China hits Japan where it hurts will PM Takaichi give in

Published: 17 February 2025. The English Chronicle Desk. The English Chronicle Online

Relations between China and Japan have deteriorated sharply in recent months as Beijing has begun to exert pressure on Tokyo in ways that hit at the heart of Japan’s economy, diplomacy and security priorities, raising the question: will Japan’s Prime Minister Sanae Takaichi cave to China’s demands or stand firm?

At the centre of the row is Tokyo’s stance on Taiwan, a democratic self-governing island that Beijing considers part of its territory. In a parliamentary speech in November, Takaichi warned that a hypothetical Chinese attack on Taiwan could constitute an “existential threat” to Japan and justify a military response under its self-defence laws. China responded angrily, accusing her of crossing a diplomatic “red line” and violating the so-called One-China principle, sparking a full-blown diplomatic crisis between the two neighbours.

Beijing’s backlash has not been limited to rhetoric. China has moved to damage key pillars of Japan’s external ties. Trade cooperation, traditionally robust between the world’s second and third-largest economies, has been described by China’s commerce ministry as “severely damaged” following Tokyo’s Taiwan comments — a stark warning for Tokyo given that China is Japan’s second-largest export market after the United States.

In concrete terms, China has taken measures with tangible economic impact. Beijing has suspended imports of Japanese seafood products, a significant blow for Japan’s fisheries industries, and issued travel advisories discouraging Chinese tourists and students from visiting Japan — a move that analysts say could cost billions in lost tourism revenue. China remains a major source of visitors, and fluctuations in tourist flows can hit local retailers, hospitality firms and broader consumer spending.

Tensions flared further when Japan seized a Chinese fishing vessel in its exclusive economic zone this month, arresting its captain and adding to diplomatic strain. The incident marked the first such enforcement action involving a Chinese vessel since 2022, and it has been publicly criticised by Beijing as provocative.

Japan’s territorial dispute with China over the Senkaku Islands dispute in the East China Sea adds another layer of complexity. While not new, this dispute has become more volatile against the backdrop of the Taiwan tensions, with both sides increasing patrols and surveillance in contested waters.

Domestically, Prime Minister Takaichi faces a delicate balancing act. Her electoral victory and hawkish reputation have bolstered nationalist support for a more assertive security posture, including revising Japan’s post-World War II pacifist constitution to widen military capabilities. Yet opposition figures and business leaders have warned that escalating tensions risk harming Japan’s economic interests and stability.

Members of the opposition, including lawmakers from parties like Reiwa Shinsengumi, have urged Takaichi to retract her Taiwan remarks, arguing that they are not only unnecessary but damaging to diplomatic efforts and economic ties. These voices highlight the political costs at home, where a more cautious approach to China may better serve national interests.

Beijing’s strategy appears to be leveraging its economic and diplomatic tools to signal that Japan’s security rhetoric carries consequences. Analysts note that China’s influence over critical supply chains — particularly in high-tech and rare-earth materials where Japan remains dependent — gives it additional leverage in the dispute.

Despite the pressure, Tokyo has sought to keep diplomatic channels open. Takaichi has reiterated that Japan values stable ties with China and remains “always open” to dialogue, even as differences persist. Japanese officials stress that maintaining regional peace and economic cooperation remains a priority even amid security disagreements.

The global context further complicates matters. With the United States reaffirming security commitments to allies in the region, Tokyo’s policy choices are watched closely in Washington. Coordination with US defence strategy against potential destabilisation in East and Southeast Asia remains a factor shaping Japan’s posture.

As China continues to use trade, tourism and diplomatic channels to exert influence, the question looms large: will Prime Minister Takaichi yield to Beijing’s demands by softening her stance on Taiwan and related security issues, or will she double down on a tougher policy that risks further economic friction? The answer will have profound implications not only for bilateral ties but for the broader strategic balance in the Indo-Pacific.

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