An argument over a few islands with the prospect of hydrocarbon resources is heating up between China and Japan.
http://en.wikipedia.org/wiki/Senkaku_Islands_disputeThere seems to be some tough talking on both sides and with the potential to drag others into the spat: The US are deeply involved in the economies of both countries and will want this to pass without offense to both side.
China is a veritable global super-power and Japan's economy and national confidence is still reeling post tsunami/Fukishima disaster. That isn't to say that (though unlikely at this stage) if there is armed conflict that Japan would be pushovers; Japan has the ballistic missile tech and vast quantities of weapons grade Plutonium should they feel they had no other choice but to go nuclear. China knows this for sure and won't push things too far. That isn't to say they haven't been complicit in, or at least turned a blind eye to some anti-Japanese rabble rousing.
http://www.japantimes.co.jp/text/nn20120919a1.htmlProtests flare in China on contentious anniversary
The pretext for invasion 81 years ago fuels rallies in 125 cities
Kyodo
BEIJING/SHANGHAI — The anniversary Tuesday of a 1931 incident that paved the way for Japan's occupation of northeastern China further stoked anti-Japan sentiment across China, sparking protests in at least 125 cities where demonstrators denounced Tokyo's nationalization of the Senkaku Islands.
As armed police tightened security around the Japanese Consulate in Shanghai, about 7,000 protesters chanted slogans such as "Beat Japanese imperialism," "Boycott Japanese products" and "Destroy Japan and retrieve Okinawa."
http://www.theaustralian.com.au/news/world/china-japan-heading-towards-war-says-us-defence-secretary-leon-panetta/story-e6frg6so-1226475484583China, Japan heading towards war, says US Defence Secretary Leon Panetta
CHINA and other Asian countries could end up at war over territorial disputes if governments keep up their "provocative behaviour", US Defence Secretary Leon Panetta has said.
Speaking to reporters before arriving in Tokyo on a trip to Asia, Mr Panetta appealed for restraint amid mounting tensions over territorial rights in the East China Sea and the South China Sea.
"I am concerned that when these countries engage in provocations of one kind or another over these various islands, that it raises the possibility that a misjudgment on one side or the other could result in violence, and could result in conflict," Mr Panetta said, when asked about a clash between Japan and China.
"And that conflict would then have the potential of expanding."
http://www.chinadaily.com.cn/cndy/2012-09/18/content_15764244.htmThe visiting US Defense Secretary Leon E. Panetta is expected to appeal for Chinese restraint in handling the escalating tension with Japan over the disputed Diaoyu Islands during his meeting with his Chinese counterpart, General Liang Guanglie.
While in Tokyo, Panetta made a similar appeal to Japan on Monday, expressing the hope that the dispute be resolved in a peaceful manner.
Clearly, defusing the dangerous situation is in the United States' best interest - his country has nothing to gain from being dragged into an open military showdown with China by a bellicose Japan.
Yet leaving aside the fact that US military strategy is increasingly targeted at China as a potential enemy, the US has been playing a very negative role in the current turmoil in the East and South China seas.
The world constantly hears US appeals for restraint and negotiations over territorial disputes and we continually hear Washington proclaim that it is taking no sides in such disputes, yet behind the scenes it is clearly a different matter.
On his way to Japan, Panetta reiterated that his country is not taking sides in the dispute over the Diaoyu Islands. But, then on Monday, after his meeting with Koichiro Gemba, the Japanese foreign minister, Gemba told the press that the Diaoyu Islands are covered by the security treaty between Japan and the US.
Panetta should clarify why, if the US does not have a position in the dispute, his country seems to have extended coverage of the security treaty, meant to protect Japanese territory, to include the Diaoyu Islands, which are legally Chinese territory as the US well knows.
This is important particularly because the dispute over the Diaoyu Islands is essentially a US-made legacy of World War II.
The US' intentional blindness to the illegal nature of Japan's claims to the islands and the ambiguity they are intentionally trying to bring into the dispute are hypocritical. And including the territory into the US-Japan security treaty violates a core Chinese national interest.
Panetta's visit is supposed to be part of the US' alleged commitment to peace and stability in the Asia-Pacific. But he is going to have a lot of explaining to do to convince China of this and successfully achieve his stated goal of deepening the military-to-military relations between the US and China.
http://latimesblogs.latimes.com/world_now/2012/09/us-ambassador-to-china-surrounded-by-protesters-car-damaged.htmlU.S. ambassador to China caught in Beijing protest; car damaged
BEIJING -- The car of the U.S. ambassador to China was surrounded Tuesday by a small group of demonstrators who damaged the vehicle and briefly prevented it from entering the U.S. Embassy compound in Beijing.
A YouTube video of the incident showed the protesters chanting slogans such as "down with the U.S. imperialists" and, in an apparent reference to the Chinese government's purchase of U.S. government debt, "return the money!"
The five-minute video shows a black car approaching the embassy and attempting to turn into the gate. As demonstrators surround the vehicle, several dozen Chinese police and uniformed guards rush to the scene. Several water bottles are thrown at the car and one man can be seen banging on the hood of the vehicle.
http://www.telegraph.co.uk/finance/china-business/9551727/Beijing-hints-at-bond-attack-on-Japan.htmlBeijing hints at bond attack on Japan
A senior advisor to the Chinese government has called for an attack on the Japanese bond market to precipitate a funding crisis and bring the country to its knees, unless Tokyo reverses its decision to nationalise the disputed Senkaku/Diaoyu islands in the East China Sea.
http://www.theglobeandmail.com/news/world/chinese-cyber-attacks-hit-japan-over-islands-dispute/article4553048/Chinese cyber attacks hit Japan over islands dispute
At least 19 Japanese websites, including those of a government ministry, courts and a hospital, have come under cyber attack, apparently from China, police said Wednesday.
Many of the websites were altered to show messages proclaiming Chinese sovereignty over the Diaoyu islands, a Japanese-administered chain Tokyo calls Senkaku, the National Police Agency (NPA) said in a statement.
http://ibnlive.in.com/news/china-steps-up-military-air-force-drills-in-tibet/292129-2.htmlChina steps up military, Air Force drills in Tibet
Beijing: Amid a raging dispute with Japan over islands in East China Sea, Chinese army has scaled up its military exercises on all fronts including aerial drills by its air force in Tibet as well as by special forces.
Special operations forces from the PLA have began an annual set of military drills aimed at training reconnaissance capabilities and survival skills, state-run CCTV reported.
While its naval forces in the East China Sea practiced capture of islands, state media here carried picture of Air Force planes flying over Himalayas in a formation.
(not that this is any way related - curious and tragic timing)
http://news.yahoo.com/japans-ambassador-designate-china-dies-tokyo-ministry-043340035.htmlJapan's ambassador-designate to China dies in Tokyo: ministry
TOKYO (Reuters) - Japan's ambassador-designate to China, Shinichi Nishimiya, died on Sunday in a Tokyo hospital, the Foreign Ministry said, three days after he was found unconscious on a Tokyo street.
Doctors were looking into the cause of death, ministry official Takashi Ariyoshi said in a statement, but no other details were available. Nishimiya, 60, was found unconscious on a street near his home on his way to work.
Nishimiya was to have left in mid-October to take over from Uichiro Niwa as Japan's top envoy in Beijing.
While coincidental, Nishimiya's death came as tensions flared up between Japan and China over a disputed group of islands in the East China Sea claimed by both countries.