Why Is Taiwan Putting China and Japan on Edge?

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00:00There's fresh tension brewing between China and Japan over Taiwan.

00:03Just weeks after President Xi Jinping and Prime Minister Takai-chi Sané agreed to improve ties,

00:08the Japanese leaders said that if China fought to take control of Taiwan,

00:12it could amount to a survival-threatening situation for Japan,

00:15which is the legal threshold for Japan to also use force.

00:19A Chinese diplomat responded with a threat to decapitate anyone who interfered in China's affairs,

00:23and Beijing came back with threats of economic retaliation and travel warnings,

00:27a move that's dragged down shares of travel firms and Japanese cosmetic brands.

00:32While territorial disputes and China's expanding military power have been points of tension,

00:37Beijing's ambitions over Taiwan have also worried Japan for years.

00:40Just look at this map. Taiwan sits right next to Japan's southern islands.

00:44The closest one, Yonaguni, is roughly 60 miles away.

00:48For years, Japanese leaders have avoided discussing what a Taiwan conflict might mean for Japan,

00:53preferring to call for the status quo to be maintained.

00:55But Takai-chi's more direct acknowledgement of Taiwan signals a shift.

01:00And that shift comes with big stakes.

01:02China is Japan's top trading partner, and both economies are deeply intertwined.

01:06That puts Japan at risk of the same kind of retaliation Beijing used against South Korea a decade ago,

01:11when it deployed a US missile defense system.

01:14China responded with boycotts that hit tourism, hurt major companies,

01:18and shaved about 0.4% off South Korea's GDP.

01:20China is Japan's a bad partner with Japan.

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