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Tensions between China and Japan  threatened to escalate today over Japan's detention of a Chinese fishing boat captain who was arrested near an island whose ownership is in dispute.
PHOTO
An activist takes part in a protest in front of the Japan Interchange Association, the de facto... Expand
An activist takes part in a protest in front of the Japan Interchange Association, the de facto Japanese embassy, in Taipei, Sept. 14, 2010. The activists claim sovereignty of a group of disputed East China Sea islets -- called Senkaku in Japan, Diaoyutai in China and Tiaoyutai in Taiwan -- after a Chinese fishing boat captain was detained by Japan following a collision with two Japanese coast guard boats last week. Collapse
(Pichi Chuang /Reuters)

Chinese Premier Wen Jiabao issued a stern warning today, stating, "If Japan clings to its course, China will take further action....Tokyo bears all responsibility for the situation and it will bear all consequences."

Meanwhile, in Tokyo Japan's chief cabinet secretary, Yoshito Songoku, appealed for a calm dialogue. "We hope Japan and China will hold high-level talks as soon as possible to ease the diplomatic row," he told a press conference.

But there are now concerns that China is escalating the war of words, hitting Japan where it hurts hardest, its economy. According to a report in the New York Times today, China is is halting shipments of rare-earth minerals to Japan. These vital minerals are used by Japan in high-tech products like hybrid cars and wind turbines. While China has since denied any official trade embargo the mere whiff of a halt in exports is likely to raise fears in Japan that China is moving to target the country's already ailing economy.