Japanese Prime Minister Sanae Takaichi described China as an “important neighbour” in a parliamentary policy address on Tuesday, signaling a desire to stabilize relations despite ongoing tensions between the two countries.

Takaichi acknowledged the long-standing relationship between Tokyo and Beijing, saying Japan aims to maintain open communication on shared challenges and promote dialogue to protect its national interests. At the same time, she emphasized that Japan would continue to “firmly assert our country’s positions” and call for responsible behavior from China.

Relations between the two economic powers have been strained since last November, when Takaichi suggested that Japan might intervene should China attack Taiwan. This comment triggered a diplomatic spat that saw Beijing impose travel advisories against Japan and restrict exports of rare earth minerals critical to Japanese industries. China's top diplomat recently described the ties as “waiting to be normalised again” during talks with a former Japanese foreign minister leading a trade delegation in Beijing.

In addition to foreign policy, Takaichi addressed domestic challenges, highlighting Japan’s declining population as a “quietly advancing national crisis.” She pledged to develop a comprehensive strategy to address demographic issues by the end of the year. According to government statistics released in July, Japan’s population dropped below 120 million for the first time in 42 years.

Takaichi also reiterated her commitment to maintaining market confidence through a proactive and responsible fiscal policy. Her administration has faced scrutiny over expansive government spending, which has raised concerns about Japan’s mounting debt and triggered market volatility.

Despite these challenges, the prime minister continues to enjoy unusually high approval ratings a year into her term. Her policy speech sought to balance a firm stance on national security with initiatives aimed at economic stability and demographic revitalization.