Japanese Prime Minister Sanae Takaichi's recent provocative remarks on Taiwan are an attempt to divert public attention away from pressing domestic economic woes such as rising cost of living and mounting debt, said a Chinese expert on Saturday.
In a parliamentary meeting on November 7, Takaichi openly stated that a "Taiwan contingency" could become a "survival-threatening situation" for Japan and at that time Japan can exercise its right to collective self-defense to deal with it, which imply the possibility of armed intervention in the Taiwan Strait.
Einar Tangen, a commentator of China Global Television Network (CGTN), offered insights into what Prime Minister Takaichi stands to gain by wading into the Taiwan question.
"She's trying to divert attention from the fact that she doesn't have a very robust economic plan. In essence, she has said that she's going to spend her way out of the dilemma that Japan has with the population, et cetera. She's very, very dependent on the U.S. I mean, remember this is the most indebted nation in terms of percentage of GDP," he said.
Japan holds the world's highest debt-to-GDP ratio running above 200 percent for the past five years due to decades of fiscal stimulus and an aging population.
China remains Japan’s largest trading partner and a key investment destination for Japanese companies. To antagonize China, Tangen warned, would be a dangerous move.
"And as I said, this is a lady who does not have a clear economic objective. She's already said she's going to spend her way out. Her only novel idea is that instead of going to a strict year-by-year budget, they're going to go to a flexible multi-year budget, but there's really nothing new in there, just increasing wages and saying that she's going to pursue strategic interests. This is a country that has a 20 percent exposure to China, in terms of its trade, it would be devastating," he said.
Takaichi, who was elected as Japan's first female prime minister just last month, inherited a country facing a weak yen, labor shortages, and higher living expenses.
"The question is how does she think she can go forward economically? You can distract the people for only so long before your economic policies make it clear that you do not have a real direction. Antagonizing China just doesn't seem to make any type of economic sense," Tangen said.
Japanese PM diverting attention from economic woes with provocative Taiwan remarks: expert
Mergers, acquisitions, and reorganizations in China's A-share market have picked up markedly since the start of the year, with deals disclosed in the first quarter up over 80 percent year on year, led by strong momentum in hard-tech sectors.
Data from Wind Information, a China financial data provider, showed that by Tuesday, listed companies had announced 829 merger, acquisition, and reorganization deals, with 224 on the ChiNext board and 94 on the STAR Market. By sector, "hard technology" sectors, represented by semi-conductor and smart manufacturing, have emerged as the most active areas.
"Hard-tech sectors typically feature rapid technological iteration, heavy research and development investment and long industrial chains, with significant economies of scale. Given these features, industrial mergers, acquisitions, and reorganizations have been a key tool for hard-tech companies to strengthen supply chain resilience and competitiveness. In addition, China's related policies, dubbed 'Six Measures for Mergers and Acquisitions,' explicitly support listed companies in carrying out mergers, acquisitions, and reorganizations around strategic emerging industries and future industries, while moderately increasing regulatory tolerance for unprofitable assets. This has created more favorable institutional conditions and a better market environment for listed companies in the hard-tech sectors to accelerate industrial upgrading and strengthen independent innovation," said Chen Jie, head of Mergers and Acquisitions Group at the investment banking division of China International Capital Corporation.
Chen also noted that the surge in mergers, acquisitions, and reorganizations has been reshaping valuation dynamics in the A-share market. As integration and synergies take time to materialize, investors are increasingly shifting their focus from short-term sentiment to long-term value based on business logic. At the same time, sustained mergers and acquisitions activity is expected to support the revaluation of leading companies.
"Through consolidation and expansion, leading A-share firms are likely to see their core competitiveness and long-term growth prospects become more evident. This will help the market better recognize their intrinsic value, offering higher valuation, and contribute to a more rational and mature valuation system overall," said Chen.
China's A-share sees mergers, acquisitions, reorganizations pick up,led by hard-tech sectors
