Japan, China, and Taiwan are in a dispute over islands that convey ownership of potentially oil and gas rich offshore areas. The Japanese Coast Guard finds itself in the middle of the dispute. In the latest move it looks as if the Chinese may be moving drilling equipment into the disputed area. This is on the heals of apparently more aggressive fisheries enforcement by the Japanese Coast Guard that resulted in two Japanese cutters being rammed and a Chinese vessel seized with its captain still being held for prosecution. Some additional background here.
Chuck Hill's CG Blog
Chuck Hill's CG Blog 
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Chuck,
I’ve read the articles you referenced. The interesting thing is that the Japanese Coast Guard doesn’t actually have authority to enforce Japanese fisheries law. The Japanese Fisheries Agency has it’s own fleet. Their website is down now so I can’t confirm the name, but I’ve been on their largest ship and it was hands down the best maintained ship I’ve ever seen of any class or type.
Obviously the Japanese CG was treating the Chinese fishing vessel incursions as a violation of national sovereignty, just as we do, but I’m interested to know whether they were simply the closest government vessel on hand or whether they were the preferred agency to respond for authority or capability reasons.
Sincerely,
Bradley Soule
More indication this is being taken very seriously by the Chinese. http://www.washingtontimes.com/news/2010/sep/19/china-cuts-off-top-ties-with-japan/
Analysis of Chinese decision making processes here: http://www.washingtonpost.com/wp-dyn/content/article/2010/09/23/AR2010092306861.html?wprss=rss_world
There is an interesting follow up to this story here, http://newpacificinstitute.org/jsw/?p=7930, that suggest that not every one in China was happy with how this incident went down.