Hugh Cortazzi, a retired British diplomat, ambassador to Japan in the early '80s, has a sensible article summarizing British comment on recent 'anti-Japanese' demonstrations in China. In typical diplomatic fashion, his comments are not necessarily his own views but introduced with locutions such as 'commentators have suggested that', 'it is probable that' etc.. Comments in square brackets are my own.
On Japan:
1) PM Koizumi's visits to Yasukuni Jinja are provocative
2) Koizumi has effectively repeated Murayama's 1995 apology for Japan's war crimes.
3) The fuss is over approved textbooks, but approval of a textbook does not make its use compulsory, merely allows it.
4) "regardless of what a few rightwing nationalists such as Tokyo Gov. Shintaro Ishihara may say, Japanese public opinion, even if incensed by anti-Japanese demonstrations in China, remains basically pacific and that the chances of a revival of extreme nationalism and militarism in Japan are remote."
On China:
1) "The general impression is that the recent anti-Japanese demonstrations in a number of Chinese cities were at least condoned, if not actively encouraged and planned, by the party, which could have stopped them if it had wanted to do so"
2) "the demonstrations may have developed rather further than the authorities wished and that reining back the demonstrations was not quite as easy as expected"
3) "Some commentators have even suggested that the demonstrations were allowed to develop as far as they did because Beijing saw them as a way of allowing activists to let off steam in a way that was not directly harmful to the party"
4) "It is also probable that the Chinese authorities wanted to make it clear both within and outside China that they were opposed to a permanent Japanese membership on the U.N. Security Council, which countries such as Britain now firmly support" [as do the US -- of course -- and France].
5) "China's officially approved textbooks tend to play up Japanese atrocities during the war. The textbooks also fail to note the huge changes in Japanese society since the war's end and the pacific nature of the Japanese Constitution and of public opinion." [In fact the textbooks in use in China seem to be as grotesque and distorted as one would expect in an authoritarian one-party state. Japan's education system is an ideological battleground; in China the battle was lost long ago.]
6) "One aim of the anti-Japanese demonstrations is thought to have been to warn the Japanese government to keep off what the Chinese regard as their turf, namely the Senkaku islands and gas reserves in the area."
On possible consequences:
1) "Attention has rightly been focused on economic relations between Japan and China. The Chinese economy, as well as Japanese firms, have greatly benefited from Japanese investment in productive activities in China. Chinese threats to boycott Japanese-made products could well backfire and anti-Japanese strikes in Japanese-owned factories could damage Chinese exports and the Chinese economy."
His final section, on what should happen next, may be close to the views of the British foreign office:
From a London perspective, it is important that Japanese leaders try to avoid being provocative toward China. In particular, Koizumi would be wise to refrain from further official visits to Yasukuni Shrine, and the Ministry of Education and Science should look long and hard at textbooks that play down the behavior of the Japanese Imperial armed forces.
Indeed, there is a strong case for ending the way in which history textbooks are "officially approved" by the ministry. In many other democratic countries, there is no system of censorship and vetting of textbooks. Although this is not in fact the case, the present system tends to suggest that Japanese textbooks are centrally compiled. None of these suggestions, however, means that Japan should condone damage caused by anti-Japanese demonstrations in China. Nor should the Japanese be intimidated from pressing their case for permanent membership on the Security Council or from continuing to cooperate with the Americans in relation to Taiwan.
There is no need for Japan to send troops to the Senkaku islands, as Ishihara apparently advocates. A modus vivendi needs to be sought through bilateral talks between China and Japan. If this fails, outside arbitration might be considered. The relationship between China and Japan in the Far East is too important to be neglected or overlooked by any of us.
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