Troubled waters for China, Japan

The husk of a dead volcano protruding from the East China Sea has become the battleground between the two mightiest economies in Asia.

At stake are potentially lucrative gas drilling rights in waters claimed by China and Japan. But the outcome of the territorial dispute may hinge on the medicinal herbs of a Chinese empress, the collection of bird excrement by the Japanese and the definition of what really makes an "island."

The latest controversy over the simmering dispute erupted when Japanese patrol officers arrested the captain and crew of a Chinese fishing boat earlier this month near the disputed islands -- known as Diaoyu in China and Senkaku in Japan. The crew was released, but the Chinese captain remains in custody. He is to appear in a Japanese court on charges that he rammed two Japanese boats with his vessel .

Chinese Premier Wen Jiabao on Tuesday urged Japan to release the boat captain "immediately and unconditionally," China's state news agency Xinhua reported.
Disputed islands

The economic repercussions have been immediate. The Chinese government cut off high-level talks with Japan on coal and increased commercial flights between the countries. The dispute also threatens planned talks on a 2008 agreement to jointly develop gas fields located near the disputed islands and in other parts of the East China Sea.

Run-ins between China and Japan over the sovereignty of the islands are nothing new. Japanese nationalists held demonstrations on the island back in 1990. But what is most worrisome to long-time watchers of the dispute is the assertiveness of both governments in the current fracas.

"A big difference this time: These incidents aren't being sparked by nationalists," said James Manicom, an expert on maritime disputes at the Balsillie School of International Affairs in Waterloo, Canada. "In the past, the most important thing (for Beijing and Tokyo) was to try to make this issue go away and to keep a lid on nationalist sentiment. Japan in particular now sees (territorial sovereignty) as a vital issue economically and as a national security issue."

"It's different in terms of the context of China rising and Japan in bit of a travail both economically and politically," said Mark Valencia, a fellow at the National Asia Research Program. Agency