Few signs of thaw in Japan-China relations one year after Takaichi’s Taiwan remarks

Tokyo on Saturday will mark one year since Prime Minister Sanae Takaichi’s remarks about the possibility of a Japanese military intervention in a Taiwan crisis triggered a diplomatic rupture with Beijing — a rift that shows few signs of closing as the two sides remain stubbornly at odds.

The ongoing dispute between China and Japan began following Takaichi’s remarks in parliament on Nov. 7, 2025, that the Self-Defense Forces could be deployed under the right to collective self-defense in “worst-case” scenarios, such as a Chinese naval blockade of Taiwan, which the prime minister said could constitute a “survival-threatening situation” for Japan.

The comments, the first by a sitting prime minister to detail a specific case of how Tokyo might respond to a Taiwan Strait crisis, triggered outrage in Beijing. China claims Taiwan as its own and has vowed to bring the democratic island under its control, by force if necessary.

Over the last year, Beijing has reimposed a ban on seafood exports, restricted Japan-bound exports of rare-earth minerals and dual-use items, and warned tourists not to visit Japan.

It has ostensibly linked this crackdown as a response to what it says are Japanese steps toward “remilitarization.”

As the diplomatic standoff drags on, it has taken a particular toll on Japanese businesses, disrupting supply chains, squeezing revenue and forcing companies to rethink their exposure to China.

“Chinese export controls on rare earths have disrupted shipments of magnets used in automobiles and electronics, while unpredictable licensing procedures have complicated domestic companies’ efforts to secure stable supplies,” said a senior analyst at the Japan External Trade Organization (JETRO).

Exports of yttrium oxide to Japan, for instance, plunged 98% in the first nine months of 2026, falling to just 18 metric tons from 887 tons a year earlier, according to Chinese customs data. Shipments of dysprosium and terbium oxide — critical materials used in high-performance magnets for electric vehicles and industrial machinery — have also virtually ground to a halt.

Beyond manufacturing, tourism, aviation and entertainment have likewise been hit hard, with declining Chinese visitor numbers eating into revenues and prompting airlines to cut flights.

Even so, Japanese companies have shown little appetite for abandoning one of their largest export markets altogether.

An October survey by PwC Japan found that 49% of respondents planned to maintain their existing operations in China, up from 39% a year earlier, while the share considering moving production or procurement elsewhere slipped to 23% from 26%.

“The Japanese private sector cannot simply turn their backs on China, as doing so would cost them customers and market share to increasingly competitive foreign rivals,” the JETRO analyst added.

Japan has long viewed any Chinese takeover of Taiwan — which sits just 120 kilometers from Okinawa Prefecture’s Yonaguni Island — as an existential crisis.

Japan relies on maritime routes for more than 99% of its imports and exports, and it remains dependent on foreign countries for around 90% of its energy needs. It also relies heavily on food imports, with the country’s calorie-based self-sufficiency ratio standing at just 37%, well below that of other developed countries.

While some, including the U.S. intelligence community, have said that Takaichi’s remarks represent “a significant shift” for a sitting Japanese leader, the prime minister has said her administration’s stance on a Taiwan emergency is consistent with that of past governments.

Takaichi and senior administration officials have repeatedly attempted to soften the impact of her remarks, saying that the door to dialogue with China remains open.

Tokyo has managed to make some progress on that front, with both sitting and past government officials holding talks with the Chinese side after months of intransigence.

Former Japanese Foreign Minister Takeshi Iwaya held talks with China’s top diplomat and its top economic minister in late September, the first official meetings between a Japanese politician and such high-ranking Chinese ministers since Takaichi’s remarks.

This was followed by the rare delivery of a condolence letter by Chinese leader Xi Jinping to the family of former Japanese Prime Minister Yasuo Fukuda, who died last month. The letter also urged “Japanese authorities” to “safeguard the political foundation” of bilateral ties.

On Friday, Chief Cabinet Secretary Minoru Kihara said that “China is an important neighbor, and despite existing issues, we have a long-standing relationship built over many years.”

“Based on this,” he added, “our policy is to comprehensively promote a strategic and mutually beneficial relationship with China.”

But while these moves appear to hint at a softening of China’s approach, they may actually represent a hardening of its position.

Iwaya, a Sinophile who has in the past advocated for diplomacy with China, is not close to Takaichi. And, according to Naoko Aoki, a political scientist at the Rand Corp. think tank, feting him in Beijing “in a way underscored the coolness of relations between the two countries at the top political level.”

Xi’s message, meanwhile, was pointedly addressed to Fukuda’s family — not Takaichi — while similar messages had traditionally been sent to the sitting Japanese leader, Aoki noted.

“So this may actually reflect the political tensions between the two countries,” she said.

Meanwhile, revisions to three key security documents that lay out the trajectory of Japan’s security strategy are also due by the year-end. Those documents, which are virtually certain to include plans for a considerable defense spending hike and language referring to China as a top strategic concern, are sure to prompt consternation in Beijing.

“Behind China’s continued hard-line stance over the past year is partly an effort to rein in the Takaichi government’s defense ambitions as it seeks to revise the security documents,” said Rumi Aoyama, director of the Institute of Contemporary Chinese Studies at Waseda University.

While frictions at the top level will likely persist, Aoyama added that “Beijing’s economic pressure and attempts to spread anti-Japan narratives on the international stage have yielded little success.”

The next opportunity for the two sides to push for an easing of tensions will be later this month, when Xi hosts the Asia-Pacific Economic Cooperation summit in Shenzhen, China, on Nov. 18 and 19. Takaichi is due to attend.

Asked about planning for a Takaichi-Xi meeting at the APEC summit — the two countries’ leaders had met at the venue each year from 2022 to 2025 — the government’s top spokesperson on Friday declined to comment.

However, Japan is believed to be seeking such a meeting, and there have been media reports that China instead proposed talks with Premier Li Qiang, the ruling Communist Party’s No. 2 official, which Tokyo expressed reluctance about.

Ke Long, an economist and China specialist at the Tokyo Foundation, said a leaders’ meeting was unlikely, as Beijing seeks to keep up pressure against Tokyo even as a weakening Chinese economy made it more receptive to renewed business ties with Japan.

Still, Ke said Beijing’s sustained pressure could backfire, arguing that “China’s restrictions could further accelerate Japan’s efforts to reduce its dependence on Chinese supplies and seek more self-reliance.”

“Japanese firms have long been aware of the risks of overreliance on China and have already begun diversifying their supply chains,” he said. “I expect that trend to continue as companies seek to optimize their supply networks.”

When I lived there in the ‘70’s, the Taiwanese preferred Japanese rule over the Nationalists (mainlanders). A protest against the Nationalists in Feb 1947 led to a massacre, kind of proving their point, after which the KMT pretty much outlawed any discussion about at the time. According to many Taiwanese I spoke to, they were treated well by the Japanese who made infrastructure and health improvements in Taiwan during their occupation.

Interesting. The nationalists were the bad guys during gunboat diplomacy days before WW2. Afterwards they’re the good guys. I do believe it was under martial law for the longest time under the nationalists. Sounds like the ‘who lost China?’ question is valid.

China wants payback after the rape of Nanking 90 years ago. Taiwan won’t be enough and foreign policy won’t be an issue when it comes to the 2028 elections. Advantage democrats.

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