A Japanese Maritime Self-Defence Force ship transited the Taiwan Strait for the first time on Wednesday, Japanese media reported.

The Japanese destroyer Sazanami, along with ships from the Australian and New Zealand navies, ‘transited’ the narrow waterway between mainland China and the island of Taiwan, Kyodo news agency said.

The ships are believed to have been in the South China Sea for exercises, Kyodo reported.

The People’s Liberation Army (PLA) followed and monitored them throughout the process, and the situation was under control,’ the Chinese newspaper Global Times reported, citing unnamed sources.

China warned on Thursday that it was ‘extremely vigilant’ and had complained to Japan after the latter said it had sent a ship into the Taiwan Strait.

When a Japanese self-defence force ship entered the Taiwan Strait, the Chinese military … handled the matter in accordance with the law,” foreign ministry spokesman Lin Jian said, adding that ‘China is extremely vigilant about the political intentions of Japan’s actions’.

The crossing came about a week after Tokyo protested to Beijing over the new route taken by the PLA Navy’s Liaoning aircraft carrier and two destroyers on their way to the Pacific.

The Liaoning and two Type 052D guided missile destroyers sailed through the East China Sea towards Japan’s adjacent territories, passing between the islands of Yonaguni and Iriomote.

A month ago, amid escalating regional tensions, Japan announced that a Chinese military aircraft had entered its airspace and that Japanese warplanes had responded.

Relations between the two Asian powers have become even more problematic as Tokyo’s geopolitical and military alignment with the United States has deepened.

China test-fired an intercontinental ballistic missile (ICBM) into the Pacific Ocean on Wednesday for the first time in 44 years, in a show of force that raised concerns among the United States and its allies.

The test, Beijing’s first major missile launch since its two hypersonic weapons tests in the summer of 2021, came as the People’s Liberation Army (PLA) conducted intensive air and naval exercises in the region and ahead of a meeting between Chinese leader Xi Jinping and US President Joe Biden expected in the coming weeks.

China’s defence ministry said the ICBM carrying a dummy warhead was launched into international waters at 8.44am, adding that it was a ‘routine adjustment in our annual training plan’ in accordance with international law and was not aimed at any country or target.

However, the West has interpreted the launch as a political message and it is thought that it could raise concerns in the US that Beijing is modernising its nuclear weapons.

According to analysts, China has signalled that it has the capability to strike US territory with nuclear weapons. Notably, this show of force coincided with the Xi-Biden meeting.

In July 2021, the PLA launched a missile using a ‘fractional orbit bombardment’ system to propel a nuclear-capable ‘hypersonic glide vehicle’ around the Earth for the first time. It conducted a second hypersonic test the following month.

Analysts say the Rocket Force, the PLA’s conventional and nuclear missile arm, has used ranges in Xinjiang or the Bohai Sea as the target area for almost all its tests. The last time an ICBM was launched from a range other than these two was in 1980.

Beijing did not specify which missile it tested on Wednesday or where it was launched. But four security officials in Asia said the launch came from Hainan in southern China and was judged to be a land-based ICBM like the Dongfeng-41.

It does not appear to have been launched from a [Rocket Power] base or the Wenchang Space Launch Centre. It was most likely launched from a coastal area,’ Duan Dang, a Vietnam-based maritime security analyst, told the Financial Times.

Two senior Japanese officials said the ICBM did not fly over Japanese territory. But this launch, along with their recent attacks on our territory with military aircraft and ships, is seen as a serious provocation to the stability of this region,’ one of the officials said.

China could catch up with the US in nuclear weapons by 2030

China, which in the past had few nuclear warheads to retaliate against an enemy nuclear attack, is now rapidly expanding its arsenal of warheads and missile launchers.

According to US defence experts, this build-up could put China on a par with the world’s two leading nuclear powers, the United States and Russia, by the early 2030s.

This has sparked a debate in Washington about whether and how the United States should expand and adjust its own nuclear capabilities and posture.

According to the Japanese military, another PLA Navy fleet entered the Sea of Okhotsk on Monday, while Chinese and Russian naval vessels conducted joint training near Japan.

Experts say that by conducting the ICBM test at the same time as other exercises, the PLA is trying to demonstrate its capabilities across the board.

China has announced a series of stimulus measures, including a cut in its benchmark interest rate, as it grapples with a slowdown in the world’s second-largest economy.

In a public briefing on Tuesday, the People’s Bank of China also announced more support for the struggling property sector, as well as a state fund to revive the stock market and help with share buybacks.

While economists were sceptical that China could meet its full-year growth target of 5%, Bank of China Governor Pan Gongsheng said the measures were aimed at ‘supporting the steady growth of China’s economy’ and ‘promoting a moderate price recovery’.

China’s blue-chip CSI 300 index, which tracks shares traded in Shanghai and Shenzhen, rose 3.8 per cent on Tuesday after the announcement. Hong Kong’s Hang Seng index rose 3.9 per cent, led by mainland Chinese companies listed in the region.

Pan said the central bank’s main policy rate, the short-term seven-day reverse repurchase rate, would be cut to 1.5 per cent from 1.7 per cent.

“The central bank will also cut the reserve requirement ratio, the amount of reserves lenders must hold, by 0.5 percentage points, signalling a possible further cut of 0.25 to 0.5 percentage points this year. The RRR cut will provide Rmb1 trillion ($142 billion) of liquidity to the banking system”, he said.

“The rare simultaneous cut in policy rates and the RRR, the relative size of the cuts, and the unusual guidance on further policy easing all point to policymakers’ growing concern about headwinds to growth,” Goldman Sachs analysts said in a note to clients. “In our view, this signals a new round of policy easing to support the real economy,” he said.

“However, further demand easing – especially fiscal easing – is likely to be needed to improve China’s growth outlook,” they added.

China’s economic growth has slowed in recent months as a prolonged downturn in the property sector has weakened consumer sentiment and reduced spending.

Economists have cut growth forecasts below the government’s official target of 5 per cent by 2024 as deflationary forces persist and producer prices have fallen since last year.

Policymakers have turned to exports in the hope that the housing crisis will bottom out, but strong shipments of electric vehicles, batteries and other goods have failed to fully offset the weak domestic economy.

“China’s economy is recovering, and the monetary policy our bank has introduced this time will help support the real economy, stimulate spending and investment, while providing a stable floor for the exchange rate,” Pan said.

Pan was joined by Li Yunze, director of the National Financial Regulatory Administration, the new financial sector watchdog, and Wu Qing, chairman of the China Securities Regulatory Commission, the market regulator.

The government will boost stock market liquidity by allowing brokers, insurance companies and funds to use central bank facilities to buy shares, officials said. The People’s Bank of China will also provide credit facilities for shareholders to buy back shares.

“A new stimulus is definitely positive,” said Liu Chang, macro economist at BNP Paribas Asset Management.

But with economic momentum weak heading into the fourth quarter, he said the authorities would have to ‘move very quickly to implement additional measures in the coming weeks if they want to achieve the 5 per cent target’.

In this context, we think there is still a worrying lack of urgency behind their words on stimulus,” Liu said.

Among other measures, the bank reduced mortgage down payments for second homes from 25 per cent to 15 per cent. Second homes had previously been subject to stricter conditions to curb property speculation, a focus of President Xi Jinping.

The central bank also said it would improve conditions for its destocking programme, under which it is providing Rmb300 billion to local state-owned enterprises to help them buy unsold inventory from property developers.

Economists say reducing China’s unsold housing stock is crucial to restoring confidence in the economy and boosting domestic consumption.