Escalating spat between Japan and China over disputed islands is likely to halt ongoing talks over joint gas drilling, said analysts.
According to analysts the diplomatic tension might evolve into a full-blown diplomatic battle to stop potentially lucrative undersea gas fields drilling by the two Asian giants.
Under that deal, Japanese will be allowed to invest and share in the profits of existing Chinese operations in the Chunxiao fields, which Japan calls Shirakaba, that run closer to China, while Japanese and Chinese will jointly develop other fields farther out.
Already, Beijing has suspended ministerial-level contacts with Tokyo, and postponed a second round of talks on the natural gas deposits.
The chill was set off by Japan's arrest of a Chinese fishing boat captain two weeks ago for colliding with Japanese coast guard vessels near islands in the East China Sea claimed by both nations.
China and Japan compete as the world's No. 2 and No. 3 economies, but they have become intertwined and both have an interest in not letting any dispute undermine vital trade and business ties.
Access to gas fields so close to their shores would be a boon for energy-hungry China as well as resource-poor Japan. A thorny issue for some time, the two sides agreed in 2008 to jointly develop the deposits.
According to analysts the diplomatic tension might evolve into a full-blown diplomatic battle to stop potentially lucrative undersea gas fields drilling by the two Asian giants.
Under that deal, Japanese will be allowed to invest and share in the profits of existing Chinese operations in the Chunxiao fields, which Japan calls Shirakaba, that run closer to China, while Japanese and Chinese will jointly develop other fields farther out.
Already, Beijing has suspended ministerial-level contacts with Tokyo, and postponed a second round of talks on the natural gas deposits.
The chill was set off by Japan's arrest of a Chinese fishing boat captain two weeks ago for colliding with Japanese coast guard vessels near islands in the East China Sea claimed by both nations.
China and Japan compete as the world's No. 2 and No. 3 economies, but they have become intertwined and both have an interest in not letting any dispute undermine vital trade and business ties.
Access to gas fields so close to their shores would be a boon for energy-hungry China as well as resource-poor Japan. A thorny issue for some time, the two sides agreed in 2008 to jointly develop the deposits.
