The historical relations between China and Japan all centre in Korea and it was in and over Korea that they first came in serious conflict in the modern period of their history. The results of this conflict were to prove of tremendous significance not only in the history of the two immediate contestants involved in the conflict, but for the entire world.
Korea’s geographical situation was such that it inevitably became a bone of contention between her two neighbours -- China and Japan. Any one of these two powers, if in possession of Korea, could entertain and realise expansionist designs towards the other.
China being a vast and powerful country in the beginning was unaware of what was happening in Japan. In fact, she had looked with scorn towards Japan as an inferior nation. The situation began to change considerably since the second half of the 19th century. Japan, having once been opened to the West, was quick to learn Western sciences, technology, education and diplomacy, and consolidated her position. With the Meiji Restoration, internal unity of Japan under the Emperor strengthened. The situation was just the contrary in China. The Chinese territory was being trimmed and her influence was decreasing. The ruling Manchu dynasty was fast losing its prestige and vitality. Moreover, the Chinese suffering from a superiority complex were not inclined to learn anything from the West.
Again, the Chinese, by unwisely engaging into an armed conflict with the Western Powers had exposed her own weakness. As such, she was compelled to sign a number of humiliating treaties with them granting extra-territorial concessions, open a large number of her ports to trade with them and allow Christian missionaries. Her national prestige had thus been lowered. Japan proved wiser. It did not expose weakness by inviting armed conflict. She gave concessions to Europeans on honourable terms and also strengthened herself by adopting Western learning in science, technology and war.
Before the Meiji restoration, China had considered Japan merely a tiny State under her control and influence. But Japan had considerably strengthened her position after the Meiji restoration, and wanted to expand particularly in the direction of Korea. She also wanted to revise her relations with China on the basis of equality. As such, in the beginning of the seventies of the 19th century, Japan sent a Mission to China to conclude a treaty. But the Chinese Foreign Office showed reluctance for a Treaty on equal terms with Japan. She only allowed to latter to have trade with her. In 1871 A.D., a Treaty of friendship was signed between the two countries, thus marking the beginning of formal relations.
However, in 1874 A.D., the relations between the two neighbours worsened over Korea. It was under the formal control and nominal suzerainty of China, but for some years now she had not paid any attention to it. This led Japan to entertain political and territorial ambitions in Korea. Land and food for its ever expanding population, commercial expansion required due to rapid industrial progress, the imperialistic ambitions of Meiji Regime and Russia’s big naval station at Vladivostok near Korean borders with Russia’s designs against Korea itself were some of the factors that were responsible for Japan’s desire to have an early grab of Korea before any other power could do so.
Relations between China and Japan first came into conflict in 1874 A.D. over the Loochoo Islands. A certain number of ship-wrecked sailors of these islands were killed by some savage inhabitants in Formosa. Japan claiming sovereignty over Loochoo demanded compensation. China replied that Loochoo was her territory and ship-wreck incident was an internal affair of China in which Japan had no right to intervene. Japan adopted threatening policy by sending two armies -- one to Formosa and the other against China. But the mediation of the British representative, Sir Thomas, brought a compromise. China agreed to pay compensation and assured safety for Japanese seamen.
Importance: China indirectly agreed that Japan had some legal rights over Loochoo Islands. China’s responsible statesmen, such as Li-Hung-Chang, became conscious of Japan’s aggressive designs against China, which were most dangerous than that of the Europeans.
But the real conflict between China and Japan was over Korea. As rightly pointed out by Vinacke, "The historical relations of Japan and China all centre in Korea that they first came into serious conflict in the modern period of their history." As hinted above, Russia’s ambitions in regard to Korea and China’s neglect of Korea led Japan to strengthen her hold over the hermit Kingdom. As such, she concluded a treaty with Korea.