(Corrects location of assault on Japanese man to Guiyang in Guizhou province, from Guilin in the southern region of Guangxi.)
* Protesters damage U.S. ambassador’s car
* China warns of trade, economic backlash
By Sui-Lee Wee
BEIJING, Sept 19 (Reuters) - China moved quickly on Wednesday to snuff out anti-Japan protests after days of angry demonstrations over a territorial dispute forced Japanese businesses to shut their doors and threatened an economic backlash.
Relations between Asia’s two biggest economies have faltered badly, hitting their lowest point in decades on Tuesday when China marked the highly charged anniversary of Japan’s 1931 occupation of its giant neighbour.
Tension had run high on land and at sea, with four days of major protests in cities across China and Japanese and Chinese boats stalking each other in waters around a group of East China Sea islands, known by Japan as the Senkaku and by China as the Diaoyu.
“It seems the protests in front of our embassy have subsided,” the Japanese embassy in Beijing, the focal point of protests, said in an email to Japanese citizens.
Outside the embassy, police moved on a lone protester who had been shouting “Defeat small Japan” early on Wednesday.
Japanese businesses shut hundreds of stores and factories across China, some sending workers back to Japan in fear the protests would get out of hand. Japan’s Beijing embassy had been under siege by protesters throwing water bottles, waving Chinese flags and chanting slogans evoking Japan’s occupation.
To prevent a repeat of those protests, large numbers of riot police were deployed around the embassy and Beijing’s subway operator closed the station nearest to the Japanese mission.
On Tuesday, about 50 Chinese protesters surrounded and damaged a car carrying U.S. Ambassador Gary Locke, embassy spokesman Nolan Barkhouse said. The incident happened outside the U.S. embassy, which is close to the Japanese embassy.
“Embassy officials have registered their concern about yesterday’s incident with the Chinese ministry of foreign affairs and urged the Chinese government to do everything possible to protect American facilities and personnel,” Barkhouse said.
Chinese Foreign Ministry spokesman Hong Lei said it was “an individual case” which would be investigated.
Rowdy protests sprang up on the same day in other major cities including Shanghai, raising the risk they could get out of hand and backfire on Beijing, which had given its tacit approval through state media. One Hong Kong newspaper said some protesters in the southern city of Shenzhen had been detained for calling for democracy and human rights.
Tuesday was especially significant as China marked the day Japan began its 1931 occupation of parts of the mainland.
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 disputed islands are believed to be surrounded by large energy reserves.
Visiting U.S. Defense Secretary Leon Panetta said Washington was concerned that these “disputes could lead to greater conflicts and to greater violence”.
“I understand the deep wounds that China suffered during World War Two,” Panetta told Chinese military cadets. “But at the same time we cannot live in the past.”
Tokyo’s nationalist governor, Shintaro Ishihara, who floated a plan for metropolitan authorities to buy the islets, prompting the government to buy them instead, was unrepentant.
“If Japan yields to China on this (territorial) problem ... China’s hegemony in Asian waters would easily be established,” Ishihara told the Tokyo Metropolitan Assembly.
Emotions spilled over into occasional violence. Japanese broadcaster NHK said about 30 Chinese had punched a Japanese man, Keiichiro Kawahara, and burned his clothes with cigarettes on Sunday in Guiyang in the southern province of Guizhou.
A Japanese couple was assaulted in Hong Kong on Tuesday, the Hong Kong government said, appealing to the public to respect the law. Japanese Prime Minister Yoshihiko Noda has repeatedly urged Beijing to protect Japanese citizens in China.
China’s commerce ministry spokesman, Shen Danyang, said the dispute would harm trade and economic development. “Japan must take complete responsibility for this,” told a news briefing.
China, the world’s second-largest economy, and Japan, the third-largest, have total two-way trade of around $345 billion.
Many Japanese restaurants remained closed on Wednesday, some covered with signs such as “the Diaoyu islands are China’s”. (Additional reporting by Terril Yue Jones, Michael Martina, Max Duncan and David Alexander in BEIJING, Melanie Lee in SHANGHAI and Antoni Slodlowski, Kiyoshi Takenaka and Nathan Layne in TOKYO; Editing by Nick Macfie)