China, Japan land dispute worsens

TOKYO -- A territorial dispute between China and Japan worsened Sunday as Prime Minister Yoshihiko Noda said he'll demand the Chinese government ensure the safety of Japanese citizens, thousands protested in Chinese cities and Toyota Motor Corp. and Panasonic Corp. reported damage to their operations.

Demonstrators took to the streets in a dozen cities across China including Beijing, Shanghai and Guangzhou, calling for Chinese sovereignty over disputed islands and the boycott of Japanese goods. In Shenzhen, police used tear gas and water cannons to stop protesters from reaching a Japanese department store, Radio Television Hong Kong reported.

"I intend to strongly demand that the Chinese government ensure security" of Japanese citizens, Noda said on public broadcaster NHK.

Tensions between Asia's largest economies escalated after Noda's government said last week it would purchase disputed islands from their private Japanese owner, prompting China to dispatch government vessels near the islands known as Senkaku in Japanese and Diaoyu in Chinese. The row comes as both countries grapple with a global economic slowdown and China prepares for once-a-decade leadership change.

"This is another blow for the global economy," said Andy Xie, formerly Morgan Stanley's chief Asia economist.

Tokyo Governor Shintaro Ishihara triggered the dispute in April when he said he might use public funds to buy the islands. Tensions escalated after Japan's cabinet approved the purchase of the islands last week.

-- Bloomberg News