Since 2014, both China and Japan have been pursuing a policy of normalization of their bilateral relations, which worsened after the Japanese government’s decision in 2012 to nationalize three out of the five disputed Senkaku islands. There are a number of factors, at times contradicting each other, that shape Japan’s contemporary policy towards China: from deep interest in intensification of trade and economic cooperation with China and in ensuring regional security, concerns over US President Donald Trump’s actions and hence over the sustainability of US-Japan close partnership and alliance, to the challenge of rising China. A specific feature of Japan’s policy towards China is that, due to deep contradictions between the two countries, Tokyo views the rise of China not as bringing opportunities, but instead as a serious challenge or a potential threat. The strengthening of China’s economic and especially military power - along with North Korea’s missile and nuclear program - is seen in Tokyo as the deepest security concern. As China’s comprehensive national power strengthens, China’s foreign policy behavior becomes more assertive, foreign policy and foreign trade activities intensify, Japan’s challenge of rising China attains new dimensions. During the past several years, Tokyo has been facing a need to find an appropriate response to China’s Belt and Road Initiative, to the establishment of the Asian Infrastructure Investment Bank (AIIB), and to China’s intensified economic and military activities in the East China and South China Seas. This article demonstrates how the Abe Shinzo Cabinet meets the challenge of rising China under the conditions of Japan’s policy to normalize relations with its strong neighbor. Specifically, the article identifies and characterizes the Abe Cabinet’s measures to hedge the risks connected to China’s Belt and Road Initiative and China’s assertiveness in the East China and South China Seas.