ABSTRACT
Chapter 2 establishes the background of the Senkaku/Diaoyu Islands dispute. It focuses on three key elements: (a) the identities of key stakeholders (China, Japan, and the United States), (b) the history of the dispute, and (c) the key interests attached to the disputed islands. Each of these will have bearing on the rational choice calculations of China and other key actors. Identity is crucial to understand the preferences of the stakeholders and to offer a more nuanced understanding of their choices. Furthermore, it is important to examine the history of the dispute to show what worked and what did not in the past in the management of the dispute, as this will affect the choices of states, which are considered to be learning entities. It also provides an insight into the overall trajectory of the dispute over time, challenging the cyclical interpretation of the dispute that focuses on cycles of escalation and de-escalation, arguing rather for an overall downward trajectory. Finally, highlighting the key economic, political and security interests of the major stakeholders is crucial as their relative value will determine what is rational and what is not in their pursuit.
