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Although China has participated in 23 unique territorial disputes, China has defused or resolved the majority of them. Moreover, in resolving these disputes, China has usually pursued compromise agreements that divide contested territory and received a smaller share of land in the overall settlement. To explain this variation, I develop an opportunity cost model of territorial dispute settlement. In my model, leaders face strong incentives not to settle territorial disputes, lest they be punished at home or abandon an important international source of leverage. Facing these incentives, leaders will only settle territorial disputes when an increase in the opportunity costs of the dispute, such as poor relations with the opposing state, makes compromise more attractive. For China, ethnic geography shapes the underlying opportunity costs of its territorial disputes. China is much more likely to settle disputes over land frontiers in non-Han Chinese areas than disputes over Han Chinese areas or uninhabited offshore islands. Settlements occur when internal windows of vulnerability, such as border area instability or domestic political upheaval, suddenly and sharply increase the cost of disputing territory for China?’s leaders. These windows constitute rapid internal decreases in China?’s internal power, decreases that make territorial disputes more costly and settlements more attractive. [ABSTRACT FROM AUTHOR]

Despite potential gains of significant oil resources and the fact that China has compromised in the majority of its territorial disputes, China has been unwilling to compromise on its claimed sovereignty of the Senkaku/Diaoyu Islands in the East China Sea, against Japan. The purpose of this article is to explain China's reluctance to drop its territorial claim and compromise with Japan about sovereignty of the disputed islands. I argue that there have been strong incentives for China to maintain its territorial claim against Japan because the Chinese government has been able to use the territorial dispute to make bargaining gains on exogenous issues disputed with Japan. By provoking Japan through confrontational actions, China has used the dispute to gain bargaining leverage by achieving concessions on other disputed issues with Japan, or compelling or deterring certain Japanese policies or actions. Data analysis from 1978-2001 supports the theory. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]