Japan's tourism drive threatened by China crisis

Every day cosmetics store manager Masayuki Miyabe eyes the busloads of wealthy Chinese tourists descending upon his shop in Tokyo's upscale Ginza district with a mixture of relief and anticipation.


"They spend three times more than the average Japanese shopper," he said. "Chinese customers are a big part of business for most stores around here, from sports brands to major department stores."

But nearly three months after relaxing regulations to attract big-spending Chinese tourists to help boost a fragile economy, Japan faces the threat of thousands of travel cancellations as relations with China unravel.

Chinese health food and cosmetics maker Pro-Health last week cancelled a Japan trip for 10,000 employees in protest over Japan's arrest of a Chinese trawler captain amid the worst row between the Asian powers in years.

And on Wednesday, China's official Xinhua news agency said travel agents had seen a fall in the number of travellers to Japan since the dispute began.

It quoted Zhang Jianzhong, a spokesman for China's National Tourism Administration as saying: "Many Chinese people have cancelled their trips to Japan and may turn to other countries".

Beijing has threatened "further actions" if Tokyo does not release the captain arrested after his boat collided with two Japanese patrol vessels, reigniting a territorial dispute over resource-rich East China Sea islets.

A spokesman for CITS Japan, the Japanese unit of a Chinese travel agency, said it had not yet received any further cancellation requests in the wake of Pro-Health's action.

But any decline would be a blow to a country looking to help offset crippling deflation and sagging domestic demand by cultivating one of the fastest-growing and biggest-spending groups travelling to Japan.

"China is one of the important segments of foreign tourists to Japan," said Makoto Nukaga, a tourism researcher and chairman of Chibagin Research Institute in Chiba. "The dispute may impact the number of tourists from China."

According to the Japan Tourism Agency (JTA), Chinese tourists are set to overtake South Koreans as the biggest national group to visit to Japan in 2013 with 3.9 million visitors from 1.01 million last year.

Their purchasing power has spurred Japanese retailers and other service providers to adapt to these high spenders with more mandarin language services and in accepting a Chinese debit card.

"Shopping is more important for Chinese tourists than tourism," said the CITS Japan spokesman.

In a recent survey the JTA said Chinese tourists were the fourth-largest spenders at an average of 137,000 yen (1,615 dollars) per visit as they seek out designer handbags, digital cameras and cosmetics.

Russians were top spenders at 174,000 yen, followed by French (152,000 yen) and German visitors (146,000 yen).

Adding airfares and accommodation, the total Chinese spend stood at nearly 235,000 yen per visit, according to the agency.

With this in mind, Tokyo in July altered regulations to drastically lower its annual income threshold for granting visas to Chinese tourists to 60,000 yuan (8,950 dollars) per year, about a quarter of the previous requirement.

Rolling out the red carpet for China's travellers is just one of the many ways in which Japan has increased its dependence on its eastern neighbour. China last year displaced the US as the biggest importer of Japan's goods.

With China's economy outpacing Japan as the country continues its transformation from poverty-hit communist state to global heavyweight, it highlights Japan's need to re-energise its own economy, with tourism crucial.

But anti-Japanese sentiment is growing in Chinese Internet chatrooms.

"If everyone in China launched a boycott against Japanese goods, that would deliver a heavy blow to little Japan," read one posting on the Sina.com portal.

"We shouldn't export anything to Japan, not even chopsticks," said another on Sohu.com.

Relations between the two sides also suffered during 2001-2006 premiership of Junichiro Koizumi due to his annual visits to the Yasukuni shrine in Tokyo, which honours 2.5 million Japanese war dead, including war criminals.

"From past experience, the impact of this dispute will be digested in the long run," said Chibagin Research Institute's Nukaga.

But with Japan refusing to back down in the current dispute, a nervous wait for Japan's retailers awaits. "The situation just seems to be getting worse," said Miyabe, as another group of Chinese shoppers entered his store.