Newly appointed Japanese Prime Minister Shinzo Abe has criticized the way the authorities in China are handling the Island issue between the countries.

Abe was critical of Japan's larger neighbor for wrong handling of the territorial dispute over the islands called Senkaku in Japan and Diaoyu in China. He said that it was wrong to damage business in order to achieve political objectives.

He pointed out that the Japanese companies and Japanese nationals in China are being harmed in order to achieve political objectives. The relationship between the two Asian economic giants has been severely affected due to the sovereignty over the islands as the issue has sparked nationalist feelings in both the nations.

The relationship hit a low when Japanese government decided to purchase three of the islands from their private Japanese owner in September. Japan controls the islands that are claimed by both China as well as Taiwan.

Shinzo Abe's Liberal Democratic Party had won 294 seats in Japan's 480-member lower house of parliament. Former Prime Minister Yoshihiko Noda's Democratic Party of Japan lost three- fourths of its members.