Japanese tourism and retail sectors already experienced double digit drops after tensions between China and Japan increased over Taiwan. Things escalated further when China’s Education Ministry warned students studying in Japan to return home. They encouraged these students to stay involved and remain highly attuned to the security progress.
Japan’s Prime Minister Sanae Takaichi recently raised eyebrows with an audacious declaration. She indicated that Tokyo would consider taking military action should Beijing choose to invade Taiwan. Fears are growing that Taiwan will become a battleground for Japan and China. Taiwan is located only 100 kilometers south of Japan’s nearest island, casting significant shadows of doubt on that argument. Takaichi stated, “If there are battleships and the use of force, no matter how you think about it, it could constitute a survival-threatening situation.”
The implications of this geopolitical tension have been anything but benign and, quite frankly, has been immediate and egregious. The Chinese government is now advising its citizens to reconsider studying in Japan. They point to safety concerns and an increase in crimes targeting Chinese people. After all, China has long been the top source of tourists to Japan. Indeed, last year more than 100,000 Chinese students registered to study in Japanese educational establishments.
As a result of the growing diplomatic tensions, some Chinese airlines are closing ranks. China Southern Airlines, China Eastern Airlines and Air China all have implemented refund policies for flights to Japan. This mirrors a growing sentiment among citizens of China about visiting Japan during an era of heightened tensions.
China has long considered Taiwan a rebel province. It thinks there’s still the chance that Taiwan will someday peacefully come back under its control, which makes the situation even more challenging. Beijing has not ruled out the use of force. The impact of this move would be a major destabilizing blow to regional stability and peace.
Japan’s self-defense forces are on standby, prepared to respond. They will act with overwhelming resolve first if the contingency emerges as an armed conflict posing a direct threat to Tokyo’s survival. Under Japan’s 2015 security law, a “survival-threatening situation” is defined as an armed attack on Japan’s allies that presents a significant risk to national security.
The short term impact of all of these advances has been seen in an exuberant stock market. Shares in cosmetics company Shiseido dropped about 10%. At the same time, department store chain Takashimaya and the owner of global fashion brand Uniqlo both tumbled more than 5 percent during morning trade. The retail and tourism sectors are especially at risk, with many businesses depending on Chinese consumers.