Japan says eyeing China moves at disputed gas field

TOKYO (Reuters) - Japan's new foreign minister said Friday that Tokyo would carefully watch China's activities at a gas field in disputed waters of the East China Sea and take appropriate steps if there is proof that Beijing has begun drilling.

Foreign Minister Seiji Maehara also urged China to implement a bilateral agreement to jointly develop maritime gas fields, as friction intensifies between the two Asian giants.

Japanese media quoted outgoing foreign minister Katsuya Okada as saying that equipment that appeared to be intended for drilling had been brought to a Chinese facility in the Chunxiao gas field in the East China Sea, although drilling has not been confirmed.

"We will take appropriate steps if we can confirm (that drilling is taking place)," Maehara told a news conference.

"We currently accept the explanation that the equipment in the field is to be used for repairs. On the other hand, we want to carefully watch what activities take place from here on."

Chinese Foreign Ministry spokeswoman Jiang Yu neither confirmed nor denied the Japanese media reports, but said Beijing was within its rights whatever was happening in the area.

"China exercises full sovereign rights and jurisdiction over the Chunxiao gas field, and the Chinese side's activities in Chunxiao are entirely reasonable and legitimate," Jiang said, in comments carried by the official Xinhua news agency.

Jiang added that China had "sent a maritime monitoring vessel to strengthen law enforcement activities in our related seas and to protect China's maritime rights and interests."

TESTY TIES

The exchange over gas drilling has turned up the volume in an increasingly testy argument between China and Japan about territorial rights in the seas, especially around a group of uninhabited islets called the Diaoyu islands in China and the Senkaku islands in Japan.

The dispute over the islands has flared for more than a week since Japan arrested the captain of a Chinese fishing boat seized after it collided with Japan Coast Guard ships near the islands.

China has repeatedly demanded that Japan free Zhan Qixiong and last week bared its anger by cancelling planned talks over the natural gas reserves, which are in the same seas as the disputed islands.

Tokyo objects to Chinese development of the Chunxiao gas field in seas close to Japan's claimed boundary in the East China Sea. China disputes that boundary claim.

Estimated known reserves in the disputed fields are a modest 92 million barrels of oil equivalent, but both countries have pursued the issue because there may be larger hidden reserves.

Although China's drilling is in an undisputed area, Tokyo fears it could drain Japanese gas through a honeycomb of seabed rocks.

Disputes have arisen over China's development of four gas fields in the Xihu trough, a seabed depression parallel to the Chinese coast, about 500 km (310 miles) southeast of Shanghai.

Japan says the median line between the two countries' coasts should mark the boundary between their exclusive economic zones. China says the boundary is defined by its continental shelf, extending its zone beyond the median line.

Maehara, an advocate of close ties with security ally Washington, also expressed concern over Beijing's military build-up, underscoring Tokyo's growing wariness about its giant neighbour's intentions.

"I want China to fulfil its responsibility to explain (its military spending)," he said.

But he also noted that China's dynamic economy was vital for Japan's own growth and said he wanted to work to create a "win-win" relationship.

(Additional reporting by Ben Blanchard and Chris Buckley in Beijing; Editing by Sanjeev Miglani and Edmund Klamann)