BEIJING: China postponed yesterday a ceremony marking the 40th anniversary of the establishment of diplomatic ties with Japan because of an ongoing territorial dispute, the Xinhua news agency said.

“Due to the current situation, the Chinese side has decided that the reception commemorating the 40th anniversary of the establishment of diplomatic relations will be postponed until an appropriate time,” Xinhua quoted an official as saying.

The unnamed official from the Chinese People’s Association for Friendship with Foreign Countries was referring to the ongoing row centering on the Tokyo-controlled Senkaku islands in the East China Sea, which are claimed by Beijing under the name Diaoyu.

The ceremony was due to take place on Thursday.

Asia’s two largest economies have wrangled about the islands since the 1970s, but the row flared in August after pro-China activists landed on one of them.

Tensions escalated dramatically after the Japanese government subsequently bought three of them from their private owners.

The Chinese friendship association has a close relationship with China’s foreign ministry.

Officials at the ministry refused to immediately confirm the postponement when contacted by AFP.

A diplomat in Tokyo who declined to be named confirmed Beijing’s decision, telling AFP without elaborating: “China informed the Japanese side” about the postponement.

The escalating row saw hundreds of Japanese rally Saturday against Beijing’s handling of the issue, days after anti-Japanese protests saw shops and factories vandalized in China.

Some 800 demonstrators waved national flags as they marched through downtown Tokyo, denouncing Beijing as a “brute state” and “fascist.”

Protesters marched through the Roppongi entertainment district, near the Chinese embassy, shouting: “We will never give in to China’s military threat!“

Japan’s coastguard said late Sunday that all Chinese marine surveillance vessels had for the first time in about a week withdrawn from waters near the islands, according to the Kyodo news agency.

A day earlier, the coastguard had said it was monitoring seven Chinese ships near the chain, down from 14 on Wednesday.

Meanwhile, China’s first aircraft carrier was handed over yesterday to the navy of the People’s Liberation Army, state press said, amid rising tensions over disputed waters in the East and South China Seas.

The handover ceremony of the 300-meter (990-foot) ship, a former Soviet carrier called the Varyag, took place in northeast China’s port of Dalian after a lengthy refitting by a Chinese shipbuilder, the Global Times reported.

During the handover ceremony the aircraft carrier raised the Chinese national flag on its mast, the PLA flag on its bow and the navy’s colors on its stern, the short online report said.

A ceremony to place the ship into active service would be held sometime in the future, the paper said without elaboration.

The announcement comes at a time of heightened tensions over maritime disputes in the Asia-Pacific region, where China’s growing assertiveness has put it on a collision course with Japan, Vietnam and the Philippines.

Beijing confirmed last year it was revamping the old Soviet ship, and has repeatedly insisted the carrier poses no threat to its neighbors and will be used mainly for training and research purposes.

But numerous sea trials of the aircraft carrier — currently only known as “Number 16” — since August 2011 were met with concern from regional powers including Japan and the United States, which called on Beijing to explain why it needed an aircraft carrier.

Construction of the Varyag originally ended with the 1991 collapse of the Soviet Union.

China reportedly bought the carrier’s immense armored hull — with no engine, electrics or propeller — from Ukraine in 1998 and began to refit the vessel in Dalian in 2002.

The PLA — the world’s largest active military — is extremely secretive about its defense programs, which benefit from a huge and expanding military budget boosted by the nation’s runaway economic growth.

China’s military budget officially reached $106 billion in 2012, an 11.2 percent increase.

According to a report issued by the Pentagon in May, Beijing is pouring money into advanced air defenses, submarines, anti-satellite weapons and anti-ship missiles that could all be used to deny an adversary access to strategic areas, such as the South China Sea.

China’s real defense spending amounts to between $120 to $180 billion, the report said.