CORRECTED-China clamps down on anti-Japan protests, tensions high
(Corrects location of assault on Japanese man to Guiyang in Guizhou province, from Guilin in the southern region of Guangxi)
* Police clamp down on protests around Japan's embassy
* Protests on land and at sea
* China warns of trade, economic backlash
By Sui-Lee Wee
BEIJING, Sept 19 (Reuters) - China moved quickly on Wednesday to snuff out more anti-Japan protests after days of angry demonstrations over a territorial dispute forced Japanese businesses to shut their doors and threatened an economic backlash.
Relations between Asia's two biggest economies have faltered badly, hitting their lowest point in decades on Tuesday when China marked the highly charged anniversary of Japan's 1931 occupation of its giant neighbour.
Tensions had run high on land and at sea, with four days of major protests in cities across China and Japanese and Chinese boats stalking each other in waters around a group of East China Sea islands at the centre of the dispute, known by Japan as the Senkaku and by China as the Diaoyu.
"It seems the protests in front of our embassy have subsided," the Japanese embassy in Beijing, the focal point of protests, said in an email to Japanese citizens.
The embassy cited a message from the Beijing public security bureau saying "the authorities ask for cooperation that there be no protests in the embassy district". Beijing's public security bureau was not immediately available for comment.
Outside the embassy, police moved on a lone protester who had been shouting "Defeat small Japan" early on Wednesday.
Japanese businesses shut hundreds of stores and factories across China, some sending workers back to Japan in fear the protests would get out of hand. Japan's Beijing embassy had been under siege by protesters throwing water bottles, waving Chinese flags and chanting slogans evoking Japan's occupation.
To prevent a repeat of those protests, large numbers of riot police were deployed around the embassy and Beijing's subway operator closed the station nearest to the Japanese mission.
On Tuesday, about 50 Chinese protesters surrounded and damaged a car carrying the U.S. ambassador to China, Gary Locke, U.S. embassy spokesman Nolan Barkhouse said. Locke was not hurt.
"Embassy officials have registered their concern about yesterday's incident with the Chinese ministry of foreign affairs and urged the Chinese government to do everything possible to protect American facilities and personnel," Barkhouse said.
Rowdy protests sprang up on the same day in other major cities including Shanghai, raising the risk they could get out of hand and backfire on Beijing, which had given its tacit approval through state media. One Hong Kong newspaper said some protesters in the southern city of Shenzhen had been detained for calling for democracy and human rights.
Tuesday was especially significant as China marked the day Japan began its 1931 occupation of parts of the mainland.
Sino-Japanese ties have long been plagued by China's bitter memories of Japan's military aggression in the 1930s and 1940s and present rivalry over resources. The disputed islands are believed to be surrounded by large energy reserves.
Emotions spilled over into occasional violence during the protests. Japanese public broadcaster NHK reported that several Chinese people had punched a Japanese man, Keiichiro Kawahara, and burned his clothes with cigarettes on Sunday in Guiyang in the southern province of Guizhou.
A Japanese couple was assaulted in Hong Kong on Tuesday, the Hong Kong government said, appealing to the public to respect the law. Japanese Prime Minister Yoshihiko Noda has repeatedly urged Beijing to protect Japanese citizens in China.
Well-known Japanese firms have also suffered, with car makers Toyota Motor Corp and Honda Motor Co halting some operations after attacks on their outlets. Nissan Motor Co said it would resume work on Wednesday.
China's commerce ministry spokesman, Shen Danyang, said the territorial dispute would harm bilateral trade and economic development. "Japan must take complete responsibility for this," told a news briefing.
China, the world's second-largest economy, and Japan, the third-largest, have total two-way trade of around $345 billion.
A slew of other Japanese companies -- from Mazda Motor Corp and Mitsubishi Motors Corp to Panasonic Corp and Fast Retailing Co -- also shut plants and stores in China, sending Japanese share prices falling.
Credit rating agency Fitch has warned the dispute could hurt the creditworthiness of some auto and tech firms.
Many Japanese restaurants remained closed on Wednesday, some covered with graffiti such as "the Diaoyu islands are China's". (Additional reporting by Terril Jones, Michael Martina and Max Duncan in BEIJING and Antoni Slodlowski in TOKYO; Editing by Paul Tait and Mark Bendeich)
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