The sabre-rattling between Japan and China over the Senkaku Islands is escalating and now the U.S. is involved.

Both China and Japan are conducting larger-than-usual naval exercises in the East China Sea.

According to Xinhua, the official government news agency in Beijing, the Chinese fielded 11 ships from the East China Sea fleet and eight military aircraft last Friday. The naval units operated in coordination with the marine surveillance and the fisheries agencies.

Xinhua said the exercises were in response to threats to China’s territorial sovereignty and claimed boats operated by the marine surveillance and fisheries agencies have been stalked and harassed by foreign vessels.

On Tuesday, Japanese Self-Defense Forces (JSDF) aircraft spotted seven Chinese warships near the the tiny island chain. China said the ships were on routine training.

On Sunday, the Japanese Maritime Self-Defense Force marked its 60th anniversary with a major exercise involving about 40 ships, including state-of-the-art destroyers, hovercraft able to launch assaults on rough coastlines and new conventional submarines. For the first time, naval forces from the United States were involved. Australia and Singapore also participated.

In addition, the Japanese government announced that fighters from its self-defense force were scrambled 209 times from April to September, the highest number of scrambles in the past decade. 69 of the launches were in response to Chinese aircraft.

Because Japan is constitutionally forbidden to maintain traditional military forces, the U.S. is obliged to come to the country’s defense. One of the largest U.S. bases in the region is on Okinawa, the prefecture that includes the Senkaku Islands.

U.S. Secretary of Defense Leon Panetta, quoted in a JSDF press release issued on Septmber 17, said: “Obviously, we are concerned by the demonstrations, and we’re concerned by the conflict that is taking place over the Senkaku Islands. And the message that I’ve tried to convey is a message that we have to urge calm and restraint on all sides. United States policy with regards to these islands is well known. And obviously, we stand by our treaty obligations. They’re longstanding, and that has not changed. But the United States, as a matter of policy, does not take a position with regards to competing sovereignty claims. Having said that, we expect that these issues will be resolved peacefully. And although, you know, we understand the differences here with regards to jurisdiction, it is extremely important that diplomatic means on both sides be used to try to constructively resolve these issues. These approaches have to be based on clear principles, principles that relate to international rules and regulations and that have been consistently enunciated. It’s in everybody’s interest for Japan and China to maintain good relations and to find a way to avoid further escalation.

Japanese automakers have already cut sales projections and production schedules for the Chinese market as growing anti-Japan sentiment spreads through China. With the addition of U.S. military forces to the Japanese operations, and despite Panetta’s comments, it’s possible there will be a backlash against American automakers, as well. Both Ford and General Motors are heavily invested in China and GM depends heavily on its Chinese joint ventures to maintain its ranking as the world’s top car company.

At the moment, it’s probably a fairly good time to be a German automaker in China.