As Islands Dispute Simmers, China's Hu Calls for Rise of a Maritime Power Vincent Yu / AP A huge screen shows a broadcast of Chinese President Hu Jintao speaking at the opening session of the 18th Communist Party Congress at the Great Hall of the People in Beijing, China, Nov. 8, 2012. On the streets of Beijing these days the only outward indication of the recent conflict between China and Japan are the bumper stickers that declare the Diaoyu Islands, which are held by Japan, are rightfully China's. They are typically affixed to Japanese cars like some sort of patriotic talisman to prevent drivers and their vehicles from being harmed in the sort of violent protests that exploded across China's major cities this summer. They hardly need worry. The security lockdown that spread across the Chinese capital in the weeks ahead of the Communist Party's 18th National Congress has blocked any sort of protest, patriotic or otherwise, from bubbling up in Beijing. Amid the display of enforced harmony in Beijing the conflict with Japan continues unabated, with very real impacts to the diplomatic and economic relationship between the two neighbors. In his lengthy report at the start of the party congress Thursday, outgoing President Hu Jintao called on China to make itself a maritime power and "resolutely safeguard China's maritime rights and interests." Last year China launched its first aircraft carrier, a refurbished ex-Soviet vessel renamed the Liaoning. China has seen years of significant increases in military spending, though its total defense outlay is less than a quarter of what the U.S. spends. And it has built up a vast fleet of civilian "white hull" fisheries and maritime enforcement vessels it is using to press its claims in the East and South China seas. MORE: Code Red: China's Leadership Transition Begins Amid Pomp and Security China's new leadership doesn't want to look weak on its territorial disputes with Japan and southeast Asian neighbors including Vietnam and the Philippines. At the same time there is a small if ever-present risk that an accident between rivals at sea could lead to armed conflict. A group of former U.S. officials who recently met with Japanese Prime Minister Yoshihiko Noda and China's Vice Premier Li Keqiang, who is likely to take over as premier next year, warned that Japan and China risk an armed standoff if they don't improve communication over their disputed island claims, Bloomberg reported Nov. 1. Diplomats from Japan and China have held a handful of low-level meetings over the islands, but produced no breakthroughs. At an Asia-Europe summit this week in Laos, the diplomatic tension was evident. Television cameras captured Chinese Premier Wen Jiabao and Noda refusing to acknowledge each other as they crossed paths in a meeting hall. A day later Chinese Foreign Minister Yang Jiechi slammed Japan for "outright denial" of the outcomes of World War II. Noda responded by denying that a territorial dispute exists over the islands, which Japan calls the Senkaku. The dispute, which has its roots in the late 19th century when Japan took control of the islands following the First Sino-Japanese War, resumed this year after Japan's central government purchased three of the islands in September from a Japanese family for $26 million. The move was intended to thwart plans by the nationalist Tokyo Governor Shintaro Ishihara to buy the islands. Beijing considers the islands part of its territory from long before Japan's first claims, and says that the U.S. was wrong to return the Diaoyu to Japanese control in the 1970s following American administration after World War II. The renewed dispute has had a marked impact on economic ties between China and Japan. Several Japanese automakers have reported steep declines in sales in China, the world's largest car market. In October, Nissan Motor's sales in China dropped by 40% over the previous year, Toyota's fell by 44% and Honda's by 53%, according to a report from IHS Automotive, even as other foreign automakers such as South Korea's Hyundai reported gains in China sales for the month. Chinese officials also refused to attend International Monetary Fund and World Bank meetings in Japan last month out of protest. MORE: Big Exercise, Low Profile, In Japan-China Dispute In the waters around the islands, China has made its presence felt. As of Wednesday, Chinese marine surveillance and fisheries vessels have carried out nearly daily patrols off the Diaoyu islands for more than two weeks. Japan has complained about the Chinese incursions, but China has maintained that such patrols are "routine rights protection." The patrols followed China's September declaration to the U.N. of Diaoyu Island baselines - points of land from which maritime boundaries are drawn. "The government's view is to normalize the patrols and the law enforcement around the Diaoyu Islands," says Jin Yongming, a maritime law expert at the Shanghai Academy of Social Sciences. In the future, such law enforcement behavior, especially sending law enforcement ships into our territorial waters surrounding the Diaoyu Islands, will continue. These patrols, along with China's roping off of a shoal in the South China Sea also claimed by the Philippines this spring, are efforts to use civilian law enforcement agencies to redefine the status quo, argues M. Taylor Fravel, a professor of political science at the Massachusetts Institute of Technology. The goal of the Diaoyu patrols is "to demonstrate that the purchase of the islands will not affect China's sovereignty claims and to challenge Japan's position that there is no dispute over the sovereignty of the islands," he wrote in a Nov. 1 article in The Diplomat. The risk of increased patrols in disputed waters is that an incident between Chinese and Japanese vessels could easily lead to greater conflict. "If you consider the situation today compared with what it was just over two months ago, we are in a much more risk-fraught situation than we were because of the regular patrols," says Linda Jakobson, director of the East Asia Program at Lowy Institute for International Policy in Sydney, Australia. Amid the festering Diaoyu dispute, the U.S. and Japan are carrying out joint military exercises in waters off Okinawa. The Keen Sword exercise, which includes 10,000 U.S. and more than 37,000 Japanese personnel, began Monday and runs until Nov. 16. While the U.S. says it does not take a position on the rival claims to the islands, it recognizes that they are under Japanese administration and thus covered under the two countries" security treaty. Some Chinese analysts say the U.S. pledge to aid Japanese defense of the islands undermines its claims of neutrality on the territorial dispute. So far China's incoming leaders have given no indication they will take any new approach to territorial disputes such as the Diaoyu. Xi Jinping, who is expected to take over from Hu, denounced Japan's purchase of the islands during a September meeting with U.S. Defense Secretary Leon Panetta, according to a report from the official Xinhua News Service. "I don't think China will change any behavior regarding the Diaoyu Islands after the Communist Party Congress," says Jin. That means the patrols will be normalized and continue. with reporting by Chengcheng Jiang/Beijing PHOTOS: China: Island Dispute Spurs Anti-Japan Protests