China has now sent some 16 coast guard vessels (either belonging to the civilian-administered Marine Surveillance agency or the Fisheries Law Enforcement command) near the waters of the Senkaku/Diaoyu Islands.

In addition, according to a story in the Beijing’s Jinghua Times also republished by the state-owned Xinhua News, a fleet of some 700 fishing vessels, from Zhejiang province, has arrived in the area. Out of that massive assembly, 23 ships are reported to be within 60 nautical miles of the northernmost island in the group, and a few are now less than half that distance away.

That’s adding pressure to an already tense situation. Japanese businesses have been attacked across China in past weeks, factories owned by Japanese companies have closed down temporarily, and there may be larger trade and commercial repercussions in the second and third-largest economies in the world, at odds over history and territory.

It all stems from a dispute over a group of tiny islands and reefs in the East China Sea, nearly all less than a square mile in size, supposedly sitting on top of a wealth of energy and fisheries resources, but in fact far removed from the area’s most lucrative gas fields.

Japan’s government said Thursday that China should pay for the damage to its diplomatic facilities caused by protesters.

"Regarding damage to our embassies and consulates, we plan to demand compensation as it is an issue between the governments," Japanese Chief Cabinet Secretary Osamu Fujimura told the press on Thursday.

In response to questions about whether it would help pay for damages to Japanese companies, China’s foreign ministry offered a noncommittal answer on Thursday, saying that China is “a country with rule of law, (that) will protect foreign groups and their personnel… relevant parties in China will take appropriate measures in accordance with the situation.”

Earlier on Tuesday, in reaction to landings on the islands by two Japanese nationalist demonstrators, the Chinese government responded by saying that “Japanese right-wing activists' illegal landing on China's Diaoyu Island constitutes a severe defiance of China's territorial sovereignty. China has lodged solemn representations. … We urge the Japanese side to take effective measures to stop all acts that may escalate the situation. … China reserves the right to take further actions.”

Japan is now expected to send a special envoy to China to enter into discussions on how to resolve the current impasse. Its recently appointed ambassador to China, Shinichi Nishimiya, died suddenly on Sunday in Tokyo (either by coincidence, or as some would suggest, from stress), after an earlier health issue delayed his departure and assumption of duties. Nishimiya was meant to replace Uichiro Niwa, who had been the ambassador in 2010 when other major anti-Japanese protests broke out.

In early September of 2010, a Chinese fishing vessel collided with a Japanese coast guard ship (both sides still dispute who struck whom) near the Senkakus/Diaoyus and the captain was subsequently put under arrest. On Sept. 18 in 2010, as with 2012, the anniversary of the Mukden Incident (which led to Japan’s military takeover of northeastern China in 1931) generated large-scale protests in China. Relations remained cool for months, although by early 2011, the two countries appeared to be on better terms, especially as the Chinese government made an effort to express sympathies in the wake of the March 2011 tsunami and nuclear disaster that hit northeastern Japan.

The scale and bellicosity of this year’s protests, which have taken place in over 100 cities across China, are leaving observers in doubt as to the speed at which relations could be repaired with Japan.

China Japan Coast Guard