The relationship between China and Japan is strained following the Japanese government's decision to "purchase" Diaoyu Islands. The Japanese government’s misjudgment on Diaoyu Islands dispute has aroused strong opposition from the Chinese politicians, the military and civil society besides triggered large scale of protests in China. The diplomatic relationship that established by the two countries 40 years ago is further straining in conjunction of the incident. Under the domestic political and social pressure, their economic relationship will inevitably be affected. Will the bilateral economy relations badly damaged? Or will the situation under control?This report consists brief analysis on China-Japan economic relationship.