Getty Images - Japan Dispute Takes Rising Toll On Top Asian Economies - Bloomberg - China

The last time a dispute between Japan and China blew up in 2010 over eight uninhabited islands, the economic fallout lasted less than a month. This time, the spat is prolonging a recession in the world s third-largest economy.

Four months after Chinese consumers staged a boycott of Japanese products over the islands in the East China Sea, sales of Japanese autos in China have yet to recover, Chinese factories began to favor South Korean component suppliers, and the U.S. has displaced China as Japan s largest export market.

The spats have become increasingly costly as Japan s dependence on China as an export market has risen, said Tony Nash, a Singapore-based managing director at IHS Inc., which provides research and analytics for industries including financial companies. Nationalism around the issue has resulted in lower demand for Japanese products in China and even Chinese firms sourcing products from Korean suppliers.

Growth Cut Biggest Effect Ishihara s Offer Election Win Economies Lose Uniqlo Stores Oil Resources Chinese Anger U.S. Relations Acquisition Spending Enlarge image Shinzo Abe

Tomohiro Ohsumi/Bloomberg

Shinzo Abe, Japan's incoming prime minister and president of the Liberal Democratic Party.

Shinzo Abe, Japan's incoming prime minister and president of the Liberal Democratic Party. Photographer: Tomohiro Ohsumi/Bloomberg

Enlarge image Xi Jinping

Tim Rue/Bloomberg

Xi Jinping, new head of the Chinese Communist Party, called the purchase a farce.

Xi Jinping, new head of the Chinese Communist Party, called the purchase a farce. Photographer: Tim Rue/Bloomberg

Enlarge image Japan-China Ties

The Asahi Shimbun via Getty Images

The standoff over the islands known as Senkaku in Japan and Diaoyu in China has contributed to declines in Japan s shipments to China for the six months through November.

The standoff over the islands known as Senkaku in Japan and Diaoyu in China has contributed to declines in Japan s shipments to China for the six months through November. Source: The Asahi Shimbun via Getty Images

Enlarge image Japan-China Ties

Nelson Ching/Bloomberg

Toyota Motor Corp., Japan s biggest carmaker, said last month output in China fell the most in at least a decade.

Toyota Motor Corp., Japan s biggest carmaker, said last month output in China fell the most in at least a decade. Photographer: Nelson Ching/Bloomberg

Enlarge image Japan-China ties Japan-China Ties

Lam Yik Fei/Getty Images

An anti-Japanese protester throws a gas cannister during a demonstration over the disputed Diaoyu Islands in Shenzhen, China.

An anti-Japanese protester throws a gas cannister during a demonstration over the disputed Diaoyu Islands in Shenzhen, China. Photographer: Lam Yik Fei/Getty Images