Both countries reiterate their claim to East China Sea islands in meeting on sidelines of UN General Assembly.

China has accused Japan of a “severe infringement” on its sovereignty in talks at the United Nations between their foreign ministers over a territorial row.

China said on Wednesday that Yang Jiechi, foreign minister, told his Japanese counterpart Koichiro Gemba in New York that ties between the Asian powers would remain strained until Japan reversed its purchase of disputed East China Sea islands.

The Chinese comments came in an apparently heated discussions on the sidelines of the UN General Assembly on Tuesday and were detailed in a statement issued in Beijing by the foreign ministry.

“The Chinese side will by no means tolerate any unilateral action by the Japanese side on the Diaoyu Islands,” Yang told Gemba, according to the statement.

The meeting in New York was the highest level diplomatic contact between the two countries since an escalation in tensions this month after Japan’s central government bought the isolated East China Sea islands from their private owners.

The move sparked anti-Japan protests across China.

Strident in tone

China’s meetings with Japanese diplomats suggest that China does not want the tensions over the island chain, believed to be in waters rich in natural gas deposits, to lead to a rupture in relations.

Yang, however, was strident in his tone.

“The Japanese move is a gross violation of China’s territorial integrity and sovereignty, an outright denial of the outcomes of victory of the world anti-fascist war and a grave challenge to the post-war international order,” Yang was quoted by Xinhua as saying.

Japan said that the the purchase of the islands was meant to avoid a more provocative bid from Shintaro Ishihara, the mayor of Tokyo, who planned to have his metropolitican government buy them.

The Japanese government says that it is trying to keep communications channels open.

China postponed a ceremony marking the anniversary of the resumption of diplomatic ties with Japan, but an official at the Japan-China Economic Association said Fujio Cho, Toyota Motor Corp chairman, and Hiromasa Yonekura, chairman of Japanese business lobby Keidanren, and other representatives of Japan-China friendship groups would attend an event on Thursday in Beijing.

Patrol vessels from the two countries have also been playing a tense game of cat-and-mouse in the waters near the disputed islands, raising concerns that an unintended collision or other incident could escalate into a broader clash.

Production slowed

Japanese automakers, including Toyota Motor Corp and Nissan Motor Co., are cutting back production in China following anti-Japan protests over the islands that shuttered dealerships and darkened their sales outlook in the world’s biggest car market.

Production slowdowns are a normal feature of the auto industry in mature markets like the United States and Japan, where they are used to keep inventories from ballooning and avoid pressure for automakers to offer deep discounts that erode profitability.

But the steps by the Japanese automakers to cut output in China are an anomaly in a market that has driven the industry’s global growth for a decade and where most automakers had been adding capacity until China’s economic slowdown in recent months.

That caused production to outpace sales, resulting in larger-than-normal inventory levels at many car dealers.

“For the time being, I think you’re going to see Japanese automakers’ sales in China down by 20 to 30 percent,” said Koji Endo, auto analyst at Advanced Research Japan.

“The last time we had protests like this in 2010, the effects only lasted about a month, but I think this time is going to be different. This is going to have a serious impact.”

There were also signs the tensions were having an effect on other sectors. Most notable was air travel, with All Nippon Airways Co Ltd (ANA) announcing on Wednesday that 40,000 seat-reservations were cancelled for flights between Japan and China from September to November.