China Warns It Will Respond "Forcefully" To Japanese Violation Of Its "Territorial Sovereignty"

China Warns It Will Respond "Forcefully" To Japanese Violation Of Its "Territorial Sovereignty."(CD).BEIJING - China on Friday said it will take forceful measures in response to any moves that challenge the country's bottom line on sovereignty. "We want to live in friendship with all countries including Japan, but we have to uphold our principles and bottom line," Chinese Vice Foreign Minister Zhang Zhijun told reporters Friday night. Zhang said China pursues a policy of friendship and partnership with its neighboring countries and stays committed to the path of peaceful development. "However, should anyone want to challenge China's bottom line on the issue of sovereignty, China will have no alternative but to respond forcefully so as to remove disturbance and obstacles and move steadily on the path of peaceful development," he said. Zhang said Japanese government's "purchase" of the Diaoyu Islands, which was announced on September 10, constituted a grave violation of China's territorial sovereignty. He said the move has caused "the most severe repercussions" on China-Japan relations since the two countries normalized diplomatic relations in 1972.
The Diaoyu Islands are part of China's territory in accordance with historical fact and law, Zhang said. Japan has no right to buy or sell Chinese territory in any way and no transaction is allowed over even one inch of the Diaoyu Islands or anything on it, he said. Zhang said the "purchase" farce had been orchestrated by Japan's right-wing forces. The Japanese government, instead of doing anything to stop the right-wing forces from violating China's sovereignty and sabotaging China-Japan relations, has stepped in and "purchased" the islands itself. "What the right-wing forces had wanted to do and achieve was finally accomplished by the Japanese government," he said. The dangerous political tendency of the Japanese right-wing forces had once plunged Asia into a major disaster. Such forces, if not stopped but used, if encouraged and indulged out of domestic political needs, will become further emboldened and lead Japan further down a dangerous path, Zhang said. Some Japanese political figures have swaggered into the Yasukuni Shrine which honored WWII war criminals and paid tribute there without feeling guilty or ashamed, dismissing the feelings of the people in other Asian countries, which were victims of Japan's past aggression, he said. If Japan cannot face up to history, cannot examine its conscience and sincerely correct its mistakes, no matter how developed its economy is, it will never stand up morally or psychologically, he said. Zhang said China has expressed its adamant opposition to the illegal "purchase" of the islands from the very beginning. "Yet the Japanese government has turned a deaf ear to China's warning."
The Chinese government has taken a series of forceful measures to safeguard its territorial sovereignty. No external threat or pressure could weaken, not even in the slightest way, the resolve of the Chinese government and people to uphold China's territorial sovereignty, he said. China and Japan have maintained contact and consultations on the issue of Diaoyu Islands through various channels and in different forms. The two sides started vice foreign ministerial-level consultations on Diaoyu Islands in Beijing on September 25. In the contact and consultations at all levels, China has stated its government's solemn position on the issue and strong determination to safeguard territorial integrity, Zhang said. China has urged Japan to have a correct reading of the situation, abandon any illusion and face up to reality. Japan should correct its mistake with credible steps and make real efforts so that the current problem will be handled properly, he said. "We do not want to see the situation spin out of control. But this, however, is not to be decided by the Chinese side," Zhang said. He demanded Japan take seriously China's solemn position and major concerns, and stop all actions that undermine China's territorial sovereignty.Read the full story here.

Bond Wars: Chinese Advisor Calls For Japanese Bond Dump.

                                                     Beijing:Japanese embassy

Bond Wars: Chinese Advisor Calls For Japanese Bond Dump.(ZH).By Tyler Durden.Earlier today we casually wondered whether the US stands to lose more by supporting China or Japan in their escalating diplomatic spat, considering the threat of a US Treasury sell off is certainly not negligible, a dilemma complicated by the fact that as today’s TIC data indicated both nations own almost the same amount of US paper, just over $1.1 trillion. In a stunning turn of events, it appears that China has taken our thought experiment a step further and as the Telegraph’s Ambrose Evans Prichard reports, based on a recommendation by Jin Baisong from the Chinese Academy of International Trade (a branch of the commerce ministry) China is actively considering “using its power as Japan’s biggest creditor with $230bn (£141bn) of bonds to “impose sanctions on Japan in the most effective manner” and bring Tokyo’s festering fiscal crisis to a head.” I.e., dump Japan’s bonds en masse.
Should this stunning recommendation be enacted, not only would it be the first time in world history that insurmountable credit is used as a weapon of retaliation, it would mark a clear phase transition in the evolution of modern warfare: from outright military incursions, to FX wars, to trade wars, culminating with “bond wars” which could in the span of minutes cripple the entire Japanese fiscal house of cards still standing solely due to the myth that unserviceable debt can be pushed off into perpetuity (as previously discussed here).
Not needing further explanation is the reality that should China commence a wholesale Japanese bond dump, it may well lead to that long anticipated Japanese bond market collapse, as creditor after creditor proceeds to sell into a market in which the BOJ is the buyer of only resort in the best case, and into a bidless market in the worst.
The immediate outcome would be soaring inflation as the BOJ is forced to monetize debt for dear life, buying up first hundreds of billions, then trillions in the secondary market to avoid a complete rout, matched by trillions of reserves created out of thin air which may or may not be halted by the Japanese deflationary gate, and which most certainly could waterfall into the economy especially if Japanese citizens take this as an all clear signal that the Japanese economy is about to be crippled in all out economic warfare with the most dangerous such opponent, and one which just defected from the “global insolvent creditor” game of Mutual Assured Destruction. One thing here is certain: Japan picked on the wrong country when two weeks ago it "purchased" the disputed Senkaku Islands. If it thought that China would just forgive and forget with a wink, it was dead wrong.
It now has several two options: undo all that has happened in the past fortnight, in the process suffering tremendous diplomatic humiliation, leaving Senkaku in the "no man's land" where they belong, or push on, and suffer the consequences. And the consequences for the country represented by the question market in the chart below, would be tragically severe, as would they for the entire "developed", insolvent and daisy-chained world.Hmmm......."Yu So Phukt".Read the full story here.

Video - Islands dispute hits China-Japan trade ties, Major firms temporarily shut factories and offices

Escalating tensions in China over disputed islands have forced some Japanese companies there, including electronics-production giants Canon and Panasonic, to suspend work. As protests continued on Monday over the territorial dispute, China pledged to protect Japanese citizens and property and urged anti-Japan protesters to express themselves in an "orderly, rational and lawful" way.
Hong Lei, Chinese foreign ministry spokesman, said it was up to Japan to correct its ways and the direction of developments was now in Japan's hands. China's pledge came after Canon announced that it will stop production at three of its four Chinese factories on Monday and Tuesday, citing concerns over employees' safety. Panasonic has taken similar steps at its plants in China. Toyota Motor Corp said it is tallying losses from the violence, including a suspected arson attack on a dealership in eastern China's Shandong province.
All Nippon Airways Co reported a rise in cancellations on Japan-bound flights from China.A commentary in the People's Daily newspaper said the Japanese economy had already experienced two lost decades from the 1990s and was suffering further weakness in the aftermath of the world financial crisis and 2011 earthquake. "Japan's economy lacks immunity to Chinese economic measures," the commentary said although it added that given the interdependency of the two, sanctions would be a "double-edged sword" for China. The commentary - which only appeared in the paper's overseas edition - said that China in principle opposes economic sanctions to solve international disputes and would have to weigh carefully any decision to impose them. "Amidst a struggle that touches on territorial sovereignty, if Japan continues its provocations China will inevitably take on the fight," the commentary said.Hmmmm.........“Men can’t live without face, trees can’t live without bark.”.Read the full story here.

Video - Chinese navy holds drills as protests against Japan intensify.