Japan is starting to turn inward amid anti-China protests which have begun to dominate the headlines, with numerous rallies staged in the wake of the September sovereignty dispute over the Diaoyu/Senkaku Islands. A video leaked in early November showed the Chinese fishing boat involved in the incident deliberately ramming into a Japanese coastguard ship.

The incident has left an indelible impression in Japan of how assertive China has become. In the same month, 4,000 Japanese protesters greeted President Hu Jintao near the site of the Asia-Pacific Economic Cooperation forum summit in Yokohama. At around the same time, the Russian President Dmitry Medvedev visited the Northern Territories after the G20 summit and his meeting with Chinese leaders. This seemed like a united front between China and Russia on territorial disputes, and further exacerbated the feeling of victimhood in Japan.

Japan's nationalism and China's rise It is increasingly common for Japanese officials to describe China as a threat. Prime Minister Naoto Kan has been criticized for his 'appeasement diplomacy' towards China. At the same time, a right-wing, nationalistic discourse is beginning to emerge at the edges, with extreme groups like Zaitokukai, which enlist many underemployed, calling for expanding the Japanese military to counter threats from other countries including China. But it is no longer just the right-of-center groups who are sounding the alarm. A wider cross-section of Japanese society is coming to believe that their country is being browbeaten by a newly assertive China.

If we were to summarize the different situations in which a nation expresses its nationalist feelings, they could generally be classified as either an exertion of superiority over weaker states or of exploitation by stronger ones. There is a third situation, in which the country is somehow in 'decline.' It is this situation that Japan finds itself.

For most of its history, Japanese nationalism has developed around the idea of a strong state. As a successful modernizing latecomer after the Meiji restoration, Japan exercised imperialist ambitions toward its Asian neighbors. While Japan felt inferior in the face of Western powers, its rapid developments brought about feelings of superiority towards Asia, leading to its neo-colonial policy of aggressions.

Post-war Japan developed a cooperative relationship with the United States under the Yoshida Doctrine, in which Japan traded its political and military status for economic power. The spectacular rise of Japanese trading power during the 1970s and 1980s led to 'economic nationalism.' The prevailing confidence was best summarized by the title of the book The Japan That Can Say No, co-authored by Shintaro Ishihara and Akio Morita in 1989. Ideas of nihonjinron, national distinctiveness and the innate superiority of Japanese society blossomed.

Today, Japanese nationalism is increasingly overwhelmed by one factor: the rise of China, which overtook Japan this year in terms of gross domestic product. If it was Japan's superiority that drove its nationalism, then today it is its concerns over an impression of inferiority driven by the bursting of the Japanese bubble in 1991 and the subsequent economic stagnation, coupled with the rise of Chinese economic power since 1978.

Since the 1990s, there has been growing negative sentiment in Japan about China's criticisms on historical issues and China's failure to acknowledge the role of Japanese investment and aid in its development.

Shadows of the Cold War Since Sino-Japanese diplomatic relations were established, it has been characterized by cycles of confrontation and cooperation. But controversy over Japan's history of aggression has simmered throughout the period. While Japanese leaders have offered statements of apology, China still finds such expressions inadequate. Ordinary Japanese, on the other hand, acknowledge that Japan did conduct horrendous atrocities in China. But they increasingly see China's reiterations of these issues as manipulations with the intention to undermine Japan politically, like the Chinese opposition to Japan's bid for a permanent seat at the UN Security Council in 2005.

To this date, Japan is still stuck in the past. The onset of the Cold War immediately after World War II denied Japan the opportunity of reconciliation with its neighbors. During those years, the pursuit of material prosperity became Japan's only clearly identifiable goal, living as it did in a world of 'virtual reality' under the US umbrella, delegating its political and military responsibilities to its security guarantor. Even when China was weak and in chaos, Japan's political influence was never commensurate with its considerable economic strength. If Japan could not do it then, it is even less likely to do so in face of a resurgent China.

Paradoxically, more than two decades after the fall of the Berlin Wall, the relationship between Japan and the US is closer than ever. During the Bush administration, the US-Japanese relationship was seen as 'more important than ever before,' as former Undersecretary of State Richard Armitage put it.

The coming into power of the Democratic Party of Japan brought hopes that Japan would pursue a foreign policy more independent from the US. But the downfall of former Prime Minister Yukio Hatoyama and the recent imbroglio with China have pushed Japan closer to the US again and away from China. This month, Japan and the US are holding their biggest-ever joint military exercises, taking the Chinese navy as the hypothetical enemy. A similar one already took place in August in Okinawa and Kyushu.

Navigating between China and the US There is, however, one crucial difference between the US and Japan. As both enemy and friend of China, America's China policy is flexible and pragmatic. Japan, by contrast, remains profoundly isolated from its continental neighbor. Japan's failure to come to terms with its past will continue to handicap its relationship with the region, especially China. At a time when East Asian nations are increasingly falling under the sphere of Chinese influence, Japan's only solace will be to maintain dependent on the US as long as possible.

In 1988, Laura Newby described the ambivalent attitudes between China and Japan as deriving from a 'complex psychological heritage' characterized on all levels by feelings of 'superiority and inferiority, pride and shame, arrogance and humility.' A century ago, Japan, no longer viewing itself as a pupil of Chinese civilization, prided its modernization and distinctive adaptation of Western knowledge.

Today, Japan finds itself beside a strong China as its prestige declines. This has translated into fear, anxiety and, increasingly, antipathy towards China. When the DPJ first came into power in 2009, it talked of the creation of an "East Asian Community" based on a fraternal relationship with China. Since then, its foreign policy has been unsteady and vague. Hatoyama's futile effort at the Okinawa base relocation issue irritated the US. Kan's diplomacy during the Diaoyu/Senkaku trawler incident angered China.

For Japan, the peculiar historical and contemporary sources of conflict with China, complicated by the endurance of the US-Japan security alliance, make the task of navigating between an emerging superpower and a declining one all the more difficult. But it is a challenge that must be met. For at stake is whether China and Japan will ever learn to live in peace, and whether they will work together for an integrated Asia.

Andy Yee is a Hong Kong-based writer and a former researcher for the political section of the European Union Delegation to China in Beijing. He blogs at Global Voices Online.