Japan urged China to remain calm and not inflame their diplomatic spat further Monday, after Beijing severed high-level contacts and then called off a visit by Japanese youth over the detention of a Chinese fishing boat captain near disputed islands.
China's actions pushed already-tense relations to a new low, and showed Beijing's willingness to play hardball with its Asian rival on issues of territorial integrity, which include sparring with Japan over natural gas fields in the East China Sea.
Late Sunday, Beijing said it was suspending ministerial and provincial-level contacts, halting talks on aviation issues and postponing meetings to discuss energy-related issues, including a second round of talks with Japan on the gas deposits.
On Monday, an official Chinese youth organization called off a visit by 1,000 young Japanese to Shanghai, piling more pressure on Japan to release the captain, who has been held for nearly two weeks after his ship collided with Japanese patrol boats in the East China Sea on Sept. 7.
The tensions have sent ties to their lowest level since the 2001-2006 term of former Prime Minister Junichiro Koizumi, whose repeated visits to a war shrine in Japan enraged China. They have raised questions about cooperation between the nations at international forums such as this week's summit in New York on United Nations goals to fight poverty, which Japanese Prime Minister Naoto Kan and Chinese Premier Wen Jiabao are attending.
While competitors, the economies of the China and Japan, the world's second- and third-biggest economies, have become more intertwined in recent years and there have been no signs so far the dispute would hurt business relations.
Kan's spokesman, Noriyuki Shikata, told The Associated Press that China had not yet given formal notice of the suspension of contacts and exchanges.
"We call for calm and prudent action by China in order not to further escalate the situation," Shikata said. Any Chinese decision to suspend contacts would be "truly regrettable," he said.
Shikata said the investigation into the Chinese captain's case was being conducted on the basis of Japanese domestic law without taking into account political considerations.
China's Foreign Ministry, meanwhile, said Japan's actions had severely damaged relations.
"If Japan acts willfully, making mistake after mistake, China will take strong countermeasures, and all the consequences will be borne by the Japanese side," Chinese Foreign Ministry spokesman Ma Zhaoxu said.
The fishing boat's 14 Chinese crew were released last week, but the captain's detention for further questioning - pending a decision about whether to press charges - has inflamed ever-present anti-Japanese sentiment in China. Beijing announced the suspension of contacts shortly after a Japanese court approved a 10-day extension of Captain Zhan Qixiong's detention on Sunday.
An official with the All-China Youth Federation responsible for dealings with Japan told The Associated Press the suspension of the youth trip was "mainly about the Diaoyu islands incident" - a reference to the disputed islands in the East China Sea that are called Senkaku by Japan and known as Diaoyu or Diaoyutai in Chinese.
"Considering the current situation of the China-Japan relations, we think that it is not a good time for hosting such events," said the official, who declined to give her name because she was not authorized to speak to the media.
Japan's Foreign Ministry complained about the trip's suspension, which was to have started Tuesday.
"Such a youth exchange program is meaningful to establish stable Japan-China relations," the ministry said in a statement. "The last-minute decision by the Chinese side is extremely inappropriate and regrettable, and we have made an appeal to the Chinese side."
Liang Yunxiang, a professor at Peking University's School of International Studies, said Beijing was compelled to respond vigorously because of the demands of public opinion.
China must also protest Japan's punishing the captain under Japanese law, since neglecting to do so would be tantamount to accepting Japanese sovereignty claims over the islands, he said.
"If Japan releases the captain now, it would leave both sides some room for maneuver. China would believe its complaints were having an effect and Japan could also say the captain has already served the punishment according to Japanese law," Liang said.
This latest spat takes place against the background of more aggressive efforts by Beijing to pursue its claims on territory in the South China Sea and tap energy resources in the East China Sea.
In a possible sign of further turbulence ahead, Shikata, the Japanese spokesman, said the government was monitoring reports that China could be preparing to begin drilling in a disputed East China Sea gas deposit in violation of a 2008 agreement between the two nations.
"It would be unavoidable for us to consider taking a countermeasure if we confirm unilateral violations by the other party," Shikata said, without giving details on what measures are being considered.
China's Foreign Ministry had no immediate comment on the reports.
By Associated Press Writer Christopher Bodeen; AP writer Mari Yamaguchi in Tokyo contributed to this report