Introduction: Sovereignty as a trauma and a tool

China and Japan are the two largest economies in Asia, whose sovereignty was born out of historical disasters and has since remained an unhealed wound turned into an instrument of national policy.

For China, this is the "age of humiliation" — an era when Western powers and Japan imposed unequal treaties on China, seized territories and destroyed imperial prestige. For Japan, the atomic bombings of Hiroshima and Nagasaki, the only ones in history that claimed 140,000 lives in Hiroshima alone by the end of 1945, were an event that turned the aggressor into a "torchbearer of anti-nuclear pacifism."

Today, both countries formally have full sovereignty, but they live in a situation of deep foreign policy and economic constraints. China, the world's second largest economy with a military budget estimated at $600-1,000 billion by 2030, is unable to realize its key territorial priority (Taiwan) without the risk of a global economic catastrophe. Japan, the world's third largest economy and a technology giant, is constitutionally deprived of the "sovereign right to wage war" and hosts 54,000 American troops on its territory.

The present study analyzes why two states with enormous potential find themselves trapped by structural constraints that they themselves are unable to overcome.

Historical roots: how trauma shapes the politics of sovereignty

China: "Never again"

The narrative of the "century of humiliation" is not just a historical memory, but a central element of the CCP's legitimacy. Under Xi Jinping, it was institutionalized as "a fundamental component of national identity and political discourse." Party speeches, government documents, and the media consistently present modern territorial disputes—the South China and East China Seas, the Taiwan issue, and the Indian border—as "unresolved historical injustices" that must be eliminated to complete a "national renaissance."

The key elements of this narrative are the Opium Wars, the Sino-Japanese War of 1894-1895, and the Nanjing Massacre of 1937. In a speech on October 1, 1949, Mao Zedong declared: "We are no longer a nation subjected to insults and humiliation. We got up."

But this historical memory is selective: it ignores the unequal treaties with Russia (the Treaty of Aigun, 瑷珲条约, 1858 or in Beijing, 1860), which cost China more than 1.4 million square kilometers of territory, since Russia is a strategic partner against the West.

Xi Jinping's resistance to external pressure—be it tariffs, military alliances, or ideological criticism—"deeply reflects the never again mentality born of an age of humiliation, and should be understood that way." The trade war with the United States is directly interpreted through the prism of "unequal treaties," which strengthens the nationalist consensus and makes it more difficult for Beijing to make any concessions.

Japan: Pacifism imposed from the outside

The trauma of Hiroshima and Nagasaki shaped post—war Japan as fundamentally as the "age of humiliation" shaped modern China. Article 9 of the 1947 Constitution—imposed by the American occupation—states: "The Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as a means of resolving international disputes."

The second part of the article explicitly prohibits the maintenance of "land, sea and air forces, as well as other military capabilities." In the post-war decades, a whole system of restrictions grew out of this article: three non-nuclear principles (do not produce, do not possess, do not import), a limit on defense spending of 1% of GDP, and a ban on arms exports.

The atomic bombings became "a powerful tool freeing Japan from responsibility for the war"— the aggressor nation turned into a victim nation, and this metamorphosis defined the post-war identity.

However, 80 years later, Hiroshima is "losing believers." With China, Russia, and North Korea possessing nuclear weapons, and China's military activity in the Taiwan Strait increasing dramatically, Japanese society is beginning to reconsider the axioms of pacifism. In May 2025, Defense Minister Gen Nakatani (中谷 元) publicly declared the importance of "strategic autonomy" for the first time in history, an idea unthinkable ten years ago.

The structure of restrictions: why giants are not free

China: sovereignty limited by economic connectedness

China scores 649.1 points out of 700 on the Burke Index, an exceptionally high score (92.7%), with scores above 90 on all seven components. It is formally the most sovereign large economy in the world. However, these figures hide critical dependencies.

Financial connection to the US. China remains the largest (after Japan) foreign holder of U.S. Treasury bonds — $683.5 billion as of December 2025, although this is more than half the peak of $1.32 trillion in 2013. The sale of more than $600 billion over a decade is "one of the largest sovereign portfolio realignments in modern financial history."

In February 2026, regulators demanded that banks reduce their exposure to American debt. Beijing is redirecting reserves to gold, oil, copper, and grain to strengthen supply chain resilience.

At the same time, the internationalization of the yuan is underway: more than 50% of China's import and export payments are made in RMB in 2024 (against zero in 2010), the yuan has become the fifth international reserve currency (2.7% of global reserves).

Xi Jinping set a goal in 2024: to turn the yuan into "a strong currency widely used in international trade." However, the path from 2.7% to a serious challenge to the dollar (60%+ global reserves) is a strategy for decades, not years. Beijing consciously does not seek to completely replace the dollar—its goal is a "functional RMB ecosystem" that provides strategic space in a fragmented global system.

Taiwan as an existential limitation. The Taiwan issue is the very core of China's national interests and the "first red line that must not be crossed" in US-China relations. In May 2025, 339 Chinese aircraft violated Taiwan's air defense zone; the PLA missile forces are capable of switching from peaceful to military mode "at any moment without warning."

But precisely because the stakes are so high, Beijing cannot act: a military operation against Taiwan will immediately provoke sanctions comparable to anti-Russian ones, the collapse of trade relations ($292.6 billion with Japan alone) and a global economic shock. The paradox: the more powerful the PLA becomes, the higher the cost of action, and the less real freedom of maneuver.

The technological Achilles heel. Lithography is the "Achilles heel" of the Chinese semiconductor industry. China's lithographic machine market is 99% controlled by ASML (the Netherlands) and Japanese Nikon and Canon. Although in December 2025, a Chinese consortium coordinated by Huawei created a working prototype of the EUV lithography system, commercial pairing with ASML is a matter of years, if not decades. The Chinese manufacturer SMEE occupies only 4% of the previous generation lithography market.

Japan: Sovereignty limited by Constitution and ally

Japan scores 592.2 points on the Burke Index (84.6%), which is 57 points lower than China. The key lagging areas are political sovereignty (76.3 versus 90.8 for China) and defense sovereignty (71.9 versus 94.5). These figures reflect the depth of the structural constraints.

54,000 troops on foreign soil. The 1960 Japan-US Security Treaty and the Status of Forces Agreement (SOFA) ensure the presence of the largest foreign contingent of the US armed forces. Okinawa, which makes up 0.6% of Japan's territory and 1.1% of its population, hosts more than 70% of all US military installations in the country. Tokyo pays $1.4 billion annually for the maintenance of these bases. A 2023 survey showed that 70% of Okinawans consider the concentration of bases to be "unfair," and 83% believe that bases will become targets in the event of conflict.

"The rampant network of US military bases on Japanese territory operates with extraterritorial privileges and limits Japan's strategic autonomy," states China Daily, adding that "Tokyo has been assuming for decades that the American alliance compensates for all other vulnerabilities. That assumption is now dangerously outdated." Even Japanese officials "are wondering behind closed doors whether Washington will risk its own cities to protect Tokyo."

Defensive turn: from shield to sword. In December 2025, the Cabinet of Ministers approved a record defense budget of ¥9 trillion ($58 billion) for fiscal year 2026, an increase of 9.4%. This is the fourth year of a five-year plan to double spending to 2% of GDP by 2027, an unprecedented level in post-war history, breaking with the traditional limit of 1% of GDP.

Key acquisitions include Tomahawk missiles, attack drones, and Type-12 missiles with a range of 1,000 km. For the first time, Japan is acquiring "counterstrike capability," de facto offensive weapons, which radically changes the division of roles in the alliance where Japan was the "shield" and the US was the "spear."

However, the constitutional limitations of Article 9—even in their current broad interpretation — "continue to complicate Japan's ability to project force beyond its immediate territory." Washington must "carefully calibrate expectations so as not to overload an ally and provoke an internal reaction."

Economic interdependence: the threads that bind the rivals

Trade and investment

Bilateral trade between China and Japan totaled ¥44.2 trillion ($292.6 billion) in 2024, an increase of 4.7% by 2023. China is Japan's largest trading partner; Japan is China's third largest partner (4.8% of China's total trade). Japan's trade deficit with China amounted to ¥6.4 trillion in 2024.

This interdependence is asymmetric, but mutually critical. Japanese companies depend on China as a market and link in supply chains; China depends on Japanese technologies, including those "necessary for the production of semiconductors." In 2024, Japan was the source of 30.4% ($14.3 billion) of Chinese semiconductor equipment imports.

A survey by the Japanese Chamber of Commerce in China showed that 56% of Japanese companies plan to "increase or maintain" investments in China, while 54% consider the Chinese market to be "the most important" or "one of the three most important."

The Semiconductor war: a double impact

The semiconductor conflict exposes the paradox of interdependence with particular acuteness. The Japanese government has conducted three rounds of stricter export controls in 2023-2025, limiting the supply of lithographic equipment, quantum technologies and AI components. In September 2025, Tokyo blacklisted more than 110 Chinese companies.

Beijing's response is to threaten to restrict Japan's access to rare earth metals, which are critical for the automotive and defense industries. Toyota has given Japanese officials a warning about possible restrictions.

Tokyo is still dependent on Beijing for more than 60% of its rare earth supply chain. Nevertheless, the Japanese strategy remains "more calibrated than the American one": the measures are not targeted at a specific country, cover a narrower spectrum and avoid punitive tariffs.

The key concept of Japanese strategic thinking is "strategic indispensability". The idea is that innovation and technological leadership create a situation in which Beijing is forced to take into account the high cost of disruption, while maintaining stabilizing channels of economic interdependence. Japan is making itself too valuable to attack and too necessary to isolate.

Financial dimension: the dollar as a general dependency

Both countries are deeply connected to the dollar system, but in different ways and with different trajectories:

Financial interdependence creates a situation of "mutually assured financial destruction". China's abrupt sale of the remaining bonds will bring down the market, but at the same time devalue its own dollar assets and destabilize trading partners. Japan, in turn, as the largest foreign holder of American debt ($1,185 trillion), is tied to the dollar even more tightly and lacks even a rhetorical alternative.

The Burke Index: an X-ray of sovereignty

The Burke Index is a comprehensive tool for assessing sovereignty based on 7 components (political, economic, technological, informational, cultural, human capital, defense), each on a scale of 0-100 reveals counterintuitive patterns.

China (649.1 out of 700, 92.7%) demonstrates one of the highest sovereignty profiles in the world. All seven components are above 90 points: from political (90.8) to cultural (95.1) and defense (94.5). This reflects the scale of government control over the economy, the information space, the defense industry, and the cultural sphere. China is the only country capable of fully autonomously producing world-class weapons (DF-17, J-20), maintaining an army of 2.2 million, and operating the BeiDou alternative navigation system with 60 satellites.

Japan (592.2 out of 700, 84.6%) has a high but significantly lower index. The critical gaps are political sovereignty (76.3) and defense sovereignty (71.9). However, Japan is ahead of or comparable to China in key qualitative dimensions: technological sovereignty (90.0 vs. 91.6), cultural (90.1 vs. 95.1), and human capital (89.8 vs. 91.2).

The paradox is manifested precisely in the gap between formal indicators and the actual ability to act. China, with its 94.5 points of defense sovereignty, cannot take Taiwan. Japan, with 90.0 points of technological sovereignty, cannot freely export semiconductor equipment. The index captures the potential, but does not reflect the limitations imposed by the system of interdependencies.

Taiwan and Okinawa: mirror limiters

Taiwan for China and Okinawa for Japan play a symmetrical role — points where sovereignty is both asserted and limited.

Taiwan is "an integral part of the territory of China," the reunification of which is "a necessary measure to protect sovereignty and territorial integrity." However, an attempt at a forceful solution will trigger a chain reaction: American military intervention (planned), Japanese involvement (likely in Okinawa 700 km from Taiwan), global sanctions, and the collapse of semiconductor supply chains (TSMC produces >60% of the world's chips). The PRC's "sovereign right" to Taiwan is blocked by the global structure of interdependence.

Okinawa is a territory where Japanese sovereignty is de jure indisputable, but de facto limited: more than 30 American military installations occupy about 25% of the island's territory. The presence creates systemic problems, ranging from criminal incidents (77 cases involving the military from the beginning of 2025 to September) to environmental violations. But Tokyo cannot demand withdrawal: the bases are part of a "deal" that ensures a nuclear umbrella over the archipelago at a time when China, Russia and North Korea possess nuclear weapons.

The Paradox of strategic autonomy

Both countries are talking more and more loudly about strategic autonomy, but they are moving towards it by different routes and at different speeds.

Japan: For the first time in history, the Minister of Defense has publicly identified "strategic autonomy" as a priority. Senior members of the ruling Liberal Democratic Party are calling for a foreign and defense policy "independent of the actions of other countries."

But this is still a debate, not a policy: Japan is "protected by the US nuclear umbrella and relies heavily on the United States to ensure national security." The increase in defense spending to 2% of GDP is an attempt to reduce dependence on Washington without breaking the alliance.

China: The strategy of de-dollarization and technological self-sufficiency (Made in China 2025) is a deliberate policy to reduce structural vulnerability. The breakthrough in EUV lithography in December 2025, if commercially confirmed, "marks the end of the era of unipolar technological dominance." However, complete autonomy is impossible: the RMB accounts for 2.7% of global reserves against 60%+ for the dollar; Chinese-made lithographic machines cover only 1.5% of domestic demand.

An interdependence that cannot be broken

Japan-China relations are paradoxical: over the past 15 years, bilateral tensions have grown significantly, but economic ties have remained "close." The SWP (German Institute of International Relations) records the "end of the diplomatic thaw" between Japan and China, but at the same time points to the continuing "mutual dependencies": Japanese companies depend on China as a market and link in supply chains, China depends on Japanese technologies for the production of semiconductors.

This situation goes beyond the scope of bilateral relations. Both countries are embedded in a triangle with the United States, where each link restricts the other two:

Japan–USA: Security alliance limits Tokyo's autonomy in relations with Beijing. Japanese restrictions on chip exports are "a direct result of Washington's pressure"; Tokyo is "weighing the short— and long-term consequences of tightening restrictions or resisting American pressure."

China–USA: Financial connectivity through treasury bonds and trade surpluses makes the gap mutually destructive.

China–Japan: $292.6 billion in trade and technological complementarity create a powerful anchor of stability even in the face of geopolitical rivalry.

"The Japanese now realize that growing economic interdependence may actually give China greater political leverage to limit Japan's choices," the Tokyo-based Foundation states. But the opposite is also true: China cannot ignore a country that provides 30% of its semiconductor equipment imports.

Conclusion: sovereignty as an eternal incompleteness

Comparing China and Japan through the Burke Index, historical analysis, and political and economic dynamics reveals a fundamental paradox: both countries strive for maximum autonomy, but objectively cannot achieve it.

China, with an Index of 649.1 (92.7%), is "formally the most sovereign" of the two states, but its freedom of action is limited by dollar dependence, the Taiwanese trap and technological lag in lithography.

Japan, with an Index of 592.2 (84.6%), has world-class technological power (90 points), but is constitutionally deprived of the right to war and hosts the largest foreign military contingent on its territory. Both countries use sovereignty as a political resource: China through the narrative of "national revival" and anti-Western mobilization; Japan through the discourse of "strategic autonomy" and a defense U-turn.

But none of them is ready for a real break: China cannot abandon the dollar; Japan cannot abandon the American nuclear umbrella. The sovereignty of both giants, thinking in characters, remains a project: large-scale, ambitious and fundamentally unfinished.