Relations between China and Japan have reached their lowest point in over ten years. There is little chance of a quick return to the tense but manageable peace that defined the last twenty years.
The conflict began on 7 November. Japanese Prime Minister Sanae Takaichi told the Diet that a Chinese attempt to take Taiwan by force would be a “survival-threatening situation” for Japan. She stated this justified Tokyo’s use of collective self-defense alongside its US ally. Beijing views Taiwan as an inseparable part of China. The statement crossed a major boundary for the Chinese government.
China followed with a standard escalation pattern from its familiar strategy. But this time, the response had greater intensity. Also, the Japanese leadership shows no sign of yielding.
Beijing’s Multi-Pronged Retaliation
Diplomatic fury: China demanded an immediate retraction and apology. None came. Its foreign ministry and “wolf warrior” diplomats launched a sustained verbal assault on Takaichi personally.
Travel warnings: Beijing warned citizens that Japan was unsafe for travel or study. It cited vague “security concerns.”
Economic pressure: Authorities restricted imports of Japanese seafood. They cancelled concerts and film screenings. State-linked travel agencies began sending tourists to other destinations.
Military signalling: Chinese Coast Guard and Navy vessels sailed repeatedly through waters near the Senkaku/Diaoyu islands. In early December, People’s Liberation Army Air Force jets locked fire-control radars on Japanese patrol aircraft. This provocative act stopped just short of opening fire.
Global campaign: Beijing filed a formal protest at the United Nations. It lobbied third countries to condemn Japan’s “interference in China’s internal affairs.”
Japan’s Tourism Takes the First Hit
The damage is already clear. Chinese visitors made up roughly one-fifth of Japan’s inbound tourism before the crisis. Early data from the Japan National Tourism Organization (JNTO) show a 15–20 per cent drop in foreign arrivals for the first quarter of 2025 compared to 2024. This decline comes almost entirely from a collapse in visitors from mainland China.
Major Chinese online travel agencies report a sharp drop in bookings to Japan. Agencies have cancelled packages or sent travelers to South Korea, Thailand, Vietnam, or Europe. Analysts estimate the direct economic damage to Japan could reach ¥2–2.5 trillion (approximately A$14–17 billion). This will happen if the stoppage lasts through the important spring cherry-blossom and Golden Week seasons.
Why This Crisis Feels Different
Past conflicts eventually ended. These included Yasukuni visits in the 2000s, the 2010 trawler incident, and the 2012 Senkaku nationalization. Leaders on both sides knew that a total break would hurt both countries.
The political situation has changed decisively this time.
- Leadership styles: Prime Minister Takaichi calls herself the heir to Shinzo Abe’s legacy. She built her political brand on confronting China. She cannot back down without hurting the “strong Japan” image she created.
- Domestic politics: Takaichi has been in office for two months. She uses the crisis to rally public support and distract from her party’s lingering slush-fund scandals. Cabinet approval ratings sit above 55 per cent.
- Structural shifts in Tokyo: The dovish Komeito party is no longer in the ruling coalition. Pro-China old-guard LDP figures like Toshihiro Nikai have lost influence. Hardliners like Taro Aso now control foreign policy.
- A more assertive Beijing: Xi Jinping leads a China that is richer and militarily stronger. It relies less on Japanese investment than at any time since 1972. Economic pressure costs China less than before.
- Taiwan factor: The current crisis differs from previous disputes. It connects explicitly to the Taiwan Strait. Tokyo now links this issue to its own survival. The topic enjoys broad bipartisan support in Japan.
Japan's Tourism Accelerates Diversification
Tokyo acts quickly. The government fast-tracked campaigns to attract visitors from Southeast Asia, India, Europe, and the Middle East. Officials expanded visa waivers. They also increased the “Cool Japan” cultural-promotion budget. Airlines report surging interest from Australian, Indian, and European travelers. These visitors fill the gap left by absent Chinese tour groups.
Supply-chain de-risking began during the Abe era. It has accelerated recently. Japanese firms continue to shift production to Vietnam, India, and Mexico. This move reduces vulnerability to future Chinese sanctions.
No Clear Path Back
Shinzo Abe’s 2006 formula guided Sino-Japanese relations for half a century. It proposed a “mutually beneficial relationship based on common strategic interests.” That framework has collapsed.
Takaichi committed to raising defense spending to 2 percent of GDP by March 2026. This target is two years ahead of schedule. Beijing shows every sign of hardening its stance. Diplomats on both sides privately admit that the old methods fail.
One veteran Japanese official described the situation. “In the past we always found a way to step back from the brink. This time, neither leader seems to want the ladder.”
Japan’s tourism industry and broader regional stability will suffer. The cost of that mutual intransigence is just beginning to appear.
