China and the World

Tokyo tension

Sino-Japanese dispute worsens

The dispute between China and Japan – as reported in last week’s Talking Point – continues to worsen. The detention of a Chinese trawler captain by the Japanese has flared up into a stand-off over the sovereignty of eight islands the Chinese calls the Diaoyu and the Japanese the Senkaku. The Wall Street Journal points out that the dispute is “significantly escalating”.

Chinese prime minister, Wen Jiabao has this week refused to meet his Japanese counterpart at a UN gathering in New York, it being cited as “inappropriate”. Wen later raised the stakes by threatening “retaliatory” measures – although without specifying what these might be.

On Wednesday a Chinese foreign ministry spokesperson made plain the nation’s growing frustration: “This issue has already seriously damaged China-Japan relations. The key to avoiding a further deterioration in the situation lies in Japan immediately and unconditionally releasing the captain.” Chinese police are investigating four Japanese citizens it accuses of illegally filming a military site in Hebei, and symbolically, officials have blocked a goodwill visit by 1,000 Japanese students to the Shanghai Expo.

What about the business impact? Chinese cosmetics firm Baojian has made its protest public by cancelling a trip to Japan by 10,000 of its sales staff. So serious has it become that Nissan’s Carlos Ghosn has made a statement on whether it will impact sales in China.

The Nikkei newspaper reports that China is Japan’s biggest two-way trading partner. Japanese companies generated $382 billion in sales in China last year, according to Tokyo’s trade ministry data.

Shanghai Daily claims the Diaoyu Islands have been Chinese territory since the early years of the Ming Dynasty (1368-1644) and that maps printed in Japan in 1783 and 1785 which marked out the boundary of the Ryukyu Kingdom show the islands as Chinese. However, Japan has administered the isles since 1972. “If China thinks that by taking a strong stance that Japan will just roll over, then it is mistaken,” said an editorial in the Yomiuri Shimbun newspaper, Japan’s largest daily.

It’s tough to see now how either government can back down without losing face at home…


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