Japan protests as Chinese ships enter disputed waters

 Japan protests as Chinese ships enter disputed waters

TAIWAN COMPLICATION

The arrival of Taiwan vessels in the area could complicate the potentially fraught game of cat-and-mouse being played near the islands, where mainland China has launched an effort to assert sovereignty by sending government ships into the disputed waters.

Taiwan television showed the boats leaving Suao port in heavy rain, sporting banners and large Taiwan flags.

The Taiwan fishing group said their boats would sail around the islands to reassert their right to fish there and did not rule out trying to land on the rocky isles.

Taiwan Defense Minister Kao Hua-chu told parliament that the military was ready for any contingency, but did not elaborate.

Taiwan has traditionally had friendly ties with Japan, but the two countries have long squabbled over fishing rights in the area. Beijing deems Taiwan to be an illegitimate breakaway province, and the two sides both argue they have inherited China’s historic sovereignty over the islands, which are near rich fishing grounds and potentially huge oil and gas reserves.

The latest flare-up in tensions over the islands comes at a time when both China and Japan confront domestic political pressures. Japanese Prime Minister Yoshihiko 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.

Noda leaves for New York on Monday to take part in the annual gathering of the U.N. General Assembly, and attention will focus on whether he refers to the dispute.

Worries are simmering that the row could hurt the economic ties that closely bind China and Japan. China is Japan’s largest trading partner. In 2011, their bilateral trade grew 14.3 percent in value to a record $345 billion.

Tokyo’s Nikkei China 50 index, composed of stocks of Japanese companies with significant exposure to the world’s second-largest economy, shed about 1.3 percent on concerns over the dispute.

Bank of America Merrill Lynch said Japanese carmakers saw a 90 percent drop in showroom traffic and a 60 percent fall in sales in the southern Chinese province of Guangdong, the largest market for Japanese brands, since the beginning of the anti-Japan protests.