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Frank Chen

Ralph Jennings

Japanese Prime Minister Sanae Takaichi's landslide election victory has dimmed hopes that ties between Tokyo and Beijing will significantly improve in the near term, analysts and businesspeople said, though some expect tensions to stabilise over time.
Her ruling coalition secured the win on Sunday, strengthening the hand of a leader who infuriated Beijing by outlining how Tokyo might respond to a mainland attack on Taiwan.
Enterprises caught in the middle of the dispute would have to tread cautiously, even as Beijing weighed the risks of maximising pressure, analysts said.
“Japanese voters have given Takaichi a strong mandate to continue her policy on security and diplomacy,” said Kazuto Suzuki, a professor at the University of Tokyo’s Graduate School of Public Policy. “If China continues to strengthen pressure on Japan, it would strengthen public support for her.”
He added that Beijing could decide against further leveraging its dominance in rare earths. “China has not explicitly imposed export controls, but it has slowed down the issuing of licences. I don’t think it will change as a result of the election.”
Charles Chang, a finance professor at Fudan University in Shanghai, said businesses would likely operate as normal, albeit with greater caution. “People in trade are like, ‘We’ll just keep doing it unless we’re being asked to stop’,” he added.
A Chinese executive at a Japanese robot manufacturer also shrugged off fears of fresh blows to business, citing a shift in Chinese consumer behaviour.


“I don’t think Takaichi will be more hawkish than before the election … now that she has won and China has made its position clear,” the person said on condition of anonymity.
“We haven’t seen a boycott of Japanese brands in China after Takaichi’s controversial Taiwan remarks … This is proof that Chinese consumers are becoming mature and are less swayed by political rifts.”
Beijing sees Taiwan as part of China to be reunited by force if necessary. Most countries, including the United States, do not recognise Taiwan as an independent state, but Washington is opposed to any attempt to take the self-governed island by force and is committed to supplying it with weapons.
Trade between China and Japan grew 4.5 per cent year on year to US$322 billion in 2025, reversing a 3 per cent decline in 2024, according to Chinese customs data. At the same time, Beijing reportedly reinstated a ban on Japanese seafood imports and restricted exports of dual-use items after Takaichi’s remarks.
Tourism between the two countries is expected to remain subdued in 2026, continuing a decline that began in November following a Chinese travel advisory warning and mass flight cancellations.
Japan should expect 4.8 to 5.8 million Chinese arrivals this year, down from 9.3 million in 2025, according to travel marketing platform China Trading Desk. Between 140,000 and 160,000 Chinese travellers could visit Japan during the Lunar New Year break and spend between US$266 million and US$304 million, it said.
The owner of a travel agency in Shandong province agreed that Takaichi’s sweeping victory would likely hurt tourism, but said Japan-bound trips could slowly recover once “everyone calms down”.




“Takaichi’s win is bad news for ties so China’s measures may continue … But travel has solid demand: the two countries are so close, and Japan has a unique lure,” the manager said, also declining to be named.
“The sector is not hoping for an immediate rebound anyway … we are at a multi-year low.”
Despite the broader downturn, the manager reported stable performance in some segments, including business travel and repeat visits to Japan, noting that many young, “apolitical” backpackers from the mainland were heading to Kyoto and Mount Fuji, sometimes via a third destination such as Hong Kong or Seoul.
But the impact had been felt in the other direction. China Highlights, a travel agency that organises tours of the country, had seen its Japanese clientele drop by more than half, CEO Steven Zhao said. Numbers were already low, he added, because of previous disputes between Beijing and Tokyo among other “challenges”, with no growth prospects on the horizon.
China’s hosting of the 2026 Asia-Pacific Economic Cooperation forum, especially the leaders’ meeting in Shenzhen in November, could help repair ties, said Suzuki, the University of Tokyo scholar.
“I think the Apec summit will be a good time [for Beijing] to lower the tension for setting up a meeting between PM Takaichi and President Xi Jinping.”


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The dispute between Beijing and Tokyo erupted on November 7, 2025, after Takaichi became the first Japanese prime minister to explicitly state that any use of force by Beijing against Taiwan could be a “survival-threatening situation” for Japan, suggesting that the country’s military could intervene. Photo: Reuters

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Ties between China and Japan have deteriorated since November, when Japanese Prime Minister Sanae Takaichi made contentious remarks about Taiwan that drew a sharp response from Beijing. Photo: Reuters

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Japan’s finance minister said she would attend a G7 gathering in Washington on Monday with the “risk of a rare-earth-supply interruption from China in mind”. Photo: Getty Images

A sample of monazite, a mineral used in the rare earth industry to extract elements such as cerium, lanthanum, and neodymium, is seen at the Geological Museum of China in Beijing. Photo: Reuters

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Japan’s Prime Minister Sanae Takaichi, leader of the ruling Liberal Democratic Party, speaks to the media at the LDP headquarters in Tokyo on Sunday. Photo: EPA

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Beijing has tried to drum up support among Southeast Asian diplomats following Japanese Prime Minister Sanae Takaichi’s (centre) comments about Taiwan in November. Photo: Reuters

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Neither side likely to want escalation in months-long dispute but near-term outlook uncertain, analysts say


Neither side likely to want escalation in months-long dispute but near-term outlook uncertain, analysts say.


China, Japan dispute: what next for businesses after Takaichi’s election sweep?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Neither side likely to want escalation in months-long dispute but near-term outlook uncertain, analysts say

Neither side likely to want escalation in months-long dispute but near-term outlook uncertain, analysts say