Japan’s China row could be the GDP killer that sinks Takaichi

By taking a hard line on China, Japan’s Sanae Takaichi thinks she’s establishing her right-wing bona fides. In reality, she may be ensuring her premiership will be a brief one. Takaichi wasn’t chosen by the Liberal Democratic Party (LDP) to stir a geopolitical hornet’s nest with China. She was picked to raise Japan’s economic game and to tame surging inflation. Unfortunately, Takaichi has yet to explain how she will lower living costs.

It’s still early days, of course. But 29 days should be enough time to begin articulating even the vaguest contours of a strategy to halt the rise in consumer prices. Instead, her new government is now preoccupied with geopolitical sparring with Chinese leader Xi Jinping over Taiwan.

It’s likely to be a costly distraction. Losing business from Chinese consumers and tourists is the last thing Japan needs, particularly with the economy contracting 1.8% year on year in the third quarter.

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