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Recent naval ship visits and exchanges of goodwill between China and Japan suggest an improvement in the two countries' bilateral relationship, which had been steadily deteriorating since the late 1990s. In the longer term, however, Sino-Japanese relations will likely be tested or constrained by five key sets of issues: (1) territorial and resource disputes, (2) nationalism and issues of mutual antipathy, (3) Taiwan's political status, (4) the rapid rise of China's military power, and (5) the U.S.-Japan security alliance. The manner in which these issues are managed or resolved will likely play a major role in shaping the Sino-Japanese relationship and thus the overall geopolitical environment in East Asia. A key complicating factor in the relationship, however, is the persistence of divergent worldviews: Chinese leaders appear to be more consistently persuaded by realist notions of international politics, whereas Japanese leaders tend to favor liberal-institutionalist values. The two countries may use these different lenses to view the same incident or issue, potentially creating misunderstanding and miscalculation. [ABSTRACT FROM AUTHOR]