The Japan Times, in an editorial says:

Still, Japan must realize that it has committed diplomatic mistakes in addressing this issue and make efforts to regain China’s trust. Following a Chinese trawler’s collision with Japan Coast Guard patrol ships near the Senkakus in September 2010, then Foreign Minister Seiji Maehara said that no agreement on shelving the Senkaku issue existed. Japan failed to fully explain to China that the government purchase of three of the five Senkaku islets was designed to forestall Tokyo Gov. Shintaro Ishihara’s apparent desire to destabilize Japan-China ties with his plan to buy the three islets and that the purchase only changes ownership status domestically.

Furthermore, Mr. Noda disclosed the plan to “nationalize” the three islands on July 7, the 75th anniversary of the 1937 Marco Polo Bridge Incident, which marked the start of the second Sino-Japanese War. Then in early September, a day after Mr. Hu asked Mr. Noda “not to make a wrong decision” during a meeting in Vladivostok, Japan officially announced the nationalization, causing Mr. Hu to lose face.

Which direction will Shinzo Abe’s new government take? Will his diplomats be manage to achieve this?

On Sept. 10, the Chinese Foreign Ministry called for returning to the joint understanding of the shelving of the Senkaku issue and resolving the dispute through negotiations. Japan should respond in kind and employ diplomacy characterized by caution, perseverance and ingenuity.

Or are we headed towards poorer bilateral ties between these two giant economies? What will that mean for the rest of us?

And now we have news of increased defence spending from the Abe government. How will the Chinese respond?