China and Japan are two of Asia’s most powerful nations and the region’s biggest trading partners. Yet centuries of intense rivalry mean their economic embrace can never be taken for granted.

Trade cooperation between China and Japan has taken a "great" hit following the recent remarks on Taiwan made by the Japanese prime minister, the Chinese commerce ministry said on Thursday.

Less than a month into her term, Japan's conservative leader has stirred tensions with China by suggesting a Chinese move against Taiwan could prompt a Japanese military response.

China’s benchmark bond yield is poised to fall below Japan’s, a historic crossover that may reignite fears the world’s No. 2 economy is sliding into the deflationary spiral that paralyzed its neighbor in the 1990s.

Japan has warned its citizens in China to step up safety precautions and avoid crowded places, amid a deepening dispute between Asia's two largest economies over Japanese Prime Minister Sanae Takaichi's comments on Taiwan.

Beijing is flexing its military and economic might to show its displeasure with the Japanese leader’s comments about defending Taiwan. But its aggressive approach risks backfiring.