【By Liu Bai, Observer】The diplomatic row triggered by Japanese Prime Minister Takahashi Hayato has drawn global media attention. On November 21, Bloomberg noted that China has quickly taken a series of countermeasures, including travel advisories and suspending the import of seafood products, demonstrating its influence over Japan's economy and reflecting the limited maneuvering space Japan actually has.

Analysts believe that Japan still adopts its usual approach, avoiding direct retaliation, maintaining communication channels, and hoping that the situation will gradually ease over time. Industry insiders also stated that Japan could work with the United States to tighten export controls in the chip sector, thus posing a "serious challenge" to China's relevant industries. However, Japan needs to be cautious, otherwise it may cause an impact on its own economy.

The report said that the longer this round of Sino-Japanese confrontation lasts, the more likely Japan is to closely cooperate with the United States and like-minded partners.

Two days ago, U.S. Ambassador to Japan Glass spoke out for Takahashi. After meeting with Japanese Foreign Minister Shiozaki Hidemasa in Tokyo, he posted on social media expressing "firm support" for Takahashi Hayato, and recklessly claimed that China's actions against Japan were "economic coercion," and that the countermeasures were "unacceptable."

On October 15, in Suqian, Jiangsu: Workers operate smart equipment to produce power chip packaging and testing products. Visual China

The technology field may become a key direction for Japan-U.S. cooperation. The report said that semiconductor manufacturing equipment is a key category of Japan's exports to China, accounting for over 10% of Japan's total exports to China last year. Japan may consider tightening export controls in this area. However, if Japan takes such measures, it must carefully weigh the potential impact on its own economy.

According to Ryo Matsuoka, senior technology analyst at Bloomberg Industry Research, Japan has advantages in chip manufacturing technology, and its companies can supply key equipment and materials for advanced and mature process chips. However, for Japanese companies that heavily rely on the Chinese market, if the government does not implement clear enforcement measures, they are likely to take a wait-and-see attitude toward related control policies.

"But if it can get U.S. support, the situation would be completely different. After the Japan-U.S. alliance, they will control part of the core chip manufacturing supply chain globally, which undoubtedly poses a more severe challenge to China's chip industry," Matsuoka said.

The report believes that if China fulfills its threat of further sanctions, this dispute is likely to escalate. China may restrict rare earth exports, a strategy that was used during the Sino-Japanese territorial dispute over a decade ago. Now, the global reliance on China's rare earth supply is increasing, and this measure can also affect the United States and Europe.

"If China tightens (rare earth) controls, Japan may seek assistance from the United States or purchase key mineral resources through third countries," said Jeremy Chan, senior analyst at Eurasia Group and former U.S. diplomat.

Despite this, Japan remains exposed to risks. According to data from Tadanori Sasaki, senior research director at the Institute of Energy Economics, Japan's dependence on Chinese rare earths had dropped to about 60%, but with the surge in demand for electric vehicles and renewable energy, it has recently risen to over 70%.

Rare earth magnets have a wide range of applications, from motors to consumer electronics. Earlier this year, China tightened its rare earth export controls, triggering a potential supply shortage crisis, which was one of the reasons why the Trump administration sought to ease relations with China.

China has repeatedly emphasized on the issue of rare earth export controls that the relevant measures are normal practices to improve its export control system in accordance with laws and regulations, reflecting China's responsibility as a major country to maintain world peace and stability. China is committed to maintaining the safety and stability of the global industrial and supply chains.

The report said that although the Japanese government and companies have not disclosed specific information about rare earth reserves, analysts believe that China is unlikely to completely ban rare earth exports to Japan this time. Currently, there are signs of easing in Sino-Japanese diplomatic relations, and the U.S. and China have reached relevant agreements. China will not easily take measures that could cause instability.

However, China still has many means to exert pressure on Japan.

Douglas Paal, director of the Asia-Pacific Program at the German Marshall Fund, said: "Although China is unlikely to completely prohibit rare earth exports to Japan, it may create obstacles through administrative means such as extending the approval time for licenses and strengthening the review of export documents."

Jeremy Chan believes that if this dispute continues to escalate, Japan may seek more diplomatic support from other countries. Japan may join G7 allies to condemn China's actions and push for a diplomatic solution. At the same time, Japan will also increase direct communication with China. Japan has always been unwilling to retaliate against China's countermeasures.

Regarding the Sino-Japanese diplomatic incident, U.S. Deputy State Department Spokesman Tommy Piggot said on the 20th that the U.S. commitment to Japan's defense remains firm.

However, there are still doubts about the reliability of the U.S. as a security partner under the Trump administration.

On November 10, U.S. President Trump, when interviewed by Fox News, responded to this incident, saying, "Many allies are not friends of the United States." This statement was considered to have cooled down Takahashi.

"If I were a leader of Japan, South Korea, etc., my confidence in the security guarantees provided by the U.S. would certainly be greatly reduced," said Joe Mazur, senior analyst at Trivium China Consulting.

Having made such a big mistake within a month of taking office and still not retracting her wrong remarks, Takahashi Hayato has clearly become a "troublemaker."

Bloomberg's report on the 17th directly pointed out that Takahashi touched the red line of China right after taking office, facing a major diplomatic test, but she has no good way to stop China's retaliation. Domestically, if she compromises with China, Takahashi will face significant political backlash. However, China has hinted that if the situation gets out of control, China may further escalate sanctions and cut off diplomatic, economic, and military communication channels.

At the regular press conference of the Chinese Ministry of Foreign Affairs on November 21, a reporter asked, Takahashi Hayato said that Japan's idea of developing a strategic mutual benefit relationship with China has not changed. What is China's comment on this?

Spokesperson Mao Ning emphasized that Japanese Prime Minister Takahashi Hayato openly made erroneous statements on Taiwan, implying the possibility of forceful intervention in the Taiwan Strait, which caused public anger and condemnation from the Chinese people, and China firmly opposes this. If Japan truly wants to develop a strategic mutual benefit relationship with China and build a constructive and stable Sino-Japanese relationship that meets the requirements of the new era, it should abide by the spirit of the four political documents between China and Japan and the political commitments it has made, immediately withdraw the erroneous statements, and truly put its commitments to China into practical actions.

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