Four Japanese Held in China as Fishing Boat Tensions Escalate

Japan said four of its citizens are being held in China for allegedly videotaping military targets as tensions heightened over a territorial dispute that has damaged ties between Asia’s two biggest economies.

The four are employees of Fujita Corp., Chief Cabinet Secretary Yoshito Sengoku said today in Tokyo. They were visiting Hebei, China on company business unrelated to military issues, Fujita spokesman Yoshiaki Onodera said.

The detention comes as China ratchets up pressure on Japan to release a fishing boat captain who collided with Japanese Coast Guard vessels near islets claimed by both countries. The islands, known as Diaoyu in Chinese and Senkaku in Japanese, are in the East China Sea near natural gas fields. The two countries signed an agreement in 2008 to jointly develop the fields that has yet to be implemented.

“We’re confirming details, but China informed us that the four Japanese are under investigation related to military facility laws,” Sengoku told reporters today in Tokyo. “We don’t think this has a link to the Senkaku issue raised by China.”

He couldn’t confirm reports that China has cut off exports of rare earths -- materials used in hybrid vehicles and laptop computers -- to Japan. A Chinese government official denied the report yesterday.

Photographer: Nelson Ching/Bloomberg

Chinese Premier Wen Jiabao this week called on Japan to “immediately and unconditionally” release the captain, saying failure to do so would result in “further measures” being taken. He didn’t elaborate. Close

Chinese Premier Wen Jiabao this week called on Japan to “immediately and... Read More

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Photographer: Nelson Ching/Bloomberg

Chinese Premier Wen Jiabao this week called on Japan to “immediately and unconditionally” release the captain, saying failure to do so would result in “further measures” being taken. He didn’t elaborate.

“Once we confirm the facts, we’ll respond appropriately,” Sengoku said.

‘Immediately and Unconditionally’

Chinese Premier Wen Jiabao this week called on Japan to “immediately and unconditionally” release the captain, saying failure to do so would result in “further measures” being taken. He didn’t elaborate.

Japan is China’s second-biggest trading partner after the U.S., with two-way commerce in the first seven months of the year rising 25 percent from the same period in 2009 to $65.2 billion, Chinese customs data show. China is Japan’s largest trading partner, buying 10.2 trillion yen ($121 billion) of the nation’s goods and services last year.

China surpassed Japan as the world’s second-largest economy last quarter. The Japanese nominal gross domestic product for the second quarter totaled $1.288 trillion, less than China’s $1.337 trillion, according to Japanese government statistics. Sony Corp. and Panasonic Corp., the world’s two largest consumer electronics makers, are cutting television prices in China in a push to expand market share in the world’s second-largest market for flat-panel TVs.

‘Negative for China, Japan’

“It will be negative for Japan, China and the global economy if ties between the countries with the No. 2 and No. 3 GDPs deteriorate,” Japanese Finance Minister Yoshihiko Noda said today. “It’s desirable for both nations to address this calmly.”

Sengoku two days ago proposed “high level” talks between the two countries to ease the conflict. China rejected the suggestion, with Foreign Ministry spokeswoman Jiang Yu saying that “playing tricks to deceive the world and international public opinion is not a way out.”

U.S. Secretary of State Hillary Clinton urged Japan and China to resolve the issue through dialogue, as American officials declined to step into a broader territorial dispute.

The U.S. encourages “both sides to work aggressively to resolve” their differences “as quickly as possible,” State Department spokesman Philip J. Crowley said yesterday in New York, where Clinton met with Japanese Foreign Minister Seiji Maehara on the sidelines of the United Nations General Assembly’s annual meeting. “We don’t take a position on the sovereignty of the Senkakus,” Crowley said.

Obama Meeting

U.S. President Barack Obama met separately with Japanese Prime Minister Naoto Kan and Wen yesterday. He didn’t raise the dispute in his meeting with the Chinese premier, said Jeff Bader, Obama’s director of Asian affairs.

The diplomatic row is the most serious since 2005, when thousands of Chinese protested Japanese textbooks that downplayed wartime atrocities. The captain’s detention sparked a Sept. 18 protest at Japan’s embassy in Beijing that was more tightly controlled by police than those five years ago, when demonstrators threw rocks at the consulate in Shanghai.

To contact the reporter on this story: Sachiko Sakamaki in Tokyo at ssakamaki1@bloomberg.net

To contact the editor responsible for this story: Bill Austin at billaustin@bloomberg.net

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