China Protests Against Japan Continue on War Anniversary

Thousands of people hemmed in by riot police protested outside the Japanese Embassy in Beijing over a territorial dispute, as state media commemorated an attack that led to Japan’s World War II occupation.

As a helicopter hovered overhead, demonstrators waving Chinese flags marched up and down a street outside the embassy that had been blocked off. Japanese retailers in China closed their doors and covered up their logos to thwart attacks after car dealerships were torched over the weekend as protests spread over Japan’s plan to buy islands claimed by both countries.

Japan “totally caused” the current crisis and should “take responsibility,” China’s Defense Minister Liang Guanglie told reporters in Beijing today in a joint appearance with U.S. Defense Secretary Leon Panetta. “In the future we will very closely watch the evolution with regards to this dispute and we reserve the right for further actions.”

The protests over the islands, known as Diaoyu in Chinese and Senkaku in Japanese, coincide with a once-a-decade leadership transition in China that has already been clouded by the ouster of Politburo member Bo Xilai and a two-week absence by Vice President Xi Jinping, who is in line to take over the top job. China and Japan’s worst diplomatic crisis since 2005 is endangering a trade relationship that has more than tripled in the past decade.

“We’re not just protesting Diaoyu Island,” said Liu Lin, 53, who took a day off from work to demonstrate. “We’re angry because the Japanese did not learn their lessons from World War II like Germany. Instead they are trying to steal our territory again.”

‘Open Fire’

In Shanghai, thousands of protesters marched through the streets waving Chinese flags and holding portraits of Mao Zedong. Protesters shouted slogans and carried banners saying “Down With the Japanese” and “Open Fire on Japan.”

China Central Television observed a moment of silence today to commemorate the 81st anniversary of the Manchurian Incident, an attack on a Japanese railway that historians say was used as an excuse to start an invasion that would see Japan take control of most of China.

Purchase Approved

The protests began last week after Japan’s cabinet approved the purchase of the islands for 2.05 billion yen ($26 million) on Sept. 11. China, which has said it doesn’t accept the move, dispatched government vessels to the area around the islands.

A Chinese fishing ban in waters surrounding the islands ended Sept. 16, and Chinese and Japanese media aired footage of fishing vessels heading out to sea. The state-run China News Service reported yesterday that 1,000 fishing boats typically go to the region and the government would send more vessels than in recent years.

The standoff is putting at risk a $340 billion trade relationship. Toyota Motor Corp. (7203), Honda Motor Co. and Nissan Motor Co. halted production at some plants while Panasonic Corp. (6752) reported damage to its operations in China.

Shares of Fast Retailing Co. (9983), owner of the Uniqlo clothing brand, fell the most in three months in Tokyo trading after the company closed 42 stores. Seven & I Holdings Co. closed 211 stores and Aeon Jusco shut 30 outlets as of today.

Throwing Bottles

At the Japanese embassy, protesters threw bottles and branches at the building’s walls, which were spattered with eggs and paint. A recording of a female voice, played in a loop over a loudspeaker, urged protesters to display their patriotism “in an orderly manner” and avoid behaving “impulsively.”

Japan’s government urged China to “take all measures to prevent any further harm to Japanese citizens or Japanese companies,” Chief Cabinet Secretary Osamu Fujimura said today.

Fujimura said the government received a report that two Japanese landed on one of the disputed islands today and left after being warned by the Coast Guard. Hong Kong-based activists may go to the region as early as tomorrow, the Apple Daily reported today.

“Considering that Japanese companies make important contributions to the Chinese economy and employment, people should look at the broader picture and act calmly,” Fujimura said.

To contact Bloomberg News staff for this story: Daryl Loo in Beijing at dloo7@bloomberg.net; Henry Sanderson in Beijing at hsanderson@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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