Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Tensions between Japan and China are escalating sharply over Taiwan
Speaker 2: Biden risk. This diplomatic spat shows no signs afe cancy
Speaker 2: of easing and this back and forth.
Speaker 3: Relations between China and Japan have never been easy, but
Speaker 3: right now they're in the dumps.
Speaker 2: China had canceled this trilateral meeting between the culture ministers,
Speaker 2: and in the meantime, Japan's Defense minister is saying that
Speaker 2: Japan will plan to deploy some missiles from Yunaguni, which
Speaker 2: is an island just one hundred kilometers to the east
Speaker 2: of Taiwan, a very strategic location.
Speaker 3: The cause of all this tension are remarked by Japan's
Speaker 3: new Prime Minister Sanai Takichi. In response to a question
Speaker 3: in the parliament earlier this month, Takiichi linked Japan's security
Speaker 3: with the territorial integrity of Taiwan.
Speaker 2: Takaichi is probably the first prim start to actually explicitly
Speaker 2: say that an attack on Taiwan could be an existential
Speaker 2: crisis for Japan, which gives in the legal justification to
Speaker 2: lean in militarily.
Speaker 3: Japan and China have a long and tense history, often
Speaker 3: marked by disputes over wartime grievances and territorial claims. But
Speaker 3: James Mager, Bloomberg Senior reporter based in Beijing, and Isabelle Reynolds,
Speaker 3: our Tokyo buer chief, say this dispute is different.
Speaker 4: Taiwan is the red line. There's a series of different
Speaker 4: issues between Japan and China. Those are all important, but
Speaker 4: when it revolves around Taiwan, there is no leeway in
Speaker 4: the system for just accepting that maybe someone said something
Speaker 4: and it wasn't a threat.
Speaker 1: That's right. I think what's happened is she said the
Speaker 1: quiet part that aloud, the things that people would normally
Speaker 1: only talk about and plan for behind the scenes. She's
Speaker 1: publicly acknowledged that we have to think about that.
Speaker 3: Welcome to the Big Take Asia from Bloomberg News. I'm Wanha.
Speaker 3: Every week we take you inside some of the world's
Speaker 3: biggest and most powerful economies in the markets, tycoons and
Speaker 3: businesses that drive this ever shifting region. Today on the show,
Speaker 3: China and Japan clash again, but this time the point
Speaker 3: of contention is Taiwan. We find out why Japan's new
Speaker 3: Prime Minister has put Taiwan on the table and what
Speaker 3: it could mean for both sides. Following Takeiichi's comments on Taiwan,
Speaker 3: Beijing has stepped up its protest and retaliation. The Chinese
Speaker 3: government has warned its citizens against traveling to Japan and
Speaker 3: instructed its airlines to reduce the number of flights to
Speaker 3: the country. Beijing's also suspended imports of Japanese seafood and
Speaker 3: halted approvals for movies too. China's Foreign ministry has repeatedly
Speaker 3: demanded Takichi retract her comments on Taiwan. Isabel says Takiichi
Speaker 3: has refused used to do so, saying there was no
Speaker 3: change to Tokyo's stance on how it would respond to
Speaker 3: a major security crisis in the region.
Speaker 1: So what happened was on November seventh, in parliament, Takeichi
Speaker 1: said that a conflict in which Beijing was trying to
Speaker 1: take over Taiwan and was using armed force and was
Speaker 1: using warships could potentially amount to an existential crisis for Japan.
Speaker 1: And now that is significant because under Japan's pacifist constitution
Speaker 1: and the laws it passed subsequently in twenty fifteen, an
Speaker 1: existential crisis would allow Japan potentially to send in its
Speaker 1: own military to the defense of a friendly nation.
Speaker 3: And is that a big shift in Japanese politics for
Speaker 3: her to say that.
Speaker 1: There was a huge amount of discussion leading up to
Speaker 1: the twenty to fifteen legislation. Everyone's been very careful not
Speaker 1: to point out exactly what sort of situation where which
Speaker 1: countries might be involved, were where Japan might send an
Speaker 1: ex military. So to come out and say this very boldly,
Speaker 1: very frankly, and not really mincing her words in any
Speaker 1: way is a big step away from how Japan has
Speaker 1: approached this issue in the past.
Speaker 3: So certainly other Japanese leaders have been known to stay
Speaker 3: away from the issue of Taiwan.
Speaker 1: Yeah, that's absolutely true. They expressed friendliness towards it, but
Speaker 1: they've had this formal set of words that they want
Speaker 1: any conflict between the two sides to be resolved peacefully.
Speaker 4: And I think on that it is important to note
Speaker 4: that people outside the government, or people who used to
Speaker 4: be ministers or MPs like Takh before she became the
Speaker 4: Prime Minister, has said similar things. What's really different here
Speaker 4: is that the Prime Minister, in her official capacity in
Speaker 4: parliament made these comments, and I think part of The
Speaker 4: reaction from China was they were expecting her to do
Speaker 4: something like this. They did know that she had these
Speaker 4: views because she has expressed them in the past, and
Speaker 4: I think for them it was their expectations or their
Speaker 4: fears about what she would do as prime minister were
Speaker 4: confirmed and then they reacted to that. So it really
Speaker 4: is what you can say as a private citizen, what
Speaker 4: you can say as a very minor MP, and what
Speaker 4: you can say as the Prime minister tend to be different.
Speaker 3: And of course we know that Takyishi made history last
Speaker 3: month when she was sworn in as a country's first
Speaker 3: woman prime minister. She's barely unpacked her bags right in
Speaker 3: the PM's office. To your point, why pick this fight now?
Speaker 1: I think there are some doubts about whether she said
Speaker 1: this on purpose. She is very new to the job
Speaker 1: and she's talked about how she only gets two to
Speaker 1: four hours of sleep at night, so I mean, you know,
Speaker 1: maybe she was sleep deprived and felt corded into it.
Speaker 1: And I don't forget this was not something she came
Speaker 1: in and read out as a prepared statement. This was
Speaker 1: part of a long session of being grilled by an
Speaker 1: opposition MP about what exactly would constitute an existential crisis,
Speaker 1: and at the end of it, she came up with this.
Speaker 3: How did her comments land in Japan.
Speaker 1: It's been a very mixed reaction. I mean, we've seen
Speaker 1: a lot of public commentators sort of on both sides saying,
Speaker 1: of course she should not have said that, you should
Speaker 1: have withdrawn it, and the opposition urged her to withdraw
Speaker 1: those comments. But Herst's public support rate is still enormously high.
Speaker 1: It's probably the highest for any prime minister in more
Speaker 1: than two decades. And if you look at the opinion polls,
Speaker 1: they're also a bit mixed, as you would probably expect.
Speaker 4: And I think that's also an interesting point that what
Speaker 4: she's saying isn't unexpected for people in Japan. There has
Speaker 4: been this debate now since twenty fifteen or a decade
Speaker 4: on what would happen if China did try to invade Taiwan.
Speaker 4: Japan is right next door. Obviously Japan is going to
Speaker 4: be affected by that. If nothing else. There are thousands
Speaker 4: of Japanese citizens in Taiwan who would need to be
Speaker 4: helped in some way, assisted out of Taiwan, evacuated, and
Speaker 4: so there's a public recognition that this is a very
Speaker 4: important question and the government will have to do something
Speaker 4: or decide to do something if there is a war
Speaker 4: in the Strait. You know, it's not like this came
Speaker 4: out of nowhere, and Japanese people have never thought about this.
Speaker 3: Now we know the two leaders, President she Jinmping and
Speaker 3: the Prime ministers in Aataki Uchi just shook hands about
Speaker 3: a month ago at the APEX summit in South Korea.
Speaker 3: Are there any warning signs that anyone saw.
Speaker 4: Then that meaning went pretty well? I was there at
Speaker 4: the venue, not having the meeting itself, but everyone I
Speaker 4: spoke to you afterwards, the Japanese side, they seem to
Speaker 4: think the meeting had gone pretty well and there any
Speaker 4: real hiccup or wrinklin That was Takachi sound tweeted that
Speaker 4: she had met the Taiwanese representative to APEX, and the
Speaker 4: Chinese reacted to that quite badly, so they said she
Speaker 4: was flaunting it and hyping it up on Twitter, which
Speaker 4: kind of speaks to how I what I said earlier
Speaker 4: that they were primed for her to do something that
Speaker 4: they see is being provocative, and when she did that,
Speaker 4: I think they were like, we knew it. She's exactly
Speaker 4: what we thought she was going to be, and now
Speaker 4: we have to react.
Speaker 3: And what's interesting, though, is the reaction. Even if they
Speaker 3: were expecting that at some point she would say these things,
Speaker 3: the reaction from Beijing hasn't been your standard diplomatic speak
Speaker 3: at all. Right, it's gotten actually quite hostile and personal,
Speaker 3: including a rather shocking post from China's consule general there
Speaker 3: in Osaka, Isabelle. I wonder if you can tell us
Speaker 3: about that and what the reaction to that was.
Speaker 1: Yeah, So the concert general in Osaka, Shuri Jian. Forgive
Speaker 1: my Chinese, I don't speak at all. So the very
Speaker 1: day after this debate in parliament, he started posting messages
Speaker 1: on x on Twitter saying things about the dirty neck
Speaker 1: that sticks in where it's not wanted, will we sliced
Speaker 1: off with no hesitation. He's known for that kind of rhetoric,
Speaker 1: so it wasn't all that surprising from him, and he
Speaker 1: did delete it, but by that time it had already
Speaker 1: been reported by the Japanese media, and of course there
Speaker 1: was a complete Twitter storm about it, and it seemed
Speaker 1: as though it was only after that the mainline government
Speaker 1: in Beijing started to really weigh in and follow his
Speaker 1: lead as to how they should deal with this issue.
Speaker 3: And what do you think that indicates? Does China then
Speaker 3: take this threat quite seriously?
Speaker 4: Taiwan is the red line when it revolves around Taiwan.
Speaker 4: There is no leeway in the system for just accepting
Speaker 4: that maybe someone said something and it wasn't a threat.
Speaker 4: They have to react the way they think about Taiwan
Speaker 4: that it is and they will get it back, and
Speaker 4: everyone is trying to keep them from getting it. Means
Speaker 4: that they have to react and stamp down on these
Speaker 4: things immediately, Otherwise if they don't, then six months later
Speaker 4: someone else's They think someone else is going to get
Speaker 4: bright ideas about saying something else about Taiwan. And there
Speaker 4: may also be a calculation that Tokayi sign Is knew
Speaker 4: she's weak. She doesn't have a majority in either house
Speaker 4: of parliament. The last couple of prime ministers haven't lasted
Speaker 4: that long. There may be an expectation that she's not
Speaker 4: going to last, and it may will be that kind
Speaker 4: of thinking as driving the Chinese reaction to Tokhan as well,
Speaker 4: that if we push, then she'll be gone and we'll
Speaker 4: have someone less hawkish.
Speaker 1: To deal with that sounds very likely to me as well.
Speaker 1: I mean, whether she actually is weak or not, that
Speaker 1: remains to be seen. Obviously, her position at the moment
Speaker 1: isn't all that strong, but some people say she could
Speaker 1: call an election pretty soon. She's got massive public support,
Speaker 1: and she could even manage to grab back a majority
Speaker 1: for her LDP on its own without any coalition partners
Speaker 1: if her support rate stays how it is. And honestly,
Speaker 1: the things that China's saying, it's hard to say right
Speaker 1: now because the economic effects have not filtered through yet,
Speaker 1: but just that kind of rhetoric I think is much
Speaker 1: more likely to add to support for Takeitu than the
Speaker 1: other way around.
Speaker 3: After the break the historical beefs between China and Japan,
Speaker 3: and how the legacy of World War two underpins the
Speaker 3: current tensions between Beijing and Tokyo, I wonder if we
Speaker 3: can step back a little and James, you kind of
Speaker 3: preface this a little before us, but I wonder if
Speaker 3: we can talk a little bit about the historical beefs
Speaker 3: between the two countries, because that obviously underpins perhaps a
Speaker 3: lot of the reactions on both sides. What are the
Speaker 3: old scabs, the old wounds in this relationship that might
Speaker 3: be now being bloodied right now.
Speaker 4: Obviously, the biggest issue between Johanna and China is left
Speaker 4: over from World War Two. And by World War two,
Speaker 4: I mean not ninety thirty nine to ninety forty five.
Speaker 4: The Chinese definition of World War two, or they're fight
Speaker 4: against the Japanese now is nineteen thirty one to ninety
Speaker 4: forty five. Because Japan was a colonial power. Japan held Korea,
Speaker 4: Japan held Taiwan, Japan took over a large chunk of
Speaker 4: northern China, and then they gradually took more and more,
Speaker 4: and then they've invaded Shanghai and Nanjing and southern China
Speaker 4: in ninety thirty seven. And so that history of being
Speaker 4: invaded by Japan over decades and millions and millions of
Speaker 4: Chinese people being killed by the Japanese or dying because
Speaker 4: of the effects of those wars at that conflict. So
Speaker 4: there's this resentment and hatred because of the events of
Speaker 4: that period to ninety forty five. And then there is
Speaker 4: this belief that Japan is now trying to not take
Speaker 4: back Taiwan as a colony, but it's trying to separate
Speaker 4: Taiwan from its rightful place on the mainland, and also
Speaker 4: this idea that the Japanese government, the Japanese people haven't
Speaker 4: really repented sincerely on their actions during those various conflicts,
Speaker 4: and so all that is bound together. It can be
Speaker 4: incredibly angry, resentful attitude towards Japan. The historical question at
Speaker 4: this story of a match live and it's made much
Speaker 4: worse with the Chinese because of this. Status of Taiwan
Speaker 4: is still very much contested.
Speaker 3: Yeah, and Isabelle I wonder how does Japan see this?
Speaker 1: Even within Japan, this is a hugely divisive issue. I
Speaker 1: think going back to when ties were restored in nineteen
Speaker 1: seventy two, from there on, Japan contributed huge amounts of
Speaker 1: aid and there was lots of technological transfer, and I
Speaker 1: think the feeling behind that for a lot of people
Speaker 1: was we want to try and make up for the
Speaker 1: things that we did wrong in the past. But there's
Speaker 1: also a part of the population who feels like there
Speaker 1: was nothing wrong. We waged a war. All countries wage wars.
Speaker 1: We shouldn't be single alert for criticism just because we lost.
Speaker 1: But I think nowadays, to be honest, people are not
Speaker 1: looking so much at history in Japan. They're just thinking
Speaker 1: we have this giant economic and military might right next
Speaker 1: door to us, How are we going to manage to
Speaker 1: sort of get along with them getting the economic benefits?
Speaker 1: However we can without fooling under their sort of influence
Speaker 1: too far.
Speaker 3: Now it is about this back comes at a time
Speaker 3: when Japan's economy is WOBBLI. We've seen GDP shrink, the
Speaker 3: yen is weak, there's persistent inflation. China issued a travel
Speaker 3: advisory warning its citizens not to travel to Japan. Is
Speaker 3: there a risk there to the Japanese economy?
Speaker 1: To a certain extent, there certainly is. Chinese people make
Speaker 1: up a quarter of visitors to Japan at least so
Speaker 1: far this year, and that's just really started to recover
Speaker 1: in the last year or two from the pandemic period,
Speaker 1: So yes, that could be quite damaging. On the other hand,
Speaker 1: there have been a lot of complaints in Tapan about
Speaker 1: over tourism and about poor manners on the part of
Speaker 1: Chinese tourists in particular, so that might not damage take
Speaker 1: support rates in particular.
Speaker 4: And also tourism is an important source of foreign currency
Speaker 4: revenue for the country, but a slight reduction in tourist
Speaker 4: revenue isn't going to be as damaging as the risk
Speaker 4: or the possibility of Japanese companies in China being targeted
Speaker 4: or seeing boycotts. Japanese car companies still have billions of
Speaker 4: dollars of investments here. Other Japanese companies have billions and
Speaker 4: billions of dollars of investment here, seven to eleven, Uniclo Family, Panasonic,
Speaker 4: Canon Fujitsu. You know, these are huge companies that do
Speaker 4: a lot of revenue here. And if you start to
Speaker 4: see real consumer boycotts, if you start to see businesses
Speaker 4: pulling back from doing business with Japanese companies, then the
Speaker 4: hit to Japan Inc. Could be substantial. While tourism is
Speaker 4: very vivid in your face, the bigger thread is going
Speaker 4: to be if this goes on for a long time
Speaker 4: and Toyota sales in China crater even more than they've
Speaker 4: already been falling. They're already falling because of competition from
Speaker 4: Chinese companies. If those crater, then the effect of that
Speaker 4: is going to be quite big for Japan's economy and
Speaker 4: for those companies.
Speaker 3: James, what's been the public mood in China over this?
Speaker 4: Obviously the press and the government reactions is one thing.
Speaker 4: But I think the thing that sticks out for me
Speaker 4: so far at least, is there hasn't really been a
Speaker 4: public reaction. Japanese restaurants are still full, and unlike previous times.
Speaker 4: I was speaking to someone who's lived here for more
Speaker 4: than twenty years, and they were saying, in two thousand
Speaker 4: and five or in twenty ten, you saw Japanese restaurants
Speaker 4: putting up signs in that windows saying where are in
Speaker 4: by Chinese people? This is a Chinese restaurant. We just
Speaker 4: sell Japanese food, and I haven't seen any sign of
Speaker 4: that yet.
Speaker 3: President Donald Trump has now entered the conversation as well,
Speaker 3: speaking directly with both she and Takeichi. This week, Trump
Speaker 3: and she held the first talk since agreeing to a
Speaker 3: tariff truce, and Trump's readout of the phone call, they
Speaker 3: discussed trade and Russia's war in Ukraine, but he made
Speaker 3: no mention of Taiwan. Meanwhile, China's Foreign Ministry says she
Speaker 3: told Trump on the call that Taiwan's return to China
Speaker 3: is essential a cornerstone of the post World War two
Speaker 3: international order. Hours after that conversation wrapped, spoke with Takeichi.
Speaker 3: She said the US president reached out to reaffirm ties
Speaker 3: with Tokyo and said she could call him any time.
Speaker 3: The back to back calls show the US is tricky
Speaker 3: balancing act managing tensions between a key US ally and
Speaker 3: its biggest rival for most Japanese people, Though Isabelle says
Speaker 3: they'd rather move past this issue altogether, I.
Speaker 1: Think from the japan side, they will just continue making
Speaker 1: these very sort of low key and modest but steady
Speaker 1: efforts to try and smooth things over.
Speaker 4: I do think it matters how well Takaichi San does
Speaker 4: in any election that she calls. There's talk that election
Speaker 4: might happen in January next year, and if that happens,
Speaker 4: as she does win a majority, especially if she wins
Speaker 4: a majority with her own party, that puts her in
Speaker 4: a really good position to be the prime minister for
Speaker 4: three years or more. And so if she can show
Speaker 4: that she has domestic political stability or there is domestic stability,
Speaker 4: she has domestic political strength, and couple that with not
Speaker 4: saying things like this again or being vague when you
Speaker 4: need to be vague, and that continued low key kind
Speaker 4: of work by diplomats. Maybe over time there can be
Speaker 4: an improvement in this, but I think if I don't
Speaker 4: see any prospects of real improvement or change this year.
Speaker 3: This is The Big Take Asia from Bloomberg News. I'm wanha.
Speaker 3: To get more from The Big Take and unlimited access
Speaker 3: to all of Bloomberg dot Com, subscribe today at Bloomberg
Speaker 3: dot com slash podcast Offer. If you liked the episode,
Speaker 3: make sure to subscribe and review The Big Take Asia
Speaker 3: wherever you listen to podcasts. It really helps people find
Speaker 3: the show. Thanks for listening and see you next time.