China pushes Japan with sea claims, trade threats

BEIJING (Reuters) - China has moved to bolster its legal position in a volatile territorial dispute with Japan, state newspapers said on Monday, warning that Japan could endure another "lost decade" of economic stagnation if Beijing turns to trade retaliation.

The volley of warnings from Chinese officials and newspapers came after a weekend of protests across dozens of cities, some of them violent. Japanese Prime Minister Yoshihiko Noda urged Beijing to ensure Japan's people and property were protected.

The ruling Chinese Communist Party, which rarely allows street protests, opened the door to the display of public anger after Japan's decision last week to buy disputed East China Sea islands, which Tokyo calls the Senkaku and Beijing calls the Diaoyu, from a private Japanese owner.

Beijing called that a severe violation of its sovereignty and the dispute has triggered a wave of nationalist ire that the Chinese government has sought to both channel and contain.

China's latest effort to show resolve in the dispute was to announce it will submit to a United Nations commission a proposal spelling out its claims in the East China Sea, based on its definition of the limits of its continental shelf.

The planned submission "reflects the Chinese government's unwavering determination and will to protect national maritime rights", said Deng Zhonghua, a Chinese Foreign Ministry official in charge of boundary and maritime issues, according to a Xinhua news report late on Sunday.

Smaller protest marches resumed on Monday in front of the Japanese embassy in Beijing, watched by hundreds of police and anti-riot officers, but were nothing like the thousands who turned out in several cities at the weekend.

The long-running territorial row has erupted again while Asia's two biggest economies focus on domestic political pressures. Noda's government faces an election in months, adding pressure on him not to look weak on China.

China's Communist Party is preoccupied with a leadership turnover, with President Hu Jintao due to step down as party leader at a congress that could open as soon as next month.

Those political pressures have narrowed the room for diplomatic give-and-take. Last week, a Chinese commerce official warned that the argument could spill over into economic ties.

China is Japan's largest trading partner. In 2011, their bilateral trade grew 14.3 percent in value to a record $345 billion. A Nissan Motor Co Ltd executive has said the tensions were affecting business with China.

On Monday, the overseas edition of the People's Daily, the main newspaper of the Chinese Communist Party, warned that Beijing could resort to economic retaliation if the dispute festers, threatening enduring repercussions for Japan.

"How could be it be that Japan wants another lost decade, and could even be prepared to go back by two decades," said a front-page editorial in the newspaper. China "has always been extremely cautious about playing the economic card", it said.

"But in struggles concerning territorial sovereignty, if Japan continues its provocations, then China will take up the battle," the paper said.

At the weekend, Chinese demonstrators looted shops and attacked Japanese cars and restaurants in at least five cities. Protesters also broke into Japanese-run factories in eastern Qingdao on Saturday, according to the Japanese broadcaster NHK.

China and Japan have long been at odds over how they define their territorial limits in the East China Sea. Beijing's planned submission to a U.N. commission is intended to clarify its claims under international law.

Japan says the median line between the two countries' coasts is the boundary of their respective exclusive economic zones. China says the boundary is defined by its continental shelf, extending its claimed zone beyond the median line.

(Additional reporting by Ben Blanchard; Editing by Paul Tait)

Source: http://news.yahoo.com/china-pushes-japan-sea-claims-trade-threats-021433836--finance.html

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