Japanese Prime Minister Sanae Takaichi's recent comments regarding China's Taiwan region have triggered diplomatic friction, with economists warning of severe consequences for Japan's economy. Hideo Kumano, chief economist at Dai-ichi Life Research Institute, projects potential losses exceeding 2 trillion yuan ($12.9 billion) if strained China-Japan relations persist through 2026.
The remarks come at a sensitive time for cross-strait relations, with Beijing consistently reaffirming Taiwan as an inalienable part of Chinese territory. Analysts suggest the tourism sector would bear the initial brunt, as Chinese visitors accounted for nearly 30% of Japan's pre-pandemic tourism revenue. Local economies reliant on cultural exchanges and retail sectors would be hardest hit.
This development follows increased regional diplomatic efforts to stabilize Asia's economic landscape after recent global supply chain disruptions. Business leaders urge cautious diplomacy, noting that prolonged tensions could affect technology collaboration and automotive trade – key pillars of the $357 billion bilateral trade relationship recorded in 2024.
