BEIJING—There are many obscure tourist sites in Beijing. One missed by many foreigners is the Chinese People’s Anti-Japanese War Memorial Hall.


The museum illustrates why China, America’s most fearsome potential competitor, and Japan, Washington’s most important Asian ally, often are at odds. The two are a conflict waiting to happen, which could draw the U.S. into war with a nuclear power.


Chinese President Xi Jinping presided over last week’s World War II victory parade in Beijing. However, the conflict with Japan continues in many people’s minds.


Following Washington’s lead, Tokyo did not recognize the PRC until 1972. Since reestablishing official ties the two countries’ relationship has gyrated up and down. More than talking is necessary to resolve four major disputes: history, trade, territory, and security.


Although the Chinese Communist Party manipulates history for its own benefit—young Chinese learn little about the 1989 Tiananmen Square protests—the CCP has been quick to criticize Tokyo for failing to take responsibility for Imperial Japan’s actions.

While China’s demand for remorse is understandable, the vast majority of Japanese are horrified by the prospect of conflict. Even more nationalistic Japanese, such as Prime Minister Shinzo Abe, don’t contemplate a new round of military aggression—which would be impossible against nuclear-armed China.


Yet high Japanese officials continue to inflame Chinese sensibilities. Commemorating World War II’s end Prime Minister Abe offered official regret for the conflict, but his remarks were dismissed by the leaders of China and other nations as “evasive” and not “sincere.”


Beijing has its own historical agenda. The regime has been battling Western influences and recently unleashed a veritable tsunami of documentaries, concerts, exhibitions, movies, television shows, musicals, children’s programs, and more to promote nationalistic fervor. Criticism of Japan is central.


Two months ago the Xi government opened a new exhibit at the anti-Japanese memorial, or Museum of the War of Chinese People’s Resistance Against Japanese Aggression. The government quoted visitors as calling the museum “a very good place to experience and see atrocities the Japanese imperialists committed.”


Economics provides an area of both cooperation and tension. After the PRC’s founding commercial ties developed slowly and were vulnerable to political disruption. Since establishing diplomatic relations in 1972 both trade and investment expanded greatly.


Total bilateral trade ran about $344 billion in 2014. However, politics continues to undermine the relationship.


Territorial disputes have grown increasingly vitriolic, especially over the status of the unpopulated Senkaku/​Diaoyu Islands, claimed by both nations. The half dozen islets are controlled by Japan, but the PRC now conducts air and sea patrols around the contested lands. Tokyo has pressed the U.S. for explicit defense assurances for the islands.


Security remains a top Chinese priority. Japan recently proposed its largest defense budget yet, about $42 billion. The PRC is Tokyo’s primary target.


The Japan‑U.S. alliance greatly magnifies Japanese military strength. Moreover, Washington not only has supported Tokyo in the controversy over the Senkakus/​Diaoyus, but also has offered general backing for the Philippines and an ambiguous commitment to Taiwan’s independence.


While the U.S. and Japan have no aggressive designs on China, Beijing understandably looks uneasily at the alliance of its old enemy with the globe’s dominant power. Thus, China is developing a military capable of confronting American as well as Japanese military action, no easy task.


The anti-Japanese Museum illustrates the challenge to China-Japan relations. The memorial devotes 887 exhibits with 5000 documents and relics and 3800 photographs to sullying Japan’s reputation.


The animus between China and Japan should scare the rest of the world. While war between the PRC and Tokyo seems—and should be—unthinkable, it could be just one drunk ship captain or careless fighter pilot away.


As I wrote in Forbes online: “The people of China and Japan should work through their difficult histories. The future belongs to those now living. They must find reconciliation and create a better world for those yet born.”