Enmity between China and Japan is hardening into a confrontation that appears increasingly difficult to untangle by diplomacy. Positions on the dispute over the Diaoyu/Senkaku island group are wide apart, and politically viable options to bridge the gap remain elusive. New frictions have arisen. China’s announcement in November 2013 of an Air Defence Identification Zone (ADIZ), overlapping that of Japan’s and covering the disputed islands, deepened Tokyo’s anxiety that Beijing desires both territory and to alter the regional order. Prime Minister Shinzo Abe’s provocative visit to the Yasukuni Shrine in December 2013 triggered a bitter argument as to whether Japan has fully atoned for its Second World War aggression, a still vivid sore in the region. Amid heightened suspicion and militarisation of the East China Sea and its air space, the risks of miscalculation grow. Leadership in both countries needs to set a tone that prioritises diplomacy to calm the troubled waters: November’s Asia-Pacific Economic Cooperation (APEC) summit might provide such an opportunity.

A perception is gaining ground in Tokyo that the still new administration of President Xi Jinping is particularly assertive and that China seeks to revive its hegemonic “Middle Kingdom” status in the region. China perceives the Abe government as the “troublemaker” that stokes tensions in order to rearm Japan. Insensitive actions and strident rhetoric increasingly appear to be replacing diplomacy. Both sides progressively consider the other as a primary national security threat and are boosting their military capabilities and adjusting their defence postures accordingly.

Although not likely to attempt to wrest control of the islands fully from Japan any time soon, Beijing acts upon the belief that the balance of power is shifting in its favour and that a strength-driven approach can pressure Japan into accepting incremental changes over time. Tokyo, appearing to agree that China has long-term power advantages, seeks to tighten its U.S. alliance and unite regional countries around rules-based opposition to unilateral changes.

Presumably, neither desires an armed conflict, but they face heightened risk of an unplanned clash. The danger spans three theatres – the waters near the disputed islands; the high seas of the Western Pacific; and the airspace over the East China Sea – and involves law enforcement vessels, fishing boats, naval fleets and military aircraft. While it appears that patrol patterns around the islands have stabilised and risky behaviour there has eased since late 2013, military encounters in the other two theatres have become more frequent and dangerous.

The People’s Liberation Army (PLA) has stepped up exercises in offshore waters in its quest for blue water capability, coming as a consequence into increasing contact with the Japan Self-Defence Forces (SDF). The sides have starkly different interpretations of their operational rights and limitations. Japan insists on rights to surveillance in international waters. China has demonstrated a willingness to take risks to keep foreign vessels and aircraft away from its fleets. Repeated close calls have resulted. Since China announced an ADIZ that overlaps with Japan’s, there has been a spike in the number of encounters by military aircraft, with both sides accusing the other of provocative behaviour.

Tokyo has been more active in pursuing crisis management and seeking out mitigation mechanisms but is concerned not to do so in a way that compromises its sovereignty claims or legitimises China’s ADIZ. Beijing says that the current political environment is not conducive to engagement on this front. Even though awareness of the risk of unplanned clashes has been growing in both capitals, and both have accepted a multilateral Code for Unplanned Encounters at Sea (CUES), neither unofficial discussion nor the non-binding code has yet to reduce close calls.

The November 2014 APEC summit in Beijing may offer an opportunity for President Xi and Prime Minister Abe to meet and set the tone for negotiations on establishing and implementing means to manage the tension. Both sides would need to commit to handle the fragile relationship with extreme care and show restraint around the flashpoints, including the islands dispute and historical issues. Bilateral relations urgently require a sufficiently long period of calm to pursue discreet diplomatic initiatives.