Though the international boundary across the Eastern China Sea has not been defined, the two sides have agreed to cooperate with each other before the delimitation has been decided without breaking laws in either country.
As a first step, the two sides will select by mutual agreement areas for joint development under the principle of mutual benefit. Specific matters will be decided by the two sides through consultations.　
Japanese Foreign Minister Masahiko Koumura and Minister of Economy, Trade and Industry Akira Amari declared in Tokyo that Japan would invest in two Chinese companies which are exploiting the Chunxiao oil field and take corresponding profits according to the holding ratio. The two parties agreed that the joint development would include the Longjing gas field in the neighboring area, and to jointly develop areas across the "middle line," so called by Japan. China and Japan will each invest 50% in the development of this area, and each get 50% of the returns.
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The dispute goes back to the 1970s, when China discovered large oil fields in the middle of the continental shelf under the East China Sea. Since the erecting of China‘s first drilling platform in 1980, China has built 30 drilling platforms, 20 of which are in production.
After 20 years�exploitation, China has developed 8 oil and gas fields and some large oil and gas structures.
But Japan claims half of the oil and gas resources in this area. According to the United Nations�"Convention on the Law of the Sea," coastal countries can enjoy up to a 200-nautical-mile exclusive economic zone. As the East China Sea is only 360 sea miles wide, China’s and Japan’s "exclusive economic zones" overlap and became a cause for dispute. Japan has insisted on dividing the overlapped areas by a "middle line", but this has never been accepted by China, which claims, according to the Convention on the Law of the Sea, the demarcation of the exclusive economic zone should follow the "natural extension of the continental shelf," which would put the boundary farther east, in the vicinity of the Okinawa Trough.
The development of the East China Sea oil and gas fields has long been one of the most nagging and bitter disputes between China and Japan. China’s exploitation of the Chunxiao oil field has always worried the Japanese government. Even based on the "middle line," the Chunxiao field is located on the Chinese side. But since it’s being exploited from a structure provocatively straddling the "middle line," the Japanese have worried that China, as first mover, would take all the oil and gas resources in the area.　　
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