Taiwanese fishing boats have been hit with a water cannon as they entered Japanese territorial waters around a disputed island chain.
The provocation came on the same day that China put its first aircraft carrier into service.
Japanese coastguard vessels fired the cannon at 50 Taiwanese ships after they refused to heed warnings not to enter waters near the Senkaku islands.
Eight surveillance ships dispatched by Taipei to accompany the fishing boats retaliated with their own water cannon.
When told to leave Japanese waters, the captain of one of the Taiwanese patrol vessels replied that the ships were operating in Taiwan's waters and engaged in legitimate activities. He also demanded that the Japanese coastguard withdraw.
Many of the Taiwanese ships were flying banners demanding that Japan hand over the territory to Taiwan, which calls the islands Tiaoyutai. Further clouding the issue, China lays claims to the isolated islands and calls them the Diaoyu.
Coastguard officials in Japan's Okinawa prefecture, which administers the islands, said there were no reports of injuries in yesterday's clashes.
All the vessels had left Japanese territorial waters before midday, although monitoring aircraft have since identified a further six Chinese patrol ships sailing just outside the area around the islands.
Zhang Zhijun, China's vice foreign minister, said Beijing "will absolutely not tolerate any unilateral action taken by the Japanese side that infringes on China's territorial sovereignty".
Separately, China's leading military leaders attended the commissioning ceremony for their new aircraft carrier, the Liaoning, at a naval base in Dalian.
The ministry said the vessel will help "effectively safeguard national sovereignty, security and development interests". (© Daily Telegraph, London)