Concerns Mount Over Business Effects of Prolonged Friction Between Japan, China

By Arata Hashizume and Ryosuke Terunuma / Yomiuri Shimbun Staff Writers

14:06 JST, December 7, 2025

With one month having passed since Prime Minister Sanae Takaichi made a remark in the Diet about a possible Taiwan contingency, concerns are growing over prolonged friction between Japan and China.

The Chinese government has urged its citizens to refrain from traveling to Japan, and there are impacts such as the cancellations of events, although anti-Japan protests or other violent activities have not occurred.

Hotel bookings plunge 57%

“I know there are issues between Japan and China, but I planned this trip a long time ago. I just want to enjoy shopping and experience nature,” said a 39-year-old Chinese national who was visiting Tokyo’s Ginza district with his family from Shanghai.

Domestic hotels have seen a wave of cancellations, primarily from group tours, since Nov. 14 when the Chinese government urged its citizens to refrain from traveling to Japan. According to Tripla Inc., which provides hotel reservation management systems, bookings from China decreased by 57% compared to before Beijing made the announcement.

On Friday, China’s three major airlines announced they would extend their policy of free flight changes or refunds for routes to Japan until March 28, 2026. This move is expected to prompt more travelers to change their plans, particularly those who had booked trips for the Chinese New Year holidays in February.

Concerns are emerging within Japan. “If this chill in relations persists, it could hit the bottom line of businesses in areas that rely on Chinese visitors,” said a public relations official at a major hotel chain.

Private exchanges take hit

The cultural sector is also taking a hit. A concert by singer Ayumi Hamasaki that had been scheduled for Nov. 29 in Shanghai was canceled just a day before. Similarly, Bandai Namco Holdings Inc. was forced to cut short an experiential event in Shanghai on the second day, after it began on Nov. 28.

While organizers cited “force majeure” for the cancellations, the deterioration of bilateral ties is clearly taking a toll on private-sector exchanges.

The outlook for business diplomacy is equally uncertain. Visits planned for late January by Yoshinobu Tsutsui, chair of Keidanren (Japan Business Federation), and Ken Kobayashi, chair of the Japan Chamber of Commerce and Industry, are now in limbo.

The visits are annual events and have been arranged to include meetings with Chinese leadership, including President Xi Jinping. However, it is unclear whether the Chinese side will accept the visits. “Japan and China are economically inseparable,” said a Japanese business official. “Even if political relations are tense, visiting China is significant to convey the message that business is separate from politics.”

Restrained response

Notably, boycotts of Japanese products or anti-Japanese demonstrations in China have mostly not been confirmed. With Japanese manufacturers operating factories across China, which play a vital role in local employment and consumption, Beijing appears to be exercising restraint.

At the director general-level talks between Japanese and Chinese diplomatic authorities held in Beijing on Nov. 18, there was a notable moment when Liu Jinsong, director general of the Chinese Foreign Ministry’s Department of Asian Affairs, spoke to a senior Japanese Foreign Ministry official with his hands in his pockets. However, immediately after the talks, Liu visited a Japanese manufacturer’s facility in Liaoning Province. Sources say he encouraged the continuation of business operations, suddenly switching to a friendly tone.

Toru Nishihama, chief emerging market economist at Dai-ichi Life Research Institute Inc., said, “The Chinese government may avoid trade measures that would significantly damage its own economy.” However, he warned that disruptions to tourism and entertainment “are likely to persist,” adding that these factors could gradually exert downward pressure on Japan’s economy.