Diplomatic overture to Beijing

Japanese Prime Minister Sanae Takaichi delivered her general policy address to the Japanese parliament, the Diet, on Monday, 5 October 2026, defining her government's diplomatic approach toward Beijing. In her address to lawmakers, Takaichi described China as an important neighbour and committed her cabinet to establishing a constructive and stable bilateral relationship despite ongoing regional difficulties. She emphasised that maintaining steady contact remained vital for managing common challenges and safeguarding Japan's core national interests.

“China is an important neighbour and, despite difficulties, we have built an enduring relationship over the years.”

Takaichi balanced her call for constructive engagement by stressing that Tokyo would not compromise on fundamental security stances. She stated that Japan will firmly assert its positions and demand responsible behaviour from Beijing in its regional conduct.

“We will work to ensure communication on common challenges, promote dialogue to preserve our national interests and build a constructive and stable relationship.”

Bilateral friction and diplomatic contact

Diplomatic relations between Asia's two largest economies have experienced intense friction since November, when Takaichi suggested during a parliamentary appearance that Japan could intervene in the event of an attack on Taiwan. The Chinese government, which claims sovereignty over Taiwan, reacted sharply to the statement. A diplomatic channel opened on 28 September in Beijing, when Chinese Foreign Minister Wang Yi held talks with former Japanese Foreign Minister Takeshi Iwaya. Iwaya travelled to the Chinese capital as the head of a Japanese trade delegation. During their discussion, Wang emphasised that bilateral ties needed to return to normality and called on Tokyo to correct its political stance regarding Taiwan.

Economic pressures and fiscal policy

Takaichi delivered her policy speech one year after taking office, maintaining unusually high public approval ratings while managing severe domestic economic headwinds. Financial markets in Tokyo have displayed sustained nervousness surrounding the prime minister's long-term public expenditure policies and Japan's rising national debt. Furthermore, the administration faces persistent challenges from accelerating consumer price inflation, steep depreciation of the currency, and the economic fallout of prolonged diplomatic tension with Beijing. Addressing the Diet, Takaichi reaffirmed her cabinet's commitment to respond with flexibility to economic shifts and market concerns, though she did not outline specific fiscal measures.

Demographic crisis and domestic policy

Takaichi also directed legislative attention toward Japan's rapid demographic decline, identifying the shrinking population as a national crisis that advances silently. Official statistics released in July confirmed that the domestic Japanese population fell below 120 million for the first time in 42 years. To address the long-term impact on the economy and society, the prime minister pledged that her administration will formulate and present a comprehensive national strategy before the end of the year.