China-Japan Tensions Escalate, As China Breaks Off High Level Contacts, Japanese Flag Burned In Protest

Tyler Durden's picture

On the anniversary of the 1931 Japanese invasion of China, tensions between the world's second and third largest economies are escalating. The Associated Press reports that late Sunday, China broke off high-level government contacts with Japan "over the extended detention of a fishing boat captain arrested near disputed islands. The rare move pushed already tense relations to a new low, and showed China's willingness to play hardball with its Asian rival on issues of territorial integrity." The latest straw on the camel's back was the detention of a Chinese fishing boat and its captain, after it hit two Japanese Coast Guard boats in the East China Sea, a territory claimed by both countries, as previously reported by Zero Hedge.Furthermore, " the captain's detention for further questioning — pending a decision
about whether to press charges — has inflamed ever-present anti-Japanese
sentiment in China." China reaction has been swift and merciless, proving just great the ego of the now second largest economy, and largest holder of US debt, has become: "Beijing has suspended ministerial and provincial-level contacts,
halted talks on aviation issues and postponed a meeting to discuss
coal." Also, attached pictures of Japanese flag burning can not instill much confidence in Sino-Japanese relations stabilizing any time soon.

More from AP:

"If Japan acts willfully, making mistake after mistake, China will take strong countermeasures, and all the consequences will be borne by the Japanese side," Chinese Foreign Ministry spokesman Ma Zhaoxu said in a statement.

Takeshi Matsunaga, a spokesman for Japan's Foreign Ministry, said the reported measures were unilateral.

"We ask China to respond calmly so as not to escalate the problem further," he said.

The move raises questions about cooperation between China and Japan at international forums such as this week's summit in New York on United Nations goals to fight poverty, which Chinese Premier Wen Jiabao and Japanese Prime Minister Naoto Kan are attending.

It also throws into doubt whether China's President Hu Jintao will attend the annual summit of Asia-Pacific Economic Cooperation forum leaders to be held in Yokohama, Japan, in November. Leaders of the two countries were also due to attend a G-20 summit in Seoul the same month.

This is the lowest bilateral relations have fallen to since they were strained under former Prime Minister Junichiro Koizumi, whose repeated visits to a war shrine in Japan during his 2001-2006 term angered China.

The two countries halted ministerial-level defense talks for three years from 2003. But even in those tense times, Japan's foreign minister visited China in 2004 and met Wen.

China's decision to cut high-level contacts appears to reflect a worry about losing face in front of the Chinese public which might trigger a nationalistic backlash against the government if it appears weak or unable to protect the country's sovereignty.

Already, the number of Chinese tourists visiting Japan has plunged because of the dispute, CCTV said. On Friday, a Beijing-based food company announced it would cancel a planned group tour to Japan for 10,000 people to reward employees, their families and business partners.

Beijing made the announcements shortly after a Japanese court approved a 10-day extension of captain Zhan Qixiong's detention.

"His detention was extended for further questioning. He will be held until Sept. 29," an official at the Naha Public Prosecutor's Office in Okinawa, southern Japan, said on condition of anonymity because he was not authorized to speak to the media.

Under Japanese law, prosecutors can hold a suspect for up to 20 days while deciding whether to file formal criminal charges. The first 10-day detention period ended Sunday.

And one can be absolutely certain, that a direct result of this action will be the massive gobbling up of even more JGBs in an attempt by the PBoC to once again streghten the yen, as Central Bank warfare escalates, forcing the Bank of Japan to intervene yet again in the FX market, further angering Europe, whose currency has surged by over 10% in the past week, and making life for investors on either side of the Atlantic and Pacific ever more unpredictable, in a landscape in which the biggest marginal buyers (and sellers) of securities are increasingly the central banks themselves. The only winner out of this: the US Treasury department which buys even more time to proceed with a failed Keynesian policy of pereptually debt-funded, deficit creation.

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traderjoe's picture

Interesting times, m'fers!

caconhma's picture

It is the time for Japan to understand the obvious

  • Japan cannot any more rely on America for its safety, security, and prosperity
  • Only its own nuclear capabilities can keep Japan safe and secure
Dollar Bill Hiccup's picture

The Chinese often whip up a little nationalism when the leadership is focussing on other issues that may be difficult to spin, at present the question of RMB revaluation that will be pressed at the G20 in Seoul.

Maybe they are beginning to feel hemmed in by their own economic policies.

Down the road a ways this may heat up, but for now it is smoke and mirrors.

Saxxon's picture

You said it.  This side show is to distract the roiling masses from food and energy inflation ON FIRE RIGHT NOW in China.

shinola's picture

Hmmm,  could "stirring the pot" of  long-held animosities between Japan & China work to the advantage of the USA?


How about India & Pakistan?


Interesting times indeed.

three chord sloth's picture

Does China have any friends left?

Shameful's picture

In the world of geo-politics there is no such things as friends. There are temporary allies, dupes, patsies, victims, rivals, puppets, and enemies, no friends.

three chord sloth's picture

True 'nuff!

Allow me to rephrase it... Does anyone gain more than they lose from dealing with China today?

North Korea? Maybe Australia with her mineral sales? Anyone else..?

Bolweevil's picture

Some African countries (temporarily)?

Justibone's picture

I would classify North Korea as a Chinese "client".  A troublesome client, though.

Horatio Beanblower's picture

The Chinese and Japanese governments need to stay out of television studios -

cossack55's picture

Might be a great time to find out where Yamashita's gold really is (or was).  What about that Black Eagle Trust?

Things that go bump's picture

I thought the the Ferdinand Marcos family has it?  I read somewhere that there was a judgment of some sort against Imelda regarding part of that.

Atomizer's picture

Why didn't the media cunts think about blending the Japanese flag burning with the Florida Koran burning story?

Never mind, we borrow money from Japan. Mum is the word. LOL

Gully Foyle's picture

And yet nothing about Scurvy dogs boarding a mateys boat.

Fuck, what better topic to receive the International Talk like a Pirate day treatment?

bugs_'s picture

What is the penalty for burning a Chinese flag?

Atomizer's picture

Expect the UN to be on this case immediately. Humanitarian crisis. NGO's will hit the land lines for money donation's.

30% GP margins in the name of humanitity effords.

Jonathan E's picture


Yes the media rarely lets a geo-political skirmish go without some flag burning piccies.

"Excuse me sir - associated press, would you kindly burn this for me while I take a few snaps."

The horror.


Shameful's picture

Nice.  This does not overly surprise me, the Chinese have a deep seated hate/fear of Japan.  Read a while back that one general in China was pushing for more fitness training for the children because he was worried about Japanese children being more fit, and that giving them an edge in any potential conflict.  Totally ignoring the fact that Japan is a demographic nightmare, sure most places are but China is blazing the trail.

bankonzhongguo's picture

Talk to someone from Nanjing.  The Chinese government actually must work to keep nationalism down.  Some might remember the US bombing the Chinese consulate in Serbia (by accident?).  The PAP rolled up in front of the US Embassy in Beijing and dropped off a couple trucks worth of river stones.  Just big enough to fit in a hand.  Well, you know the rest of the story.  Everything in China was hit; riots, arson.  Just wait until your inventory disappears or that precious WOFE has its accounts frozen because Little Timmy Geithner pouts to the G-20.  The Pacific is a large body of water.

Chinese power and population up.  Japanese power and population down. 

Payback will be a bee-atch.  And we aren't ten years into the new century.

pragmatic hobo's picture

for Japan, chickens are coming home to roost.

eigenvalue's picture

The protests were orchestrated by the Chinese government when the Chinese consulate in Serbia was bombed. The majority of the protesters were university students actually. Orders were given that a bit violence was allowed.  My friend was there in Beijing then.

StychoKiller's picture

The Chinese Govt. gets some propaganda, the students get to perform some street theater mayhem -- everybody wins!

Pillage's picture

duke it out, burn burn burn! rawr

Jendrzejczyk's picture

Not enough to freak out about going on in the world already? Now this to add to the flock of Black Swans.

edit: Or should that be a wedge/bevy (definitely not gaggle).

JackES's picture

Just nuke Jap already.

stop BS talking.

Village Idiot's picture

"Just nuke Jap already.

stop BS talking."


You may already know that I am Jewish, but did you know my wife is a Japanese citizen?

JackES's picture


Ask her get out of Japan.

There's a reason why Japan is the only country being nuked.


Since you are Jew, do you like to live in Germany?

Village Idiot's picture

"Ask her get out of Japan."

Thank you for your concern, JackES, but my wife lives here in the United States.


"Since you are Jew, do you like to live in Germany?"

I live in the United States, JackES, where do you live?



"There's a reason why Japan is the only country being nuked."

This is the part of your post that I find most interesting, JackES.  Why do you think Japan should be "nuked?" 


The musings of Mr. JackES.  Enjoy. 



EDIT:  I just took a moment to look at a previous comment from JackES.  I went back to his very first post on ZH, and this is what he wrote:

by JackES
on Sun, 02/07/2010 - 21:54


If you are in charge of China's huge foreign exchange reserves, what can you do about it?

And, what can you do about those US debts?

I guess there's no good answers



Hey, Jack, what's with the "dumbed down" writing style?  Grow up, little man.





merehuman's picture

VI , i thought you were a southern woman! Go figure.

Village Idiot's picture

Are you asking me?  If it was the "trader" comment, no harm intended. I come here to listen and learn from the traders.

purple's picture

Welcome to the 'Asian Century'.


purple's picture

Somewhere Jim Rogers is weeping.

Anarchist's picture

Weeping? Jim chose the winning hand.

Japan and its enabler the US will pay for the millions of Chinese who died due to western interference. Most Americans have no clue the US backed Japan's invasion and occupation of Korea, Vietnam and China. Japan should know any future war will use genetic weapons. A bug does not care if is killing a Chinese or Japanese.

Mr pain's picture

Wrong - US embargoed oil and steel from Japan because of this and this is why Japan attacked Pearl Harbor.