China-Japan spat could derail gas drilling talks (AP)

A tense maritime incident Tuesday in which two Japanese patrol vessels and a Chinese fishing boat collided near a disputed island chain triggered a diplomatic spat between the Asian giants.China expressed its "great concern" over the series of two collisions in the East China Sea, while Japan summoned a Chinese diplomat to protest the incident, in which no-one was reported injured and neither vessel sank.

Japan's Prime Minister Naoto Kan voiced regret Monday over a wave of angry anti-Japanese protests in China at the weekend, sparked by a tense territorial row between the Asian economic giants.Thousands of mostly young Chinese protesters took to the streets of at least four cities to assert China's claim to a disputed island chain where a maritime incident six weeks ago kicked off the heated diplomatic spat.

Japan on Wednesday said two Chinese fisheries patrol boats withdrew from waters near a disputed island chain that is at the centre of the worst diplomatic row in years between the Asian giants."The coastguard was using radar to monitor the two vessels," a coastguard spokeswoman said. "They moved away around dawn (on Wednesday) and left the area," she said.Beijing had sent the boats on September 23 to protect Chinese fishing vessels operating near the disputed islands in the East China Sea known as Senkaku in Japan and Diaoyu in China.

The back-and-forth between China, Japan, and the U.S. over disputed islands in the East China Sea this week continued ratcheting up, exposing policies that could prevent any diplomatic solution. China's new map:

Beijing has postponed diplomatic talks with Tokyo planned for later this month after Japan extended the detention of the captain of a Chinese trawler, as a spat between the Asian giants deepened.The neighbours had been scheduled to hold talks in mid-September on issues relating to the East China Sea, where the Chinese boat and two Japanese coast guard vessels collided Tuesday near an island chain claimed by both sides.

Beijing has postponed diplomatic talks with Tokyo planned for later this month after Japan extended the detention of the captain of a Chinese trawler, as a spat between the Asian giants deepened.The neighbours had been scheduled to hold talks in mid-September on issues relating to the East China Sea, where the Chinese boat and two Japanese coast guard vessels collided Tuesday near an island chain claimed by both sides.

Russia’s decision to give China a share of prized Arctic exploration licenses as part of a “breakthrough” deal signals how the world’s largest oil and gas producer and the biggest energy consumer are redrawing the global energy map.

Yves here. Please note I am posting this piece in order to stir reader discussion. The history of the islands known as Diaoyu and Senkaku, depending on what side of the fight you are on, is plenty tortured. One of my good buddies was predicting in the mid 1990s that they would be the casus belli for World War III. By Robert H. Wade, professor of political economy at the London School of Economics. Cross posted from Triple Crisis