"This is so much beyond what we saw in 2005–06," says Arai.
The atmosphere complicates even the most basic interactions between Chinese and Japanese. Arai says even the simple collection of debts from Chinese customers may best be left for another point in the future. "You simply lay low and don't do very much," he says.
The Japanese lawyer in Beijing says there are fears that the Chinese government may be engaging in economic harassment. In the past, he notes, the import and export of Japanese goods through Chinese customs have slowed during times of political tension. The approval of permits and other business licenses may also see delays. This translates into a loss of revenues for those investors.
In his comments Sunday, Noda was reacting in part to reports that similar punitive measures appear to be occurring again.
"All of the Japanese companies are very disappointed," the lawyer says.
For small and midsize Japanese companies that have historically been hesitant to invest overseas, the blow-up may make the prospect of entering the China market even more off-putting. Some lawyers think there may be some shift in investment toward markets seen as more congenial, like Southeast Asia.
Still, the Sonys and Toyotas have already made massive investments in China, which has been Japan's largest trading partner since 2007. Japan is China's second-largest among individual nations. The fact that economic ties are already so deep is a major reason that many lawyers think that any slowness resulting from the protests will be short-lived.
Koshi Ishikawa, a Tokyo-based partner at DLA Piper, says that "for a time," Japanese companies may be shy of China investments. But in the long run, China still needs Japan's advanced technologies to continue growing its economy, and Japan continues to import more and more Chinese goods.
"I think it's just a temporary situation," he says, adding that, while his Japanese clients are cautious, none feel threatened enough to pull out of the Chinese market.
Other lawyers echo that sentiment.
