If the recent tension between China and Japan over disputed islands in the East China Sea is any indication, relations between the world’s second and third largest economies will not be smooth for some time to come, despite ever-increasing bilateral trade and investment. That is because the latest rush by both countries to affirm their sovereignty over the islands ― called Senkaku in Japanese and Diaoyu in Chinese ― reflects a sense of insecurity and a perception that the other side is taking an aggressive stand, which means that the issue is unlikely to be resolved in the foreseeable future.
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