CWA # 2068
Peace and Conflict Quarterly Review (January–March 2026)
China-Japan Tensions
Escalating Defence Posturing and Economic Decoupling
The China-Japan tensions remained high, with distrust on both sides, as reflected in military provocations and incursions during the first quarter. On the economic front, both China and Japan are taking active steps to diversify their supply chains.
|
Femy Francis
17 April 2026
|
Conflict Weekly #327, 17 April 2026, Vol 7, No. 14
The first quarter of 2026 showed calibrated tension between China and Japan. The quarter reflected strains between the two countries in 2025, as Japan's new Prime Minister, Sanae Takaichi, took a more hardline stance towards China. Before Takaichi, relations were muted; there has been a significant shift under the new leadership, with China believing Japan is moving away from its usual pacifist posture. The quarter saw economic dependence and efforts to decouple, as well as limited but consistent military provocations. There is neither détente nor a complete breakdown in their relations, but rather a continuation of managed rivalry. The quarter also reflects the larger regional and geopolitical competition and the increased presence of the US in the region. There was a major focus on the securitisation of supply chains, especially in advanced technologies.
1. Escalating defence positioning over the Senkaku/Diaoyu Islands and Taiwan
The first quarter saw a rise in military tensions between China and Japan over the Senkaku/Diaoyu Islands. Chinese coast guards sustained their presence in the waters near the Island. Japan reported that Chinese ships were present in the zone for over 60 days between January and March, with multiple infringements into Japan-occupied territories. In 2025, Japan’s Air Self-Defence Force recorded over 700 confrontations with Chinese aircraft, which continued into the first quarter of 2026.
There was an escalation after Japanese Prime Minister Sanae Takaichi suggested Japan would intervene if Taiwan were invaded, stating that it is a national security risk to Japan. This led to diplomatic protests by China, and the People’s Liberation Army conducted several naval and air defence exercises in the East China Sea. These had fighter jets and stimulated air strike operations. Japan also increased its defence spending to 2 per cent of GDP by 2027, amounting to USD 315 billion over five years. Japan also deployed Type-12 cruise missiles and expanded military infrastructure in the Nansei Islands.
2. Economic decoupling
In the first quarter, China imposed export restrictions on 20 Japanese firms, including major ones such as Kawasaki Heavy Industries, Subaru, and Mitsubishi Heavy Industries. They noted that they opposed the sale of dual-use technologies that could be used by these major firms to aid Japan's military forces. China currently produces 80-90 per cent of global gallium and about 60 per cent of germanium. They are essential components for semiconductors and other advanced electronics. Japan, in response, has committed over USD 13 billion to aid domestic semiconductor production, including collaboration with TSMC in Kumamoto. China-Japan trade remained high, China maintained its surplus, and Japan continued to rely on Chinese imports.
3. Limited but continued diplomatic engagement
Diplomatic channels between the two countries remained open, as both prevented any escalation. A key example is the usage of the maritime and aerial communication system established in 2018, whenever there were close encounters between the navy or the coast guard. Tourism has also been affected by two factors: one, COVID-19, and the second, the row over Takaichi's support for Taiwan. Tourism in the first quarter shows the recovery of Chinese tourists in Japan, which had been reduced after the statement and China's diplomatic protest. They continued to engage in regional forums, though no major agreements were signed.
4. The Taiwan factor over China-Japan relations
Taiwan has become an important point of contention between the two countries. This comes after Takaichi stated that Taiwan’s sovereignty is critical to Japan’s national security. This was surprising, coming from a Japan that was a post-war pacifist, and it showcased the policy of the new leadership.
For China, Taiwan is a sensitive issue. Beijing has maintained that it will not tolerate any external intervention in Taiwan and notes that it is a core sovereign matter. China has maintained a high military presence in the water near the Taiwan Straits, with the PLA repeatedly violating the median line. Otherwise, muted relations are at risk, with Taiwan in the middle, intensifying bilateral tensions.
5. China's warning against external actors in East Asia regional issues
China has warned against the presence of external actors in the East Asian region and the issues they pose. This is evident in the US maintaining 54,000 troops in Japan, with a major base in Okinawa. They also conducted a joint military exercise in 2026, which included amphibious operations and other defence simulations. Some analysts believe this is in preparation for a possible Chinese invasion of Taiwan. Additionally, the US is also present in South Korea and routinely conducts military exercises with South Korea. Then there is the Quadrilateral Security Dialogue (Quad). China sees this as a strategic framework to curb its development. It believes that QUAD encourages exclusive bloc mentality and undermines regional negotiations and cooperation.
To Conclude: The China-Japan Tensions in the first Quarter (Jan-March 2026)
China-Japan relations during the first quarter of 2026 reflect multifaceted concerns and issues. It showcases both rivalry, discernment, and restraint in the face of conflict. The tensions remain high, with distrust on both sides, as reflected in recent military provocations and incursions. On the economic front, both China and Japan are taking active steps to diversify their supply chains. Regardless, diplomatic channels have been maintained. Both countries have become more assertive while practising restraint to avoid full conflict. This is likely to maintain after the first quarter of 2026, where both countries will practise measured decoupling.
