Japan's decision Monday to purchase disputed islands China says are part of its territory is raising tensions between the two Asian neighbors.
Following a meeting of Japanese government leaders, Chief Cabinet Secretary Osamu Fujimura announced Tokyo's plans to push forward with the deal and Japan's aims to nationalize the uninhabited islands.
The islands, which are located near rich fishing grounds and near waters believed to hold potential oil reserves, are known as Senkaku in Japan and Diaoyu in China.
Fujimura tried to play down the potential impact of the decision, stressing that Japan was just transferring ownership of the land from private to state hands.
Fujimura says Japan does not want the issue to interfere with Sino-Japanese relations. He says it is important to avoid misunderstandings and Tokyo has been keeping in close contact with China over the issue through diplomatic channels.
The decision comes just a day after Chinese President Hu Jintao warned Japan against making any wrong decisions over the dispute.
The Chinese Foreign Ministry issued a stern statement chastising Japan over the decision and noting the days of bullying China are over. The statement said the Chinese government will not sit back and watch as its sovereignty is violated.
China Foreign Affairs University Political Scientist Wang Fan says the government is likely to take some tough measures against Tokyo in response.
Wang says the Japanese government should know that by acting this way there will be consequences, and it will have to face those consequences. He says Japan's decision could have a big impact on trade and diplomatic relations.
Just how far the situation could escalate is unclear.
The last time tensions rose severely between Japan and China was in 2010, when a Japanese coast guard ship collided with a Chinese trawler it was chasing away from the disputed islands.
After Japanese authorities decided to detain the Chinese captain of the ship, Beijing responded by suspending political and cultural exchanges and stopping the export of rare earths to Japan.