Islands dispute leaves diplomatic ties in tatters

By buying the islands he tried to outflank Ishihara, but that seems to have backfired as the subtleties of Japan’s property laws are lost on Beijing.

Noda said Japan must be firm “without being provocative or being provoked” on territorial issues. He faces a tough election and cannot be accused of weakness by the main opposition Liberal Democrat Party (LDP), which takes an even tougher line.

Former Japanese defence minister Shigeru Ishiba, a frontrunner to lead the LDP, said last week he was inspired by former British prime minister Margaret Thatcher’s handling of the Falklands crisis in 1982, when Britain fought a war with Argentina to keep the islands.

“I have no plan to withdraw the nationalisation. Losing even a small part of your territory means you will eventually lose the whole country,” he said.

Now, instead of a gala concert this week, the mood in China has turned fiercely anti-Japan. The world’s second-largest economy has already said the row will have an impact on trade with Japan, the third-largest economy in the world. They have two-way trade of about €265 billion, and Japanese companies including Toyota and Panasonic have invested billions of dollars in China.

A Reuters poll at the weekend showed that 41 per cent of Japanese firms expected the row to affect their business plans and some were mulling shifting operations elsewhere.

Nationalism in China is intensifying. Chinese bakeries in some cities are selling anti-Japanese “mooncakes” to mark the Moon Festival, spurning the usual auspicious messages in favour of “Kill the Japanese” or “Hate Little Japan”. The country’s largest search engine, Baidu, featured an animated illustration of the islands, while the country’s biggest internet company, Tencent, placed a banner on its QQ website commemorating the 81st anniversary last week of the Mukden Incident, which led to Japan’s invasion of China.

In Taipei, capital of self-ruled Taiwan, hundreds marched yesterday to protest against Japan for occupying the islands.

Last week, some of the more shrill Chinese voices were calling for a nuclear response to what is seen as Japanese aggression.

Should the stand-off escalate, this would most likely draw in the US as it has said the disputed islands are “clearly” covered by a 1960 treaty obliging the US to help Japan if it is attacked.

Chinese people are still angry over Japan’s invasion and brutal occupation between 1931 and 1945, and there is a feeling that Japan has not done enough to atone for its military aggression.