China says tensions with Japan likely to hurt trade By Ben Blanchard and Xiaoyi Shao BEIJING (Reuters) - Rising tension between China and Japan over disputed islands is likely to harm their trade ties, a senior Chinese commerce official said on Thursday. Asia's two largest economies both claim islands in the East China Sea and tensions have flared since Tuesday when Tokyo announced it would purchase disputed islands from a private Japanese owner, an act that Beijing has called a violation of its sovereignty. Chinese Vice Minister of Commerce Jiang Zengwei added to the volley of warnings from Beijing. "With Japan's so-called purchase of the islands, it will be hard to avoid negative consequences for Sino-Japanese economic and trade ties," Jiang told a news briefing. China is Japan's largest trading partner. Jiang hinted that the government saw nothing wrong with peaceful boycotts of Japanese goods. China is a big market for Japanese cars and electronics. I still haven't seen any actions by Chinese consumers in response to the Japanese violation of Chinese territorial sovereignty, but if we do see them expressing their stance and views in a reasonable way, I think that would be their right. A Nissan Motor Co Ltd executive said last week that the tensions are affecting business with China. The row is the latest episode in troubled relations between the two neighbors. Their long-running territorial dispute erupted again last month when Japan detained a group of Chinese activists who had landed on the disputed islands, known as Senkaku in Japanese and Diaoyu in Chinese. On Thursday, at least 100 protesters gathered at the Japanese embassy in Beijing, watched by police. Additional reporting by Chris Buckley and Sabrina Mao; Editing by Jonathan Thatcher