The thing is, China is not as strong as you (and unfortunately many others) presume. Let us not forget the US & its vassals are still 50% of the world’s GDP and that China’s manufacturing share is only 30% or so of the world’s total. It is not as dominant as often portrayed. Individually China maybe the strongest country, but collectively it can’t take on the entirety of the US empire.Inaction also has consequences, and red lines keep getting pushed back by adversaries. Remember when China said 九二共识 was the red line, and was disregarded by Tsai Ingwen. Nothing happened.
"The Japanese comments are an unprecedented provocation, but they are still too minor to justify significant economic retaliation by China."
Disagree. This is just allowing adversaries to further chip away at China's credibility. If 台湾有事日本有事 said by a Japanese PM is still too minor, then...dunno what to say.
Also, I doubt other countries "care" about who's in the right and who's in the wrong. They cares about who is "mightier" in the literal sense of word. You show might, other countries will come around. What China is putting out now is a circus.
So the reality is that China cannot just stoke the fires of conflict and give reason for the US & its vassals to unite in common purpose. Japan is actually one of the countries China was trying to go neutral on Taiwan, and under its previous prime minister there were signs that Japan might actually be receptive.
Unfortunately in came the right wing chicken hawk who exploited the party’s in fighting to assume leadership. She’s certainly torpedoed relations, but I think the Chinese leadership still assumes she’s a flash in the pan and that the next Japanese leader will be more mature & reasonable. Hence starting small with the sticks so as to not alienate every last Japanese leader and make it impossible for a dove to mend relations.
The only way to beat the US empire in the long term is divide & conquer. You don’t want them putting aside their differences and uniting against you with half the world.
China is strong but not THAT strong.

