China is trying to impose economic costs on Japan for wading into the issue of Taiwan. But experts say the escalating dispute could ultimately hurt China too.

Trade cooperation between China and Japan has been "severely damaged", the Chinese commerce ministry said on Thursday, urging the Japanese prime minister to retract her comments on Taiwan or face the consequences.

Weeks into the job, Japan’s new leader has come face-to-face with what it means to cross China’s red line on Taiwan.

Prime minister says leaders discussed Indo-Pacific ‘challenges’ amid tensions over Taiwan between Tokyo and Beijing