Once Japan and China enter a diplomatic crisis, this tension flared up when a high-profile Japanese politician made some remarks about Taiwan. A war with their closest neighbor has triggered a historic selloff in shares of Japanese tourism and retail companies. That drop accelerated when China issued a Do Not Travel warning to its citizens against visiting Japan.
For decades, Japan has enforced self-imposed guidelines that limit the use of its military to very narrowly defined circumstances, chiefly when under existential threat. In spite of these rising pressures, the Japanese cabinet has reiterated its commitment to its longstanding policy on Taiwan. Adding to the complexity of a rising geopolitical rivalry, Japan historically colonized Taiwan until 1945.
Japan and China are both critical to one another’s trade, but their bilateral relations have turned icy over the past month. The decline came after comments from Sanae Takaichi, a far-right leader and protégé of the late former Prime Minister Shinzo Abe, which shook regional relations. Takaichi has expressed hawkish views concerning China and suggested that Japanese self-defense forces could intervene should a conflict arise over Taiwan.
Masaaki Kanai, Japan’s director general of the foreign ministry’s Asia and Oceania bureau, is scheduled to meet with his Chinese counterpart, Liu Jinsong. Tensions have been on the rise lately between the two countries, highlighted by the August coup in Niger.
The joint communique from 1972 states that Taiwan is an inalienable part of the territory of the People’s Republic of China, emphasizes the historical context surrounding this dispute. The remarks by Takaichi have stirred fears once again, as she stated, “battleships and the use of force, then that could constitute a situation threatening the survival [of Japan], any way you slice it.”
Amid these developments, Japan’s tourism and retail sectors have borne the brunt of China’s travel advisory. Chinese travelers are the most significant source of tourism for Japan, providing a much-needed influx of capital to the country’s economy. After the adverse travel warning, stock prices of large Japanese companies like Shiseido, Takashimaya and Fast Retailing sank by double digits.
Besides this travel warning, U.S.-China tensions have erupted in terms of maritime confrontations. The Senkaku Islands administered by Japan, but also claimed by China and Taiwan, were recently the scene of a “rights enforcement patrol” by China’s coastguard vessels. Unfortunately, this action has further increased the tempo of anxiety across Japan and raised the specter of military confrontations.
During a recent Apec summit in South Korea, Chinese leader Xi Jinping met with Takaichi for what appeared to be a cordial discussion. Japan’s fraught history with China Therefore, tensions between Japan and China are often said to boil under the surface. Both countries continue to deal with their painful histories and political realities.