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FS2002/FS2004 Scenery--Diao Yu Island (Diao Yu Tai). The Diaoyutai Islands are a group of eight uninhabited islands located 120 miles northeast of Taiwan on the continental shelf. For several centuries they have been administered as part of Taiwan and have always been used exclusively by Chinese fishermen as an operational base, both before and after World War II. After 1968 when large deposits of oil and natural gas were discovered in that region, Japan claimed that the Diaoyutai Islands are part of them. By Gordon Lee.