Asia's New Cold War

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Man of the moment Captain Zhan gets a hero's welcome on Sept. 27 in his home village in China's Fujian province

After surviving a harrowing maritime adventure, the fishermen of Gangfu village on China's eastern coast are sometimes presented with a rejuvenating bowl of noodles topped with duck eggs. But on Sept. 25, Gangfu's Zhan Qixiong was lavished with a more extravagant welcome: bouquets of flowers from cheering local leaders, a chartered flight home courtesy of the Chinese government and, of course, the requisite bowl of noodles.

Zhan had endured a trial on the high seas all right, but his was no tale of a shipwrecked mariner's rescue. Rather, the captain, 41, had returned from 18 days in detention in Japan after his trawler collided with Japanese Coast Guard boats patrolling waters near rocky isles claimed by both China and Japan. Called the Diaoyu Islands by the Chinese and the Senkaku by the Japanese, the tiny outcroppings in the East China Sea have been administered by Japan for decades, but China (and Taiwan) assert historic claims over them.

For his ordeal in the custody of a historical enemy, Zhan enjoyed a hero's reception back in China. But the row has pulled relations between East Asia's two great powers to its lowest ebb in years, showing just how delicate the balance of power remains in a region that from 1894 to 1953 suffered from near constant war. Japan contends that Chinese fishing and naval vessels in recent months have flocked in ever greater numbers to the disputed area, turning what was once a relatively placid outpost into a flash point. After the Chinese trawler and its crew were detained by the Japanese Coast Guard on Sept. 8, Beijing reacted with percussive fury, severing many diplomatic ties, slowing down Japanese cargo shipments and even briefly suspending exports of rare-earth minerals that Japan needs to manufacture everything from hybrid cars to superconductors.

Tokyo's decision to free captain Zhan which came shortly after four Japanese were arrested in China for allegedly trespassing in a military zone, a move widely seen as tit for tat was supposed to defuse the diplomatic crisis. Although the ruling Democratic Party of Japan faced sniping from hard-liners for capitulating to Beijing's hardball tactics, most Japanese understand that the countries' economies are too closely linked for a single fishing trawler to derail relations. But after the skipper's release, China showed few signs of wanting to ease tensions. The state-run China Daily opined that the incident had "caused irreparable damage to bilateral ties." Beijing demanded an apology and compensation from Tokyo. Japanese Prime Minister Naoto Kan responded sniffily, saying, "We have absolutely no intention of responding to [such demands]." A day later, Tokyo proposed that Beijing pay for damages to the Japanese patrol boats caused by the trawler collision.

Changing Currents
Japan credits its long rise to a commitment to peace after its catastrophic losses in World War II, while China has linked its recent economic-boom trajectory to a philosophy of "peaceful development." But while both nations use the word peace , or a variant of it, whenever they can, China and Japan have become locked in a nasty war of words, with many wondering what will come next.

The growing friction reflects the shifting power dynamic in the Asia-Pacific region. This summer, if Beijing's official figures are to be believed, China surpassed recession-plagued Japan as the world's second largest economy. Now, a resource-hungry China is flexing its geopolitical muscle too. The Diaoyu/Senkaku islands may be uninhabited rocks, but they are thought to be surrounded by major underwater deposits of natural gas; not coincidentally, in August Beijing announced that it had dispatched a manned submarine more than two miles beneath the South China Sea to plant a Chinese flag on the seafloor. China's increasingly assertive claim to nearly all of the South China Sea has riled other Asian nations, who believe they're entitled to at least part of that vast aquatic expanse. Most contentious are the Spratly and Paracel islands, a scattering of coral atolls across much of the South China Sea, parts of which are claimed by six governments and are located in waters surprise, surprise believed to hold significant untapped oil and natural-gas reserves. Even as China complained about the treatment of its trawler and crew by Japanese forces, Vietnamese officials have been quietly grumbling that Chinese naval boats routinely detain Vietnamese fishermen who venture into waters Beijing considers its own.