By Kiyoshi Takenaka and Chris Buckley
TOKYO/BEIJING (Reuters) - Japan said it will ask China to pay for damage to its patrol boats suffered in a collision with a Chinese trawler, as Asia's top two economies continue to bicker over the affair.
China's newspapers accused Japan of exploiting the dispute to bolster its alliance with the United States and warned that Tokyo couldn't afford the economic price of confrontation with Beijing.
Verbal volleying has continued for days in a quarrel between the two neighbours over Japan's detention of the Chinese skipper of the fishing boat that collided with two Japanese coastguard ships, although he was released and returned home on the weekend.
China, growing more assertive on the regional and global stage, has demanded that Japan apologise and offer compensation.
Japan has rejected those demands and said it would instead ask China to cover the damage from the September 7 incident near disputed isles, known as Diaoyu in China and Senkaku in Japan.
"Naturally, we will be asking for the boats to be returned to their original condition," Chief Cabinet Secretary Yoshito Sengoku said.
The dispute has raised concerns about damage to Sino-Japanese trade ties at a time when Japan is becoming increasingly reliant on China's dynamism for growth.
It has also illustrated the fragility of ties troubled by Chinese memories of wartime occupation by Japan, military mistrust and maritime territorial disputes.
China has recently detained four Japanese citizens on suspicion of violating the law regarding protection of Chinese military facilities, though the exact offence is not clear.
Japanese Foreign Minister Seiji Maehara on Monday summoned the Chinese ambassador to Japan, Cheng Yonghua, and told him that the case should be handled swiftly.
Two Chinese fishery patrol boats has been in the area near the disputed islands since Friday, despite repeated complaints from Japan's foreign ministry, Sengoku said.
PLAYED UP 'CHINA THREAT'?
Comments in Chinese state media underscored the degree of distrust of Japanese intentions in Beijing, and the conviction that the dispute over a single boat captain carried much broader geopolitical implications.
The People's Daily, the key mouthpiece of China's ruling Communist Party, said political forces in Japan "exploited intensified contention between China and Japan to play up the 'China threat'" and to build on a deepening of Tokyo's alliance with the United States.
Japan had underestimated China's resolve and misjudged where its own interests lay, said a commentary in the newspaper. Up until now, China's main official newspaper has not given extensive editorial comment on the dispute.
"Japan's development and prosperity cannot be divorced from China's development and prosperity, and Japan cannot afford the price of continued contention with China," said the commentary.
The United States had to balance its alliance with Japan with the need to win cooperation with China, said the newspaper.
Susan Shirk, a professor at the University of California, San Diego, said China's continued rancour appeared to be driven, at least partly, by a desire to please public opinion and powerful domestic constituencies.
"You can always count on the Japan relationship as the one where you can look tough, look strong, and satisfy the public," said Shirk, who served as U.S. Deputy Assistant Secretary of State responsible for China under former president Bill Clinton.
Japan has called for calm, although the government is under fire from its own domestic media for "caving in" to Chinese pressure by releasing the captain after China detained the four Japanese citizens. Japan has denied a link.
Japanese officials have also been concerned about the economic fallout from the spat. Hiromasa Yonekura, head of Japan's biggest business lobby Keidanren, on Monday called for both sides to be cool-headed.
China became Japan's biggest trading partner last year and bilateral trade reached 12.6 trillion yen ($150 billion) in the January-June period, a jump of 34.5 percent over the same period last year, Japanese data shows.
Some Chinese customs offices have began stricter checks on shipments to and from Japan, causing delays, the Mainichi newspaper in Japan said, as concerns grow that Beijing is holding back shipments of rare earth minerals vital for electronics and auto parts. China has denied of an export ban to Japan.
(Additional reporting by Chisa Fujioka, Yoko Nishikawa, Yoko Kubota in TOKYO; Editing by Nick Macfie)
