After several years of seeking to counter each other while insisting that their relations were at a recent best, Tokyo and Beijing became overtly contentious. A major event of the reporting period was China’s passage, and subsequent enforcement, of a law empowering its coast guard to take action, including through the use of force, to defend China’s self-proclaimed sovereignty over the Japanese administered Diaoyu/Senkaku Islands in the East China Sea. Heretofore reluctant to criticize Beijing over its actions in Xinjiang and Hong Kong, Japanese Foreign Minister Motegi Toshimitsu finally did so in April, and pledged to work with the United States to resolve China-Taiwan tensions. Chinese Foreign Minister Wang Yi warned that a continuation of such moves would cause Chinese-Japanese ties to hit bottom and threatened retaliation for any interference on Taiwan. No more was heard about a long-postponed Xi Jinping visit to Japan.

Politics

Japan continued to reach out for allies supportive of its positions with regard to China. Suga took an interest in visiting India and the Philippines—both of whom have border disputes with the PRC—as well as to the US. China was the unspoken major topic of Suga’s meeting with US President Joseph Biden in April, with Biden reiterating that Article V of the US-Japan Treaty of Mutual Cooperation and Security applies to the Senkaku Islands and opposing any unilateral efforts to change the status quo in the East China Sea. The two sides “shared concerns” over China’s abuse of human rights in Xinjiang and Hong Kong, which drew a response from Beijing, accusing Japan of being a vassal of the United States and interfering in China’s domestic affairs.

As the new year began, Global Times termed a report, in center-left Mainichi Shimbun saying that Japanese elites had been inoculated with Chinese vaccines suspected to have been smuggled into Japan, to have been fabricated “out of thin air.” There is, said Global Times, “no way that Chinese vaccine producers would engage in this illegal business.” Around the same time, the Japanese government considered how to publicize mid-19^th century British and German maps showing the Senkaku Islands as Japanese territory. The maps, reprinted in center-right Yomiuri Shimbun, predate the formal establishment of Japanese administrative ownership in 1895, will likely be put on display at the National Museum of Territory and Sovereignty in Tokyo’s Kasumigaseki area as well as on the museum’s webpage. As of March, Japan was strengthening cooperation with European nations to work toward a free and open Indo-Pacific (FOIP) region to counter Chinese expansionism. In January, Foreign Minister Motegi became the first Japanese foreign minister invited to participate in the discussions of the European Union’s foreign affairs council. According to Asahi, the fact that a number of EU foreign ministers expressed support for the FOIP reflects a steady change in European views of China. One sticking point for further cooperation, it was reported, is that EU nations could call upon Japan to take a stronger stance against China’s human rights abuses.

Figure 1 19th century map from the London Atlas showing the Senkaku Islands. Photo: Japan Forward

In January, a Japanese research fellow at London’s International Institute for Strategic Studies advocated redefining Japanese and British efforts to meet their common challenge from China. Japan is also increasing its engagement with Myanmar to counter Chinese dominance. Measures include support for education and health initiatives, negotiating peace between the Myanmar military (Tatmadaw) and the Arakan Army insurgents, and financial contributions to the troubled $8 billion Dawei Special Economic Zone project. If fully developed, the Dawei SEZ would be Southeast Asia’s largest industrial complex as well as a crucial link in Japan’s plan to create a Japan-Mekong Southern Economic Corridor that would connect Vietnam, Cambodia and Thailand to southern Myanmar.

Alongside these sources of friction, efforts for reconciliation continued. At a virtual conference on maritime security in January, the director-general of the Japanese Foreign Ministry’s Asian and Oceanian Affairs Bureau protested Chinese ships’ activities around the Diaoyu/Senkaku islands while China reiterated hopes to manage differences through dialogue and communication and to safeguard stability in the East China Sea. Global Times cited unnamed analysts’ speculation that the Japanese motive was partly to exert psychological pressure on China while reminding the Biden administration that it should continue Trump’s policy in the Indo-Pacific.

In a move sure to worsen China-Japan relations due to its relevance to the disputed Diaoyu/Senkaku islands, the Standing Committee of China’s National People’s Congress adopted a law in late January empowering the coast guard to take action, including the use of weapons, when national sovereignty, sovereign rights, or jurisdiction is illegally infringed on or threatened by foreign organizations or individuals at sea. At the time of the law’s passage, Chinese expert on Japanese politics Wang Guangtao opined that Japan, and its territorial disputes, were not likely to be a priority for Biden, who is facing “a domestic mess.” The Japanese government reacted nervously to the new Chinese regulations with an unnamed Defense Ministry official warning it has the potential to “shake the order based on international law.”

In February, a meeting between Japanese and British foreign and defense ministers expressed concern about the new coast guard law. News that the Queen Elizabeth II aircraft carrier strike group will be dispatched to East Asia was said to signal the Japan-UK desire for cooperation in maritime security: Tokyo wants to utilize British naval power to offset China’s maritime advances while London seeks avenues for regional cooperation after its departure from the European Union. Kyodo cited Defense Department Press Secretary John Kirby’s statement “we hold with the international community about the Senkakus and the sovereignty of the Senkakus, and we support Japan obviously in that sovereignty,” thus appearing to back Japan’s sovereignty over the islands and contradicting past statements that the US takes no position on the sovereignty issue. Another Defense Department spokesperson later “clarified” that “there is no change to US policy.”

A Global Times opinion piece criticized Tokyo for having taken the West’s side in opposing the military coup in Myanmar, and advised the Japanese government to ask itself which was more important: peace and stability in Myanmar or forcibly promoting the democratic system and engaging in a global competition of models and systems. A Nikkei article co-authored by a Chinese and Japanese argued that Beijing must realize that it needs the world on its side if it is to realize the Chinese dream. If China continues to insist that it has the right to continue its current course of expansion, it will not end well, they argued; the Chinese dream must become everyone else’s dream.

The Japan Parliamentary Alliance on China, a supra-partisan group of Diet members concerned with policy toward the PRC, adopted a statement condemning the PRC government for its violations of Uyghur human rights and called for legislation to impose sanctions on high-ranking foreign government officials and organizations involved in the violation of human rights. However, the Japanese government remained cautious about deeming China’s actions to be genocide, with Motegi telling a press conference that “we need to hold discussions with relevant ministries and agencies. We want to consider the issue carefully.” A similar note of caution characterized Japanese government reactions to the military coup in Myanmar, with Kyodo reporting that it feared sanctions would drive the military closer to China. Chinese analysts opined that, due largely to their high volumes of trade with the PRC, Japan and Germany “are less likely [than the other G7 members] to be roped into joining the US-led ‘counter China alliance.’”

South China Morning Post reported increasing resistance to influential LDP policymaker Nikai Toshihiro within his own party for his ties to Beijing. Critics believe Nikai is responsible for the government’s failure to condemn China’s human rights violations, its silence on the situation in Hong Kong, and its tepid reaction to Chinese ships’ repeated incursions into Japanese waters around the disputed islands in the East China Sea. Citing polls, the paper pointed out that financial scandals involving members of Nikai’s faction had damaged Prime Minister Suga, with an election expected in the fall.

Figure 2 Japanese LDP policymaker Nikai Toshihiro with Chinese President Xi Jinping during a 2015 meeting in Beijing. Photo: Reuters via SCMP

In March, taking note of China’s punitive economic actions against Australia in response to that country’s call for an independent investigation into the origins of the coronavirus, Japanese ambassador Yamagami Shingo, speaking at the Australian Financial Review’s business summit, assured Australia that it “is not walking alone” in dealing with an increasingly aggressive China, which is of great concern to his country.

In what was described as a conscious move to counter China’s vaccine diplomacy campaign, it was announced that Japan, which does not have its own domestically developed vaccines, will partner with the other countries of the Quadrilateral Security Dialogue (Quad)—Australia, India, and the US—to provide vaccines to developing countries. However, center-left Asahi editorialized against allowing the Quad to be seen as anti-China, advocating if each partner could contribute to the advancement of universal values without pretending that it was without its own problems, the Quad would transcend its agenda of dealing with China and serve the greater purpose of supporting the international order.

Speaking at a press conference, Chief Cabinet Secretary Kato Katsunobu expressed “strong displeasure” at a comment by a Chinese Foreign Ministry spokesperson that Japan is a “strategic vassal” of the United States.

Kato, asked to explain why Japan has not joined major Western economies in sanctioning the PRC over its human rights violations, expressed his “grave concern” over the violations but pointed out that Tokyo lacks a legal framework for the imposition of “sanctions directly and explicitly connected to human rights issues.” Tepid as Kato’s response was, in an April telephone call to Foreign Minister Wang Yi, Japanese counterpart Motegi Toshimitsu expressed Japan’s “serious concerns” over China’s treatment of Uyghurs and Hong Kong. Wang responded that China opposes interference in its internal affairs. Motegi also voiced concern over China’s activities in the South China Sea and its new coast guard law.

In very different reporting on the same telephone call, Global Times reported that Wang warned Motegi that bilateral ties had been “soured by Japan’s intense hobnobbing with the US,” and its unacceptable interference in China’s internal affairs with regard to Xinjiang and Hong Kong. He also reportedly issued a warning over Taiwan (to be discussed in a later section).

Aiming for closer cooperation to counter China’s growing clout in the Indo-Pacific, Suga in April announced plans to visit two states with border disputes with China—India and the Philippines, though those trips were later cancelled due to COVID concerns—and Japan called for an in-person Quad summit on the sidelines of the G7 meeting in June. While two members, India and Australia, are not G7 members, host country Britain has invited them, along with South Korea, as special guests.

The Chinese Foreign Ministry in April expressed its “strong dissatisfaction and firm opposition” to Japan’s decision to release treated radioactive water accumulated at the Fukushima Daiichi nuclear power plant, threatening unspecified countermeasures. Japanese officials pointed out that other countries, including China and South Korea, have released treated radioactive water from reactors into the environment. Xinhua argued that the deeply rooted selfish nature implicit in the release fully exposes Japan’s carefully cultivated image of self-discipline and its disregard for the public health and food safety of the international community.

Referencing Suga’s meeting with Biden, the Chinese Foreign Ministry in the same month expressed “serious concerns” over negative moves and collusion between the two countries against China, with spokesperson Zhao Lijian stating that China would “make necessary responses as appropriate.” Apparently seeing no link between the US support for Japan’s position on the Senkakus and US concern for Japanese in the waters surrounding Taiwan, Asahi editorialized that, although solid backing from the US is vital to defending the Senkaku Islands, the joint statement about the importance of peace and stability across the Taiwan Strait puts Japan in danger of being drawn into a security emergency: under legislation enacted in 2015, Japan can provide logistical support to the US “in a situation that has an importance influence on Japan’s peace and security.” However, the paper urged, Japan should focus on diplomatic efforts for self-restraint by China and the US.

Also in April, and aiming to counter China’s rapid expansion in the construction of undersea communication cables, Japanese, Australian, and US officials agreed to strengthen information sharing on China’s activities and cooperate in financing submarine cables in strategically important areas. Under its Belt and Road Initiative, China has been actively laying cables to create a huge economic bloc, using low costs, apparently backed by the PRC government, as leverage.

The biennial issue of the war-related Yasukuni Shrine arose in April, as usual. Renmin Ribao noted that, although Suga sent a ritual masakaki offering to the shrine’s spring festival, he did not personally attend, nor did Cabinet ministers, although two also sent masakaki offerings. Visits and ritual offering, it stated, hurt the feelings of China, South Korea, and other countries brutalized by Japan during World War II. In the same month, to bolster its claim to the disputed Diaoyu/Senkaku Islands, China’s Ministry of National Resources released a topographical study of the area based on satellite images. Asahi speculated that the release may have been to counter a report issued in March by Japan’s Environment Ministry concerning breeding by short-tailed albatross on the islands that was also based on satellite images.

As the report period closed, Japan lodged a forceful protest demanding the removal of a tweet by a Chinese Foreign Ministry spokesman adapting a famous Hokusai print into an image of nuclear waste being poured into the sea by people in Hazmat suits. China issued “solemn representations” to Japan over the latter’s newly released diplomatic blue book which, said a Foreign Ministry spokesperson, maliciously attacked and interfered in China’s internal affairs. Stating that China-Japan relations faced grave tests, he urged Japan to correct its mistakes. The blue book terms the Chinese Coast Guard’s repeated entries into Japanese territorial waters as a violation of international law, with its detailed explanation of efforts to realize a free and open Indo-Pacific region clearly made with China in mind.

Economics

While crediting China’s year on year growth of 18.3% in the first three months of 2021, economists believed a historically sluggish pace of 0.6% expansion compared with the quarter before indicated that the economic recovery was not yet solid. Jobless rates for migrant workers and new graduates increased. Beset with recurring waves of coronavirus infection, the Japanese economy shrank 1.6% in the same period, although in February the Nikkei topped 30,000 for the first time since August 1990 and unemployment rates were in the low 2% range, as before the pandemic. Japan’s exports to China gained even as those to other countries contracted.

In a move certain to unnerve Japan, which sought to lower its dependence on China for rare earth supplies, the PRC’s Ministry of Industry and Information Technology announced in January that its companies will be required to follow export control laws and regulations regarding the export and import of rare earth minerals. A tracking system is to be established that will enable closed loop management. Four days later, the Japanese government announced plans to commercialize the mining of rare metals on the seabed around Minamitorishima in the Ogasawara Islands. Japan is hoping also to include the high seas, protecting its rights to seabed resources by having a lead over China in mining technology.

Driven largely by its ability to shake off the effects of the pandemic on its economy more quickly other major trading nations, China imported 22% of Japanese exports in 2020, surpassing the US (18.4%). Although total Japanese exports fell by 11.1%, those to China gained by 2.7%, despite ongoing Japanese worries about overreliance on China. With sales falling due to competition from Chinese rivals, Japanese manufacturer Panasonic plans to withdraw from solar cell and panel production in 2022 since it cannot compete with Chinese rivals that can produce the items at lower cost. This will leave Kyocera and Sharp as the only major Japanese companies that produce solar batteries and panels. Panasonic will, however, stay in the renewable energy business, focusing on such segments as power management systems for smart cities. Chinese orders placed with Japanese machine toolmakers increased 23.5% in 2020 even as companies suffered sharp falls from the US and even more so from Europe. Yasakawa Electric is building a large plant in Jiangsu to produce servomotors and controllers for industrial robots and Daifuku plans a plant also in Jiangsu, to manufacture conveyors for use in clean rooms.

The Second Japan-China Capital Markets Forum, an initiative to strengthen cooperation between the securities markets of the two countries, was held online at the end of January. The 400 participants heard discussions on capital market restructuring, the future on China-Japan collaboration in capital markets, developments in derivatives markets, and the role of capital markets in an aging society.

Japan is expected to participate with the “Five Eyes” (Australia, Canada, Great Britain, New Zealand, and the US) in a US multinational fund for the development of 5G telecommunications technology and strengthening of the supply network to prevent the spread of equipment made in China. Interviewed by Bloomberg, Japanese Ambassador to Bangladesh Ito Naoki stated that Japan has been incentivizing its companies to shift manufacturing facilities out of China. With the help of $350 million in special Japanese loans, a $100 million special economic zone is being developed in Bangladesh to attract Japanese production facilities. Over the past decade, the number of Japanese companies operating in the country, including Honda and Mitsubishi, has tripled to about 300. However, in March, two Japan-based manufacturers of semiconductor wafer, one of which is headed by a Chinese, are turning to China in an effort to catch up with top producers Shin-etsu Chemical and Sumco, which together control 55% of the global wafer market. Financing has been assisted by a Chinese public sector fund and directed primarily toward the production of 12-inch wafers used to make advanced semiconductors. Led by chip-making equipment, nonferrous metals and plastic, Japanese exports to China rose 3.4% in February, slowing sharply from a 37.5% gain in the prior month due partly to the Lunar New Year holiday. And, in response to China’s request that Toyota manufacture key components of fuel cell vehicles in the PRC, Toyota will do so starting as early as 2022. This will be the first time Toyota has produced such components outside Japan.

Controversy continued to swirl around the security implications of Chinese company Tencent’s acquisition of a 3.65% share in wireless carrier Rakuten that did not receive the pre-screening prescribed by Japan’s newly amended Foreign Exchange and Foreign Trade Act.

Defense

The major defense-related development of the period was China’s passage of a coast guard law that empowered its coast guard, whose vessels are larger and more powerful than counterpart vessels, to use force against intruding vessels in areas that are also claimed by and currently under the administration of Japan. China sent the aircraft carrier Liaoning and support ships through the Miyako Strait and commissioned three new vessels, as well as announcing a defense budget increase of 6.8%. Japan sought out defense allies in Europe, commissioned an Aegis-class destroyer, and extended infrastructure aid to an Andaman island strategically situated off the Malacca Strait.

On Jan. 1, Naha coast guard officials confirmed the presence of four Chinese government ships in the contiguous zone off the contested Diaoyu/Senkaku Islands. The total for 2020 was 333 days, that for 2019, 282 days. January was a busy month in the defense posture of both China and Japan. Bracing for further advancements in China’s military and the rise of drone warfare, Japan began to develop unmanned, remote-controlled fighter aircraft with the goal of having them operational by 2035 to coincide with the deployment of the country’s next-generation manned fighters. Japanese authorities were also concerned with domestic leakages of technology. Back-to-back articles in Yomiuri in January revealed that at least 44 Japanese researchers were involved in China’s Thousand Talents Program to attract high-level scientists from overseas. Some of the scientists were teaching at universities with close ties to the Chinese military on such topics as artificial intelligence, robotics, and neuroscience. Questioned about their motives, the scientists cited China’s more attractive research environment: according to Yomiuri, the Chinese government has been supplying a number of Japanese researchers with more money than they can spend. Currently, Japan has no regulations regarding participating in the Thousand Talents Program. China’s science and technology budget is now nearly seven times that of Japan.

Hong Kong’s South China Morning Post described China’s strategy to wear down Japanese resistance to its claim over the Senkaku Islands through repeated air and sea incursions. Citing RAND analysts, the article warned that if Japan and the US responded by stepping up cooperation in the area, the tensions could escalate and China’s security situation become less stable.

Commenting in January on Japanese interest in becoming the “sixth eye” in the Five Eyes alliance, a research associate at Fudan University’s Center for Japanese Studies opined that Japan is “strong in will but weak in capability” but will continue to move closer to the alliance. The barriers to inclusion are mainly domestic: unlike the CIA and the UK’s MI6, Japan does not have a highly specialized intelligence organization. Moreover, current anti-espionage laws are weak, with stricter laws facing constitutional hurdles. Finally, integration with other members of the Five Eyes will be difficult since, unlike them, Japan is not an Anglo-Saxon country.

Even as Chinese military budgets continued to rise, the official Chinese military newspaper Jiefangjun Bao criticized Japan’s draft military budget for developing multidomain combined combat capabilities with the US, thereby breaking the boundaries of the country’s pacifist constitution. Specifically, the paper pointed out that Japan’s Quasi-Zenith Satellite Systems will host a US Space Situational Awareness sensor payload, and that the two are creating an intelligence-sharing mechanism that can detect and track missiles. Already in 2019, the two confirmed that the Japan-US Security Treaty is applicable to cyberattacks. In the first US-Japanese ministerial-level talk since Biden took office, Defense Secretary Lloyd Austin affirmed to Defense Minister Kishi Nobuo that the Senkaku Islands fall within the scope of the Japan-US Mutual Security Treaty.

Responding to affirmations for Japan’s position on the disputed Diaoyu/Senkaku Islands by Biden, Secretary of State Antony Blinken, Defense Secretary Austin, and National Security Adviser Jake Sullivan, a Chinese military expert commented that the PLA needs “emergency plans as well as plans for potential combat in the future.” Yet, Japan should avoid miscalculating American intention by going too far in pushing the issue of ownership of the islands, since Washington may simply be paying lip service to Tokyo.

And then, as mentioned in the “politics” section, the Standing Committee of China’s National People’s Congress adopted a law empowering the coast guard. On Jan. 29, the National Security Council met, with Foreign Minister Motegi later telling a news conference that China must not apply the law in a way that goes against international law. Taking action is difficult since, as an unnamed senior Defense Ministry official commented, an increased Self-Defense Forces (SDF) presence might fall into a trap of giving China an excuse to dispatch more ships to the area. Responding to queries, Chinese Foreign Minister Wang Yi repeated the ritualistic formula that  China’s new coast guard law does not target any specific country.

In February, a professor at the Japan Coast Guard Academy observed that increasing numbers of Chinese fishing vessels were leading to resource depletion in the Sea of Japan as well as in the South China Sea and in the Galapagos Islands. Unlike Japanese vessels, which are restricted by tonnage and what fishing methods they can use, Chinese vessels are not, and use a method called “pair trawling,” making them a new threat. He urged China to take a more responsible attitude, and for Japan strengthen its system of law enforcement and coordination. Tokyo conveyed “strong concerns” to Beijing over China’s new coast guard legislation.

In March, Motegi described as “truly regrettable and unacceptable” Chinese coast guard vessels intrusion into what the Japanese government considers its territorial waters for two successive days. A spokesman for an Okinawa fishing cooperative said that fishermen were afraid of being shot at by Chinese ships. LDP Diet members discussed a bill allowing the Self Defense Forces to crack down on illegal activities in territorial patrol zone that have been designated in advance by the prime minister. Chinese Foreign Ministry spokesperson Wang Wenbin stated that its coast guard’s intrusion into territorial waters claimed by Japan are legitimate measures taken to safeguard sovereignty in accordance with the law. Under Article 7 of the police duties execution law, the Japan Coast Guard is permitted to use weapons against vessels trying to land on the Senkaku Islands when perpetrators commit crimes categorized as violent and dangerous and offer resistance. According to Japanese coast guard, 14 Chinese marine patrol vessels entered Japanese waters in the first month that China’s new law on its coast guard went into effect. This compares with six in January and 12 or fewer intrusions per month last year. They have been approaching Japanese fishing boats more frequently, aiming to chase them out.

A February analysis by US think tank Foreign Policy Research Institute opined that if China is to establish maritime primacy in the Indo-Pacific, it must first get its navy beyond the Ryukyu Islands. This entails not only sailing its naval forces into the Pacific Ocean but keeping them safe and supplied once there. Japan’s growing defenses in the Ryukyus complicate China’s ability to do either. According to a memo written in 2018 that was declassified in the final days of the Trump administration but not made public until February 2021, the US will defend both Taiwan and the Senkaku Islands in the event of an “emergency.”

Responding to the 6.8% increase in China’s defense budget, a March Asahi editorial asked how the world could buy the narrative of peaceful development that China has been trying to sell. The Chinese military newspaper Jiefangjun Bao riposted that it is a nation’s right to determine its defense expenditures and how they will be used, stating that other countries do not have the right to point fingers. China’s expenditures were determined by “our defense demand, economic size, and defensive defense policy, and is [sic] commensurate with our ranking as the world’s second largest economy.”

That same month, a US defense website reported that Japan’s Office of National Space Policy signed a “historic” memorandum of understanding to launch two US payloads into Geostationary Earth Orbit on Japan’s Quasi Zenith Satellite System to help surveillance of Chinese space activities.

Also in March, the Maritime Defense Force commissioned its newest Aegis-equipped destroyer, the Haguro, completing its fleet arrangement as advocated in the 2013 National Defense Program Guidelines. The Haguro’s Cooperative Engagement Capability (CEC) allows instant sharing of tactical information such as the location of enemy missiles and is also capable of mounting the SM-3 Block IIA interceptor missiles now being jointly developed with the US. Defense Minister Kishi Nobuo hinted that the SDF and US military might conduct joint drills around the disputed Diaoyu/Senkaku Islands in the future. They have heretofore avoided doing so, citing the risk of heightening tensions with China. The US and Japanese defense chiefs agreed to closely cooperate in the event of a military clash between China and Taiwan, though apparently there was no discussion on how the coordination would take place and the communique merely called for peace and stability in the Taiwan Strait.

According to Japanese government sources, local opposition to the deployment of a Ground Self Defense Force detachment on Yonaguni Island has diminished in the five years since its controversial deployment there. The GSDF pays ¥15 million (about $137,000) annually in rent, and service members pay about 20% of the town’s tax revenue as well as participating with their families in volunteer activities such as cleaning up roads. The island is considered a likely target in the event of confrontation with China.

Figure 3 Japanese and Indonesian Foreign and Defense Ministers meet during the “two-plus-two” meeting in Tokyo. Photo: David Mareuil/Pool via Reuters

Japan’s efforts to include other countries in its efforts to counter Chinese expansionism included two-plus-two talks with Indonesia at the end of March that centered on shared concerns over China’s growing include and territorial claims in the East and South China seas. They resulted in an agreement on the transfer of Japanese defense equipment and technology to Jakarta. The two sides also agreed to actively participate in multinational military exercises, to jointly develop remote islands in the South China Sea, and to oppose attempts to change the status quo by force. The Chinese Foreign Ministry immediately expressed its “grave concern,” saying that the Indonesian side had “clarified the situation” without specifying how, and urged the Japanese media to stop creating false news. Signaling a closer defense relationship with India, Japan made its first project-type grant to an Indian-owned Andaman island. The Andamans provide unparalleled advantage in surveillance and monitoring the Malacca Strait as well as being close to the Straits of Indonesia, the alternate route into the Indian Ocean. The shallow waters and crowded sea lanes of the area force submarines to surface, enabling India to track Chinese boats as they pass from the South China Sea into the Indian Ocean. At 2+2 security talks, the German and Japanese foreign and security ministers exchange views on China’s territorial claims in the East and South China sea and expressed grave concern over the situation in Hong Kong and Xinjiang. They agree to increase cooperation in defense and military equipment and technology transfers based on the intelligence-sharing pact they signed in March.

According to Renmin Ribao, at the third annual meeting of the China-Japan maritime and air liaison mechanism and fifth round of working-level consultations on defense affair, the Chinese side reiterated that the disputed Diaoyu/Senkaku Islands are China’s inherent territory and urged Japan to stop provoking China and making groundless accusations against it. Japanese papers did not mention the meeting.

Nikkei reported in early April that a meeting of LDP lawmakers heard that China is planning to build up land around the disputed Diaoyu/Senkaku Islands and move 20,000 people there. In response, a proposal was being prepared that would allow Japan Coast Guard vessels to use arms against foreign ships that refuse to comply with expulsion orders, in accordance with international law. The LDP caucus was also reportedly considering the deployment of the GSDF to remote islands to reduce response time in the event of a hostile situation. According to a Defense Ministry source, the large-scale deployment of F-35Bs is considered a “decisive measure for the defense of remote islands” in response to China’s military buildup, The planes’ short takeoff and vertical landing capabilities mean they can be used at both SDF and civilian airports, and they will operate together with the Kaga destroyer, which is being upgraded to an aircraft carrier.

In April, a few days after exercises between the US and Australian navies in the eastern Pacific, the Chinese aircraft carrier Liaoning and five escort vessels passed through the Miyako Strait for the first time since April 2020. Japan deployed assets to monitor the movements of the Chinese vessels and scrambled a fighter plane in response to the passage of a Chinese Y-9 military transport aircraft over the strait. In line with its effort to deal with China’s military buildup in the region, Japan will build three transport ships to supply ammunition, fuel, and provisions to troops stationed on its outlying islands. The expected date of deployment is 2024. According to Chinese naval expert Toshi Yoshihara, if Japan continues with limiting its responses to expressions of regret and concern, there is no doubt that China will seize sovereignty of the contested islands.

Declassified documents obtained by Kyodo from the US National Archives revealed that the US government rejected requests from its military to resume use of a bombing base in the disputed Diaoyu/Senkaku Islands lest it become involved in the China-Japan dispute over their sovereignty.

As the reporting period closed, Japanese newspapers reported that the Chinese navy, already the world’s largest, launched three new vessels—a ballistic missile submarine, a destroyer, and an amphibious assault ship.

Culture

Cultural ties remained warm despite political, economic, and defense tensions, with audiences on both sides generally reacting well to productions by the other, and a few joint ventures taking place as well.

In January, Takeuchi Ryo, a Nanjing-based Japanese documentary film director explained polls showing Japanese people’s negative impressions of China as the result of a significant number of programs smearing China on Japanese TV: such programs are most popular with male viewers over 50 years old, whose self-esteem in hurt when they see China surpassing Japan. Younger Japanese, he added “do not have such a bad impression of Japan.” A few weeks later, Chinese netizens voiced approval of a 7-tip list for Japanese taking part in a Chinese competition show, including avoiding “culturally sensitive topics” like the 2008 Wenchuan earthquake, visits to the Yasukuni Shrine, “confusing statements regarding the keyword Taiwan,” and wearing clothing that features the Japanese flag. Detective Chinatown 3, a Chinese film set in Tokyo co-starring Japanese actors, took in $163 million on its first day, far surpassing the opening box office record in China and continuing to break records. Pandemic restrictions on travel are believed to be a major reason behind the success. A Japanese film production company that participated in the project is considering the film’s release in Japan. Chinese animated films, often based on works of classical Chinese literature that many Japan are familiar with, are experiencing a popularity boom in Japan.

Taiwan

Taiwan continued to be a contentious issue in China-Japan relations, with trade and cultural ties between Japan and its former colony increasingly close, albeit within Japan’s understanding of its one-China policy. Suga’s pledge to work together with the US to calm China-Taiwan relations prompted an unusually sharp warning from Foreign Minister and State Councillor Wang Yi.

Warm relations continued on people-to-people, economic, scientific, cultural, and—very cautiously—political matters. Regarding the first, the Japanese government honored 90-year-old Taiwanese librarian Liu Yao-tzu with its Order of the Rising Sun for his services in promoting cultural services between Japan and Taiwan. Liu is among three Taiwanese out of the 141 recipients in the past year. Taiwan’s iconic Taipei 101 skyscraper began displaying LED messages proclaiming the strong friendship between the peoples of Japan and Taiwan. The head of Japan’s embassy equivalent in Taiwan, the Japan-Taiwan Exchange Association (JTEA) and Taiwan dignitaries were among those attending the lighting-up ceremony.

Figure 4 Japan’s Don Quijote opened its first location in Taiwan, known locally as Don Don Donki. Photo: Taiwan News via Facebook

Economically, and amid great fanfare, Japan’s largest discount store Don Quijote opened its first branch, known locally as Don Don Donki, in Taipei. The store will be open 24 hours a day, employ 400 people, and feature Japanese products that had been in short supply because of the pandemic. The Japanese government is reportedly making efforts to convince Taiwan Semiconductor Manufacturing Co. to set up advanced manufacturing facilities in Japan with the aim of rejuvenating the country’s lagging chip industry and fending off competition from China. A joint Japan Aerospace Exploration Agency (JAXA)-Academia Sinica NKCU Institute of Space and Plasma Sciences team reported breakthroughs in energization and radiation in geospace with important implications about how electrons work at higher altitudes as well as communications and electrical systems on earth.

In February, LDP leaders formed a Taiwan project team to consider measures to strengthen relations with Taiwan. Options included a Japanese version of the Taiwan Relations Act, a regular 2+2 meeting of the two countries’ defense and foreign ministers, intelligence sharing, closer coordination among coast guards, the exchange of military liaison officers, and Taiwan’s inclusion in a missile defense network. Amid worsening ties with China, the LDP’s pro-China wing has lost ground to its pro-Taiwan wing. The newly formed Taiwan team, which was expected to submit recommendations to the government in April on bolstering ties to Taiwan, has discussed such measures as facilitating Taiwan’s entry in the Trans-Pacific partnership.

Taiwan Semiconductor Manufacturing Company (TSMC) approved a plan to invest up to $177.7 million in a fully owned subsidiary in Japan’s Ibaraki prefecture that will expand its research into 3D semiconductor material. Also under discussion is establishment of a production line in Japan. The Japanese government requested its embassy-equivalent in Tokyo to ask Taiwan, the world’s largest production base for semiconductor products, to increase output since chips for automobiles are in short supply worldwide. The German and US governments have made similar requests, with Nikkei reporting that China’s auto industry faces a more serious predicament than other countries since most of the other top chipmakers are in Europe, Japan, and the US.

The US and Japanese defense chiefs agreed to closely cooperate in the event of a military clash between China and Taiwan, though apparently there was no discussion on how the coordination would take place and the communiqué merely called for peace and stability in the Taiwan Strait. In addition to castigating Japan for “hobnobbing” with the US and interfering in China’s internal affairs, Foreign Minister Wang warned counterpart Motegi that China-Japan ties, already at a crossroads, would spiral down sharply if Japan were to involve itself in the Taiwan question and would be met with “the fiercest retaliation.”

In April, South China Morning Post wrote that, in response to an opposition politician in the Diet about Japan’s commitment to defend Taiwan at the summit with Biden, Suga replied that the statement “does not presuppose military involvement at all.” Note that, contrary to the paper’s interpretation, this does not imply that Japan would not be involved, but only that there had been no commitment to do so. Nikkei reported that, although Suga deflected pressure from NSC Indo-Pacific Coordinator Kurt Campbell for a Japanese version of the US Taiwan Relations Act, Biden had not done so, with Suga informing his aides afterward that “the Senkakus and Taiwan are linked.”

A signed editorial by the Global Times editor-in-chief warned Japan that if it follows the US, Japan would definitely become the target of the PLA and if its bases acted as vanguards during a Taiwan contingency, those bases would be hit as well. Yao Chung-yuan, a former deputy director of Taiwan’s Ministry of Defense’s strategic planning department argued that a quasi-military alliance has emerged among Japan, Taiwan, and the United States to counter the threat from China. He noted that when in 1999 the Japanese government proposed new guidelines for US-Japan defense cooperation, it expanded the definition of “areas around Japan” beyond the geographical to include six examples germane to his point: imminent armed conflict; past armed conflict after which order has not yet been restored and maintained; insurrection or civil war affecting Japan’s security; a likely influx of refugees due to political turmoil elsewhere; and acts defined by the United Nations Security Council as aggressions. As the report period closed, 74% of the respondents to a Nikkei telephone poll supported Japan’s engagement in Taiwan issues.

Conclusions: Implications for the Future

China-Japan relations are as bad as they have been since the postwar low in 2012. Increasing Chinese pressure on the disputed territories has pushed Japan closer to the United States even as Japan recognizes the importance of robust trade with the PRC if it is to pull the country out of its pandemic-induced contraction. At the same time, neither side seems willing to compromise on issues that could enable a diminution of tensions. Beijing could widen the space for negotiation by reducing its patrols into disputed areas but so far shows no inclination to do so. Although no high-level meetings are planned, Suga and Xi will have opportunities to interact at international conferences. Another barometer of relations will be what level of attention is paid to preparations for the commemoration of the 50^th anniversary of the normalization of China-Japan relations in 2022.