Rivals for as long as either side can remember, diplomatic ties between Japan and China have sunk to new lows in the past two years - and, worryingly, show no signs of getting better.

With those failing relations comes an increase in the rhetoric on both sides - claims and counter-claims over history, resurgent nationalism, disputed territory - that feed into the media in both nations and fuel public resentment towards the other country.

Masayuki Masuda, a senior fellow at the Tokyo-based National Institute of Defense Studies, the main policy research arm of Japan's Ministry of Defense, believes that as long as the governments and militaries on both sides don't communicate, there is a genuine danger of a minor incident escalating into a crisis.

More 'core interests'

"When Chinese leaders first began to use the term 'core interest,' they only ever applied it to Taiwan and to explain to the United States and the rest of the world that Taiwan was part of China and therefore a domestic issue," Masuda said in an interview in connection with the release of the NIDS's China Security Report 2013, which he co-authored.

"But from the autumn of 2008, Chinese leaders began to strengthen their claims to other areas demanding that other nations respect them."

When Beijing's "core interests" suddenly encompassed vast swathes of territory in South and East China Seas, it began to ring alarm bells in Tokyo, Washington and the capitals of several nations in Southeast Asia.

Part of the problem, Masuda believes, is that the decision-making process in China is not open. "My understanding is that every important decision on foreign policy or security is still made at the highest level of the Chinese Communist Party, the Standing Committee of the Politburo," he said. China is becoming increasingly assertive, while insisting that it seeks harmonious "win-win" relationships with its neighbors.

Hainan island incident

But in the event of a crisis, Masuda added, the processes required of a collective leadership to reach a decision can take too long to enable swift and decisive actions to be taken. The defense expert cited an incident in April 2001 when an American EP3-E surveillance aircraft collided with a Chinese fighter and was forced to land on the Chinese island of Hainan.

It took the Chinese leadership three days to decide on a course of action, Masuda points out, which was a potentially critical failure of Beijing's crisis management system.

The situation in the region is far more tense today than it was in 2001 and analysts believe there is a far higher likelihood of a dramatic escalation from a relatively minor initial incident.

"If the Chinese navy or air units were to carry out harassment activities against the US military operating in the South China Sea, for example, then the possibility of a crisis or an accident increases rapidly," Masuda said.

Crisis management

Ideally, all sides with a stake in the region should enter into discussions on crisis management measures that would swing into action at the first hint of a problem.

But Masuda is skeptical. The analyst argues that even if both sides agreed to start crisis management discussions covering the disputed islands in the East China Sea, for example, "then China would start by requesting that Japan reduce its activities in territorial waters around the islands," he said. "But it would be impossible for Tokyo to give in to that request."

Japan is concerned over a series of actions that by the Chinese side, including the unilateral declaration of an air defense zone over a vast swathe of the East China Sea late last year and the news that work has begun on no fewer than four modern aircraft carriers for the Chinese navy.

The NIDS report ends with a number of conclusions that could help improve bilateral relations, which include the establishment of crisis management measures with China.

It adds that multilateral engagement with the Chinese People's Liberation Navy and the Coast Guard would help to head off crises, while the two governments need to create a multi-layered approach to the handling of crises.

Other analysts agree that there is a need for the two sides to be in closer communication, even if they do not agree on the issues of the day. "I don't remember ties between China and Japan ever being this bad before and it seems to me that there is a real danger of an accidental clash in the disputed territorites," said Go Ito, a professor of international relations at Tokyo's Meiji University.

Necessary steps

"The most effective way of doing that is for both sides to communicate. It is very likely that they already have some sort of emergency hotline link, but we have to be sure that it works before we are in a crisis situation," he said.

And with hawkish leaders in charge in both nations, Masuda is not optimistic that the situation will improve in the immediate future.

He says reaching a compromise would be quite difficult for both Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping. "Such steps need to be taken, but it would be risky for both leaders to be seen in front of a domestic audience as making compromises."