# Takaichi makes her trip to the APEC summit in China depend on parliament as Tokyo weighs tax rises for defense

A senior aide to the prime minister visited Yasukuni Shrine, and the International Monetary Fund welcomed a temporary tax cut that Japan will finance alongside a larger military budget.

- Published: 2026-10-18T05:07:38.100Z
- Canonical: https://polylog.news/2026-10-18/takaichi-makes-her-trip-to-the-apec-summit-in-china-depend-o
- Publisher: Polylog (Global desk)
- Section: geopolitics
- Sources: [The Japan Times](https://www.japantimes.co.jp/news/2026/10/18/japan/politics/takaichi-china-apec-parliament/), [TASS (Russian)](https://tass.ru/ekonomika/28226397), [Jiji Press](https://www.jiji.com/jc/article?k=2026101800204&g=pol), [The Japan Times (Business)](https://www.japantimes.co.jp/business/2026/10/17/economy/imf-official-japan-tax-cut-plan/)

Prime Minister Sanae Takaichi will attend the Asia-Pacific Economic Cooperation (APEC) summit in China [if the parliamentary schedule allows](https://www.japantimes.co.jp/news/2026/10/18/japan/politics/takaichi-china-apec-parliament/), the Japan Times reported. The summit, set for [Shenzhen on November 18 and 19](https://en.wikipedia.org/wiki/APEC_China_2026), often gives Japanese and Chinese leaders a chance to meet. Ties have been frozen since Takaichi said in November 2025 that Japan could intervene militarily if Taiwan were attacked. At the 2025 APEC meeting in South Korea she met Taiwan's representative, and China's foreign ministry [lodged a formal protest](https://m.thepaper.cn/newsDetail_forward_31876106) calling the meeting a serious violation of the one-China principle.

Signals from Tokyo this week pointed in different directions. Jiji Press reported that Wakamiya, an aide to the prime minister, [visited Yasukuni Shrine](https://www.jiji.com/jc/article?k=2026101800204&g=pol). Beijing regards the shrine as a symbol of Japanese wartime aggression. Russia's TASS, citing Kyodo News, reported that Japan [may raise taxes to pay for military programs](https://tass.ru/ekonomika/28226397). Japanese reporting has said the government plans to bring forward its target of [defense spending at 2% of output](https://kumanichi.com/articles/2006261), partly funded by higher income tax.

Fiscal policy is moving in two directions at once. Rahul Anand, the IMF's mission chief for Japan, called the government's temporary tax cut plan [a "very welcome step"](https://www.japantimes.co.jp/business/2026/10/17/economy/imf-official-japan-tax-cut-plan/). Tokyo is cutting some taxes temporarily while it considers permanent increases for defense, and Japanese long-term bond yields are already elevated.

## What this means

Japan is rearming while trying to keep open a diplomatic channel to its largest trading partner, and it is paying for the rearmament with a mix of debt and new taxes. Japanese government bond investors and the yen are exposed. So are Japanese exporters with large Chinese sales, which carry the cost if the freeze continues. Beijing wants a statement on Taiwan before any summit. Takaichi's domestic base rewards gestures such as the Yasukuni visit, so the room for compromise on either side is narrow. The precedent is the 2014 APEC summit in Beijing. Shinzo Abe and Xi Jinping met after a two-year freeze, but only after officials agreed a four-point text in advance. The desk's read is that a short Takaichi-Xi meeting in Shenzhen is possible only if both sides agree a similar text within weeks, and that without one, Takaichi will cite parliament and send a deputy. The read would be wrong if Beijing confirms a bilateral meeting without any Japanese statement on Taiwan.

## What to watch

- Whether Chinese and Japanese officials announce a vice-ministerial meeting before November. Such a meeting is the usual step before a leaders' meeting.
- Details of any defense tax package in the coming budget. A permanent income tax increase would show Tokyo is funding rearmament rather than borrowing for it.
- China's official response to the Yasukuni visit. A sharp protest would make a summit less likely.