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Last Saturday, I saw the Queen, across a crowded paddock. I should not really have been surprised to see the monarch at Ascot racecourse. It is around the corner from her residence at Windsor Castle, and everybody knows that Elizabeth II is batty about horseracing.

Still, I couldn’t help doing a double-take when I glanced into the parade ring and saw a familiar-looking figure, in a square pink hat, chatting away to the jockeys.

My son was so excited by the sighting that he decided to put his £2 on Estimate, the Queen’s horse, which was the favourite in the first race. I should have warned him that patriotism is a bad guide to form and, indeed, the horse trailed in some way down the field.

My own gambling strategy – which was to bet on horses that I felt sorry for – was no more successful. In the first race, I went with Eye of the Storm who, ironically, has only one eye. He came third, which I thought was a creditable effort, given his handicap.

In a later race, I came across Caspar Netscher – who the racecard informed me had been forced to return to the track after an unsuccessful career at stud. I thought the poor beast could do with a morale-boost and so stuck my money on him. But he failed to place. Low testosterone levels, probably.

The day before the races, a group of Chinese diplomats had come to visit me at the FT. Normally, when I speak to diplomats, it is me who is asking the questions. But on this occasion my visitors got in first.

One said that he had noticed an article that I had written earlier this year, comparing the current tensions between China and Japan to the situation in Europe before the outbreak of the first world war. Did I really think there could be a war in Asia?

My first instinct was to say that I have absolutely no idea – and to try to change the subject. But I thought that might look evasive, so I slipped into seminar mode and tried to answer the question.

Of course, I said, neither side actually wants a war but there is always the risk of conflict, by accident, when there is a territorial dispute and rival navies and planes are jostling each other, as is currently happening in the East China Sea. What is more, China’s economy is now larger than that of Japan and the Japanese know that the gap in economic and military weight will only grow. So, from Japan’s point of view, it might be tempting to risk a clash now, rather than to wait a decade when the power gap could be overwhelming.

This kind of musing is perfectly standard stuff among western analysts. But I was slightly disconcerted to glance up and to see that some of my Chinese visitors seemed to be taking voluminous notes. Not wanting to contribute to any unfortunate misunderstandings, I hastily added that I have recently returned from Tokyo – and that the Japanese had repeatedly emphasised their desire to avoid a clash with China.

The rise in Japanese anxiety about China is, however, very evident – and so is the refusal of the government of Shinzo Abe to assuage Chinese and Korean complaints about Japan’s treatment of its wartime history. Indeed, if prime minister Abe goes ahead with a visit to the Yasukuni shrine later this year – as aides are currently suggesting he will – then there will be a further surge in Sino-Japanese tensions.

Yasukuni is where Japan pays tribute to its war dead including – much to the horror of the Chinese and Koreans – some leaders convicted as war criminals.

I visited the shrine earlier this month and noticed a relatively new memorial, in its grounds, to Radha Binod Pal, an Indian judge who dissented from the majority guilty verdict at the Tokyo war-crimes tribunal that convened in 1946. Justice Pal suggested that the men convicted as war criminals might one day be exonerated by history, and, as a result, became a hero to Japanese nationalists.

The shrine’s museum contains a “Zero fighter” – Japan’s equivalent of the Spitfire – along with a paean of praise to the plane’s success in the war. I was also able to buy a coffee mug with a portrayal of the Yamato, the flagship of Japan’s navy during the war, set against a background of the Japanese imperial flag.

Antagonising an increasingly nationalistic China is dangerous for Japan. It is also bad for business. Among the most impressive places I visited in Japan was the new headquarters of Nissan in Yokohama. The firm is working on all sorts of intriguing innovations, in particular driverless cars and the next generation of electric vehicles.

Nissan plans to sell two-thirds of its cars in emerging markets by 2016 and it already sells more vehicles in China than in the US. But the company suffered a 50 per cent drop in its sales in China after anti-Japanese riots last year, linked to the two countries’ territorial dispute.

Given that China is now the world’s largest vehicle market, such a collapse in market share could have spelt disaster for Japanese car companies. Nissan executives say that its sales in China have now recovered to their pre-dispute level. But they should be even higher than that, because the Chinese market is growing at 10 per cent a year.

British politicians are currently falling over themselves to pay court to potential Chinese investors. But, as I was gently reminded in Tokyo, Japanese companies already employ 130,000 workers in the UK – while Chinese firms have barely got started.

Nissan says that its huge plant in Sunderland is the largest factory in Britain. There are now three Brits sitting on the company’s main board, two of whom rose through the ranks at the Sunderland plant. I doubt that many British companies could boast a similar record of promotion from the shop-floor to the boardroom.

Gideon Rachman is the FT’s chief foreign affairs columnist

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