Anti-Japan demonstrations erupted in China over the weekend, highlighting a sovereignty dispute between Asia’s two biggest economies ahead of a major leadership transition later this year for China.

China is not stopping the anti-Japan demonstrations in an effort to appear confident at home, but neither Beijing or Tokyo show signs of allowing a return to the lows of 2005, when riots across China targeted Japanese shops and lasted for about a month.

“The Chinese government wants to show the Chinese people they are not taking a subtle approach on sovereignty issues, especially regarding Japan,” says Shi Yinhong, international relations professor at Renmin University of China in Beijing.

Since former Japanese Prime Minister Junichiro Koizumi left his post in 2006 after a series of actions that upset China, newer leaders in Tokyo have tried to get along with Beijing and its impossible-to-ignore global economic might.

But on Aug. 15, Japan arrested 14 activists and journalists from China, Hong Kong, and Macau who landed on the Senkaku Islands, which Japan claims. China and Taiwan also claim the East China Sea islets, which sit near fisheries and undersea oil tracts. The uninhabited islets are called the Diaoyu Islands in China and the Tiaoyutai in Taiwan.

Japan controls the islands 138 miles east of Taiwan and deported the activists on Aug. 17. Yesterday about 150 Japanese legislators and activists on 21 boats approached the islets in an apparent countermove against China.

Related demonstrations in cities around China raised reminders of much larger protests in 2005 over a Sino-Japanese series of flaps related to territory and World War II memories. News reports say that over the weekend some protesters destroyed Japanese-themed shops and Japanese made cars.

‘Tough acts abroad reap harvest at home’

Beijing, which wants to be seen at home as a rising superpower, used the events of the past week to bash Japan for political gain at home, analysts say.

Japan occupied China from 1937 to 1945. Modern Sino-Japanese territorial disputes include oil fields in the East China Sea as well as the Senkaku Islands. Those issues have fanned mass distrust of Japan among the Chinese population.

Chinese leaders must spare subtlety to prove their foreign policy mettle ahead of the Communist Party’s 18th National Congress later this year, says Lin Chong-pin, strategic studies professor with Tamkang University in Taiwan. The Congress will decide who takes the nation’s top leadership jobs.

“Tough acts abroad reap harvests at home,” Mr. Lin says. “Top leaders cannot afford to appear meek.”

Using Taiwan

So China’s current guard used the conflict from last week to make a range of statements, says Liu Yih-jiun, public affairs professor at Fo Guang University in Taiwan. The activists set out from Hong Kong in an appeal to patriotism in the Chinese-run territory and took a Taiwanese flag, a tribute to Taipei’s claim to the Senkakus, Mr. Liu notes, calling both moves “unconventional.”

Taiwan and China have worked together economically since 2008 after decades of hostilities. Taiwan lodged a protest with Japan on Sunday. “I think [the Chinese activists] were carrying out government policy, that’s beyond a doubt,” Liu says.

China’s government had formally protested to Japan a day earlier as the Japanese activists set off for the islets. Beijing expressed no room for compromise.

“China … urges Japan to put an end to its actions that seek to undermine China's territorial sovereignty,” a foreign ministry spokesman said via the official Xinhua News Agency. “The Japanese side should properly handle the current issue and avoid seriously damaging the overall situation of China-Japan relations.”

Beijing wants to send a message to Washington as well that it’s serious about territorial claims, Liu adds. The US is also pressuring China to cooperate with five other claimants to disputed territory in the South China Sea.

Japan’s moves to defend the Senkakus also point to local consumption: Approval ratings for Prime Minister Yoshihiko Noda’s government were down to 22 percent as of Aug. 6, the Asahi Shimbun newspaper found in a survey. The paper cited parliamentary infighting and said Mr. Noda’s rating came near a “critical zone.”

End in sight?

But there are signs that both sides want to quit the conflict.

The Chinese government may have allowed the weekend protests to let citizens vent anger that favors the central leadership’s goal of looking strong. But analysts believe it will not let those actions grow to 2005 levels, when 20,000 people marched – with government encouragement – in one event and caused major damage. Protests this time were reported to be as small as 200 people. That year, Japan's government sought compensation for damage to diplomatic property as Japanese, fearing violence, canceled trips to China.

Japan also freed the Chinese activists it arrested within two days, faster than it handed back a ship captain during a collision near the Senkakus in 2010.

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China, with the world’s second biggest economy, needs the lucrative investment from Japan, which is No. 2 in Asia but growing only slowly. Japanese automotive and PC makers, for their part, value China’s vast consumer markets and low-cost manufacturing bases.

“Over time, both Tokyo and Beijing will apply psychological pressure but will not let it spill over,” Lin says.