BEIJING, Sept. 21, 2010 -- It started out as a spat over a fishing boat but has rapidly escalated into a bilateral crisis, pitting the two great titans of Asia against one another in their worst diplomatic row in years.
Today, Japan's government warned that both Japan and China must beware of fomenting nationalism over the ongoing dispute.
"We should be careful not to stir up narrow-minded, extreme nationalism," Chief Cabinet Secretary Yoshito Sengoku told a news conference. "We should try to resolve the problem without escalating the situation, and we'll call for measures through all possible channels."
At the moment, that might be tough. China said today that it would be "inappropriate" for the countries' premiers to meet this week at the United Nations.
It has cut off all high-level government contact with Japan and suspended talks on aviation and energy exploration. Some 1,000 young Japanese who had been invited to travel to the Shanghai Expo, at the suggestion of Premier Wen Jiabao, have been told they are no longer welcome.
The outrage over the political dispute has seeped down to the streets.
"Millions in China Angry With Japan" blared the front-page headline of the Shanghai Daily.
One Chinese company announced on its website that it would a cancel a long-prepared trip of some 10,000 staff members to Japan in October in order "to stand on national dignity."
The cancellation was expected to bring a loss of hundreds of thousands of dollars.
Small protests against Japan broke out in several Chinese cities over the weekend. Millions of China's Internet users aired their frustration online, calling for a boycott of Japanese goods and asking the government to take stronger measures.
"What the Japanese seized was not Zhan Qixiong [the trawler's captain] but the dignity of the Chinese nation," said Li Weihua at t.sina.com.cn.
"We must firmly boycott Japanese goods. They are making so much money from us Chinese while hurting us so deeply. If you're a good Chinese person, you won't buy Japanese goods," said another.
When Boats Collide
It was two weeks ago that a Chinese fishing boat collided with two Japanese coast guard patrol ships in waters off the hotly disputed Diaoyu Islands, which China, Japan and Taiwan all lay claim to.
When the Japanese coast guard detained the fishermen and captain, and confiscated the trawler, China became incensed.
But the stand-off escalated last week when a Japanese court announced it would extend the detention of the captain by another 10 days.
"If Japan acts willfully, making mistake after mistake, China will take strong countermeasures, and all the consequences will be borne by the Japanese side," China's foreign ministry warned.
China is Japan's biggest trading partners and relations between the two countries -- the second and third largest economies in the world -- have greatly improved since a deep chill from 2001 to 2006.
But significant tensions remain. China sees Japan as an ally of the United States, and memories of its brutal World War II occupation of much of the country remain a sensitive topic here.
Japan in turn, is suspicious of an increasingly wealthy China that is growing in power and pushing to defend its territorial claims.
Last week the United States cautioned China and Japan to be careful about allowing the situation to escalate.
"We seek to resolve these disputes through direct talks between the countries involved and in a peaceful manner," Michele Flournoy, the under secretary of defense for policy told a seminar at the National Bureau for Asian Research last week.
But with the rhetoric ratcheting up and high-level contact between the two countries suspended, it remains to be seen when such talks might happen.