The territorial dispute between China and Japan over islands in the East China Sea escalated this week as Chinese protests against Japanese brands became violent and Japanese government and hospital Web sites suffered cyberattacks. In response, several top Japanese companies operating in China announced the temporary closure of facilities there on Monday in the face of heated demonstrations and at least one instance of industrial sabotage. The affected brands include Canon, Honda, Mazda, and Panasonic.
The uninhabited islands, known in Japanese as Senkaku and in Chinese as Diaoyu, have been controlled by Japan since 1895, save for the period following the Japanese surrender at the end of the Second World War in 1945 through 1972, when they were administered by the United States.
The current flare-up in the long-running feud began in August, when Chinese activists who landed on the islands were detained by the Japanese coast guard before being deported back to Hong Kong. Japanese nationalists landed on the islands a few days later, further angering the Chinese and setting off street protests in several Chinese cities that have grown into a new wave of anti-Japan sentiment.
Aside from the unwillingness of both nations to show political weakness by backing down from the standoff, there is a lot of money at stake. Trade between Japan and China, the top two economies in the region, rose about 14% in 2011, growing to a record $345 billion. Reuters reported earlier this month that sales of Japanese automobiles took a hit in August, and China’s Vice Minister of Commerce, Jiang Zengwei, said last week that the conflict was sure to have a “negative impact” on trade.
Further complicating the issue is the fact that the islands are situated in desirable fishing waters and are thought to have valuable oil resources. Definitive ownership of the islands carries with it commercial rights to the surrounding sea.
Looking to contain the regional impact, China’s Vice President Xi Jinping made an effort today to appease other Asia-Pacific nations in hopes of preserving lucrative trade relations and avoiding US involvement. China has had similar territorial disputes with Vietnam and the Philippines in the South China Sea.
Image courtesy of National Land Image Information (Color Aerial Photographs), Ministry of Land, Infrastructure, Transport and Tourism, Japan