The recent spurt in the Japan-China conflict over the contested islands, Senkaku to Japan and Diaoyu to China, was not unexpected.

The surge in anti-Japanese sentiment in China is nothing new. The root of the Sino-Japanese conflict lies in the history of their ties. Anti-Japanese sentiment flared up in China in 2005 over the new Japanese textbooks, which seemed to gloss over Japanese war crimes.

In contrast, Indo-Japanese ties have rarely been hindered by political conflict, except when India went for nuclear testing. In fact, Japan has proved to be India’s true bilateral economic partner over the years.

Can the resurgence of anti-Japanese sentiment in China prove to be a blessing in disguise for India? Can it divert Japanese investment to India?

It is important to note that economic ties between Japan and China deepened over the last decade, notwithstanding historical scars. The question is how India can reap the benefits, even as it cannot match Chinese infrastructure and low costs.

During the 2000s, China emerged as a favourite destination of Japanese investors. Japanese investment in China surged from a paltry $935 million in 2000 to $12,649 million in 2011.

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