No end in sight to spat between Japan and China over Taiwan, as neither Tokyo nor Beijing shows signs of backing down.

The outlook for business diplomacy is uncertain with visits planned for late January by business leaders, now in limbo. Read more at straitstimes.com. Read more at straitstimes.com.

Diplomatic crises often change the stakes for each, and for the Japanese, the consequences of this crisis are multifaceted. Japan’s new prime minister, Takaichi Sanae, was the initial focal point. As the Washington Post editorial board aptly noted,

The Japanese entertainment industry has become increasingly reliant on China in recent years. China is the world’s second-largest market for anime, with fantasy films like “Demon Slayer: Kimetsu no Yaiba — The Movie: Infinity Castle,” which was released last month, rising to the top of the Chinese box office.

China has attacked Takaichi, threatened economic retaliation and warned its citizens to avoid Japan. Takaichi said yesterday that Chinese warplanes had locked their radars on to Japanese fighter jets south-east of Okinawa on Saturday, in what she described as an “extremely regrettable” incident.

China continued to voice its frustration with Japan after new comments from Prime Minister Sanae Takaichi reaffirming Tokyo’s long-held position that it understands and respects Beijing’s view on Taiwan.

China is trying to impose economic costs on Japan for wading into the issue of Taiwan. But experts say the escalating dispute could ultimately hurt China too.