Image: Anti-Japan protesters in Hong Kong
AP
Anti-Japan protesters hold flags of the Japanese Imperial Army with "Japan get out" written on them during a demonstration in Hong Kong on Sunday.
updated 9/27/2010 12:26:14 AM ET 2010-09-27T04:26:14

Japan asked China to pay for damage to Japanese patrol boats hit by a Chinese fishing vessel near disputed islands, as simmering tension between the two Asian neighbors showed no signs of easing Monday.

Chief Cabinet Secretary Yoshito Sengoku's remarks came a day after Japan's prime minister rejected China's demand that Tokyo apologize and offer compensation for the arrest of the Chinese boat captain earlier this month near islands claimed by both countries.

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The captain was released Friday and has since returned to China, but the diplomatic back-and-forth since then indicates nationalistic sentiments stirred up by the incident are not dissipating.

"We will ask China to pay for damage incurred to coast guard vessels," Sengoku told reporters at a morning press conference, saying the request had been relayed to Beijing via diplomatic channels.

Sengoku also said it was now China's turn to decide whether it wants to repair bilateral ties.

"At this point, the ball is now in China's court," he said.

The tension has spread into other areas.

Since last week, China has been holding and questioning four Japanese employees of a construction company suspected of entering a military zone without authorization and illegally filming military facilities.

Meanwhile, Japanese trading company officials said starting last Tuesday, China had halted exports to Japan of rare earth elements, which are essential for making high-tech products. China's Trade Ministry denied that Beijing had tightened curbs.

Image: Zhan Qixiong
AP
Chinese fishing boat captain Zhan Qixiong arrives in Fuzhou, China, on Saturday.

The captain's Sept. 8 arrest following the collision near a chain of islands in the East China Sea called Diaoyu in China and Senkaku in Japan, has strained ties between the world's No. 2 and No. 3 economies to their worst point in years.

Beijing had exerted intense pressure on Tokyo to free the captain, cutting off ministerial-level dialogue with Tokyo and postponing talks on developing undersea natural gas fields between the nations.

'Broader point of view'
Hopes the captain's release Friday would ease tensions were dashed when Beijing demanded an apology and compensation — a demand that Prime Minister Naoto Kan flatly rejected Sunday.

"I have no intention of accepting (the demand) at all," Kan said. "It is important for both sides to act with a broader point of view."

Tokyo's counterdemand for compensation may be an attempt to blunt criticism at home that Japan caved in to Chinese pressure in its decision to free the captain.

The collision incident is one of several spats straining China's ties with its Asian neighbors while its increasingly powerful navy enforces claims in disputed waters.

On Friday, President Barack Obama and Southeast Asian leaders sent China a firm message over territorial disputes, calling for freedom of navigation and peaceful resolution of disputes in seas that China claims as its own. Obama also pledged to take a strong role in regional affairs.

Beijing was furious after U.S. Secretary of State Hillary Clinton told a regional security forum in Vietnam in July that the peaceful resolution of disputes over the Spratly and Paracel island groups in the South China Sea was an American national interest. Beijing said Washington was interfering in an Asian regional issue.

The four Japanese being held by Chinese authorities are employees of Fujita Corp., a Japanese construction company. They were in China working to prepare a bid for a project to dispose of chemical weapons abandoned in China by the Japanese military during World War II, the company said.

Officials from the Japanese Embassy in Beijing met with the four men on Saturday, said company spokesman Yoshiaki Onodera. They are in good health and are being questioned by Chinese authorities at an undisclosed hotel.

"But obviously they are hoping for their safe return as soon as possible," Onodera said.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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