I fully agree that the Diaoyu Islands should have belonged to China, but as much as I hate to admit, by international laws and standards, the effective "ownership rights" have long been lost to Japan now. And this is entirely due to the incompetency and lack of action on both PRC and ROC.
Since the 50's (might even have been a bit earlier), Japan has continually exercised their "ownership rights" by occupying the Diaoyu Islands, building structures on it, and petrolling the waters close by with their "defence" ships, while China has only occasionally voiced the ownership of the islands in foreign affair speeches while taking zero official government action. By international standards, a continual lack of presence, occupation, and petrolling the area on China's part effectively means they have forfeited their ownership claims on the piece of land. On the other hand, Japan has continually been doing this for 50+ years. Taken to the international courts, China would most definitely lose the ownership claims to Japan.
A simple analogy is, consider what happens when I move into an empty house that you originally owned. I live there for 50 years and all you do is tell people the house is yours, not mine while taking zero real action to kick me out. In 50 year's time, any reasonable law court would have concluded that your lack of action is simply an admission on your part that you have given up ownership of the house, and that the place now belongs to me.
This is what is happening now with the Diaoyu Islands. It has been forever lost to Japan because of the lack of action from China and its government.
-Lik |