Historical grievances and territorial disputes have added to the strain.
AFP examines the issues at the heart of their complicated relationship.
- Historical mistrust -
Japanese troops carried out mass murder, rape and looting in Nanjing for about six weeks from the end of 1937, a period of brutal Japanese occupation in the Second Sino-Japanese war that was part of World War II.
Tens, if not hundreds, of thousands of people were killed in the massacre.
Tokyo normalised diplomatic ties with Beijing in 1972 but relations are still dogged by historical issues.
More than 10,000 people protested in Beijing after Tokyo approved revisionist textbooks in 2005, hurling rocks and eggs at the Japanese embassy.
Takaichi has not commented publicly on the Nanjing massacre since becoming premier last month, but she questioned the official Chinese death toll of 300,000 in a 2004 blog.
Long seen as a China hawk, she has also been a regular visitor to a shrine that honours Japan's war dead -- including those guilty of crimes in World War II -- although she has not visited since taking over.
China terms such visits as "serious provocations".
- Territorial disputes -
The East Asian neighbours have also been involved in a territorial dispute over islets in the East China Sea, known by Tokyo as Senkaku and by Beijing as the Diaoyu.
The remote chain of islands has long fuelled tensions and is the scene of regular confrontations between Japanese coast guard vessels and Chinese fishing boats.
Beijing has grown more assertive about its claim over the islands in recent years, with Tokyo reporting the presence of Chinese coast guard vessels, a naval ship and even a nuclear-powered submarine.
Chinese coast guard vessels spent several hours in Japan's territorial waters around the Senkakus on Sunday, according to Japan's Chief Cabinet Secretary Minoru Kihara.
Separately, two Chinese aircraft carriers were seen operating in the Pacific for the first time this year, with Japan saying the move revealed an expansion of Beijing's military activities.
- Alliances -
The United States has been a staunch ally of Japan since the end of World War II and Takaichi vowed a "new golden age" of ties with Washington during President Donald Trump's visit to Tokyo last month.
Japan hosts several US military bases, with the bulk of the 60,000-strong troop presence in the southernmost region of Okinawa -- right on mainland China's doorstep.
That has fuelled China's belief that the United States is intent on encircling and containing it.
Tensions between China and other claimants to parts of the East and South China Seas have also pushed Japan to deepen ties with the Philippines.
Their coast guards held training drills with the United States in Japan for the first time this year.
- Taiwan -
Another flashpoint issue is Taiwan -- which Beijing claims as its territory and has vowed to take one day, by force if necessary.
Takaichi suggested this month that Japan could intervene militarily in any emergency in the self-ruled island, sparking a row during which a Chinese diplomat in Japan threatened to "cut off that dirty neck" in an apparent reference to her.
China and Japan summoned each other's ambassadors last week, with Beijing then warning its citizens to avoid travelling to Japan and saying the safety of Chinese students there was at risk.
Japan said on Monday it had scrambled fighter jets when a suspected Chinese drone was detected nears its southern island of Yonaguni, which is close to Taiwan, two days earlier.
China has staged war games around Taiwan, which was ruled by Japan for half a century until 1945, several times since 2022.
- Trade and tourism -
Asia's two biggest economies are still closely entwined, with China being Japan's largest trading partner and one of the biggest investment destinations for Japanese companies.
The neighbours maintain several hundred billion dollars in economic trade annually.
China is also the biggest source of tourists to Japan, with almost 7.5 million in the first nine months of 2025, according to the Japanese figures.
Chinese tourists spent 590 billion yen ($3.8 billion) in the third quarter, accounting for about 28 percent of all spending by international tourists, transport ministry data showed.
Japan-China spat over Taiwan comments sinks tourism stocks
Tokyo (AFP) Nov 17, 2025 -
Japanese tourism and retail shares dived on Monday after China warned its citizens to avoid the tourist hotspot in a spat over Prime Minister Sanae Takaichi's comments on Taiwan.
A senior Japanese official meanwhile arrived in China seeking to defuse the row sparked by Takaichi's suggestion that Tokyo could intervene militarily in any attack on the self-ruled island.
Asia's two top economies are closely entwined, with China the biggest source of tourists -- almost 7.5 million visitors in the first nine months of 2025 -- coming to Japan.
Drawn by a weak yen making shopping cheaper, they collectively splurged more than a billion dollars a month in the third quarter, accounting for almost 30 percent of all tourist spending.
Japan was also the fourth-most popular destination for Chinese tourists last year, helping the land of Mount Fuji, sushi and geishas set new records for foreign arrivals.
But in fears that this may now stop, investors wiped nine percent off Japanese cosmetics firm Shiseido's market value on Monday.
Department store group Mitsukoshi fell 11.3 percent and Pan Pacific, behind discount retail chain and tourist magnet Don Quijote, slid 5.3 percent.
Japan Airlines, whose shares nosedived 3.4 percent, has not seen any major cancellations on flights to and from China, a spokesperson told AFP.
Before taking power last month, Takaichi was a vocal critic of China and its military build-up in the Asia-Pacific.
If a Taiwan emergency entails "battleships and the use of force, then that could constitute a situation threatening the survival (of Japan)", Takaichi, 64, told parliament on November 7.
Under Japan's self-imposed rules, an existential threat is one of the few cases where it can act militarily. Taiwan sits around 100 kilometres (60 miles) from the nearest Japanese island.
- 'Troublemaker' -
Japan said Monday it scrambled aircraft after detecting a suspected Chinese drone near its southern island of Yonaguni, which is close to Taiwan, on Saturday.
Beijing insists Taiwan -- which Japan occupied for decades until 1945 -- is part of its territory, and the prime minister's comments have sparked a furore.
This has included a Chinese diplomat stationed in Japan threatening to "cut off that dirty neck", apparently referring to Takaichi, and China and Japan have summoned each other's ambassadors.
Beijing also advised its citizens to avoid travelling to the country and warned the roughly 100,000 Chinese students in Japan that there were risks to their safety.
Japan's Chief Cabinet Secretary Minoru Kihara told reporters on Monday that the announcements were "incompatible with the broader direction agreed upon by the leaders of the two nations".
On Sunday, Chinese coast guard vessels spent several hours in Japan's territorial waters around the disputed Senkaku Islands, known as the Diaoyu in China and a frequent flashpoint, Kihara said.
In Beijing, tech worker Daniel Feng called the Chinese government's responses "very restrained" given Takaichi's "extremely unreasonable" remarks.
"If she spouts words, that's not a problem... but if they take real action, our country's military will definitely defeat them," the 40-year-old told AFP.
Taiwanese President Lai Ching-te called on Beijing on Monday to "show restraint, act like a major power, and not become the troublemaker" in the Asia-Pacific region, where peace and stability have been "severely impacted".
"China should return to the path of a rules-based international order, which would help maintain peace, stability and prosperity in the region," Lai told reporters.
- Economic hit -
Beijing meanwhile said than Chinese premier Li Qiang has no plans to meet with Takaichi in a G20 summit in South Africa later this week which they are both set to attend.
A Japanese government official told AFP that Masaaki Kanai, the top foreign ministry official for Asia-Pacific affairs, arrived in China on Monday.
"We are trying not to escalate the situation," the official told AFP.
Kanai is expected to hold talks with his Chinese counterpart Liu Jinsong on Tuesday, according to media reports.
The diplomatic spat could spell further bad news for Japan's economy, which shrank by 0.4 percent in the third quarter, official data showed on Monday.
Marcel Thieliant at Capital Economics warned that the tensions risked escalating "into a full-blown trade spat" similar to a previous episode in the early 2010s.
This could include China restricting exports of rare earths or imposing restrictions on Japanese exports.
"Carmakers look particularly vulnerable as they are already under enormous pressure from the ascent of Chinese electric vehicle manufacturers," Thieliant added.
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