And the winner in the China-Japan feud is ...

And the winner in the China-Japan feud is ...

There were several moments when Japan had an opportunity to exit the dispute without looking like the losers. The first, on the day the incident happened, September 7th, when they picked up the Chinese crew after the confrontation in the East China Sea. They could have doled out a few words of admonishment, sent a curt message to Beijing, and then let the Chinese fishing boat go.

In the following days, as the Japanese ambassador was angrily summoned to the Chinese foreign ministry at all hours of the day, Japan had another face-saving chance to free the captain. On humanitarian grounds, perhaps using the common diplomatic excuse of the detainee in bad health. But Tokyo didn't.

When Japan finally blinked in the stand-off with China, it was badly-timed - and looked plain ugly.

Badly timed, because it came after a 48-hour flurry of developments that included the rumour China was holding off exports of rare earth minerals to Japan (first reported in the New York Times, questioned later by Reuters).  And news that the Chinese had some Japanese detainees of their own: four of them, held on charges of illegally filming military facilities in Hebei Province, China.

It looked ugly, because of the blunt announcement prosecutor Toru Suzuki made without even attempting a graceful exit.

"We have decided that further investigation while keeping the captain in custody would not be appropriate, considering the impact on the people of our country as well as Japan-China relations in the future," he said.

Japan basically told the world it was backing off from the fight with China. Even though days earlier, they had insisted the detained fishing captain be put through the Japanese judicial system. Suddenly, the judicial system didn't matter. He'd be freed. And, even though days earlier, Japan had strongly stated that the islands were theirs, and there was nothing to discuss with China over the matter.

While both countries have known for some time that the balance of power in Asia is changing (more to China, less to Japan), neither country has quite known where it stands until right now, right here: in September 2010. 

Some might argue that Japan didn't quite back off, and the fact is it still does hold de facto control of the Diaoyu/Senkaku Islands, and that it did hold the Chinese captain for almost two weeks while China looked on helplessly. But it is very difficult to look at the situation today and think: "Wow, Japan really walked away the winner here."

So China's won this battle ... right?  If by winning, we mean the hero's welcome given the boat's captain and the nationwide celebratory fervour, yes, China got its way. This has been great domestically, a boon for the Communist Party.

But you wonder what the rest of the countries in Asia are thinking.

Not only did China get its way, everyone else saw it, and saw how it was done, too. You can't imagine Vietnam, with its own territorial dispute with China, feeling any safer. Or the rest of ASEAN (Association of South East Asian Nations). Or South Korea. Or the people of Japan, as they watch their leaders capitulate.

Suddenly, everyone desires a referee in all this. Suddenly, everyone wouldn't mind too much if the United States were around more often. China might have gotten its way this time, but perhaps at the cost of a more vigilant America.