TOKYO – Japan should mend relations with China, as economic interdependence is reciprocal and security risks continue to shape one of its most complex foreign policy challenges, a professor at a Tokyo university said.
“There is no future for the Japanese economy without the Chinese economy, but there are limits to the securitization of the relationship on both sides,” International Christian University’s Stephen Nagy said in a recent interview with Kyodo News.
Annual bilateral trade totals around $300 billion, with tens of thousands of Japanese companies operating in China and employing more than a million workers.
“This relationship is reciprocal, and the Chinese don’t want the Japanese to leave. Japanese businesses don’t want to leave because it’s a place of profit,” said the professor specializing in Indo-Pacific geopolitics and great power competition.
While the United States remains Japan’s most important security partner, Tokyo’s relationship with Beijing is more complicated due to differences in political systems and national interests.
Bilateral ties have sunk to their lowest level in years amid continued backlash from China over Japanese Prime Minister Sanae Takaichi’s remarks last November suggesting Japanese defense forces could act in the event of a contingency involving Taiwan.
Beijing’s response underscored its sensitivity over sovereignty issues and its determination to discourage similar positions by other countries.
“What happens to Taiwan matters to the whole world,” Nagy said.
Describing the self-ruled island’s semiconductor industry as “an international public good,” the professor said a Taiwan conflict would disrupt semiconductor supply chains and deal a serious blow to Japan’s economy.
China has adopted a range of economic measures targeting Japan and demanded Takaichi retract her remarks.
But Nagy warned that yielding to such pressure could encourage China to repeatedly use economic leverage to influence Japanese policy, adding that Beijing views Tokyo as the most powerful “middle power” in the world, whose stance could shape the behavior of countries such as Australia, Canada and South Korea.
Middle powers are nations navigating a bipolar world dominated by the United States and China — the two superpowers leading in military and economic strength.
Nagy cited a Chinese expression meaning “kill the chicken to scare the monkey,” suggesting Beijing could use pressure on Tokyo as a warning to others.
He also warned that China may step up pressure around the Japanese-controlled, Chinese-claimed Senkaku Islands through so-called gray zone tactics aimed at gradually changing the status quo without triggering direct conflict.
Japan’s defense spending increase is inevitable amid a worsening security environment, the yen’s continued weakness and demographic pressures affecting recruitment to the Self-Defense Forces, Nagy predicted. He called Russia’s invasion of Ukraine a critical juncture for many Japanese, showing how real war is possible and spillover effects are real.
“There is no military solution to China. The solution to China is engagement, but at the same time investing in what we call a multi-polar Indo-Pacific region, where India is a big pole. Southeast Asia is a big pole. Korea, Japan is a pole. New Zealand, Australia is a pole,” the professor said.
“The European Union is a pole through trade agreements, and then try to anchor the United States in…You pull the center of gravity away from China. This gives everybody more breathing room.”
Despite debate about expanding military capabilities, “Japan’s exclusively defense-oriented policy remains appropriate,” and it should continue prioritizing deterrence and rely on diplomacy and international cooperation, he said, pointing to the widening military gap between China and Japan.
Tokyo is expected to maintain a delicate balance between economic engagement with China and stronger security coordination with like-minded partners.
As to how middle powers should interact with the administration of U.S. President Donald Trump, Nagy said, “Unfortunately, for many people, including Japan, the United States is less predictable and seems to be focused on transactional diplomacy.”
“One of the roles of middle powers is to encourage the United States to be more rules-based, to focus on issues that we have shared interests in, so we have to work through diplomacy to try and influence U.S. policy.”