China and Japan: Still Arguing, But Still (Mostly) Trading
Despite a severe diplomatic crisis between China and Japan, economic trade between the two nations continues to grow. However, Chinese sanctions have targeted specific sectors, creating a complex environment for bilateral business relations.
Why it matters
The tension between the world's second and third-largest economies has significant implications for global supply chains and regional stability in Asia.
China and Japan: Still Arguing, But Still (Mostly) Trading - The Wire China
Japanese Prime Minister Sanae Takaichi and Chinese President Xi Jinping hold a summit meeting on the sidelines of the APEC Economic Leaders' Meeting in Gyeongju, South Korea, October 31, 2025. Credit: Prime Minister's Office of Japan
Japan and China are caught up in what many observers are describing as their worst diplomatic crisis in decades. Ten months in, the picture for economic ties between the two Asian powerhouses is mixed: trade is still growing, but Chinese sanctions have hit a handful of key sectors hard.
The last high-profile summit meeting between Japanese Prime Minister Sanae Takaichi and Xi Jinping was held on October 31, 2025. Credit: Prime Minister's Office of Japan
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