Japanese Prime Minister Sanae Takaichi on Monday described China as an “important neighbour” and pledged to build a constructive and stable relationship with Beijing, while also saying Japan would firmly defend its national interests. Speaking during a policy address to parliament, Takaichi acknowledged the difficulties in relations between the two Asian economic powers but said the countries had built a long-standing relationship over the years. She said Japan would maintain communication on shared challenges, promote dialogue and seek to develop a stable relationship with China, while continuing to call for what she described as responsible behaviour.

Takaichi’s comments come after a period of heightened tension between Tokyo and Beijing, particularly following remarks she made in November about a possible Japanese response if Taiwan were attacked. China claims Taiwan as part of its territory, while Japan has longstanding security and economic interests in the surrounding region. The dispute has contributed to a deterioration in bilateral ties, with China previously warning its citizens about travel to Japan and imposing trade restrictions that reportedly affected supplies of key rare-earth materials to Japanese companies.

The Japanese prime minister's latest comments nevertheless indicate an emphasis on maintaining dialogue despite continuing disagreements. Takaichi said Japan would seek communication over shared challenges and use dialogue to protect its national interests. At the same time, she stressed that Tokyo would continue to state its own positions firmly. Her remarks came shortly after China's top diplomat indicated last week that relations with Japan were awaiting renewed normalisation, following a meeting in Beijing with a former Japanese foreign minister leading a trade delegation.

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Alongside foreign policy, Takaichi used the address to highlight Japan's demographic decline as a major domestic challenge. She pledged that her government would formulate a comprehensive strategy to address the country's falling population, describing the problem as a “quietly advancing national crisis”. The government plans to prepare the strategy by the end of the year. Official data released in July showed that the number of Japanese people living in the country had fallen below 120 million for the first time in 42 years, underscoring the scale of the demographic challenge facing Japan.

Takaichi is also facing economic pressures, including rising inflation, concerns over Japan's large public debt and market uncertainty surrounding her government's spending plans. On Monday, she reaffirmed her commitment to a proactive but responsible fiscal policy as her government seeks to maintain market confidence. Reuters reported that Japan's 30-year government bond yield reached a record high of 4.235% amid concerns about debt and inflation. Takaichi has also backed measures intended to address the impact of higher prices, including plans for a temporary reduction in the consumption tax on food.

The policy speech opened a parliamentary session scheduled to continue through December, with the government expected to pursue legislation covering economic and social issues. Takaichi's approach combines efforts to address domestic challenges such as population decline and inflation with an attempt to manage relations with China despite significant strategic disagreements. Her description of China as an important neighbour, alongside her call for a stable relationship and insistence that Japan will defend its positions, signals Tokyo's intention to keep communication channels open while maintaining its existing stance on areas of contention.

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