Japan's 'happy' Chinese new year shows the way ahead

Japan's 'happy' Chinese new year shows the way ahead
Chinese tourists crowd a tax-free counter at a Tokyo department store last September.

In Japan, the Year of the Sheep started on Jan. 1, the old lunar calendar having been scrapped back in the late 19th-century Meiji era when the samurai traded their swords and topknots for suits and ties. Recently, however, the Chinese New Year holiday -- which starts Feb. 18 this year -- has assumed new significance as increasing numbers of Chinese tourists flood through Japanese airports bound for luxury hotels, department stores and ski slopes. The impact on bilateral relations of this growing visitor influx is likely to be complex and long-lasting.

Like many things Chinese, the scale and speed of the phenomenon are staggering. In 2012 China displaced Germany as the world's largest source of outbound travelers. In 2014 the number of Chinese tourists -- 110 million -- comfortably exceeded Germany's entire population.

After Prime Minister Shinzo Abe visited Yasukuni Shrine, Japan's controversial shrine to the war dead, in December 2013, official relations between China and Japan went from chilly to Antarctic. Even so, the number of Chinese visitors rose by a staggering 80 per cent in the ensuing 12 months. About 12 years ago, more Americans than Chinese came to Japan. In 2014, the Chinese were six times more numerous and they spent 60 per cent more per head than the Americans. As a result, Japan's balance of payments in the tourism field is positive for the first time in a blue moon.

Given the well-attested correlation between overseas travel and per capita gross domestic product, the trend is likely to continue for the foreseeable future. SMBC Nikko Securities expects total visitor arrivals in Japan to rise from 13 million in 2014 to 19 million in 2020 (of which 16 million will be from other Asian countries), and a further increase to 30 million is projected for the following decade. At the turn of the century, there were a mere 4 million visitor arrivals.

In terms of discretionary spending, the tourist boom is equivalent to an increase of 1.4 million people in the Japanese population. The effects are already being felt throughout Japan, from plush Ginza department stores to the electronics souk of Akihabara, where the popular Laox electronics store is under Chinese ownership. Even the Yoshiwara, Tokyo's ancient pleasure quarter, now welcomes the tourist yen in a way that would have been unthinkable 20 years ago.

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