Takaichi and Xi: The Japan–China Power Shift

2025年11月1日

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The Significance of the Japan–China Summit — A Turning Point in East Asia

When Japanese Prime Minister Sanae Takaichi met Chinese President Xi Jinping in late October 2025, the world’s attention turned sharply toward Tokyo and Beijing. It was not merely a diplomatic courtesy meeting; it was the first direct dialogue under Takaichi’s leadership, setting the tone for a new phase in Japan–China relations. The summit marked a rare opportunity to recalibrate one of the most complex and consequential relationships in Asia.

Both leaders emphasized the importance of “constructive and stable relations,” signaling a cautious willingness to move beyond years of mutual distrust. Yet, beneath the smiles and handshakes lay the weight of deep-rooted issues — from maritime security and Taiwan to trade friction and historical grievances.

The meeting also came at a moment of shifting global dynamics. As the United States strengthens its Indo-Pacific partnerships and China faces growing economic headwinds, Japan’s position as a regional stabilizer has never been more vital. Takaichi’s government, known for its firm stance on national security, approached the dialogue with both pragmatism and resolve.

Why This Summit Matters

The 2025 Japan–China summit was more than just a diplomatic headline — it symbolized the dawn of a new era where competition and cooperation coexist. For Japan, it was a chance to assert leadership in Asia without escalating confrontation. For China, it represented an opportunity to ease tensions and restore confidence amid domestic and international challenges.

In essence, this summit should be viewed not as a fleeting event but as a strategic test for both nations. It raises a pivotal question: can Japan and China manage rivalry without conflict, and build mutual benefit in a world increasingly divided by geopolitics?

Security and Defense — The Power Balance in East Asia

Security remains the most sensitive and strategic layer of Japan–China relations. During the 2025 summit, Prime Minister Sanae Takaichi reaffirmed Japan’s commitment to a “Free and Open Indo-Pacific,” while emphasizing deterrence and dialogue as dual pillars of her administration’s policy. President Xi Jinping, on the other hand, called for stability and warned against the formation of exclusive military blocs. This dynamic highlights the delicate balance both nations must maintain in an era defined by growing regional tension.

Maritime Security and the East China Sea

The East China Sea continues to be a flashpoint. Chinese vessels have increased their incursions near the Senkaku Islands (known in China as Diaoyu), prompting Japan’s Self-Defense Forces to heighten surveillance and readiness. Takaichi’s administration has expanded maritime patrol budgets and strengthened the Japan–U.S. security alliance to counter potential provocations. For China, maintaining pressure in these waters reinforces its claim to territorial integrity, but it also risks pushing Tokyo closer to Washington.

Taiwan and the Regional Deterrence Network

The Taiwan issue remains a core security concern for both sides. Takaichi’s government has stated that peace and stability across the Taiwan Strait are “vital to Japan’s national interest.” Tokyo’s increasing coordination with the U.S., Australia, and the Philippines reflects a broader deterrence strategy — a network designed to prevent unilateral changes to the status quo. China views such actions as containment efforts, arguing they threaten its sovereignty. The summit did not produce concrete breakthroughs on this issue, but it did underline the urgency of crisis management mechanisms between Tokyo and Beijing.

Japan’s Defense Transformation

Since 2022, Japan has accelerated its defense transformation — raising defense spending to 2% of GDP and introducing counterstrike capabilities against potential aggressors. Under Takaichi, this trajectory continues but with a diplomatic nuance: she seeks to strengthen deterrence while leaving space for dialogue. This balance — firmness without provocation — is at the heart of Japan’s new defense doctrine. The summit reaffirmed this approach, positioning Japan as both a military power and a peace broker in the Indo-Pacific.

Key Takeaway

The security dialogue between Takaichi and Xi represents more than routine diplomacy. It reflects a strategic test: can East Asia sustain stability amid power competition? The answer will depend on how effectively both nations manage crisis communication and coordinate within broader regional frameworks such as the ASEAN and the Quad.

Economic Strategy — Trade, Supply Chains, and Resource Security

Economics has always been the engine of Japan–China relations. Despite political friction, bilateral trade surpassed $340 billion in 2024, making China Japan’s largest trading partner for the 17th consecutive year. During the 2025 summit, both leaders acknowledged that economic interdependence remains essential but increasingly fragile amid global decoupling and technological rivalry.

Trade Interdependence Amid Strategic Tension

Prime Minister Sanae Takaichi emphasized that “economic security cannot be separated from national security.” Japan seeks to balance open trade with the protection of critical industries such as semiconductors, AI, and rare earth processing. China, facing slower growth and export restrictions, has shown willingness to stabilize trade but continues to leverage economic tools for geopolitical influence. Both leaders agreed to resume high-level economic dialogues — a small but symbolic step toward restoring predictability in bilateral commerce.

Supply Chain Diversification and Economic Security

The COVID-19 pandemic and subsequent geopolitical crises revealed Japan’s overreliance on Chinese manufacturing. Under Takaichi’s administration, Tokyo has prioritized “supply chain resilience,” promoting reshoring initiatives and cooperation with Southeast Asian partners like Vietnam and Indonesia. The Japanese government’s Economic Security Promotion Act — passed in 2023 — has already begun to redirect investment toward trusted allies. Meanwhile, China has been developing its own “dual circulation” strategy to reduce dependence on Western markets. This economic realignment represents a silent but significant decoupling in East Asia.

Resource and Technology Competition

Rare earth minerals, lithium, and advanced chips have become the new battlegrounds of economic power. Japan remains heavily dependent on Chinese rare earth exports, but recent joint ventures with Australia and Canada aim to mitigate that risk. Takaichi’s policies focus on securing critical minerals and protecting technology transfer, while Xi’s government strengthens export controls to retain leverage. This mutual hedging has transformed economic ties into a strategic chessboard where innovation, resilience, and resource access determine influence.

Key Takeaway

The Japan–China economic relationship stands at a crossroads: neither side can afford a complete decoupling, yet both are preparing for it. In this evolving landscape, economic security has become the defining element of diplomacy — not a supplement to it. The future will depend on how Tokyo and Beijing redefine “mutual benefit” in an age where competition is the new normal.

Diplomatic Strategy — History, Territory, and the Framework of Dialogue

Diplomacy between Japan and China is shaped by both the weight of history and the urgency of the present. The 2025 summit between Prime Minister Sanae Takaichi and President Xi Jinping sought to reset dialogue mechanisms that have been strained by mistrust over territorial and historical disputes. While both leaders reaffirmed their commitment to a “mutually beneficial relationship based on common strategic interests,” the path forward remains complex.

Historical Tensions and Memory Politics

No discussion of Japan–China diplomacy can escape the shadow of history. Issues surrounding wartime memory, textbook narratives, and visits to the Yasukuni Shrine continue to influence public sentiment on both sides. Takaichi, known for her conservative views, faced scrutiny for her previous remarks on Japan’s wartime legacy. However, at the summit, she adopted a pragmatic tone — stressing the need for “future-oriented cooperation” and restraint in rhetoric. China, while reiterating its position on history, emphasized the importance of dialogue rather than confrontation. This subtle diplomatic recalibration hints at both sides’ awareness that endless historical disputes hinder strategic progress.

Territorial Disputes and Maritime Dialogue

The East China Sea remains one of the most persistent points of friction. The Senkaku/Diaoyu Islands dispute continues to test both governments’ crisis management capabilities. During the summit, both leaders agreed to enhance communication channels between defense authorities to prevent accidental clashes. This “crisis hotline” proposal was first discussed in 2018 but has gained renewed urgency as military activities in the region intensify. While sovereignty claims remain unchanged, the willingness to institutionalize dialogue signals a cautious step toward stability.

The Framework of Strategic Dialogue

Beyond specific disputes, the Japan–China relationship is structured around a broader diplomatic framework. This includes the “Strategic and Mutually Beneficial Relationship” established in 2008 and reaffirmed multiple times since. Under Takaichi, Japan seeks to modernize this framework by incorporating economic security, supply chain coordination, and technological cooperation. For Beijing, maintaining this framework provides diplomatic continuity amid global uncertainty. At the 2025 summit, both sides agreed to resume foreign-minister-level talks and promote joint academic and business exchanges — incremental but meaningful steps toward trust-building.

Key Takeaway

Diplomacy between Tokyo and Beijing has entered a phase of controlled engagement: cautious cooperation constrained by structural rivalry. The success of this diplomatic balancing act will depend on whether both governments can separate history from strategy and turn dialogue into a sustainable mechanism for peace. For now, the summit marks a fragile but necessary renewal of communication in a relationship too important to fail.

Behind the Scenes — Reading Between the Lines of the Summit

While the official readouts of the 2025 Japan–China summit focused on cooperation and stability, the real story unfolded behind closed doors. Diplomatic sources suggest that the atmosphere was both cordial and cautious — reflecting the complex mix of competition and necessity driving Tokyo and Beijing. Prime Minister Sanae Takaichi approached the meeting with strategic discipline, carefully balancing firmness on security with pragmatism in dialogue. President Xi Jinping, meanwhile, sought to project confidence while signaling openness to calibrated engagement with Japan amid mounting international pressure.

The Political Timing of the Summit

The timing of the summit was far from accidental. Held just ahead of the APEC Leaders’ Meeting, it allowed both nations to showcase diplomatic initiative before facing a wider international audience. For Takaichi, it was an opportunity to demonstrate leadership on the global stage and reassure allies of Japan’s ability to manage relations with China without compromising its security posture. For Xi, it provided a chance to soften China’s image and counter narratives of isolation following tensions with Western countries. Behind the scenes, officials from both sides had worked for months to secure talking points acceptable to domestic audiences, highlighting how symbolism in diplomacy often outweighs substance.

Strategic Messaging and Subtle Signals

Every gesture during the meeting carried strategic meaning. Takaichi’s reference to “the rule of law at sea” was a clear message to both China and the international community about Japan’s stance on maritime order. Xi’s emphasis on “cooperation, not confrontation” subtly hinted at Beijing’s desire to ease tensions while retaining leverage. Observers noted that both leaders deliberately avoided provocative language — a sign that both governments wanted to prevent escalation at a time of global uncertainty. This restrained diplomacy reflects the quiet art of managing rivalry through tone rather than treaty.

Unresolved Issues Beneath the Surface

Despite the carefully choreographed optics, several contentious topics were reportedly left unresolved. These include China’s export restrictions on critical materials, Japan’s participation in advanced semiconductor alliances, and growing concerns over cyber espionage. While the summit established a mechanism for “constructive dialogue,” it did not deliver specific commitments on these fronts. This ambiguity may be intentional — allowing both governments to claim progress without immediate concessions. As one Japanese diplomat privately noted, “In Japan–China diplomacy, progress often means avoiding regression.”

Key Takeaway

The 2025 summit was as much about perception as policy. Behind the diplomatic smiles lay a pragmatic understanding: neither Japan nor China can afford open confrontation, yet both must safeguard their strategic interests. By reading between the lines, it becomes clear that this meeting was a calculated reset — one aimed at managing competition, not resolving it. It marked the emergence of a new diplomatic realism that defines 21st-century East Asia.

Future Outlook — Scenarios for a New Era in Japan–China Relations

The 2025 summit between Sanae Takaichi and Xi Jinping has opened a new chapter in Japan–China relations — one defined not by reconciliation or rivalry alone, but by strategic coexistence. Both nations now face the challenge of managing competition while sustaining economic and regional stability. This evolving balance is shaping what many analysts call the “dual-track era”: cooperation in global governance, and competition in security and technology.

Scenario 1: Strategic Coexistence and Controlled Engagement

In the most optimistic scenario, Japan and China maintain open channels of communication and avoid military escalation. Through mechanisms such as the bilateral defense hotline and revived ministerial dialogues, both sides could institutionalize crisis management. Economic cooperation may continue in non-sensitive sectors — such as green technology, climate change mitigation, and cultural exchange — where mutual benefit outweighs rivalry. This model would mirror the “cold peace” observed between other major powers: restrained competition under a framework of managed stability.

Scenario 2: Competitive Decoupling and Regional Polarization

A less favorable path involves gradual decoupling across critical industries. Japan’s growing participation in semiconductor alliances with the U.S. and Europe, combined with China’s “dual circulation” strategy, could harden economic boundaries. If tensions over Taiwan or the East China Sea intensify, diplomatic communication could freeze once again. Such polarization would force smaller Asian nations to choose sides, fracturing regional supply chains and undermining ASEAN centrality. While unlikely in the short term, this scenario remains a serious risk should trust-building efforts fail.

Scenario 3: Conditional Cooperation and Multilateral Mediation

A middle-ground future envisions “conditional cooperation” mediated through multilateral platforms such as APEC, ASEAN+, and the G20. Japan could leverage its alliance with the United States to push for transparent regional rules, while China seeks to reassert influence through economic initiatives like the Belt and Road. Under this arrangement, both sides accept competition as structural but focus on managing it collectively. This pragmatic diplomacy would allow East Asia to function as a multipolar system rather than a binary contest.

The Role of Leadership in Shaping the Future

Leadership choices will determine which path prevails. Prime Minister Takaichi’s firm-yet-dialogue-driven approach positions Japan as a stabilizer capable of bridging democratic values and regional realities. Xi’s leadership, seeking domestic consolidation and global recognition, must weigh the costs of confrontation against the benefits of cooperative credibility. Their decisions in the coming years — on defense transparency, economic openness, and diplomatic tone — will define whether the current détente matures into a sustainable order or collapses under mutual suspicion.

Key Takeaway

Japan–China relations are entering a hybrid era — part competition, part collaboration. The 2025 summit has not solved long-standing disputes, but it has reframed them within a strategic reality both nations can live with. The future will depend on how well Tokyo and Beijing can transform managed tension into constructive coexistence — a test that may shape the entire Indo-Pacific for decades to come.

Conclusion — What This Means for Japan, China, and the Region

The 2025 summit between Prime Minister Sanae Takaichi and President Xi Jinping was not merely a diplomatic ritual — it was a defining moment that restructured Japan–China relations for the next decade. It confirmed that rivalry and cooperation can coexist, and that diplomacy in East Asia has matured into a balance of calculated restraint and shared necessity. In this sense, the meeting was less about immediate results and more about recalibrating the long-term strategy of two great powers navigating a turbulent world.

Reaffirming the Core Lessons

Three key lessons emerge from this summit. First, strategic communication is essential — even when trust is limited. Dialogue prevents miscalculation and preserves regional stability. Second, economic interdependence remains both a strength and a vulnerability; diversification, not decoupling, is the path forward. Third, leadership matters. Takaichi’s assertive diplomacy and Xi’s pragmatic restraint show that individual choices can shift the trajectory of an entire region.

Implications for East Asia and Beyond

For Japan, the new phase of engagement offers an opportunity to demonstrate responsible regional leadership while protecting national interests. For China, it provides a chance to stabilize its external environment and rebuild confidence in its international posture. For neighboring countries — from South Korea to ASEAN members — the Japan–China dynamic will serve as a barometer for broader regional order. A stable relationship between Tokyo and Beijing benefits not only Asia, but the global economy, supply chains, and climate cooperation.

Looking Ahead: From Competition to Constructive Coexistence

The coming years will test whether the promises of the 2025 summit can withstand external shocks — from technological rivalry to maritime incidents. Sustaining “constructive coexistence” will require consistent crisis management, mutual respect, and the courage to separate ideology from strategy. If both nations can manage this, Japan and China could pioneer a new model of great-power relations suited for the 21st century: one based on competition without confrontation.

Final Thought

The new Japan–China era is not about friendship or rivalry — it is about survival through balance. Both governments now stand before a choice: to compete recklessly or to coexist strategically. For the stability of East Asia and the global order, the hope is that prudence will prevail.