East China Sea, Diaoyu | featured news

China reserves the right to take strong countermeasures if Japan "creates incidents" in the waters around a group of disputed uninhabited islands in the East China Sea, a Chinese vice foreign minister said on Friday.

Some Japanese firms have temporarily shut factories and shops in China after angry protests over a territorial dispute, with Chinese state media warning on Monday that Japan could suffer another "lost decade" if trade ties sour.

Thousands of Chinese besieged the Japanese embassy in Beijing on Saturday, hurling rocks, eggs and bottles. Protests spread to other cities in a dispute over a group of remote islands.

Six Chinese maritime surveillance ships entered waters around a group of islands at the center of a heated territorial dispute between Tokyo and Beijing, ignoring warnings from the Japanese authorities.

Vast oil reserves, trillion-dollar trade routes, fervent nationalist sentiments, competing territorial claims and bitter histories – the waters off the east coast of China are a sea of money and a sea of trouble.

Japan on Friday sent home the first group of Chinese activists detained after landing on an island claimed by both Tokyo and Beijing, a move China welcomed but at the same time warned its neighbor against any further escalation in tension.