If there was a script, this wasn't in it. China's president, Hu Jintao, convened an emergency session of the Politburo's powerful Standing Committee two weekends ago, just hours after anti-Japanese protests in the capital first turned violent. Thousands of marchers had converged on the Japanese Embassy, breaking windows and chanting "Kill the Japanese!" and "Come out, Japanese pigs!" Diplomacy aside, Hu's big worry was the threat of a new Tiananmen-style showdown. A well-informed Chinese source tells NEWSWEEK that in a jittery scene reminiscent of the leadership's 1989 war room, Hu warned against allowing the turmoil to spread. That, he said, would only give dissidents "a pretext to vent their dissatisfaction."
His concern came too late. Unrest erupted in Guangzhou, Shanghai and other cities while police fought to maintain order. The public outcry was supposedly set off by advance reviews of a revisionist history textbook to be released in Japan this May. (Even Japan's leading teachers' association has denounced the book for its skimpy treatment of Japan's wartime atrocities in Asia.) But in those early stages, at least, it also may have been quietly fanned by the Chinese government. The real conflict is about the future, not the past. It's about two economic giants competing for vital energy reserves. It's about both sides' growing assertiveness on questions of regional security, including Taiwan. Above all, it's about which one will have the dominant role on the west side of the Pacific.
Japan may even have to abandon its dream of a seat on the United Nations Security Council. Proposed reforms would expand the council's permanent roster to include Germany, Brazil, India and Japan. But Beijing is threatening to use its Security Council veto to thwart the Japanese. "When we look back, this will be seen as a turning point in Sino-Japanese relations," says Minxin Pei, a Sinologist at the Carnegie Endowment for International Peace in Washington. "Both countries are becoming locked into a nasty relationship."
Late last year Japan detected a Chinese nuclear sub lurking in its territorial waters. The Japanese pursued the trespasser for two days, and Tokyo demanded an apology from Beijing. "What's notable wasn't the Chinese sub's presence, but the fact that the Japanese chased it away," says Adam Segal, a China analyst with the Council on Foreign Relations. "In the past, Tokyo would've kept quiet and let the sub go." Control over territorial waters is an increasingly sore topic. Last week Tokyo announced it would grant commercial offshore drilling rights in a disputed area of the East China Sea, not far from the scene of the sub incident. China, which surpassed Japan two years ago as the world's No. 2 oil consumer, has already begun drilling at the edge of the same undersea field. The formation could hold as much as 200 billion cubic meters of natural gas.
The rivals have ample reason to make up--not least being $200 billion a year in two-way trade. Last year China edged out the United States as Japan's No. 1 trading partner, and Japanese firms and factories on the main-land employ an estimated 1 million Chinese, including 50,000 working for Panasonic alone. Now anti-Japan militants are vowing to boycott Japanese goods--and to keep on demonstrating. But for China's leaders, there's one thing even more compelling than economics: fear of losing control.