Flashpoints | Diplomacy | East Asia

Japan-Taiwan Relations Enter ‘Deep Waters.’ Will They Sink or Swim?

Economic, technological, and societal ties between the two sides have never been stronger, yet political constraints are becoming more and more visible.

Takaichi Sanae (front left), prior to her election as Japan’s prime minister, walks with Taiwan’s President Lai Ching-te (front right) during a meeting in Taipei, Taiwan, Apr. 28, 2025.

On August 10, Taiwan’s representative to Japan, Lee Yi-yang, declined to attend the atomic bombing memorial ceremony in Nagasaki after Taiwan’s delegation was seated outside the area reserved for diplomatic representatives. Lee denounced the arrangement as a symbolic slight to Taiwan’s status and a concession to Beijing’s efforts to restrict Taiwan’s international space. Nagasaki officials, however, maintained that the seating arrangement reflected Japan’s longstanding “One China” policy rather than an effort to single out Taiwan. Yet while Taipei protested the decision, it was equally careful to ensure that the controversy did not overshadow the broader trajectory of Japan-Taiwan relations.

The episode exposed a central paradox in contemporary Japan-Taiwan relations. Economic, technological, and societal ties between the two sides have never been stronger, yet political sensitivities surrounding Taiwan’s international status continue to constrain how far the relationship can advance. The Nagasaki dispute was therefore more than a disagreement over diplomatic protocol. It illustrated how a relationship characterized by growing interdependence remains embedded within a diplomatic framework shaped by Japan’s “One China” policy and the broader dynamics of Sino-Japanese relations. As Taiwan and Japan become increasingly interconnected, both their expanding cooperation and the political constraints surrounding it have become more visible.

Taiwan and Japan have entered what many Taiwanese policymakers describe as the “deep waters” of bilateral relations. Economic integration, technological collaboration, and societal exchange have reached unprecedented levels, even as enduring political and security constraints continue to limit closer cooperation. The challenge ahead is not merely to expand areas of engagement, but to translate growing convergence of interests into sustainable forms of cooperation. Doing so will require both stronger institutional frameworks and the political will to advance the relationship despite persistent geopolitical constraints.

From Economic Partnership to Strategic Convergence

The most visible driver of Japan-Taiwan cooperation has been Taiwan Semiconductor Manufacturing Company’s investment in Kumamoto. What began as a commercial decision has evolved into one of the most important strategic projects in East Asia. For Japan, TSMC’s presence supports the revitalization of a domestic semiconductor industry that had steadily declined over the past three decades. For Taiwan, the project deepens integration with one of its most important political and economic partners. 

The Kumamoto project links Taiwan’s manufacturing leadership with Japan’s strengths in semiconductor equipment, specialty chemicals, advanced materials, and precision machinery. The result is a more resilient and geographically diversified supply chain.

But cooperation linked to the project extends beyond the economic realm. In Kyushu, local governments, universities, research institutes, and businesses have forged new partnerships with Taiwanese counterparts. Educational exchanges, workforce training programs, and joint research initiatives have expanded rapidly, creating new channels of cooperation. TSMC’s single investment has therefore become a platform for broader regional integration.

Beyond semiconductors, both sides are increasingly collaborating in sectors such as artificial intelligence, cybersecurity, drone technology, digital governance, and economic security. The signing of a Japan-Taiwan Digital Trade Agreement in 2025 reflected the growing importance of these emerging domains. Clearly, Japan-Taiwan cooperation is entering a new phase.

In the past, economic cooperation with Taiwan was relatively uncontroversial. But today, the distinction between economics and security is blurring. Semiconductors, artificial intelligence, and supply chains are no longer merely commercial issues. They have become central components of national competitiveness and strategic resilience. As a result, Japan-Taiwan relations have evolved beyond a traditional economic partnership, with growing convergence in economic security, advanced technology, and regional strategic interests. Yet important political constraints remain.

The Institutional Constraints

The institutional foundations of the relationship have not kept pace with its strategic transformation. Although Taiwan and Japan have signed numerous practical agreements over the past decade, most of the recent arrangements have been narrowly focused and technical in nature. Major agreements in the areas of fisheries, taxation, customs cooperation, investment, and aviation were largely concluded during the 2010s. More recent agreements have concentrated on specialized areas such as railway cooperation, customs information sharing, plant variety certification, and digital trade.

That’s because Japan’s approach to Taiwan cannot be separated from its management of relations with China. Since the normalization of diplomatic relations between Japan and the People’s Republic of China (PRC) in 1972, Beijing has consistently sought to limit Japan’s engagement with Taiwan whenever Tokyo has appeared to move beyond the bounds of an unofficial relationship. Beijing cites the 1972 Japan-China Joint Communiqué, in which the Japanese government stated that it “fully understands and respects” the PRC’s position that Taiwan is an inalienable part of Chinese territory. 

Although Japan did not formally recognize Chinese sovereignty over Taiwan, the communiqué became the foundation of Japan’s One China policy and remains the principal reference point for Beijing’s criticism of expanded Japan-Taiwan ties. Whenever Japan has sought to expand exchanges, support Taiwan’s international participation, or deepen political engagement, Beijing has invoked the 1972 communiqué to argue that such actions violate the spirit of bilateral understandings. 

Consequently, while Tokyo has supported practical cooperation with Taiwan in many areas, it has been reluctant to pursue measures that could be interpreted as a significant upgrade in official relations. The result is a relationship that continues to deepen in practice while advancing more cautiously at the institutional level. 

To see this in........

© The Diplomat