President Hu Jintao urged the Japanese government on Sunday to realize the seriousness of the tension over the Diaoyu Islands and stop plans for "nationalization", saying Beijing will not recognize the "purchase" of the islands by the Japanese under any circumstances.
The president made the remarks during a brief meeting with Japanese Prime Minister Yoshihiko Noda before the Asia-Pacific Economic Cooperation forum in Vladivostok, Russia.
Tokyo is reported to be set to finalize plans to "nationalize" the islands, that belong to China, on Tuesday.
Hu told Noda that China-Japan ties have encountered a grim situation recently due to the Diaoyu Islands.
China's position on the issue has been consistent and clear, he said, adding "any action by Japan to 'buy' the Diaoyu Islands is illegal and invalid and China is firmly against it".
The determination and will of the Chinese government to defend territorial sovereignty is unswerving, the president said.
He urged Japan to "be fully aware of the seriousness of the situation and not make the wrong decision", in order to safeguard overall China-Japan relations.
It is the first encounter between the leaders of the two nations since Noda announced a plan in July to "nationalize" the islands.
The move prompted strong protests from Beijing.
Japan's Kyodo News Agency said Beijing and Tokyo originally planned an official meeting between the leaders at the APEC meeting, but it was canceled due to escalating tension.
According to the Kyodo report, Noda told Hu that Tokyo wants the "broad viewpoint" of relations to be taken into account before discussing rising tension.
Speaking to journalists after the APEC forum, Noda said he told Hu that Japan wants to deepen the strategic relationship as this year marks the 40th anniversary of the normalization of diplomatic ties.
But, analysts said, this opportunity to boost ties has been overshadowed since Shintaro Ishihara, the right-wing Tokyo governor, unveiled plans on behalf of the prefectural government to "buy" the islands in April.
Noda, facing mounting nationalist sentiment at home and growing unpopularity over domestic policies, announced a plan in July to "nationalize" the islands.
Reports on Sept 5 said the Japanese government reached an agreement with the so-called private owner of the islands to pay 2.05 billion yen ($26.15 million) to buy three of the five uninhabited islands.
Tokyo is expected to hold a cabinet meeting on Monday to officially affirm the final guidelines for "nationalizing" the islands, sources told Japan's leading newspaper Yomiuri Shimbun on Sept 7.
Japanese media also said the deal will be finalized on Tuesday.
"I can't see any sincerity in Noda's statement as he said both sides should handle the tensions 'from the broad viewpoint'," said Lu Yaodong, director of the department of Japanese diplomacy of the Institute of Japanese Studies at the Chinese Academy of Social Sciences.
"Japan is always saying one thing and doing another," he said.
Lu said Hu's remarks show that Beijing is still using the last few moments to remind Tokyo of the huge risks the "nationalization" plan might pose for relations and regional stability.
"Territory is related to a nation's strategic interests. It is unreasonable for Noda to call on handling the tensions 'from broad viewpoints' when his government never cares about China's concerns," said Zhou Yongsheng, a specialist on Japanese studies at the China Foreign Affairs University.
Noda's policies face increasing domestic unpopularity and have led to rising tensions with China, the Republic of Korea and Russia, Zhou noted. A general election is expected within months.
"He might strongly promote the 'nationalization' of Diaoyu Islands to enhance his party's popularity," Zhou said.
Gao Hong, deputy director of the Chinese Academy of Social Sciences' Institute of Japanese Studies said Beijing would probably use diplomatic measures if Tokyo decided to carry through its "nationalization" plan.
Foreign Ministry spokesman Hong Lei stressed on Sept 5 that "China is closely watching the situation and will take necessary measures to safeguard territorial sovereignty".
"China may dispatch cruise ships to claim sovereignty and put direct pressure on Japan," Gao said.
Nissan Motor, the biggest Japanese automaker in China measured by sales, said on Sept 6 that it has made fewer deliveries in the country as it cut back on marketing events following violent anti-Japan demonstrations last month.
Heeding the advice of Chinese authorities, Nissan has reduced the number of promotional activities it is holding, Toshiyuki Shiga, Nissan chief operating officer, told reporters.