The return of the Diaoyu Islands controversy, prompted by the recent collision between a mainland trawler with Japanese patrol boats in waters off the disputed islands in the East China Sea, is threatening to scuttle bilateral ties.
And with the appointment of conservative hardliner Seiji Maehara as foreign minister in a Japanese cabinet reshuffle, many now fear Sino-Japanese ties will come under even more strain.
This series of events coincided with the anniversary of Japan's invasion of Manchuria 79 years ago, on September 18. People in Hong Kong, the mainland and overseas Chinese communities took to the streets to denounce Japan's wartime atrocities. Despite rising anti-Japanese sentiment, Tokyo extended the detention of the captain of the Chinese fishing boat, saying it had to investigate the incident further.
China has repeatedly raised the matter with the Japanese embassy in Beijing, to express its outrage. In retaliation, it has suspended bilateral exchanges at the provincial and ministerial levels, halted talks about increasing flights between the countries and postponed a meeting about coal.
The row over the Diaoyus - the Senkakus to the Japanese - first flared up 40 years ago. Japan's claim to the islets was backed by the US-Japan Okinawa Reversion Treaty of 1971, which said the Diaoyus were part of Okinawa. Since then the sovereignty dispute has continued between mainland China, Taiwan and Japan, sometimes touching off ultranationalist, anti-Japanese sentiment.
In the 1970s, Deng Xiaoping proposed setting aside territorial disputes and pursuing joint development - the approach that became the basis of the mainland's approach to boundary issues with Tokyo.