Shares in Japanese Retail and Tourism Plummet Following Chinese Travel Warning
Japanese retail and tourism stocks took a sharp hit today after Chinese authorities warned their citizens to avoid traveling to Japan — a move tied directly to mounting tensions between the two countries over Taiwan.
Takashimaya, the parent company of the popular fashion brand Uniqlo, saw its shares drop 5%. Oriental Land, which runs Tokyo Disneyland, fared worse, falling 5.8%.
According to the BBC, major Japanese airlines — Japan Airlines and ANA Holdings among them — have also posted declines. It’s a pointed reminder of just how much Japan’s tourism economy depends on Chinese visitors.
The trigger was a set of remarks from Japan’s newly elected Prime Minister, Sanae Takaichi, who criticised China’s military maneuvers and raised the possibility of Japanese military action if China were to invade Taiwan.
The fallout went beyond travel. The Chinese Ministry of Education stepped in, urging students thinking about studying in Japan to reconsider. Last year, over 100,000 Chinese students were enrolled at universities across Japan — which gives some sense of what’s at stake with that kind of advisory.
Over the weekend, China Southern Airlines, China Eastern Airlines, and Air China all moved quickly to offer refunds to passengers holding Japan-bound tickets.
A Long-Standing History of Strain
The friction between China and Japan runs deep. Much of it traces back to Japan’s military conduct during World War II, a period that left a devastating toll across Asia. Since 1945, meaningful acknowledgment from Japanese politicians has been rare — Tomiichi Murayama, the former Prime Minister who recently passed away, was a notable exception.
Nationalist politicians have often deflected rather than confronted allegations of war crimes, and some have honoured wartime leaders convicted of those crimes at the Yasukuni Shrine — a memorial to the 2.5 million Japanese who died in warfare, as well as to those classified as war criminals.
Military language from figures like Takaichi reliably sets off a reaction in China, and that reaction tends to have economic consequences. It happened in 2012, when Japanese car dealerships in China had to display Chinese flags to protect themselves from vandalism during the dispute over the Diaoyu Islands.
Officials from both nations are expected to meet tomorrow, though a Kyodo report points to a divided public in Japan over the country’s right to self-defense in the context of a potential Chinese move on Taiwan.
Where that leaves bilateral relations — economically and diplomatically — is the question both governments will be sitting with for some time to come.
