Anti-Japan protests flare in China
Major Japanese firms have temporarily shut factories and offices in China after angry protests flared across the country amid a territorial dispute that has triggered one of China's worst outbreaks of anti-Japan sentiment in decades.
The row between Japan and China, over a group of uninhabited islets in the East China Sea, has led to violent attacks on well-known Japanese businesses such as car-makers Toyota and Honda, forcing frightened expatriates into hiding and sending relations between Asia's two biggest economies into crisis.
Ratcheting up tensions further today, Chinese state media warned Japan it could suffer another "lost decade" if trade ties soured. Japan counted China as its top trade partner last year, with total two-way trade of more than $340 billion (€259 billion).
Protests broke out across dozens of Chinese cities at the weekend, some violent, in response to the Japanese government's decision last week to buy some of the disputed islands from a private Japanese owner. The move incensed Beijing.
The protests focused mainly on Japanese diplomatic missions but also targeted shops, restaurants and car dealerships in at least five cities. Toyota and Honda reported arson attacks had badly damaged their stores in Qingdao.
Japanese electronics group Panasonic said one of its plants had been sabotaged by Chinese workers and would remain closed through tomorrow - a memorial day in China when it marks the anniversary of Japan's 1931 occupation of parts of mainland China.
Tokyo has warned its citizens about large-scale protests in China on Tuesday. Many Japanese schools across China, including in Beijing and Shanghai, have cancelled classes this week.
Japanese prime minister Yoshihiko Noda, who met visiting US defence secretary Leon Panetta today, urged Beijing to ensure Japan's people and property were protected.
Mr Panetta said the United State would stand by its security treaty obligations to Japan, but not take sides in the row, and urged both sides to exercise calm and restraint.
"It is in everybody's interest . . . for Japan and China to maintain good relations and to find a way to avoid further escalation," he told reporters In Tokyo.
The dispute over the islands - called the Senkaku by Japan and the Diaoyu by China - intensified last week when China sent six surveillance ships to the area, which contains potentially large gas reserves, in response to Japan's purchase.
The overseas edition of the People's Daily, the main newspaper of the Chinese Communist Party, warned that Beijing could resort to economic retaliation if the dispute festers.
"How could be it be that Japan wants another lost decade, and could even be prepared to go back by two decades," said a front-page editorial in the newspaper. China "has always been extremely cautious about playing the economic card", it said. "But in struggles concerning territorial sovereignty, if Japan continues its provocations, then China will take up the battle," the paper said.
Japanese foreign minister Koichiro Gemba said today, after talks with Mr Panetta, that Tokyo and Washington agreed the disputed islets were covered by the Japan-US security treaty.