Economic ties between China and Japan have flourished for years despite their on-and-off cold political relations. Their relationship used to be characterized as "politically cold but economically warm". But that is not the case anymore. The farce of "purchasing" the Diaoyu Islands played out by Japan has sparked outrage and protests across China.

Many Chinese have spontaneously boycotted Japanese goods and canceled their trips to Japan. A latest J.P. Morgan report says Japanese auto exports to China would fall by 70 percent in the October-December period. Obviously, bilateral economic and trade relations are under tremendous strain.

China and Japan established diplomatic relations 40 years ago. Since then the two countries' leaders, entrepreneurs and general citizens have made efforts to promote bilateral economic ties, and the two sides have become highly interdependent on the economic front. China is now Japan's largest trading partner and top export destination, while Japan remains China's fourth largest trading partner after the European Union, the United States and the Association of Southeast Asian Nations.