As Japan deals with China, the nation needs to get an accurate picture of what the giant neighbor is and where it is headed, rather than be swayed by what could be a larger-than-life image of the new economic and military power in East Asia, China watchers said at a recent symposium in Tokyo.

Chinese government policies may increasingly be influenced by the country’s “public opinion.” But does that really reflect the diverse views of its population, or is it determined by the “atmosphere” of public sentiment that tends to stifle dissent?

Japanese experts on China issues discussed these and other topics during the symposium on Japan-China relations held by the Keizai Koho Center on April 22, as bilateral ties remain strained since last fall due to the territorial row over the Japan-controlled Senkaku Islands in the East China Sea.

What has happened since last September, when violent demonstrations hit Japanese business establishments in Chinese cities after Japan purchased the islands — also claimed by China — reflects a paradigm shift in Japan-China relations, said Yuji Miyamoto, a former Japanese ambassador to China.

Previously, as long as economic relations between Japan and China were sound, the two governments were able to manage other potential areas of friction — wartime history, territorial rows or Taiwan, said the former diplomat.

However, the row over the Senkakus, in which Beijing clearly demonstrated its territorial claim in the form of action, put security issues on the forefront of bilateral relations, Miyamoto said. Earlier, security issues between the two countries mainly concerned the risk of Japan being involved in a possible U.S.-China military confrontation over Taiwan, but the Senkaku row has put Japan and China in direct confrontation, he said.

These developments came after China overtook Japan as the world’s second-largest economy in 2010 — and as Japan still gropes for a new direction in the East Asian order with its relative fall and China’s rise, he noted.

On the other hand, the “strategic relationship of mutual benefits” that Japan and China have vowed to pursue since 2006 is mainly about the economy, Miyamoto pointed out. It essentially means that in a globalized world where economic interdependence among countries increases, Japan and China should cooperate to seek common economic benefits. While security issues come to the fore of bilateral relations today, the huge common economic interests continue to exist between the two countries, he said.

Economic growth is also a top priority for Chinese leaders because they need the country’s economy to keep growing for them to deal with a host of serious domestic challenges, Miyamoto said. And economic growth in the age of globalization requires cooperative relations with the rest of the world, he added.

While the Chinese leadership under the new president, Xi Jinping, will continue to take an assertive diplomatic posture to play to the growing nationalistic sentiments of the Chinese public, they will also need to prioritize economic growth — and thereby seek stable international relations, Miyamoto said.

Given the changes that have taken place, it may be difficult to return Japan-China relations to the previous state, but Tokyo should at least normalize bilateral ties to a more stable and predictable relationship of cooperation, rather than confrontation, Miyamoto said, adding that it will be the only choice for Japan as a neighbor to the rising giant in East Asia.

The diplomatic row over the Senkakus has affected economic ties as Japanese exports to and investments in China declined. Miyamoto said that negative sentiments in China toward Japan will continue to be a major risk factor for Japanese firms doing business in the country, along with the risk of greater social instability in China.

Still, most of the world’s major companies continue to need the Chinese market and go to China to compete, and if Japanese firms hesitate in doing business in China because of those risks, they could be losing in the global competition, he said.

It’s important to reflect on whether Japan may have established a mistaken image of China, said Ichiro Korogi, a professor of contemporary Chinese studies at Kanda University of International Studies. China’s diplomatic outlook as an aggressive power intent on military buildup may in fact be a reflection of its internal fragility, he said.

In dealing with China, Japan should look more closely at whether its perceived strength is real and see where it stands in terms of economic development, he said.

The slowdown in China’s economy in 2012 highlighted its continued dependence on external demand, Korogi said, noting that a 7.8 percent growth may still be a rapid growth for mature economies like Japan but will not be enough to contain the various social problems in China. The tens of thousands of public demonstrations that take place each year — with their scale becoming increasingly larger — are a reflection of the growing social instability, he said.

Toshiya Tsugami, a former Ministry of Economy, Trade and Industry official who runs a management consultancy on business in China, said that the era of rapid economic growth in China may in fact have ended several years ago — and was prolonged only with the help of massive fiscal spending introduced in the wake of the 2008-2009 global financial crisis.

China faces serious challenges to its growth in the short, medium and long term, which all appear daunting, Tsugami said. Over the short term, the massive investment spree since 2009 is nearing its limit, but deceleration in such spending carries the risk of a further economic slowdown, he said.

As wages continue to rise rapidly, Chinese industries will need to improve productivity and move up the value chain as a medium-term challenge, but that will require reform and privatization of state-owned enterprises with the powerful network of vested interests, Tsugami said. And the full effect of its aging population — with the declining labor input for growth and growing welfare costs — will arrive in the 2020s, he said.

One concern about China’s future, Tsugami said, is the growing role that public opinion seems to play in the government’s decision making. While it has long been said that the Communist Party leadership monopolizes decisions on the nation’s future course, it appears that these decisions are in fact influenced to a large extent by the public sentiment, he said.

The problem here, he said, is that a major component of this “public opinion” in China seems to be the traumatic sentiment over its past history of being subjected to humiliation by foreign powers. The flip side of this is the growing confidence that China is now making a comeback as a major power, but that could lead to a dangerous sentiment that it should seek to recapture the national interests that had been lost in the past, he said.

Another growing component of the public sentiment, Tsugami said, seems to be the discontent of some people who feel that they have been left out of the benefits from China’s rapid growth — who tend to take nationalistic viewpoints and reject economic reforms as well as international cooperation and Western values.

Tsugami also said that China is a country where people tend to follow an “atmosphere” of public sentiment, which often works to stifle diverse or dissenting views. This raises the question whether the so-called public opinion in China really reflects what people think — for example on relations with Japan, he pointed out.

The very problem lies in the way Japanese people view China — and the way China issues are portrayed in the Japanese media, Tsugami said. An excessive focus on security issues in viewing the relations with China, he warned, could lead Japan — as well as China — to lose sight of their true national interests.