Japan is currently undergoing an unprecedented transformation in its domestic social and political outlook and in its economic policies. Nearly two decades of painfully slow economic growth, a debt crisis and a demographic crisis due to an aging population have had immense long-term implications for Japan’s policy planners. Perhaps even more remarkable are developments in the foreign and security policy arena. To be sure, the single most important factor behind foreign and security policy shifts is a ‘rising China’ with an increasingly confident and assertive attitude. The ongoing transformation brought about by China’s rise has profound implications for Japan and the region.