Tensions Between Japan and China Will Diminish

On October 17, 2023, China and Japan made contradictory statements about vessels illegally entering each other's territory in disputed waters around Senkaku/Diaoyu Islands. This latest event is representative of the tensions between China and Japan over their contradictory claims on the Senkaku/Diaoyu Islands. While China is increasing its assertiveness in the Indo-Pacific, it remains unlikely that Beijing will try to alter the status quo in the region and will instead maintain its focus on Taiwan.

Analysis

Japan's current administrative authority over the islands is increasingly challenged by the Chinese coast guard and naval capabilities. Diplomatic efforts, economic interdependence, and the pressure of the international community will facilitate the preservation of the status quo between the two nations, lowering the chances of escalation.

Diplomatic Efforts

Both Japan and China are committed to handling their territorial disputes diplomatically, recognizing their mutual interest to maintain peace and prosperity in the Asia-Pacific region. The Japanese government outlined its new strategic outlook in three documents, namely the National Security Strategy, the National Defense Strategy, and the Defense Buildup Program. Japan's new strategy ranked confidence-building dialogue with China as an essential element of its diplomatic priorities.

On October 24, 2023, the Japanese and Chinese prime ministers congratulated each other on the 45th anniversary of the signing of the Peace and Friendship Treaty between the two countries. Both Japanese Prime Minister Fumio Kishida and Chinese Premier Li Qiang agreed on the importance of the treaty and the need to nurture bilateral relations in order to maintain stability and peace in East Asia. The exchange showed that both countries are engaged in easing tensions and seek to resolve their differences diplomatically.

Beijing, Seoul, and Tokyo also pledged to hold a summit to address China's concerns about the rapprochement between South Korea, Japan, and the United States. This pledge further signals Japan and China's willingness to seek solutions to disputes through diplomatic means.

Economic Interdependence

The economies of Japan and China are interdependent, providing a strong incentive for stability in the region. According to the Ministry of Foreign Affairs of Japan, China is Japan's largest trading partner, accounting for 20% of its exports, and Japan is China's third largest trade partner. By 2022, their total trade reached $335.4 billion, up 14.3% from 2021. The products exchanged are crucial for their respective industries. Semiconductors and other electronic parts are among Japan's main exports to China. Among China's main imports into Japan are telecommunications and computer equipment.

The two economies continue to invest heavily in one another. China is Japan's third-largest investment destination, with direct investment reaching $9.2 billion in 2022. A large number of companies have been set up in both countries. In 2022, the number of Japanese companies in China reached 31,324, making China the country with the highest number of overseas bases of Japanese companies.

Cost of War

The cost of war dissuades both sides from engaging in a direct military conflict. Japan has increased its naval military capacity, deterrence, and defense capabilities. In their new strategy outlook of December 2022, Japan announced its increase of defense spending to two percent of its GDP and introduced its long-range counter-attack capability. The aim of this strategy is to develop Japan's military capabilities so that China faces greater costs if it decides to engage in an armed conflict.

In addition to Japan's investment in its military, Washington's commitment to respond to an armed attack against Japan is another deterrence factor. Article V of the Japan-U.S. Security Treaty stipulates that the United States defends the whole of Japan, including the Senkaku Islands. This has been reaffirmed over the years and most recently on October 3, 2023, by U.S. Secretary of Defense Lloyd J. Austin III. Washington's commitment to Japan's security works in favor of Tokyo's deterrence strategy and effectively discourages China from escalating tensions.

International Pressure

Both Japan and China are under pressure from the international community to maintain stability in East Asia. The United States actively seeks to prevent any escalation of tensions in the region. Other regional players, particularly Russia and the ASEAN countries, have expressed concern about tensions in the East China Sea. At the 18th East Asia Summit held on September 7, 2023, ASEAN countries such as Australia and South Korea expressed their desire to focus on regional stability and economic growth and called for greater cooperation in the region. This pressure from the international community will reinforce the restraint from a military confrontation.

Conclusion

The Senkaku/Diaoyu Islands dispute will not reach a critical threshold. Ongoing diplomatic efforts and dialogue in both countries, as well as economic interdependence and international pressure, make the likelihood of armed conflict unlikely.



Victoria Boyre is a Master of Arts in International Affairs candidate at JHU-SAIS. Victoria is pursuing a double degree program between SAIS and Science Po Lille in France. Her main research interests are security, risk management, and national and international strategic challenges, with a particular focus on East Asia.