China-Japan Tensions Deepen Over Taiwan; De-escalation Unlikely

• China-Japan relations are in one of their most serious phases in decades, with de-escalation looking unlikely.
• Tensions escalated after Japanese PM Sanae Takaichi stated a Chinese invasion of Taiwan would be a "survival-threatening situation" for Japan.
• China retaliated with "wolf warrior" rhetoric, economic measures, and increased military presence near the Senkaku/Diaoyu islands.
• Japan faces potential economic losses of ¥2.2 trillion due to the spat, but has diversified supply chains to mitigate impact.
• De-escalation is difficult due to Takaichi's hardline stance, domestic political support, and broader geopolitical shifts.

Why It Matters: Unresolved China-Japan tensions over Taiwan threaten lasting regional instability and global impact.