Japan attempted to turn the tables on China on Monday, by demanding that China pay for repairs to two Coast Guard vessels that were damaged during the confrontation with a Chinese fishing boat on September 7, according to Bloomberg.

The Chinese boat had been fishing in waters surrounding uninhabited islands claimed by both China and Japan. During the confrontation, the Chinese boat collided with the Japanese Coast Guard vessels, causing some damage.

China’s President Hu Jintao (R) and Premier Wen Jiabao in 2008 (Xinhua)

Japan arrested the boat captain, and faced a storm of retaliatory threats from China. China cut off shipments of rare earth metals to Japan, and then arrested four Japanese consultants working in China, and threatened further measures.

Japan released the boat captain within a few days, in order to improve relations between the two countries, and both Japanese and American officials fully expected the whole conflict to simmer down at that point.

But that hasn’t happened. Much to everyone’s surprise, Japan’s acquiescence to Chinese demands has resulted in even greater belligerence by the Chinese. China treated the returning boat captain as a national hero, and demanded an apology and monetary compensation from Japan.

China used to say that disputes over these islands should be resolved by negotiation, but now the Chinese are saying that the disputed islands belong to China unequivocally, and that no compromise of any kind is possible. China is also increasing its use of its own patrol boats in the disputed waters, according to Yomiuri.

From the point of view of Generational Dynamics, it appears that a significant generational change of some kind has occurred.

I’ve written several times in the past that China’s leaders, including president Hu Jintao and premier Wen Jiaboa, grew up during Mao’s Communist Revolution crisis war. Like America’s Silent Generation, they grew up in the midst of enormous human suffering, and they experienced a kind of generational child abuse that makes them put compromise and conciliation ahead of everything else when they’re adults.

This stunning change from a generally conciliatory foreign policy to a much more nationalistic and less compromising foreign policy indicates to me that Hu and Wen and their entire generation are losing influence rapidly, and that people from younger generations (corresponding to America’s Boomers and Generation-X) are beginning to make all the important decisions.

Of course we won’t know for a while, if ever, what’s going on in China’s government, and how the decision making process is changing. But analysts who expect this level of Chinese nationalism and belligerence to be a one-time event should prepare to be surprised.

Increase in aggressive Chinese nationalism

The Chinese Communist Party (CCP) has “scheduled” a generational change, in a way. The 18th CCP Congress will be held in 2012. At that time, the generation of war survivors, led by President Hu Jintao and Premier Wen Jiabao, are expected to step down and give way to the next generation, born after the war.

The incident with Japan gives us a first glimpse of what things will be like after that generational change, and makes us wonder whether the younger generations will even wait until 2012 to take power.

Although nationalism has always been a big part of China’s policies, as is true of any country, it’s in the past couple of years that we’ve been seeing the signs of really aggressive Chinese nationalism.

The world financial crisis has been a big motivator, as most Chinese people, especially young people, blame America for the crisis, and for any suffering that it’s caused in China. Furthermore, the Chinese people felt enormously humiliated by the worldwide condemnation of their actions in Tibet. (See “”Chinese embarrassment and anger grows over Tibet and Olympics.””)

A big turning point in public attitudes was the publication in March 2009 of a highly popular, highly nationalistic and highly anti-American book, as described in “New book, ‘Unhappy China,’ stokes Chinese nationalism and anti-Americanism.”

In that report, I quoted one summary of the book as saying: “The authors … denounce Western influences and specifically deride the United States for being ‘irresponsible, lazy, and greedy, and engaged in robbery and cheating.’ They blame the United States for causing the current global recession. The authors urge the Chinese people to ‘conduct business with a sword in hand.’ They call for the emergence of a group of heroes to ‘lead our people to successfully control and use more resources, ridding [the world of] of bullies and bringing peace to good people.'”

In March, 2009, those were loudly stated opinions of the authors, and widely adopted by many Chinese in their thinking. What we’re seeing now, with the Japan incident, is that those opinions and thoughts are becoming national policy. The “bullies” are countries like Japan and the U.S., and China’s retaliation, and threats of further retaliation, for the boat captain jailing were just the first step in “ridding the world of bullies and bring peace to good people.” The implication is that no one should ever compromise or give concessions to bullies.

Is China afraid of its own people?

A new article from Foreign Policy magazine examines the change in policy from a different angle. The title of the article is, “Is China afraid of its own people?” This caught my attention because it’s a subject that I’ve written about many times for a totally different reason.

China’s history is full of major rebellions — the White Lotus rebellion around 1800, the Taiping Rebellion of the 1860s, and Mao’s Communist Revolution, that began with the Long March in 1934 and climaxed with his victory in 1949, are the most recent examples. From the point of view of Generational Dynamics, China is due for a new one, and the Chinese Communist Party (CCP) leaders are well aware that rebellion is in the air.

According to the article, China conducts its foreign policy in fear of a widespread nationalistic backlash:

“Apart from the party leadership’s well-known tradition of undemocratic governance, the main reason behind “black-box diplomacy” is to avoid taking responsibility for failing to stand up to foreign powers such as the United States or Japan. Despite the relative efficacy of the Great Firewall of China, fast-growing numbers of nationalists have frequently been able to use the Internet to express their views, including negative ones about Beijing’s foreign and security policies. These increasingly vocal nationalists generally believe that rising China has become a mature power and deserves a place in world affairs to match its burgeoning economic clout.

It is out of fear of a nationalist backlash that China’s negotiations with the United States and other countries regarding its accession to the World Trade Organization for instance, were wrapped in secrecy. Beijing apparently worried that should ordinary Chinese learn about the considerable concessions that it had made in areas including tariff reductions, senior cadres including former Premier Zhu Rongji would be labeled “traitors” by WTO opponents. …

President Hu Jintao and then Japanese Prime Minister Yasuo Fukuda reached a theoretical accord in mid-2008 to settle sovereignty disputes over the East China Sea. The agreement was largely based on the principle of “seeking joint development while shelving sovereignty.”

Again, Beijing made no efforts to explain to its citizens the rationale behind the potentially win-win solution. When the East China Sea accord was announced a couple of weeks after Hu left Tokyo, Chinese netizens expressed massive disapproval, even on official websites. Since then, Chinese diplomats have dragged their feet in negotiations on transforming the Hu-Fukuda theoretical agreement into a formal treaty.”

It’s out of fear of a backlash spinning out of control that the CCP has discouraged anti-Japanese protests in the current incident — the opposite of what happened after an incident in 2005.

I would restate the last sentence in the quoted paragraph much less optimistically: With the generational changes in China in recent years, the opportunity of signing a formal agreement is lost for good. It will not be possible to resolve sovereignty of the islands except by war.

And it won’t just be war between China and Japan.

Last week, US Secretary of State Hillary Clinton met with Japanese Foreign Minister Seiji Maehara in New York and said that the United States would be obligated to obligated to intervene militarily against China if China moved to take control of the Senkaku Islands, the islands under dispute.

Hillary Clinton referred to a 1960 treaty between the U.S. and Japan that obliged the U.S. to defend Japan against any attack on a territory under Tokyo’s administration, according to AFP. Clinton spokesman Philip Crowley later confirmed what she said: “We do believe that, because the Senkaku islands are under Japanese jurisdiction, that it is covered by the US-Japan security treaty. That said, we also stressed that we don’t take a position on the sovereignty of the Senkaku islands.”

And so the Senkaku Islands (called the Diaoyu Islands by the Chinese) now have the same status as Taiwan. China claims both as their sovereign territory, and we’re obligated to go to war with China to defend either of them.

From the point of view of Generational Dynamics, war with China is inevitable and unavoidable. The eclipsing of conciliators like the people in Hu Jintao’s and Wen Jiaboa’s generation, and their replacement by aggressively nationalistic people in their children’s generation, means that there will plenty of shocks and surprises, and that war will approach more quickly.