japanese companies can’t extract themselves easily at this stage so I think they’ll be quite worried.”

On Monday, meanwhile, Japanese Prime Minister Shinzo Abe sent a ritual offering to the Yasukuni Shrine to mark the spring festival, about which China promptly protested. Yasukuni is where the souls of Japan’s war dead are enshrined, including war criminals – and it is seen by regional neighbours as a symbol of Japan’s past militarism.

Sources: BBC, Bloomberg News

~StMA