Anti-Japan protests reignited across China on Tuesday, the sensitive anniversary marking Tokyo’s occupation of its giant neighbour, escalating a maritime dispute which has forced major Japanese brand name firms – including automakers – to suspend business there.

Reuters reported that relations between Asia’s two biggest economies have faltered badly with emotions running high on the streets and also out at sea where two Japanese activists landed on an island at the centre of the dispute.

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China reacted swiftly to the news of the landing, which risked inflaming a crisis that already ranks as China’s worst outbreak of anti-Japan sentiment in decades. Beijing described the landing as provocative, lodged a complaint with Tokyo and said it reserved the right to “take further action”.

The dispute over the uninhabited group of islands in the East China Sea – known as the Senkaku in Japan and Diaoyu in China – led to another day of protests that were smothered by a heavy blanket of security.

Japanese businesses shut hundreds of stores and factories across China and Japan’s embassy in Beijing again came under siege by protesters hurling water bottles, waving Chinese flags, and chanting anti-Japan slogans evoking war-time enmity, the news agency said.

Japanese prime minister Yoshihiko Noda urged Beijing again to protect Japanese citizens in China.

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“Wipe out all Japanese dogs,” read one banner held aloft by one of thousands of protesters marching on the embassy, which was ringed by riot police standing six rows deep. Japan’s foreign ministry said some embassy windows had been smashed.

Reuters noted that Sino-Japanese ties have long been plagued by China’s bitter memories of Japan’s military aggression in the 1930s and 1940s and present rivalry over resources – the islands are believed to be surrounded by energy-rich waters.

For China, Tuesday marks the day Japan began its occupation of parts of mainland China in 1931.

Rowdy protests sprang up in other major cities including Shanghai, raising the risk they could get out of hand and backfire on Beijing, which has given tacit approval to them through state media. One Hong Kong newspaper said some protesters in southern Shenzhen had been detained for calling for democracy and human rights.

Well-known Japanese firms have been targeted by protesters, with car makers Toyota and Honda halting some operations after attacks on their outlets.

Other Japanese companies — including Mazda and Mitsubishi Motors also shut plants and retail outlets in China, sending Japanese share prices falling and prompting a warning from credit rating agency Fitch that the situation could hurt some auto and tech firms’ creditworthiness.

Some firms recalled workers back to Japan due to the unrest.

“The situation on the ground in China is not so good and I was advised by the locals not to go out. I couldn’t get any work done,” Japanese expatriate worker Hisato Takase told Reuters on arrival at Tokyo’s Haneda airport.

China, the world’s second-largest economy, and Japan, the third-largest, have total two-way trade of around US$345bn, the report said.

There is no talk of Japanese firms withdrawing investment from China but some experts believe anti-Japan sentiment could prompt firms to rethink China investments in the longer term.

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