China warns Japan ties at risk over boat incident

By Emma Graham-Harrison and Chris Buckley

BEIJING (Reuters) - China warned Japan on Thursday that ties would suffer if Tokyo mishandles a dispute over a Chinese boat seized in disputed seas, intensifying a territorial rift that could deepen discord between Asia's top two economies.

China said Japan was playing a risky game when it arrested the captain of a boat that collided with two Japanese coast guard boats near disputed islets in the East China Sea.

"Disputes over territorial sovereignty are highly sensitive. If improperly handled they can hurt broader China-Japan relations," said Chinese Foreign Ministry spokeswoman Jiang Yu.

"The Diaoyu islands are China's inseparable territory and the Japanese side applying domestic law to Chinese fishing boats operating in this area is absurd, illegal and invalid, and China will never accept that," she told a regular news conference.

"We hope that the Japanese side recognizes the seriousness and gravity of the situation," Jiang said.

Relations between Beijing and Tokyo have long been dogged by mutual distrust and Chinese bitterness over Japan's occupation of much of China before and during World War Two. Chinese media warned that public opinion could become riled by the arrest.

"A wave of indignation is also brewing in Chinese society, which might snowball into a major public outcry if the Japanese authorities continue to take a hardline stance on the incident," the official China Daily said an editorial.

Japan also lodged protests with China over the incident, and Japan's top government spokesman called for calm.

"This case could easily escalate tensions and ignite Chinese public opinion," said Huang Dahui, an expert on Sino-Japanese ties at Renmin University in Beijing.

"The Chinese public will feel it's wrong to make any concessions, as will Japanese opinion, and that could make this a difficult point of friction," he said.

"WEAKNESS IS SHAMEFUL"

Since big public protests and bitter diplomatic exchanges marred ties in 2005 and 2006, both sides have made a determined effort to improve relations. But broader contention over disputed seas could unsettle ties between the two big economies.

China has been Japan's biggest trading partner since 2009, and their bilateral trade reached 12.6 trillion yen ($150.4 billion), a jump of 34.5 percent on the same time last year, according to Japanese statistics.

"Ultimately, the two governments won't want to see this dispute escalate dramatically. There's too much to lose," said Huang. "The protests of 2005 left a deep lesson, and neither side would want to let this get out of control."

But China's relations with Japan have long been exposed to pressure from domestic public opinion, with polls showing distrust of Japan despite improved official ties.

That public rancor echoed on the Chinese Internet, underscoring the expectations for an unyielding response facing the country's ruling Communist Party leadership.

"Weakness is shameful," said a person who left a comment on the website of the Global Times newspaper (www.huanqiu.com), a popular Chinese tabloid run by the People's Daily.

The latest incident took place near a group of East China Sea islets -- called Senkaku in Japan and Diaoyu in China -- over which Tokyo and Beijing, as well as Taiwan, claim sovereignty.

No one was injured in the incident.

Zhan Qixiong, the captain of the Chinese boat, was taken to the southern Japanese island of Ishigaki, and on Thursday morning to a prosecutor's office, China's Xinhua news agency reported.

The other 14 members of the boat crew are being kept elsewhere on the island and have not been arrested, said Xinhua.

China has sent a fishery "law enforcement ship" into the area, Foreign Ministry spokeswoman Jiang said.

(Additional reporting by Ben Blanchard, and Yoko Nishikawa in Tokyo)