More profound than the foreign threat, according to Sheng Hong, a reformist economist at the Unirule Institute at the Chinese Academy of Social Sciences in Beijing, would be the opening of Chinese banking to domestic competition, through interest-rate liberalisation.

ECONOMIST: Problems left over from history | The

Prof Da Zhigang, from the Heilongjiang Academy of Social Sciences, told South China Morning Post that Beijing might have been testing how the Japanese navy would respond to emergencies.

BBC: Japan Maritime Self-Defense Force destroyer Yuudachi