Japan and China can push the island row over the horizon

Tensions between China and Japan over a group of uninhabited islands in the East China Sea have eased somewhat in recent days, after a series of naval manoeuvres and violent protests in both countries. But this long-running emotional dispute over the islands, known as Senkaku in Japan and Diaoyu in China, is still steering both nations towards a collision course.

The timing of this crisis is deeply unfortunate, coinciding with critical junctures in the domestic politics of both countries and making it very difficult for either to back off. Make no mistake: this argument is serious and will not subside until tactful diplomacy usurps brash rhetoric.

China is on the cusp of a once-in-a-decade leadership transition, and senior leaders in Beijing are competing to adopt the most robust nationalistic position towards Japan. Being considered "soft on Japan" weakens the chance of promotion and hurts politicians' standing in the eyes of the Chinese people.

The majority of Chinese citizens have been brought up reading school textbooks that frame Sino-Japanese relations around the atrocities committed by the Imperial Japanese Army in China in the first half of the 20th century.

For them, the issue is far more important than a territorial dispute. It is about righting "historic wrongs". The fact that Mao Zedong repeatedly thanked the Japanese for the invasion, which created the conditions for the Communist Party to win power in China, is unknown to most. Nor do most Chinese realise that Japan has apologised to China several times and has been by far the largest aid-giver to post-Mao China.

In Japan, right-wing politicians led by the governor of Tokyo, Shintaro Ishihara, coupled with the recent announcement that fresh elections will be called "soon", leave little scope for Prime Minister Yoshihiko Noda to back down from purchasing three of the disputed islands from their private owner.

Indeed, Mr Noda's nationalisation plan was devised to pre-empt Mr Ishihara from buying them and using them to provoke China overtly. The prime minister's effort backfired, horribly.

With nationalists on both sides seeking to force the hands of their respective leaders, pressure is building on both governments to strengthen their claims. This risks an escalation of the crisis and the possibility of direct conflict increases.

But confrontation can be avoided - and the opportunity to avert it lies most solidly with China.

The Chinese government must seize the initiative and ask Japan to simply acknowledge the existence of a dispute and agree to a plan of action that freezes the issue until an agreed time, for example, 50 years from now.

This will give both sides a chance to heal the wounds from the past and defer the matter until cooler heads can work out a permanent solution peacefully.

Politically, it is virtually impossible for the Japanese government to make the first move, as it does not accept that Japanese sovereignty over the islands is open to contest.

China can move to acknowledge, not accept, Japan's position on the issue, namely that the Japanese government considers the Senkaku islands to be Japanese territories.

In return, it should demand Japan reciprocate by acknowledging, without accepting, the Chinese position: that the Diaoyu islands are historically Chinese territories that were handed over to Japan by the United States after the Second World War without Chinese consent.

It should be made clear that in these scenarios, neither side will have conceded their respective positions. Rather, they will form the basis for both sides to work out a framework for an agreement to avoid what could become a military confrontation.

The agreements should specify that the issue of sovereignty over the islands is not to be discussed or resolved for several decades.

In the meantime, any unilateral action by either party to strengthen one's claim, such as institutionalising additional maritime patrols or building new structures on the islands, will be deemed irrelevant for the final settlement. Any future negotiations will need to be based on the current claims.

The agreement should state that any exploration and exploitation of oil and gas reserves in the disputed islands and their waters should only be allowed to proceed after negotiations between China and Japan.

Moving towards such an arrangement should be acceptable to China, as it conforms to the principles laid down by the late leader Deng Xiaoping. The islands are currently under Japanese administration and their security falls within the terms of the US-Japan Mutual Defence Treaty. It would also signal that the Chinese government is committed to steering China towards a peaceful rise.

This solution is more difficult for Japan to stomach, as it could appear to imply a change in its basic position - that its sovereignty over the islands is not open to contest.

But the reality is that there is an interminable dispute. The rest of the world may not take sides, but Japan's stubborn defence that no dispute exists carries little credibility internationally. If China can demonstrate maturity in making the first move, Japan will be ill-advised to ignore it.

Steve Tsang is a professor of Contemporary Chinese Studies and director of the China Policy Institute at the University of Nottingham

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