Xu Jin, a 29-year-old marketing executive in Shanghai, was fast asleep when the beep of her cell phone woke her up. It was a text message from her boss urging her to boycott Japanese goods from May 1-June 1 to protest Tokyo's refusal to fully atone for its brutal wartime record. Although her apartment is packed with Japanese products, Xu forwarded the message to all 50 contacts on her mobile. "I've never liked the Japanese because of their government's attitude toward World War II," says Xu. "I am not a nationalist, but since everyone is boycotting Japanese products, I should, too." Similar sentiments were flying over cellular and online networks last week as angry Chinese urged one another to join anti-Japanese street protests. "Bring old tomatoes and rotten eggs to throw at the Japanese pigs," stated one e-mail message, complete with a map of how to get to the Japanese consulate in Shanghai. "When burning Japanese flags and pictures of [Japanese Prime Minister Junichiro] Koizumi," advised another, "please be careful not to light your clothes on fire."
Right now, everyone needs to be careful around combustible material; these flames could get out of control. After an enormous march against Japan in Shanghai last Saturday, relations between Asia's two leading powers have deteriorated into their worst state for years. Japanese officials have urged Beijing to stop the demonstrations on the mainland while Japan's business community—anxious to protect an economy that is increasingly dependent upon China trade—has called for constructive dialogue. But not all of Tokyo's actions have been conciliatory. Last Wednesday, Japan's Ministry of Economy, Trade and Industry began accepting Japanese companies' bids to test drill for natural gas in East China Sea waters that China claims as its own. "This is a provocation to China's rights and interests," responded Qin Gang, China's Foreign Minister. "We demand that Japan pay attention to China's concerns, or the consequences will depend upon Japan."
Beijing has been placing a lot of demands on its neighbor over the past few weeks. What started with China's opposition to Japan's bid to join an expanded United Nations Security Council (China already has a seat) subsequently ballooned into violent public attacks on Japanese diplomatic missions and businesses in several Chinese cities that continued through the weekend. In Shanghai, throngs of mostly young Chinese gathered in the vast People's Square to begin a march to the Japanese consulate across town. At first, the atmosphere was less menacing riot and more street carnival. But along the way, angry protesters broke away and vandalized Japanese restaurants with paint, rocks and bottles. By the time the demonstrators reached the consulate, tempers were fever-hot. For six hours, mobs burned Japanese flags, threw paint bombs, rocks, tomatoes and eggs at the building. Japan's Foreign Ministry lodged a formal complaint with Beijing, saying: "Whatever the reason for this violent and destructive behavior, we will not accept it."
Rationales for an outpouring of anti-Japanese rage were readily available: Japan's Education Ministry this month approved textbooks that whitewash the country's wartime atrocities, and China has long held that Japan has failed to properly atone for its past militaristic sins. Snubbing Japan's Security Council bid last week, China's Premier Wen Jiabao said: "Only a country that respects history ... [and] wins over the trust of people in Asia and the world at large can take greater responsibilities in the international community." He ignored the fact that Japan is the world's second largest economy and the second biggest contributor to the U.N.
Given the importance of China to the sputtering Japanese economy—China is Japan's largest trading partner and the source of much of the latter's export growth in recent years—one might wonder why Tokyo chose to announce its intentions to drill in disputed waters. (China has already begun a $1 billion drilling project in a nearby East China Sea natural gas field, which Japan says infringes upon its turf.) But the real debate, of course, is not over borders or textbooks or a failure to atone for old sins. The issue is which country, Japan or China, will be the dominant Asian power of the 21st century. The Japanese government has witnessed with considerable unease the dramatic economic, political and military ascent of China—and it is not about to quietly concede leadership in the region to its giant rival. Indeed, Koizumi's major legacy will likely be building Japan's influence across Asia and the rest of the world to a level commensurate with its economic might. Naturally, that campaign is generating intense friction with Beijing. "The dispute reflects the anxiety that both sides feel over China's role as a rising power in the region," says Philip Yang, professor of political science at National Taiwan University in Taipei. As this plays out, "we will see a lot more cool issues become hot."
Recent tensions could signal the beginning of a protracted standoff. Japan's parliament last week began considering a 710-page report that stresses the need for the country to amend its pacifist constitution so it can beef up its military. At the same time, Japan has demonstrated a growing willingness to confront China on a host of issues. When a Chinese submarine ventured into Japanese waters in 2003, Japan's Maritime Self-Defense Force stalked it for days and Tokyo won a (halfhearted) apology from Beijing. In a recent defense report, Japan for the first time named China as a potential threat. Then, in a joint declaration with the U.S. last month, Japan named peace in the Taiwan Strait as a "strategic interest," a move Beijing considered meddling as it seeks to force Taiwan to reunify with the mainland. Some of Tokyo's actions that might seem hamfisted—the timing of announcements, the decisions on when to escalate—are in fact highly deliberate, argues a Western diplomat in Tokyo. "The Japanese government is not looking at these issues in terms of next week or even next month," he explains. "They are looking 30 years ahead. They believe that if they back down on many of them now, their leverage and initiative will be lost forever."
Koizumi's tougher stand is playing well at home. While Japanese watched with disbelief as TV cameras captured rioting Chinese denouncing Japan, a public poll by Jiji Press last week showed that, for the first time in three months, the Koizumi Cabinet's approval rating had overtaken its disapproval figures. But stoking nationalist sentiments comes at a cost: deteriorating political relations threaten to drive a wedge between two nations that have never been closer, economically and culturally. Chinese youths listen to Japanese pop while their increasingly well-off parents covet Japanese cars and electronics. Now, finding common ground may prove harder, as Chinese use their Japanese cell phones to send text messages calling for a boycott of Japanese products. One message that went out last week announced: "Every 100 yen of lost sales means 10 fewer bullets for the Japanese military, or eight fewer pages of anti-Chinese material in Japanese textbooks."
With an estimated 16,000 Japanese companies trading with China, the specter of a widespread boycott on the mainland is a worry for Japan's business leaders. In fact, the immediate economic impact would likely be limited because the bulk of Japanese exports to China are industrial products such as heavy machinery, steel and chemicals, not camcorders and cosmetics. Still, Jusco, a Japanese department-store chain with nine outlets on the mainland, was forced to briefly close two stores in Shenzhen and Guangzhou during early April's protests as a precaution. "We suffered a slight monetary loss," says Kenichi Suenami, a spokesman for AEON, Jusco's Chiba-based parent. "But it was nothing that surprising." Even if anti-Japanese sentiments intensified, Suenami says he doesn't expect losses to amount to more than "a few percent" because most of their goods are Chinese.
But worsening relations with Beijing can do economic damage nonetheless, in the form of reduced access to the China market and declining mainland investment. Already, Japanese organizers of the Japan Trade Fair in Shanghai, which drew 150,000 people last year, have postponed their planned May 20-23 confab until the fall. "If the bad feelings between the two countries linger," frets one top executive at a Japanese automaker, "that could shape consumer decisions later, particularly for young people."
No surprise, then, that Japan Inc. is getting nervous. A senior Japanese business leader reportedly met with Koizumi earlier this month to urge him to mend fences with Beijing. Japanese businessmen hope they have convinced Koizumi that, at the very least, he must stop his annual visits to the Yasukuni Shrine—where convicted war criminals are honored and which is a symbolic center of Japanese right-wing nationalism.
China faces its own risks by allowing hard-won ties to unravel. More than 1 million Chinese work for Japanese companies, and with mainland unemployment worsening, Beijing desperately needs manufacturing jobs to continue multiplying, even if those jobs are created by a political rival. Indeed, an effective boycott of Japanese merchandise would likely imperil more Chinese than Japanese workers. At the Shanghai No. 1 Department Store last week, local clerks complained of lackluster sales of Japanese goods—ironic, given that in one section of the shop's consumer electronics division, every Japanese brand-name product was made in China through joint-venture operations.
But it is the political backlash that could have more serious consequences for Beijing. So far, the government hasn't quelled the majority of anti-Japanese rallies, even though authorities have sweeping power to do so. Political demonstrations are rarely allowed in China, and unsanctioned protests are often put down forcefully. Yet protesters in Shanghai on Saturday easily broke through police lines to attack Japanese targets.
By allowing citizens to vent pent-up frustration on Japan, the government is gambling that demonstrations won't spiral out of control—and turn instead against China's authoritarian regime. Chinese leaders need only look at their own history to see the potential for mayhem. The pivotal May Fourth movement—a blossoming of anti-establishment thought in China—was born on May 4, 1919, out of anti-Japanese protests by students and other citizens angered by the Treaty of Versailles, which ceded German concessions in China to Japan at the end of World War I. "Chinese people may be using anti-Japan protests as a safety valve to express dissatisfaction with domestic issues," says Liu Xiaobiao, a Chinese visiting scholar at the University of California, Berkeley, of the recent demonstrations. "This kind of anti-Japanese protest could change into an anti-government protest."
By late last week, there were signs that Chinese authorities were belatedly clamping down. Police posted messages on popular websites warning against unapproved demonstrations and urging citizens to express their patriotism by working or studying instead. The capital was quiet on Saturday, despite public calls for another march on the Japanese embassy. Whether that calm will last is anyone's guess. Japanese Foreign Minister Nobutaka Machimura was scheduled to make a diplomatic visit to Beijing on Sunday, in part to try to change China's mind about thwarting his country's U.N. Security Council bid. "Issues like this don't go away," says Emerson Niou, a political-science professor at Duke University. "Audiences in each country expect their government to win, which makes it hard for either country to back down." Meanwhile, another round of anti-Japanese marches is being planned—and it's set for May 4. The latest chapter in Japan's and China's troubled history may only just be starting to unfold.