Things heat up in Asia: China seizes Japanese cargo ship as payment for an unpaid compensation debt from 1936

China has seized a 119,000-tonne Japanese cargo ship in a dispute over a Second World War debt dating back 78 years.

Shanghai impounded the 1,050ft-long ore freighter Baosteel Emotion after a court ruled Japan still owed £17 million for two Chinese ships which were commandeered by the Imperial Japanese Navy and sunk.

But the seizure on Saturday has sparked a diplomatic incident and led Japan’s Prime Minister Shinzo Abe to announce: “We are demanding China take appropriate measures.”

The dispute stems from the loan of two ships from the Chinese Zhongwei Shipping Company in 1936.

They were rented for a year by a firm which later became Japanese shipping giant Mitsui O.S.K. Lines, the owner of the freighter which is now in dispute…

The Financial Times notes with alarm:

The seizure of a Japanese cargo ship by a Chinese court over compensation claims relating to the second world war could potentially expose Japanese companies to hundreds of millions of dollars in liability, although the lapse of time and the deaths of elderly plaintiffs would make pursuing such cases difficult.

In February, a Chinese court for the first time accepted a law suit brought by 40 former forced labourers against Mitsubishi Materials Co and Nippon Coke & Engineering Co, claiming damages of around $40m. A series of related cases marks a breakthrough for activists, forced for years to seek redress in Japan as Chinese courts refused to hear their cases.
China’s new openness to lawsuits brought by private individuals against Japanese companies comes as tension simmers between the two countries. Attitudes are hardening as Tokyo and Beijing spar over disputed gas-rich waters in the East China Sea, and as China seeks to reassert its economic and political weight throughout Asia.

Update: Obama says disputed islands within scope of US-Japan security treaty: U.S. President Barack Obama has assured Japan that tiny islands in the East China Sea at the heart of a territorial row with China are covered by a bilateral security treaty that obligates America to come to Japan’s defence.

Obama gave the assurance in remarks published by the Yomiuri newspaper on Wednesday, hours before he was due to arrive in Tokyo for a visit aimed at reaffirming strong U.S.-Japan ties in the face of rising tensions over China and North Korea.

“The policy of the United States is clear – the Senkaku islands are administered by Japan and therefore fall within the scope of … the U.S.-Japan Treaty of Mutual Cooperation and Security,” Obama said, referring to the disputed islands known as the Senkaku in Japan and the Diaoyu in China.

“And we oppose any unilateral attempts to undermine Japan’s administration of these islands,” he said.

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Another “red line” for Obama?