Economy affected

It is true that while the growing dispute over the islands has affected bilateral political relations, it impacted the economic sector even more. In the past four decades, after normalization of the bilateral diplomatic relations, China and Japan rely greatly on each other in economic development, as China is Japan's largest trading partner, while Japan is China's fourth largest trading partner. But it seems that the solid economic foundation is gradually being undermined.

Tourism is the first sector that felt the heat. According to data from the Japanese tourism authority this year, the number of the Chinese tourists to Japan rose dramatically in the March summer season. From July to August, a total of 398,000 tourists from the Chinese mainland visited Japan, accounting for 24.5 percent of all the foreign tourists in Japan during that period. Adding in tourists from China's Hong Kong and Taiwan, that percentage was pushed to 48.1 percent.

Since September, after the island dispute broke out, many travel agencies both in China and Japan had to close travel services to each other's countries because of the lack of interest.

Li Juan from Beijing booked a trip to Tokyo for sightseeing during China's eight-day nationwide holiday break from September 30 to October 7 several months before the time. But in late September, she cancelled the trip and went to Hong Kong instead.

"I don't think it is the proper time to go to Japan against this background, so I changed my plan," Li told ChinAfrica.

Many travel agencies in China, like the China Youth Travel Service and Jinjiang Travel, have closed their business to Japan. Data from Jinjiang Travel showed that the travel agency received no bookings to Japan during the past National Day holiday week in October.

Other sectors such as auto sales and airline transportation, which account for big business in the economic sector between the two countries, have all seen massive drops, causing great losses to both sides.

Future conflict

Despite the great losses, both sides refuse to make concessions and the dispute seems to be ascending. China now sends sea patrols regularly to the Diaoyu Islands waters and Japan has also tightened its control on the islands by sending 30 patrol ships to the waters.

On October 4, seven Chinese warships sailed the waters 110 km away from Japan's Miyako Island without informing Japan. This is the first time a Chinese warship has sailed these waters since the Japanese Government "nationalized" the Diaoyu Islands. Japanese media interpreted the move as "intimidation."

In early October, the United States sent two navy aircraft carrier battle groups and a Marine Corps air-ground task force to the Western Pacific. The situation there seems to be tense and many experts and scholars are debating the possibility of war between China and Japan.

But Xu Guangyu from China Arms Control and Disarmament Association believes that the possibility of a war between China and Japan is very slim.

"China is the world's second largest economy and Japan, the third largest; no one would like to see a war between the two economic giants as that will be a disaster for the whole world," he said. "But friction or low-intensity conflicts are possible. Such friction and conflicts will occur for a long time."

Diaoyu Islands – Fast Facts

Location: 123°20'-124°40'E (East Longitude) and 25°40'-26°00'N (North Latitude), affiliated to Taiwan Island. They are about 356 km from Wenzhou, east China's Zhejiang Province, 385 km from Fuzhou, capital of China's Fujian Province and about 190 km from Keelung, Taiwan of China

Total Area: 5.69 square km (uninhabited)

(Source: Diaoyu Dao, an Inherent Territory of China, a white paper released by China's State Council, and www.people.com.cn)