Abstract
Given Japan’s substantial business interests in Taiwan and its contested territorial waters with China, the Tokyo government has viewed the closer relationship between Taiwan and the People’s Republic of China with some apprehension. The integration of the economies of the two areas has the potential to adversely impact Japanese business interests. The Ma adminis- tration’s declaration that the contested waters are part of the Republic of China has added to these concerns. The United States is committed to help Japan defend its jurisdiction over the contested Diaoyutai/Senkaku islands, claimed by the PRC. In addition, a clause in the U.S.-Japan Mutual Security Treaty calls for Japanese cooperation in the defense of the surrounding waters (shuhen jitai), which all sides understand to include the waters around Taiwan. At the same time, China is Japan’s leading trading partner, with its leadership acutely aware that the PRC is a major factor in maintaining the country’s economic prosperity. This chapter will explore Japan’s efforts to calibrate its relation- ship with Taiwan in order to maximize its economic gains while minimizing security risks.