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the central government has targeted the Yangtze River economic corridor -- the urban industrial zones lining the Yangtze River from Chongqing to Shanghai -- as a key area for investment, development and urbanization in the coming years. Ultimately, the Party hopes to transform the Yangtze's main 2,800-kilometer-long (1,700-mile-long) navigable channel into a central superhighway for goods and people, better connecting China's less developed interior provinces to the coast and to each other by way of water -- a significantly cheaper form of transport than road or railway.

Stretching 6,418 kilometers from its source in the Tibetan Plateau to its terminus in the East China Sea, the river both divides and connects the country. To its north lie the wheat fields and coal mines of the North China Plain and Loess Plateau, unified China's traditional political cores. Along its banks and to the south are the riverine wetlands and terraced mountain faces that historically supplied China with rice, tea, cotton and timber.

The river passes through the highlands of the Yunnan-Guizhou Plateau, the fertile Sichuan Basin, the lakes and marshes of the Middle Yangtze and on to the trade hubs of the Yangtze River Delta. Its watershed touches 19 provinces and is central to the economic life of more people than the populations of Russia and the United States combined.

The Yellow River may be the origin of the Han Chinese civilization, but on its own it is far too weak to support the economic life of a great power.

This division, more than any other, forms the basis of Chinese political history and provides China's rulers with their most fundamental strategic imperative: unity of the lands above and below the river. Without both north and south, there is no China, only regional powers.

If the Yangtze did not exist, or if its route had veered downward into South and Southeast Asia (like most of the rivers that begin on the Tibetan Plateau), China would be an altogether different and much less significant place.

the Upper (encompassing present-day Sichuan and Chongqing), Middle (Hubei, Hunan and Jiangxi) and Lower Yangtze (Jiangsu and Zhejiang provinces, as well as Shanghai and parts of Anhui).

Geography and time have made these regions into distinct and relatively autonomous units, each with its own history, culture and language. Each region has its own hubs -- Chengdu and Chongqing for the Upper Yangtze; Wuhan, Changsha and Nanchang for the Middle Yangtze; and Suzhou, Hangzhou and Shanghai for the Lower Yangtze.

In many ways, China was more deeply united under Mao Zedong than under any emperor since Kangxi in the 18th century. After 1978, the foundations of internal cohesion began to shift and crack as the reform and opening process directed central government attention and investment away from the interior (Mao's power base) and toward the coast.

Today, faced with the political and social consequences of that process, the Party is once again working to reintegrate and recentralize -- both in the sense of slowly reconsolidating central government control over key sectors of the economy and, more fundamentally, forcibly shifting the economy's productive core inland.

In 2011, more than 1.6 billion metric tons of goods passed through it, representing 40 percent of the nation's total inland waterborne cargo traffic and about 5 percent of all domestic goods transport that year

First, there is a clear shift in central government policy away from intensive focus on coastal manufacturing at the expense of the interior (the dominant approach throughout the 1990s and early 2000s) and toward better integrating China's diverse regions into a coherent national economy.

By 2001, the economies of Shanghai and Shenzhen, for instance, were in many ways more connected to those of Tokyo, Seoul and Los Angeles than of the hinterlands of Sichuan and Shaanxi provinces.

This continual supply of cheap labor from the interior kept Chinese manufacturing cost-competitive throughout the 2000s -- far longer than if Chinese factories had only had the existing coastal labor pool to rely on.

This dual process -- accumulation of wealth by the state and systematic wage repression in low-end coastal manufacturing -- significantly hampered the development of China's domestic consumer base. But even more troubling was the effect of labor migration, coupled with the relative lack of central government attention to enhancing inland industry throughout the 1990s and early 2000s, on the economies of interior provinces.

In trying to urbanize and industrialize the interior, Beijing is going against the grain of Chinese history -- a multimillennia saga of failed attempts to overcome the radical constraints of geography, population, food supply and culture through ambitious central government development programs.

Wuhan, the flagship of new port investment on the Yangtze as well as nationally, actually saw declines in both the number of berths and freight throughput during that period.

Going forward, the question for Beijing will be whether and to what extent it is able to realize its ambitious plans for the Yangtze River corridor and inland China as a whole. Even then, it is not clear that expanding and industrializing a handful of inland cities will reduce mounting economic imbalances or social tensions unless combined with significant changes to a range of other policies, including the hukou (or household registration) system and the fiscal and financial relationship between city, provincial and national governments. Significant changes to these policies will, in turn, meet steep resistance from entrenched bureaucratic interests. More fundamentally, such changes would likely unleash the social unrest that Beijing's entire political economic system is intended to manage.

port development in Wuhan is similar to projects like the Three Gorges Dam or the ongoing South-North Water Transfer Project, which seeks to divert up to 10 percent of the Yangtze River's flow to water-starved provinces in northern China. All three are attempts to reconcile immense geographic and environmental constraints with the ballooning demands (both consumer and industrial) of an enormous population and an ever-expanding economy -- all while providing enough jobs to maintain a degree of stability.

The problem, then, is not simply that the Chinese government's approach to economic development is inconsistent with the needs of the economy and population as a whole

China recently became the second largest net oil importer in the world behind the United States and the world's largest global energy consumer. Gas imports have also risen in recent years, and China became a net natural gas importer for the first time in almost two decades in 2007.

Japan is the third largest net importer of crude oil behind the United States and China, as well as the world's largest importer of liquefied natural gas (LNG), owing to few domestic energy resources.

Hydrocarbon reserves in the East China Sea are difficult to determine. The area is underexplored and the territorial disputes surrounding ownership of potentially rich oil and natural gas deposits have precluded further development.

China began exploration activities in the Each China Sea in the 1980's, discovering the Pinghu oil and gas field in 1983. Japan co-financed two oil and gas pipelines running from the Pinghu field to Shanghai and the Ningbo onshore terminal on the Chinese mainland through the Asian Development Bank and its own Japanese Bank of International Cooperation (JBIC).

Only the Pinghu field, operational since 1998, has produced oil in significant quantities to date. Pinghu's production peaked at around 8,000 to 10,000 barrels per day (bbl/d) of oil and condensate in the late 1990's, and leveled off to around 400 bbl/d in recent years. In the medium-term, the East China Sea is not expected to become a significant supplier of oil.

EIA estimates that the East China Sea has between 1 and 2 trillion cubic feet (Tcf) in proven and probable natural gas reserves.

In 2012, an independent evaluation estimated probable reserves of 119 Bcf of natural gas in LS 36-1, a promising gas field north of Taiwan currently being developed as a joint venture between CNOOC and U.K. firm Primeline Petroleum Corp.

The uncontested Pinghu field began producing in 1998, reaching a peak of approximately 40 to 60 million cubic feet per day (Mmcf/d) in the mid-2000's and declining in recent years.

China began producing at the contested Tianwaitian/Kashi field in 2006, claiming it as part of its Exclusive Economic Zone.

The Chinese government prioritizes boosting the share of natural gas as part of total energy consumption to alleviate high pollution from the country's heavy coal use. To that end, Chinese authorities intend to ramp up production and increase East China Sea gas to flow into the Yangtze River delta region, which includes Shanghai and Hangzhou, two large cities with growing gas demand.

In the 1990's, several foreign companies drilled a series of dry holes in uncontested waters.

In 2003, Unocal and Royal Dutch Shell announced a joint venture (JV) with CNOOC and Sinopec to explore gas reserves in the Xihu/Okinawa trough. However, Unocal and Shell withdrew from exploration projects in late 2004, citing doubts over the commercial viability of developing energy resources in the disputed area.

The companies plan to build pipelines and a 42 Mmcf/d onshore processing terminal at Wenzhou to accept the future gas supplies from the LS 36-1 field.

Despite multiple rounds of high-level negotiations between China and Japan, the two countries have thus far been unable to resolve territorial issues related to the East China Sea.

Until these disputes are resolved, it is likely that the East China Sea will remain underexplored and its energy resources will not be fully developed.

The Daioyu/Senkaku Islands consist of five uninhabited islets and three barren rocks. Approximately 120 nautical miles southwest of Okinawa, the islands are situated on a continental shelf with the Xihu/Okinawa trough to the south separating them from the nearby Ryukyu Islands.

For several decades after 1945, the United States administered the islands as part of the post-war occupation of Okinawa. The islands generated little attention during this time

Although China had not previously disputed Japanese claims, the PRC claimed the islands in May 1970 after Japan and Taiwan held talks on joint exploration of energy resources in the East China Sea.

China claims the disputed land based on historic use of the islands as navigational aids. In addition, the government links the territory to the 1895 Shimonoseki Peace Treaty that removed Japanese claims to Taiwan and Chinese lands after World War II.

Japan claims that it incorporated the islands as vacant territory (terra nullius) in 1895 and points to continuous administration of the islands since that time as part of the Nansei Shoto island group.

Japan defines its boundary as the UNCLOS Exclusive Economic Zone (EEZ) extending westward from its southern Kyushyu island and Ryukyu islands.

China defines its boundary using the UNCLOS principle of the natural extension of its continental shelf.

Under UNCLOS, Article 121 (3), "Rocks which cannot sustain human habitation or economic life of their own shall have no exclusive economic zone or continental shelf". The Japanese have claimed that the disputed islands generate an EEZ and continental shelf. China has not taken an official position on the status of the Daioyu/Senkakus as rocks or islands.

The first assumption was that the United States was the dominant political and military power but that such power was less significant than before, since economics was the new focus. The second phase still revolved around the three Great Powers -- the United States, China and Europe -- but involved a major shift in the worldview of the United States, which then assumed that pre-eminence included the power to reshape the Islamic world through military action while China and Europe single-mindedly focused on economic matters. 

Nothing is as it was in 1991.

Europe primarily defined itself as an economic power, with sovereignty largely retained by its members but shaped by the rule of the European Union. Europe tried to have it all: economic integration and individual states. But now this untenable idea has reached its end and Europe is fragmenting.

Germany wants to retain the European Union to protect German trade interests and because Berlin properly fears the political consequences of a fragmented Europe.

In the indebted peripheral region, Cyprus has been treated with particular economic savagery as part of the bailout process. Certainly, the Cypriots acted irresponsibly. But that label applies to all of the EU members, including Germany, who created an economic plant so vast that it could not begin to consume what it produces -- making the country utterly dependent on the willingness of others to buy German goods.

Europe can no longer afford pride, and it is every nation for itself. Cyprus set the precedent that the weak will be crushed. It serves as a lesson to other weakening nations, a lesson that over time will transform the European idea of integration and sovereignty.

Authoritarian nationalism is an old European cure-all, one that is re-emerging, since no one wants to be the next Cyprus.

It is nice to imagine expanded domestic demand, but in a country as impoverished as China, increasing demand requires revolutionizing life in the interior. China has tried this many times. It has never worked, and in any case China certainly couldn't make it work in the time needed.

It is interesting to recall the extravagant claims about the future of Japan in the 1980s. Awestruck by growth rates, Westerners did not see the hollowing out of the financial system as growth rates were sustained by cutting prices and profits. Japan's miracle seemed to be eternal. It wasn't, and neither is China's. And China has a problem that Japan didn't: a billion impoverished people. Japan exists, but behaves differently than it did before; the same is happening to China.

Both Europe and China thought about the world in the post-Cold War period similarly. Each believed that geopolitical questions and even questions of domestic politics could be suppressed and sometimes even ignored.

Periods of prosperity, of course, always alternate with periods of austerity, and now history has caught up with Europe and China.

The greatest military power in the world has the ability to defeat armies. But it is far more difficult to reshape societies in America's image.

The United States has emerged into the new period with what is still the largest economy in the world with the fewest economic problems of the three pillars of the post-Cold War world. It has also emerged with the greatest military power.

Now, we are at a point where the post-Cold War model no longer explains the behavior of the world. We are thus entering a new era. I don't have a good buzzword for the phase we're entering, since most periods are given a label in hindsight.

First, the United States remains the world's dominant power in all dimensions. It will act with caution, however, recognizing the crucial difference between pre-eminence and omnipotence.

Second, Europe is returning to its normal condition of multiple competing nation-states. While Germany will dream of a Europe in which it can write the budgets of lesser states, the EU nation-states will look at Cyprus and choose default before losing sovereignty.

Third, Russia is re-emerging. As the European Peninsula fragments, the Russians will do what they always do: fish in muddy waters.

The deals they are making, of which this is a small sample, are not in their economic interests, but they increase Moscow's political influence substantially. 

Fourth, China is becoming self-absorbed in trying to manage its new economic realities.

And fifth, a host of new countries will emerge to supplement China as the world's low-wage, high-growth epicenter. Latin America, Africa and less-developed parts of Southeast Asia are all emerging as contenders

Its two great counterbalances are losing their ability to counter U.S. power because they mistakenly believed that real power was economic power. The United States had combined power -- economic, political and military -- and that allowed it to maintain its overall power when economic power faltered. 

And while China is reaching for military power, it will take many years to produce the kind of power that is global, and it can do so only if its economy allows it to. The United States defeated the Soviet Union in the Cold War because of its balanced power. Europe and China defeated themselves because they placed all their chips on economics. And now we enter the new era.