The dispute over the Diaoyu Islands (known by the Japanese as the Senkaku Islands) in the East China Sea has remained a thorny issue between China and Japan. Of course, there are other longstanding tensions between Beijing and Tokyo. A visit by Japanese officials to Tokyo's Yasukuni Shrine is one such example sparking controversy, as the shrine is seen by China as a symbol of Japan's militarist role and aggression during World War II.
Although a point of contention between the two countries, the shrine visit is an issue largely of identity and perception which is unlikely to lead to military confrontation. The dispute over the Diaoyu Islands, however, is a matter that could very well lead to physical conflict. From 1972 to 2012, China and Japan managed to avoid altercations in the East China Sea by mutually committing to a tacit understanding and shelving their differences over sovereignty. This compromise was broken in 2012, when Japan nationalised the main islands there. China has since sent official aircraft into the territorial space and official vessels into the territorial waters on a frequent basis to challenge Japan's control.
In November 2013, China established the East China Sea Air Defence Identification Zone, covering the Diaoyu Islands. Recently, Chinese warships have been reported sailing in and out of what Japan says are its territorial waters surrounding the Diaoyu Islands.
China has justified this new posture as a result of Japan's provocation through nationalising the islands. Japan has deemed China's move aggressive and, in response, is enhancing its countermeasures by building up the strength of coastguard and navy personnel deployed nearby. Japan has recently threatened to open fire should Chinese naval ships enter the territorial waters there. As part of his Asia-Pacific "rebalancing", US President Barack Obama made his position open and clear during his state visit to Tokyo in April 2014: that the US-Japan Security Treaty would be applicable to these islands.
Despite their intense relations, China and Japan have managed their fragile partnership. But such relations are highly volatile and are framed by crisis prevention and management.
In terms of crisis prevention, the two militaries concluded their "Urgency Maritime and Sea Liaison Mechanism", which serves as such a framework, and has facilitated high-level political dialogue. Lately, China has taken measures to reduce the frequency and intensity of dispatching official aircraft and vessels into the disputed area.
Since China's Marine Surveillance sent its official plane into the airspace of the Diaoyu Islands on Dec 9, 2012, it has refrained from doing so again. It has reportedly also cut the frequency of dispatching official vessels into the territorial waters by half over the past four years, although it may prolong the presence of its coastguard vessels inside the contested area.
But Chinese and Japanese coastguard vessels are continuously at a stalemate, which presents physical challenges toward each other. China has demanded Japan revoke its decision to "nationalise" the islands, which Japan is politically unable to accept.
Given China's current presence in the territorial waters, it might be unwilling to withdraw its vessels from those waters for good. Under such circumstances, it is important to implement their "Urgency Maritime and Air Liaison Mechanism" as soon as possible, so as to not spark a war, despite confrontation. Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe's bilateral meeting in Hangzhou following the G20 is a hopeful sign that this crisis management mechanism can succeed.
Fundamentally, China and Japan must lift their crisis prevention and management mechanisms and yield to a peace maintenance institution in order to settle this dispute. This would warrant a profound change of their position toward the Diaoyu Islands by a mutually acceptable permanent settlement of the dispute, or the sharing of sovereignty.
Alternatively, they could commit to co-building the disputed area as a demilitarised peace zone. As long as they concur that it is undesirable to settle matters with armed conflict, they need to approach the dispute through mutual cooperation and concession.
For a vision of a peace zone without militarisation, the parties in dispute might legally commit not to sending any military into the territorial zone, while allowing mutual access in and out of the area. Through incremental steps, China and Japan can prove they are able to reconcile and attain a peaceful relationship.
Shen Dingli is associate dean, Institute of International Affairs, Fudan University.