Probably nothing could be more damaging to the economies and general tranquility of China and Japan—and the region—than hostilities between them. Yet, spurred by intense and persistent nationalism, the two nations have been drifting toward at least sporadic confrontation with a mindless determination that sometimes belies rational judgment. The immediate cause: rival claims to own eight rocky isles, largely ignored for centuries but now thought to be surrounded by extensive oil and gas reserves deep beneath the sea.

Fortunately, the chances of intentional war are exceedingly slim. The two countries are headed by intelligent men who know full well what the costs of combat would be. And both sides realize that serious fighting could not possibly settle the ownership issue or create the peaceful international atmosphere the two nations must have for economic growth and domestic stability. In fact, both have made conciliatory gestures; most recently, Tokyo sent the leader of a member party of its ruling coalition for serious but relatively informal talks which produced hints that a summit meeting may ensue. To date, however, a way out of the dilemma is not obvious and the possibility that some accidental gunfire could get out of control remains high.

The uninhabited East China Sea islands in question, called the Diaoyus by China and the Senkakus by Japan, are located some two hundred miles off the Chinese coast north of Taiwan. Japan has claimed ownership since 1895 and, unlike Taiwan and other islands acquired in that year, did not turn them over to the then recognized Nationalist government of China when World War II ended. (Separately, the current Taiwan government also claims them.) To complicate matters and increase the dangers involved, Washington remains officially neutral on the sovereignty question but for the time being considers them territory it is obliged to defend under the U.S.-Japan mutual-security treaty.

Beijing cites assorted historical documents to justify claims dating back six hundred years to the Ming Dynasty. But Japan conducted a methodical ten-year survey that ended in 1895 and concluded no nation had ever asserted ownership, so it took them over. The acquisition was separate from those of Taiwan and other islands gained later that year by the treaty that ended a Japan-China war; those island possessions are the ones surrendered in 1945. Japanese diplomats have even buttressed their case with a 1617 document in which China seems to claim nothing further than twenty-five miles offshore. Even so, the issue remains murky; one highly respected authority, historian Odd Arne Westad of the London School of Economics, has written that “historically China has the stronger claim” but Japan, which has control, sees no reason to surrender or share them. We own the islands, Tokyo insists, so there is nothing to negotiate.

The relatively recent conclusion that vast (but still unproven) energy reserves can be found nearby, plus important fishing rights in adjacent seas, gives tangible worth to these rocky specks long thought to be without much value. But behind the current dispute are conflicting nationalisms in both Japan and China that have been deliberately exaggerated and exploited because the governments involved see political advantages in doing so. By rousing their respective populations against each other, ruling parties in both nations believe it gives extra credibility to their proclaimed right to hold power. But they seem to give far less attention to the dangers of where such jingoism might lead.

Consider China, for example. The ruling Communist Party has been losing popular esteem in recent years—in fact to some degree ever since the 1989 killings near Tiananmen Square—due to rising corruption, nepotism, pollution, income disparities and other causes. Social media have given a computer-savvy public the ability to disseminate information about official misdeeds and eroded the unofficial bargain the party uses to justify its tight grip: ever-rising living standards in return for political passivity. The public demand for greater transparency and accountability has increased enormously, often putting the party on the defensive when egregious cases of official malfeasance arise as they so often do. The new leader, general secretary Xi Jinping, has promised assorted reforms within the party structure—“power should be restricted by a cage of regulations,” in his words—but it’s too soon to know if these will satisfy a disenchanted citizenry.

During the 1970s and 1980s, relations between Japan and China blossomed on all fronts, especially economic. But since then Beijing’s leaders have turned increasingly to nationalism to justify their monopoly, with oft-time enemy Japan a prime target. State television, for example, cranks out an endless array of dramas and documentaries featuring wartime Japanese bestiality, while jingoistic commentators warn that Tokyo once again has imperial designs on China (sometimes with American approval). Chinese mobs have trashed Japanese offices and products; Toyota sales in China plummeted. Military spokesmen even insist the nation must prepare for war, just in case. Xu Qiliang, deputy chairman of the party’s Central Military Commission, told People’s Liberation Army soldiers recently that they “must do everything to focus on winning wars” because, as the official PLA Daily noted with regret, “after a long period of peace…some troops have little awareness of war and their exercises are no longer realistic. They have become a show.”

One unusual example of the anti-Japanese campaign can be found near the small, far-northeastern city of Hulin on the Usuli River that forms the border with Russia. It’s the “Hutou Fortress Relics Museum of Japanese Aggression Against China”, a massive underground facility, reminiscent of the French Maginot Line, bored into solid rock for Japanese occupiers in the early 1940s by captive Chinese workers who allegedly were executed once the job was done. Its maze of tunnels and storage spaces could house six thousand Japanese troops and their equipment, including tanks, but the fort had nothing to do with Japan’s invasion of China. Rather, the key elements were huge artillery emplacements with guns aimed across the river to sever the Trans-Siberian Railway if or when Tokyo fought the then Soviet Union. (The guns are long gone; Soviet troops who captured the site in 1945 took them away when they left three years later, blowing up the emplacements to ensure their Chinese Communist allies could never use them.)

About a decade ago, China cleared the abandoned tunnels of debris, and stocked them with wartime artifacts, vintage photographs and bilingual signs describing atrocities. The result is a grim museum designed to vilify the Japanese and arouse nationalistic support for Beijing. It isn’t entirely clear why so much money was spent in a remote area where relatively few people live or visit, but those who do see the exhibits cannot help but be affected.

More sweeping and influential is what state schools teach about Chinese modern history. As usual, honest discussion is forbidden of founding father Mao Zedong’s more irrational policies, which brought death to forty million or more Chinese. But discussion of Japan is another matter; the Japanese are often portrayed as villains bent on continual territorial expansion. Professor Westad quotes a Chinese educator as endorsing an official policy that insists, “In the selection and presentation of historical materials, we will only use those that favor China, whether they are authentic or not.” Little wonder that nationalistic propaganda can fall on fertile ground.

Not that things are always better in Japan, another nation where textbooks can evade the truth or tell outright lies about recent history, especially the dismal World War II record. Concerning the 1937 Nanjing massacre, for example, the histories don’t concede Japanese soldiers raped, pillaged and bayoneted babies—killing some 250,000 or more Chinese. One text, after admitting that many Chinese soldiers and civilians did die there, then adds “documentary evidence has raised doubts about the actual number of victims claimed….the debate continues even today.” Likewise, unlike Germany, Japan has never apologized adequately for the brutality it imposed on occupied lands, notably but not only China. Shinzo Abe, the recently elected prime minister, has suggested he might retract some apologies that have been given.

Against this background and with the islands as the core issue, both governments have been able to divert public attention from other problems and gain domestic support by vilifying a foreign adversary. On the Chinese side, this continues a longer term trend by a ruling party that faces rising criticism that it cannot easily satisfy. In fact, some analysts contend it marks China’s abandonment of cautious foreign-policy guidance from the late Deng Xiaoping: bide your time and keep a low profile. And Japan now has a conservative, nationalistic prime minister in a post he filled briefly six years ago with no great success. His winning campaign claimed Japan needs a more assertive foreign policy, especially regarding China; in particular, he says Japan must spend more on its military because, as the country’s senior general has explained, it needs “a tenacious presence” in that contested area.

In recent months, Beijing and Tokyo repeatedly have sent ships near the disputed islands, as well as patrol aircraft. Japan has scrambled F-15 jets when Chinese planes get near and threatened to fire warning shots to drive them away. Meantime, China has insisted it will never allow Japan to place civil servants on the islands as proof of ownership—as Tokyo has suggested it might do—raising fears of a forceful response. It remains unclear what Japan would do if China attempts to carry out a promised “survey” of the islands it claims to own. Any of these or other ventures might cause, for example, an aggressive sea captain to ram another’s ship, or a foolhardy pilot to clip another’s wing. A daring action by one side could bring quick response from the other, leading down a slippery slope to a place neither wants to be.

All this worries Washington for reasons that transcend its treaty obligations to Japan. Peace in Northeast Asia is essential to the current “rebalancing” of U.S. foreign policy, or the tilt toward Asia. But the dispute interferes. Secretary of State Hillary Clinton warned Beijing against doing anything rash to upset the status quo, only to be criticized sharply for meddling in China’s “internal” matters. Quietly, Washington has urged both sides to seek a diplomatic truce, such as by urging Tokyo to forget about putting government workers on the islands. Any kind of military confrontation, the U.S. counsels, would be disastrous for all concerned.

Something may be succeeding. Both Xi and Abe have restated recently that strong and friendly relations are essential, and they might even talk it over directly before long. It’s not likely the two countries can agree soon on any scheme to divide whatever wealth may lie beneath the sea—or let either side start drilling without interference—but they might decide to shove the whole matter far into the future. Otherwise, the risk of unwanted confrontation and unintended consequences will persist. Delay could allow both nations to give more sustained attention to their own domestic problems.

Robert Keatley is a former editor of The Asian Wall Street Journal and the South China Morning Post, both of Hong Kong.

Image: National Land Image Information (Color Aerial Photographs), Ministry of Land, Infrastructure, Transport and Tourism (Japan).