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When a Chinese fishing vessel apparently rammed into two Japanese naval vessels on 7 September, few imagined that the ensuing standoff would continue for as long as it did. The incident occurred in waters off the Diaoyu/Senkaku islands in the East China Sea claimed by China, Taiwan and Japan. The Japanese released all of the crew but for the captain of the vessel within a week, detaining the latter for well over a fortnight. Whatever the incident says about Sino-Japanese relations, it is notable also for three important reasons involving Chinese external policymaking and regional responses in general.

One, it reveals the complex nature of Chinese policymaking and in particular, the important role played by the PLA where key national security interests are thought to be at stake. Indeed, both former and serving military officials have increasingly begun to speak out on China’s external policies especially where these involve Japan, the US and India. In the latest case, the Japanese have suggested while normally the latest incident would have been dealt with more soberly and quietly by the Chinese, this time the PLA overruled the Chinese Ministry of Foreign Affairs in escalating the war of words and countermeasures over the detention of the Chinese skipper.

Two, the latest spat tells us something about China’s non-military coercive capabilities. Cancellations of meetings and calling off visits are common diplomatic responses. Even the arrests later, of four Japanese nationals for allegedly trespassing a military area in Hebei province, might be considered an unsurprising tactic for China. What was more interesting was China’s apparent willingness to exercise its ability to choke off the supply to Japan of rare earths – essential for high-technology products. While the Chinese have denied any such move – indeed such a move would have violated WTO rules – China’s non-military responses to external crises will bear further examination.

Three, the Sino-Japanese standoff is only the latest in a string of incidents that have set China’s neighbours on the edge. Southeast Asian nations, notably Vietnam, have been concerned for some time about China’s growing commercial activities and military presence around the disputed Spratly and Paracel islands in the South China Sea. While going into a tizzy of arms spending and military modernization, they have simultaneously urged the US to take a stronger line against China. Hence, US Secretary of State Hillary Clinton’s declaration at a July meeting of the ASEAN Regional Forum in Vietnam that the peaceful resolution of disputes in the South China Sea was a key national interest for her country was no solo American broadside.
 
And even if there is talk of the Japanese having blinked, Tokyo has also drawn greater international attention to China’s apparent belligerence on territorial disputes as well as perhaps, a growing Japanese willingness to withstand Chinese pressure. In this context, it is also significant that India will shortly be conducting joint army and naval exercises with American forces based in Okinawa in Japan, only a few hundred kilometers from the Chinese coast. Okinawa it must be noted is also the seat of the prefectural government that administers the Senkaku islands.

So much for China’s external policy and neighbourhood. An equally important dimension of the issue at hand concerns Chinese domestic politics. While the tussle for power and influence between ministries and interest groups in the government involves elite-level politics, reactions to the latest spat at the popular level too need to be considered. One aspect has always been the venting of latent Chinese hostility towards Japan in the form of public (if orchestrated) protests and calls for the boycott of Japanese goods. However, there is also another aspect namely, the reinterpretation of internal and external crises in terms of criticism of the country’s leadership. While this is not a new phenomenon, it is increasingly visible especially in China’s influential blogosphere.

Following the Tibetan riots of March 2008 and the Sichuan earthquake a few months later, for example, after the initial reactions had played themselves out, thoughtful Chinese citizens always raised questions about the shortcomings of the Chinese leadership. In the latest instance, one of China’s top bloggers Han Han called on authorities to first tackle problems at home before worrying about protecting the far-away Diaoyu islands. Similarly, in a Chinese cartoon doing the rounds on the internet, a character declares that he did not know whether or not China had the most land disputes with its neighbors, but what he did know was that it certainly had the most land disputes with its own citizens – a reference to the frequent land grabs and demolitions that corrupt authorities in China often turn a blind eye to and which are among the biggest causes of popular protests in the country.

Both externally and internally, the Chinese government and elite interest groups might need to rethink their strategies for dealing with crises. If economic interdependence is insufficient for China to compromise on territorial issues with its smaller neighbours, the latter are unlikely to behave any differently. Meanwhile, Chinese leaders must also realize that there are domestic consequences to encouraging nationalism as a means of reaction to troubles abroad.