The Goverments of China (the worlds third largest economy) and Japan (the worlds seconds largest economy atter the US)

What

Who own a group of Islands located in the East and South China Sea‘s.  The question of ownership of the islands extends back to 1895 when Japan says China ceded sovereignty of the islands when it lost the Sino-Japanese war. Japan then sold the islands in 1932. During the second World War, the U.S. administered the islands but in 1972 returned them to Japan as part of its withdrawal from Okinawa. China says its ownership extends back hundreds of years. Analysts say its policy on the islands has been maintaining the status quo. Both sides agreed in 1978 to put the issue aside and solve it in the future, using a guideline described as ‘laying aside disputes and engaging in joint exploitation’ to solve territorial issues with neighboring countries.”

Why

Last April, the govenor of Tokyo announced plans to buy a group of islands claimed by Japan, China and Taiwan. He did so without the apparent knowledge or approval of the Japanese government.  In June, Chinese Foreign Ministry spokesman Liu Weimin dismissed Ishihara’s attempt to buy the islands as “irresponsible,” and repeated China’s ownership claim

Faced with the prospect of the islands falling under the jurisdiction of the Tokyo metropolitan government, the Japanese government stepped in with its own bid for the disputed islands.   On September 11, Japan’s Chief Cabinet Secretary Osamu Fujimura confirmed that the government had approved the islands’ purchase from private owners for 2.05 billion yen (US$26.2 million)

China responded by dispatching six patrol ships to the surrounding waters, ignoring a warning from the Japanese coastguard not to approach. Citing a government statement, state-run news agency Xinhua said the patrols were “aimed to demonstrate China’s jurisdiction over the Diaoyu Islands,” while the Japanese prime minister said the government would “take all possible measures to ensure security” around the islands.

In late August, Japan deported 14 Chinese protesters who were arrested after five swam ashore the Diaoyu/Senkaku islands and waved the flags of China and Taiwan. Nine others aboard the waiting vessel were also detained. The Japanese landing sparked protests by thousands of people in a number of Chinese cities

Okay China and Japan have been arguing of this land for years  So What’s the Beef?

It could be Japan’s handling of the controversy……s power move and the war of words.  Or it could OIL,  yes OIL.   Analysts believe potentially huge reserves of natural gas and oil exist. A Chinese estimate suggests as much as 213 billion barrels of oil lie untapped in the South China Sea alone which, if true, would make it the largest oil reserve outside Saudi Arabia, according to the U.S. Energy Information Administration.