Japanese Prime Minister Junichiro Koizumi outraged China and other Asian nations on Monday by paying another controversial visit to the Yasukuni war shrine seen by critics as a symbol of Tokyo's wartime aggression.
Koizumi said on Wednesday that he did not accept the argument that relations with China and South Korea would be fine if he stopped visiting the shrine.
"The issues with China and Japan-China relations are not confined to Yasukuni," he said in a parliamentary debate.
"Relations and interdependencies have been deepening in various areas," he said. "I will make efforts to gain an understanding from China and South Korea."
South Korean Foreign Minister Ban Ki-Moon said on Wednesday he had put on hold a planned trip to Japan in protest over the visit to Yasukuni, which honors 2.5 million Japanese war dead including some war criminals from World War II.
And China on Tuesday cancelled Japanese Foreign Minister Nobutaka Machimura's planned visit to Beijing.
Analysts say the latest friction has put a spotlight on fierce rivalry between Tokyo and Beijing that has intensified as China's economy booms while Japan struggles to break out of a decade of economic stagnation.
"The two countries are always stressing the need for cooperation and dialogue," said Masahiro Wakabayashi, professor of international politics and East Asian affairs at Tokyo University.
"But in reality they are not willing to yield an inch as they are racing for Asia's leadership," Wakabayashi said. "I'm afraid that frictions between the two countries are likely to grow for the time being."
Analysts warned the latest row may spread to other conflicts between the two countries, including talks on a contested gas field in the East China Sea.
On the region's security front, Japan irked Beijing late last year by joining the US in pointing out China's increasing defense spending and tensions in the Taiwan Strait.
Japan had previously been reluctant to address the issue directly for fear of angering its powerful neighbor, a major trading partner.
Confrontation also surfaced as China led a campaign against Japan's fading bid to win a permanent seat on the UN Security Council.
"[The Chinese] have already won in the sense that the announcement of the United Nations Security Council seat has been postponed," said Gilles Guiheux, director of the French Centre for Research on Contemporary China in Hong Kong.
However, analysts also note that both China and Japan have their problems.
"For China, the political system -- the Communist control -- is the bottleneck," Wakabayashi said. "How China can manage to expand itself under its political system is always questioned."
For Japan, winning Asia's understanding for its sincere apology for wartime aggression is a prerequisite for regional leadership, said Kaoru Okano, professor of politics at Meiji University in Tokyo.
"But Prime Minister Koizumi has failed to make an effort to win Asia's understanding," Okano said. "If Koizumi's successor follows suit, Asian countries will continue turning their back."
But analysts see little chance of massive demonstrations in China like those seen earlier this year against the approval by Tokyo of a Japanese history textbook that Beijing said downplayed Japan's past atrocities as well as Japan's bid for a permanent seat on the UN Security Council.
"Do they really want to scare the tens of thousands of Japanese in Shanghai? Part of the Shanghai economy depends on Japanese investment, something like 10 percent or even more," Guiheux said.
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