The dispute over the Diaoyu Islands has intensified tensions between Beijing and Tokyo.

Many Chinese people have taken to the streets to protest, with some calling for the boycott of Japanese goods. But how deep is anti-Japanese sentiment in China, and how will it impact diplomatic ties?

Here in Wangfujing, a commercial centre in Beijing, this Japanese clothing shop is still receiving customers. Everything seems normal here. Unlike in Shenzhen, which saw the worst violence, Japanese shops in the Chinese capital so far haven't seen large angry crowds.

One student in Zhejiang Province said, "Politically, Japan isn't in the good books now but that shouldn't affect commercial ties."

Tourist in Shandong Province said, "We shouldn't use extreme means to vent our anger because it won't do any good, and it will hurt our image too."

It's been reassuring to the stores that they won't be hit by large scale boycotts, at least for now. But how do employees at the stores feel?

CCTV reporter Ai Yang said, “Staff not willing to talk to camera, businesses going on okay but worry situation may escalate.”

But not all Chinese people are for using Japanese goods, especially at a time when there's no signs of tensions easing.

One pensioner in Beijing said, "I'm very angry about the Diaoyu Islands dispute. They belong to China no doubt, and I have never used any Japanese goods in my life. I was in the army fighting against them when I was young."

Japan has made three illegal landings on the islands this year and arrested a group of Chinese activists there last week. Over the weekend, ordinary people and students staged demonstrations in over 10 major cities, including Beijing, Guangzhou, Shenzhen, Hangzhou, and many others, to protest against Japan's sovereignty claims. In some extreme cases, Japanese cars and shops were damaged. But academics warn that such sentiment is a double edged sword.

Liu says bilateral ties have been harmed at a sensitive time as next month marks the 40th anniversary of the normalization of ties between the two countries. However, he says instead of acting on impulse, more peaceful ways should be sought to solve the territorial dispute.