Japan and China Are Building a Rivalry That Can't Be Undone by a Handshake

On October 31, 2025, at the APEC summit, Sanae Takaichi and Xi Jinping sat down together and used the same phrase. China and Japan were "important neighbors," both leaders said, separated by only a strip of water. They agreed to advance strategic, mutually beneficial relations ^[1]. The diplomatic frame was intact. A handshake could still reset the relationship in months. It took five months to overwrite that frame. In April 2026, Japan's Diplomatic Bluebook downgraded China from "one of the most important bilateral relations" to "important neighboring country" -- the first such downgrade in a decade ^[2]. This week, Japan's 2026 Defense White Paper went further, labeling China its "greatest strategic challenge" ^[3]. The words changed. But the words are the least of what changed. Beneath the diplomatic surface, Japan has been systematically dismantling the institutional architecture of its post-war military restraint. The changes are not rhetorical -- they are statutes, budgets, and deployments, each one harder to dismantle than it was to build. In May 2025, Japan passed an Active Cyber Defense Law authorizing the Self-Defense Forces and police to preemptively infiltrate or disable network devices belonging to alleged attackers -- a shift from defensive to offensive cyber posture ^[4]. In December, the cabinet approved a record 122.3 trillion yen budget with defense spending exceeding 9 trillion yen, a 9.4 percent increase, part of a five-year program to reach 2 percent of GDP -- a target the budget documents attribute to pressure from the United States ^[5]. That same month, Japan announced it would reorganize its Air Self-Defense Force into an Air and Space Self-Defense Force, adding a new military domain ^[6]. On March 31, 2026, Japan operationalized its first long-range counterstrike missiles -- Type-12 missiles with a range of roughly 1,000 kilometers, produced by Mitsubishi Heavy Industries, bringing parts of mainland China within reach, alongside Tomahawk cruise missiles on the destroyer JS Chokai ^[7]. On April 21, Japan formally lifted its 80-year post-war ban on lethal weapons exports, allowing the sale of fighter jets, missiles, and destroyers to 17 partner nations, with the National Security Council replacing parliamentary oversight ^[8]. The same day, a Japanese destroyer transited the Taiwan Strait for joint exercises with the U.S. and Philippines ^[9]. Then came the constitutional target. On April 12, Takaichi told the LDP convention that the moment had arrived to reform Japan's pacifist constitution, aiming to present an amendment proposal by next year's convention ^[10].

the time has come — Sanae Takaichi

Article 9 has not been revised -- the deepest institutional change remains aspirational. But the direction is no longer ambiguous, and the changes already enacted do not require a constitutional amendment to be permanent. The historical paradox at the center of this transformation is that the United States is actively encouraging Japan to dismantle the very post-war order the U.S. imposed. After 1945, Washington wrote the constraints: the arms export ban, the defensive-only military, Article 9 itself. Now U.S. officials are pressing Tokyo to undo them. Ambassador George Glass called the lethal export ban's lifting a historic step for alliance capabilities ^[8]. Assistant Secretary of Defense John Noh told Congress that the U.S. military could not alone sustain a favorable balance of power and called on Indo-Pacific allies to raise defense spending to 3.5 percent of GDP ^[11].

The department has called upon our allies and partners to expand their contributions to our collective defence and to share the burden of restoring and sustaining deterrence in the Indo-Pacific. — United States Department of War

China is citing the Cairo Declaration, the Potsdam Proclamation, and the Japanese Instrument of Surrender -- documents rooted in the U.S.-led post-war settlement -- to argue that Japan's institutional shifts violate the legal order those documents established, not merely bilateral understandings ^[12]. Defense Ministry spokesperson Zhang Xiaogang demanded Japan repudiate its entire post-war military trajectory.

We urge the Japanese side to stop its retrogressive moves and make a clean break with militarism. — Zhang Xiaogang

But China is not merely protesting. It is building its own reciprocal institutional architecture. On January 8, 2026, China imposed an immediate ban on dual-use exports to Japan, targeting materials with military applications ^[13]. On June 29 and 30, it imposed export controls on 40 Japanese entities, including subsidiaries of Mitsubishi Heavy Industries and the National Institute for Defense Studies -- a targeted strike at Japan's defense-industrial base ^[14]. In July, it blocked rare earth shipments of terbium, dysprosium, and yttrium oxide to Japan specifically, causing Japanese corporate risk warnings to double since May ^[15]. At the United Nations, China's envoy warned the international community to stay on high alert against Japanese military expansion and the revival of militarism ^[16]. The Foreign Ministry declared that Japanese neo-militarism was already a reality and warned that once that door was opened, no one would be safe ^[17][10]. China is internationalizing the confrontation -- framing Japan's transformation not as a bilateral dispute but as a structural threat to the post-war order. Meanwhile, Japan is embedding itself in Western security architecture far beyond the bilateral U.S. alliance. In December 2025, it signed defense cooperation pacts with the Netherlands and New Zealand ^[18]. In May 2026, it added Australia, Indonesia, and the Philippines ^[19]. In April, roughly 30 NATO ambassadors visited Japan, touring defense companies and the Yokosuka naval base ^[20]. On June 1, Japan dispatched SDF personnel to NATO's Security Assistance and Training for Ukraine headquarters in Germany -- the first time Japan has embedded military personnel in a NATO operational headquarters ^[21]. In June, Japan and India signed their first joint defense co-development project and aligned their strategic frameworks to reduce dependence on China for semiconductors and critical minerals ^[22]. The economic relationship is reorienting along the same lines. Chinese tourism to Japan plunged 55.9 percent year-on-year in March 2026, the fourth consecutive monthly decline, yet Japan's overall tourism hit record highs from other countries ^[23]. Japan is building China-excluding supply chains: Mitsubishi Materials invested in U.S. rare earth refining, and Japan and France signed a roadmap to source roughly 20 percent of future terbium and dysprosium demand from a French plant by late 2026 ^[24]. French Finance Minister Lescure was blunt.

We cannot rely solely on specific countries, especially China. — Roland Lescure

The difference between the two kinds of change is concrete. A handshake at APEC changed the diplomatic framing in one afternoon. The institutional architecture is made of laws that require new legislation to undo, budgets that commit spending years into the future, missiles already in the ground, and alliance structures embedded from Yokosuka to NATO headquarters. None of these unwind because two leaders decide to be neighbors again. The October 2025 summit showed how fast the diplomatic frame can shift. Everything that has happened since shows how little that frame now controls.