China Sets Its Economic Sights on Japan as Trade Slows with US

January 2, 2019 Updated: January 2, 2019

Amid the U.S.-China trade war, Beijing is attempting to curry favor with one of the United States’ partners in the Pacific—Japan.

Chinese tourism and investment are both up in Japan, according to the Hong Kong Economic Journal, and trade talks between Japan and Chinese leadership may occur after March or April, according to the South China Morning Post.

The Chinese Communist Party (CCP) uses tourism and investment as a diplomatic method to influence other countries and regions. While a country favored by the CCP may enjoy economic boon—in this case, Japan—one that falls out of favor can be quickly cast aside, as happened with South Korea in 2018.

Japan and the United States have traditionally had favorable diplomatic relations. As the trade war pressures the Chinese economy, the CCP is seeking new partners, and may be taking advantage of Japan’s economic situation in searching for cracks in the U.S.-Japan relationship. Despite territorial stand-offs, such as the eight-year feud over the Senkaku Islands (also called the Diaoyu Islands), China began warming to Japan in 2018.

Cherry blossoms
Cherry blossoms hang over the Meguro River in Nakameguro on March 26, 2018 in Tokyo. One attraction for Chinese tourists are the cherry blossoms. (Carl Court/Getty Images)

Also in 2018, Chinese tourism to Japan increased by more than 15 percent, with more than 7.16 million Chinese tourists traveling to Japan, according to the Economic Journal. Chinese graduates from more than 1,000 universities will also be allowed easier access to visiting Japan, and will no longer be required to provide bank statements showing sufficient tourism funds. Frequent tourists will also be allowed to obtain a five-year, multiple-entry visa.

In October 2018, Chinese leader Xi Jinping spoke optimistically about China-Japan relations, according to the Economic Journal. Chinese investors are already moving toward Japan, buying both real estate and businesses.

The South Korean Experience

One of China’s methods of diplomatic influence is tourism. Since the CCP controls media within China, it can decide which countries are allowed to advertise, and even which countries are attractive to tourists.

A recent example is South Korea, the pop culture of which is popular with younger Chinese.

On Sept. 20, 2017, the Chinese Foreign Minister made a “demand” that South Korea remove a U.S.-deployed  THAAD missile defense system, according to Chinese state-run media Xinhua. The CCP claimed that the missile-defense system is used for spying into Chinese airspace.

On Sept. 28, 2017, The Epoch Times reported that Chinese media was inciting boycotts of South Korean products. This method is one concept in China’s “Three Warfares”: media warfare.

Chinese Tourists Graph
Graph of Chinese tourists traveling to South Korean from January 2016 to November 2018. Data from (Daniel Holl/The Epoch Times)

One example of propaganda used during this time was on China’s main social-media platform Weibo, which is comparable to Twitter, and included an article from Oct. 8, 2017, (Chinese) titled, “Even Japanese People are Laughing, South Korea is Unexpectedly Bragging that Korean Food is More Rich than Chinese Food, How Embarrassing!”

Chinese tourists to South Korea have significantly decreased since then.

South Korean supermarket Lotte Market had 110 markets across China as of 2017, according to The Epoch Times. In mid-2018, the CCP ordered Lotte to close 87 stores in Mainland China, leading to heavy financial losses, and by the end of July 2018, Lotte had closed all of its stores in China.