ECONOMY: Japan-China dispute hurts tourism…

With manta rays cruising pristine coral reefs in emerald bays, and white-sand beaches nestled beside funky jungles, Japan’s Ishigaki island should have thousands of tourists from nearby Taiwan and southeast China lining up for juicy, well-marbled steaks and bitter goya gourds.

Instead, Chinese attention to the island is focused on a single fisherman, Zhan Qixiong, detained there for more than 10 days after allegedly ramming a Japanese coast guard ship in disputed waters at the heart of a diplomatic spat threatening to unravel diplomatic relations and trade between the world’s second and third largest economies.

While Japan’s new Foreign Minister, Seiji Maehara, is calling it an “accidental incident” and saying the countries have “no territorial issues,” a roiling dispute over fishing grounds and gas fields could damage Prime Minister Naoto Kan’s vision to open Japan to the sort of mass Chinese tourism helping out Asian economies hurt by declining North American demand for their exports.

Though tourist arrivals dropped last year by almost 20 per cent, to 6.8 million, Japan is hoping to attract 10 million visitors to Japan this year and 25 million per year within a decade. One of those visitors was supposed to be Chinese Premier Hu Jintao, invited to the Asia-Pacific Economic Co-operation forum in Yokohama in November.

But Beijing media say China is cutting off ministerial-level relations with Japan, and China has repeatedly summoned Japan’s ambassador to lodge protests. “Any so-called judicial proceedings the Japanese side takes against the Chinese captain are illegal and invalid,” Foreign Ministry spokesman Ma Zhaoxu said in statement quoted by Xinhua news agency. “If Japan acts willfully, making mistake after mistake, China will take strong countermeasures, and all the consequences will be borne by the Japanese side.”

More importantly, bad blood lingering since the Second World War could continue to isolate Japan’s southwestern islands and other depopulating areas, which badly need visitors to revive greying communities and shrinking tax bases.

Having lost the No. 2 spot in the world economy to China this summer, many in Japan want China’s burgeoning middle class to spend their new found wealth here. On July 1, Japan eased conditions for granting visas to Chinese individuals whose families earn 60,000 yuan per year, about a quarter of the previous amount required. To make it easier for inland Chinese to visit Japan, Japan is now processing visa applications at seven consular offices instead of three, and issuing visas via 290 Chinese travel agencies instead of 48.

Mr. Kan, the Prime Minister, recently told the parliament that his tourism vision could add 10 trillion yen to the economy and create about 560,000 jobs.

As part of a “Yokoso” (Welcome) campaign, local governments have offered to translate restaurant menus for free, and put up signs in English, Korean and Mandarin in touristy areas such as Tokyo’s Tsukiji fish market. Electronics stores in Akihabara and Shibuya have recently added Mandarin-speaking staff.

The program was working, until now. The number of Chinese visitors to Japan rose 36 per cent in the first five months of this year, to about 600,000, compared with a total of 1.01 million in all of 2009, and the figures for the summer high season are likely to rise dramatically.

By opening ferry ports and local airfields to millions of Chinese who live less than 300 kilometres away from Ishigaki, tourism would also help Okinawa wean its economy off reliance on hand-outs from Tokyo and controversial U.S. marine bases. Instead, visitors around an island group – known as Senkaku in Japan and Diaoyu in China – mainly consist of U.S. and Japanese naval units; commodity hungry Chinese hoping to drill for oil and gas; and fishermen already threatening stocks across Asia.

With no direct flights to Okinawa or even Kyushu, it’s not easy for Chinese travellers to get to Ishigaki by boat either – unless they’re detained by the Japanese coast guard like the Chinese fishing-boat captain.



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