Diaoyu Islands are a cluster of tiny islands in eastern Pacific close to Taiwan, between China and Japan. Historically, Diaoyu Islands were part of China, but taken by Japan in the late nineteen century. The island was to be returned to China per truce treaty of the WWII. However, while the then Chinese government was entangled in civil war, the US occupancy kept it as a navy target field. The island was somehow, with no specific reason, turned over to Japan in the 1960s. At the time, the mainland was in the middle of the unprecedented Great Cultural Revolution, and the Taiwan was unsettled after relocating from the mainland. Neither side paid much attention until a few years later.
Although disappointed, Taiwan did not have courage and motivation to challenge arrangement made between the US and Japan. Taiwan itself had been occupied by Japan for decades. Many Taiwan people still have complicated feeling towards that period of history, when Taiwan is ruled as part of Japan, rather than as a colony. The first elected President Li Denghui had his brother fought the WWII in Japanese Imperial Army. On the other hand, Taiwan relies on US's protection against China's military threats. Still, Taiwan made some gestures to show its claim over the island. When fishermen from mainland were harassed by Japanese Coast Guard, Taiwan vowed to face off Japan with its navy, and it did.
The Communist government on the mainland is less enthusiastic for a number of reasons. By definition, the communism movement does not recognize the boundary of countries, even boundary of families (to be elaborated at another time). Throughout the history of the Chinese Communist Party, there had been abundant cases when they 'proudly' placed the interests of the Party above the interests of the country. For example, when then Chinese government was at war with the USSR, in China, over the control of a railroad, the CCP asked its members to attack Chinese government to aide USSR. In another example, to appease leaders of North Korea, China gave a large piece of land to them, so their dear leader can claim home to a scenic mountain.
Handing of the Diaoyu Island was no exception to the CCP's tradition. Afraid the US might return the island to China (Taiwan), the CCP's official mouthpiece People's Daily issued an editorial urging the US to give the island to Japan. In the article, scholars loyal to the party made every argument to prove that the island belongs to Japan, not China.
Although Chinese governments on both sides of the Strait could care less, grassroots efforts never stopped. As a matter of fact, the current Taiwan President Mr. Ma Yingjiu was a devoted activist in Diayu Island claim when he was young. A few days ago, a group of advocates sailed from Hong Kong in a rental fishing boat. The group broke through embargoes by Japanese Coast Guards, and landed on the island before being arrested by Japanese police.
Large scale of anti-Japan protest broke in China. In some places it turned violence, while stores selling Japanese goods were vandalized, and Japanese brand cars were destroyed. A white BMW with Beijing license and an black Audi with Anhui license forced the ambassador of Japan's convey to stop in Beijing, and took away the Japanese flag on his car.
Once again, the communist government on mainland told Chinese people, it's better to leave the Diaoyu Island in Japan's hand. Official mouthpiece Global Times issued an editorial authored by Han Xiaoqing, the chief representative of People's Daily in Japan, declared the 'Protecting Diaoyu Island' movement was anti-government, thus anti-China.
The backdrop of current soften stand of the CCP was the timing. The CCP is expected to hold its 18th National Party Convention this fall, postponed from summer because of fallout of senior official Wang Lijun's defection to the US. The once-in-a-decade power transfer means everything to Party officials, and nobody wants a distraction from any direction.