BEIJING (Bloomberg) -- A territorial dispute between China and Japan worsened as Prime Minister Yoshihiko Noda said he'll demand the Chinese government ensure the safety of Japanese citizens, thousands protested in Chinese cities and Toyota Motor Corp. and Panasonic Corp. reported damage to their operations.
Demonstrators took to the streets in a dozen cities across China including Beijing, Shanghai and Guangzhou, calling for Chinese sovereignty over disputed islands and the boycott of Japanese goods.
Sales of Japanese-branded passenger cars fell last month in China, compared with gains of more than 10 percent for German, American and South Korean vehicles.
China is the world's largest car market.
A Toyota dealership was damaged by fire in the Chinese city of Qingdao and the company is checking for losses in other locations, spokesman Keisuke Kirimoto said.
Smoke and flames were also reported coming from a Panasonic electronics parts plant in the same city after demonstrations, Tokyo-based spokesman Atsushi Hinoki said.
Toyota Chairman Fujio Cho will visit China on September 22 to ease the impact of rising tensions between Japan and China on Japanese automakers, the China News Service reported earlier, citing Japanese news agency Kyodo news service.
Cho and other Japanese auto executives will hold talks with government officials and visit several Chinese cities in order to restore bilateral trust, according to China News Service, a Beijing-based official news agency.
"The Toyota chairman and the delegation of Japanese company executives he will lead want to express goodwill for the Chinese government and Chinese consumers, but it is unknown whether Chinese consumers will accept it," the Chinese news agency said.
Strong anti-Japanese sentiment in China, first stoked by Japanese activists' landing on the island last month, has affected marketing and sales of Japanese-brand cars in the country.
Nissan Motor Co. COO Toshiyuki Shiga told journalists last week at an industry forum in China that the company had to cut back on marketing events after anti-Japan demonstrations started last month.
In the city of Shenzhen, police used tear gas and water cannons to stop protesters from reaching a Japanese department store, Radio Television Hong Kong reported.
"I intend to strongly demand that the Chinese government ensure security" of Japanese citizens, Noda said yesterday on public broadcaster NHK's "Sunday Debate" program.
Tensions between Asia's largest economies escalated after Noda's government said last week it would purchase disputed islands from their private Japanese owner, prompting China to dispatch government vessels near the islands known as Senkaku in Japanese and Diaoyu in Chinese.
The row comes as both countries grapple with a global economic slowdown and China prepares for once-a-decade leadership change.
"This is another blow for the global economy," said Andy Xie, formerly Morgan Stanley's chief Asia economist. "The costs for China may be less FDI but it could be worse for Japan as the bright spot for the economy has been the auto industry."
Tokyo Governor Shintaro Ishihara triggered the dispute in April when he said he may use public funds to buy the islands. Tensions escalated after Japan's cabinet approved the purchase of the islands for 2.05 billion yen ($26 million) on Sept. 11.
China has said it doesn't accept the move.
In Shanghai yesterday, hundreds of riot police watched over groups of protesters as they gathered outside the Japanese consulate chanting, "down with Japan devils, boycott Japanese goods, give back Diaoyu."
There were no reports of injuries in the largely peaceful demonstrations. Hundreds of protesters in Beijing threw plastic bottles and eggs at the Japanese embassy a day earlier as riot police stood guard at the gates.
In Guangzhou, more than 10,000 people marched in protest, the official Xinhua News Agency reported yesterday. Demonstrations also occurred in the cities of Harbin, Nanjing, Hohhot, Changchun and Wuhan, and overseas in Houston and Chicago, Xinhua reported.
Japan's Kyodo News said Sept. 15 that more than 40,000 people joined the demonstrations in 20 Chinese cities.
"Japan is becoming more and more arrogant and the feelings of Chinese are increasingly being oppressed," said Xiao Feng, 26, an office worker protesting at the Japanese consulate in Shanghai yesterday after traveling to the city from Jiangxi province. "We need to step up and make our feelings known that they can't just have their way."
Activists from Hong Kong plan to sail to the islands on Sept. 18, China National Radio reported on its website. Japan last month arrested and deported a group that departed from Hong Kong and landed on the islets to assert China's claim.
September 18 is the anniversary of the Mukden Incident, also known as the Manchurian Incident, which took place in 1931 near what is now the Chinese city of Shenyang and led to the Japanese invasion of the northeastern portions of China.
In Japan, the Foreign Ministry announced that Shinichi Nishimiya, the incoming Japanese envoy to China, died yesterday morning after an illness. Nishimiya was sent to the hospital for an unspecified illness two days after his appointment, the ministry said earlier on Sept. 13. On Sept. 15, Japanese Foreign Minister Koichiro Gemba and Defense Minister Satoshi Morimoto cut short a visit to Australia because of the protests in China, NHK reported.