I just got back from a business trip to Shanghai today and was really surprised how much this came up in conversation with my Chinese coworkers. The media in China is playing this up a lot...enought to make everyone newly aware and pissed off, but not enogh for riots or violence. I was a littel surprising to hear the words "hate" and "Japan" came up a lot from my educated friends.
One example: At one drunken point last night at a hostess bar (drinking game bar a la Taiwan) somewhere in Shanghai, we bet the beer girl a glass of beer if she could guess wher I live. She got one clue from my Chinese coworker which was "we hate them"...her answer was instantly "Japan!". So I chugged the beer in hopes of soothing international tempers....
BTW - somehow it seems funny to get this news from a site called "asiansexgazzette"