Japan lost all its occupied foreign territories such as Korea, Taiwan and the Liu Qiu Islands in 1945 after its unconditional surrender in World War II as agreed upon by all victorious allied nations. Korea, historically an ancient kingdom, then became an independent country, later quickly was engulfed in the Korean War and became a divided country. The two countries of South Korea and North Korea as the result of the war were further maneuvered by the cold war. Taiwan, historically a province of China and taken by Japan after the Sino-Japanese war in 1895, was returned to China in 1945. Then what happened to the Liu Qiu Islands, another ancient kingdom, yet a Chinese protectorate for centuries? Strangely enough, they are still now occupied by Japan without any formal treaty among the WWII victorious allied nations concerning their status after WWII.
Japan's Occupation of Liu Qiu Is Illegal
Japanese occupation of the Liu Qiu Islands today is the root of the well-known and worrisome potential conflict between China and Japan over the delineation of the economic zone of the East China Sea and over the sovereignty of the Diao Yu Islands, which are small islands further south of the Liu Qiu Islands. They are historically part of Taiwan’s off-shore fishing islands, where tremendous oil reserves were found.
Japan occupied Liu Qiu by force in 1879 without any treaty by simply taking advantage of China's weakness at the time. After the occupation, Japan atrociously killed all the Liu Qiu people who wanted to maintain their kingdom as a Chinese protectorate.
At the 1943 Cairo Conference of Roosevelt, Churchill and Chiang Kai-shek, Roosevelt suggested that Liu Qiu Islands be returned to China after WWII. Chiang answered that it would be better to first occupy them jointly by the U. S. and China, which I believe was due to his lack of confidence in China's naval power and his respect for the U.S.' role in defeating Japan. He made an unbelievable strategic blunder for his country at that moment, which turned out to be a potential Sino-Japanese conflict in the future. This conflict would not be due to China’s desire to take back Liu Qiu in the future, but due to Japan’s further strategic aggression using the Liu Qiu chain islands as stepping stones once under Japan’s control. This is exactly what is happening today.
The Cairo Declaration of December 1943, resulting from the Cairo Conference, indicated that Japan must give up all its occupied foreign territories, such as Taiwan to be returned to China. The later Potsdam Proclamation which concluded the Potsdam conference by Truman, Churchill and Stalin in July 1945 after the defeat of Nazi Germany, demanded that Japan accept an unconditional surrender to the allied nations and give up all occupied territories.
In April 1952, the United States and Japan signed the San Francisco Peace Treaty, which is a very pro-Japan peace treaty without the participation of the Republic of China or the People's Republic of China or the Soviet Union. This treaty’s Article 3 states “Japan will concur in any proposal of the United States to the United Nations to place under its trusteeship system, with the United States as the sole administering authority, Nansei Shoto south of 29deg. north latitude (including the Ryukyu Islands and the Daito Islands), Nanpo Shoto south of Sofu Gan (including the Bonin Islands, Rosario Island and the Volcano Islands) and Parece Vela and Marcus Island. Pending the making of such a proposal and affirmative action thereon, the United States will have the right to exercise all and any powers of administration, legislation and jurisdiction over the territory and inhabitants of these islands, including their territorial waters.” In short, the Liu Qiu islands were put under the United States administration pending proposal to become a United Nations trusteeship. Liu Qiu was relieved from Japan's cruel occupation as a result of Japan’s defeat by China, the United States and the Soviet Union at the end of WWII. Nonetheless, Liu Qiu was returned to Japan by the United States as Nixon's gift without any treaty involving the agreement of China or the Soviet Union. This was despite the fact that China fought Japan for the longest time and sacrificed the most in WWII.
Liu Qiu Should Resume Its Independence as a Buffer Zone
By strategic considerations, there are substantial reasons for serious conflicts in the future between China and Japan. They are in the following categories:
1) Since Japan has occupied the Liu Qiu chain islands, the vast East China Sea between the Chinese mainland and the islands provides conflicting ideas of the delineation of the economic zone.
2) Since Japan has occupied the Liu Qiu islands, it further claims the Diao Yu Islands, which are located further south, and have actually been Taiwan's off-shore fishing islands for centuries.
3) Historically, Japan is militarily a very aggressive nation; China was weak for the last century when Japan started two wars against China with cruelest atrocities. Japan wants to maintain its position of the strongest nation in East Asia; yet China is recovering its historical power and honor. Japan doesn't consider it was defeated by China in WWII; the Chinese who are seemingly passive people, but proud in their culture, are gaining back their honor as the obvious leader in East Asia in history.
4) Both China and Japan are countries in need of energy resources, in which the East China Sea is rich.
It is clear based from the above that almost all fundamental conflicts between Japan and China are rooted in the Japanese occupation of Liu Qiu, from where Japan's further strategic aggressiveness becomes possible. The serious potential conflict can therefore have only two outcomes: 1) China will just swallow the pain of losing all the strategic benefits that Japan now has because of its occupation of Liu Qiu. The benefits further include Japan's influence on Taiwan's stance towards unification with the Chinese mainland, as Japan has shown its success in projecting its power. China's passiveness would inevitably encourage Japan's appetite further down to the South China Sea which is another Chinese lifeline to energy. Appeasement invites aggression. And eventually there will appear a strong Chinese leader who will stop that aggression: This means a war between China and Japan; 2) Liu Qiu resumes the independence it had before Japan occupied it in 1879, to become a buffer zone between China and Japan. This will defuse the bomb.