China and Japan are disputing the possession of three tiny uninhabited islands in the East China Sea: Minamikojima, Kitakojima and Uotsuri. The conflict began in April, as the Governor of Tokyo, Shintaro Ishihara, announced he would buy the islands from “the family who owned them.” The Japanese government, seeing the potential for a dispute with China purchased the islands to keep them out of Governor Ishihara’s hands. The island group, called Sehkaku by the Japanese, Diapyu by China, have been considered by China to be a part of Chinese territory for decades, and she considers any occupation by Japan to be in breach of law. In purchasing the islands, which contained rich and untapped oil resources, the Japanese government set their value at $26.1 M.
China and Japan have a long history of disagreement. China still views Japan in the light of terrible atrocities by the island nation during WW II. China’s remembrance of an important Japanese invasion 81 years ago took the dispute over the top, and demonstrations against Japan and outsiders in general sprang up. China takes pride in her economy, and in her nationalism. With current economic downfalls, nationalism has risen in importance. China often seems to encourage anti-Japanese sentiment; in 2005, Chinese rioted in the streets over publication of a textbook which they claimed downplayed accounts of Japanese brutality.
In the current protest, Chinese demonstrators in hundreds of cities are venting their anger at Japanese-owned businesses. Hundreds of Japanese-owned 7-Eleven stores have had to cease operations, and Japanese restaurants and clothing outlets were targeted. Demonstrators also overturned Japanese cars, stormed into businesses, and set factories afire. In demonstrations at the Japanese embassy, protesters carried portraits of Chairman Mao Tse-tung and red banners, while hundreds of Chinese police guarded the embassy to monitor the crowd and promote peaceful behavior.
Defense Secretary Leon E. Panetta is taking the matter seriously. The United States and Japan have a long-standing mutual defense treaty; in the event of Japan being attacked, the United States is required to come to the aid of Japan. Panetta has met in recent days with China's Defense Minister, Liang Guanglie, who hopes for a peaceful settlement but has reserved the right to “further action” if Japan does not “correct its mistakes.” Hong Lei, a Chinese foreign ministry spokesman, declared: “Any unilateral actions taken by the Japanese regarding the Diaoyu Islands is illegal and invalid. China's will and determination to preserve its territorial integrity are resolute. We are closely monitoring the developments and will take necessary measures to defend our territorial sovereignty." Defense secretary Panetta calls for restraint and diplomacy.