The Wall Street Journal, 19 September 2012

The protesters smashing and burning Japanese businesses in Chinese cities these last few days are hard to fathom. Even the “peaceful” marchers carried alarming banners, some calling for the annihilation of Japan. For what?

The current fuss is over a few uninhabited outcrops in the East China Sea known as the Diaoyus in China and the Senkakus in Japan, which the U.S. restored to Japanese sovereignty (along with Okinawa) in 1972. Even U.S. Defense Secretary Leon Panetta was greeted Tuesday by a small protest outside the Beijing Embassy. This was for the sin of military support for American ally Japan, including the announcement that the U.S. would deploy a second X-band radar to Japan for missile defense.

The last widespread outbreak of anti-Japanese violence in China was in 2005. Then as now the question was asked: To what extent did Beijing orchestrate the protests? The answer isn’t entirely clear. Chinese state media initially fanned the flames of hatred but then tried to tamp them down. The police gave the demonstrators free rein but also directed them to go home once they vented their anger.

This dual approach typifies Beijing’s attitude. The Communist Party benefits from keeping anti-Japanese feeling simmering, since it derives its historic legitimacy from (supposedly) driving out the Japanese invaders and restoring China to its proper place in the world. But anger against Japan must also be kept within bounds, lest protesters blame China’s leaders for not being more assertive with Tokyo.

Japan’s own nationalists make the legacy of past wars harder to handle. In 2005, the fight was mostly about Japanese school textbooks that glossed over Japan’s atrocities during the Second World War. This time Tokyo Governor Shintaro Ishihara proposed that the city buy the Senkakus from their private owners. Knowing that Mr. Ishihara, an extreme nationalist, would stir up trouble, the central government stepped in to purchase the islands.

In doing so, Japanese Prime Minister Yoshihiko Noda acted responsibly to minimize friction with Beijing. Yet China jumped on the move as a provocation. Perhaps some form of diplomatic protest was necessary for Beijing to preserve its claim to the islands. Yet Beijing has now taken steps that increase the risk of an armed skirmish. Several coast guard and fisheries vessels confronted Japanese forces last Friday, and on Monday Chinese media reported a flotilla of fishing boats was on its way to the islands.

All this suggests that Beijing is seeking a way to distract the population from bad economic news and a succession of political embarrassments. Still, it would be a mistake to underestimate the depth of Chinese nationalism or view the Communist Party’s actions as purely cynical.

As scholar Guo Yingjie has written, modern China harbors two strains of nationalism. The cultural variety emphasizes the preservation of traditions and values that are seen as the essence of being Chinese. The political variety focuses on the creation of a strong state capable of defending its sovereignty, and sees traditional culture as a drag on development.

The clash between these two visions of China has created an identity crisis, Mr. Guo believes, as well as a love-hate relationship with foreign cultures. In recent years the Communist Party has tried to bring them together by touting a “China model” that incorporates Confucian values. But a return to nativism could hamper the adoption of foreign ideas and reforms that China needs to take the next steps toward an innovation-based economy. So far China has not sought to overturn the international status quo as the Soviet Union did, but this new super-nationalism could change that.

Ultimately, China will pay a price for putting its nationalist impulses ahead of its national interest in cultivating foreign trade and investment and acquiring a reputation as a stable, rational and trustworthy power. The question is, how high will the price have to go—and who else will have to share in paying it—if Chinese leaders don’t put their worst impulses in check.

http://online.wsj.com/article/SB10000872396390444450004578001760904647792.html