Exit the dragon: Hard times for Chinese tourism providers in Japan
Chinese businesses struggle to adapt as their compatriots stay away
Chinese restaurants can be seen in the Ameyoko shopping district in Tokyo on Dec. 16. Proprietors says business has dried up since Beijing warned tourists to stay away from Japan. (Photo by Yuki Kohara)
TOKYO -- A "one dragon" system of Chinese businesses in Japan catering to visiting compatriots has become a significant victim of the travel warning issued by Beijing last month as relations with Tokyo deteriorated.
China advised its citizens on Nov. 14 to refrain from traveling to Japan, a move seen as retaliation for Prime Minister Sanae Takaichi's Taiwan remarks a week earlier, viewed by China interference in its domestic affairs.
Visitors from China make up the largest group of tourists in Japan, and an industry has grown up known as yitiao long (one dragon), where their entire itinerary, including accommodation, transportation, entertainment and food, is handled by Chinese-owned businesses in Japan. Services are offered in Chinese, and most financial transactions are conducted online on Chinese payment services.
There are no official estimates of yitiao long's size, but a Chinese marketing analyst, who did not wish to be named, said he "wouldn't be surprised" if it exceeded 1 trillion yen ($64 billion) per year, looking at how much the Chinese generally spend in Japan and estimates from think tanks on Japan's potential tourism losses from the Tokyo-Beijing spat.
But the prolonged dispute with China means the "dragon" is now shrinking amid mass cancellations.
"My private lodges in Tokyo had been fully booked every day until Nov. 14, but almost all reservations for December have been cancelled and [the Chinese] tourists have been reluctant to pay the cancellation fee," a Chinese woman running three vacation rental houses told Nikkei Asia on condition of anonymity. "But I cannot say 'Japan is safe and come visit us,' nor criticize the Chinese government."
She is one of many Chinese business owners operating services for tourists from China. They include small travel agencies, chauffeurs and tour guides, Chinese restaurants and even rental services for traditional Japanese clothing. It is a largely untracked segment of Japan's tourism industry, with the businesses primarily operating online using Chinese services, some even lacking the required Japanese permits.
The vacation rental home owner makes her accommodations available for booking through the Chinese online travel agency Ctrip, and all payments are made via WeChat Pay or Alipay, services provided by Chinese tech giants Tencent and Alibaba, making it difficult for Japanese authorities to track.
The "dragon" had been growing on the back of rising numbers of tourists and residents from China in Japan. The country received 8.7 million tourists from China in the first 11 months of this year, an increase of nearly 40% compared with 2024, when visitors nearly tripled, data from the Japan National Tourism Organization showed. Tourists from China accounted for more than 20% of total visitors.
Meanwhile, the number of residents from China in Japan reached more than 900,000 at the end of June. They are the largest nationality group, accounting for 23% of the total foreign residents. Their growing numbers are partly due to Japan's lax visa standards, which incentivize middle- and upper-class Chinese nationals to immigrate to Japan for their children's education and investment purposes.
But Japanese PM Takaichi's comments on Taiwan in a parliamentary session -- saying that a Taiwan emergency could constitute a survival-threatening situation for Japan -- look set to reverse the trend.
Chinese airlines are reducing flights to Japanese cities and growth in tourist numbers from China for November slowed to a meager 3%, a sharp contrast to the more than double-digit expansion experienced since the start of the year.
The effects are clearly visible at popular tourist destinations. Rows and rows of authentic Chinese restaurants in Ueno, a district in Tokyo usually frequented by Chinese tourists, were empty on a cold day in mid-December. A railroad crossing in the city of Kamakura near Tokyo, famous for its depiction in the popular 1990s basketball anime "Slam Dunk," was crowded with tourists from Southeast Asia, but those from China were scarce.
"In the past, it was common to see groups of Chinese tourists being led by tour guides and taking photos near the crossing. However, recently, that number has clearly decreased," a security person overlooking the crossing said.
Japanese businesses are looking to adapt by catering to tourists from other parts of the world, a workaround that is proving difficult for the Chinese businesses.
"Most of our customers are Chinese, and we cannot suddenly pivot to the tourists from Europe or the U.S. [We have] no clue," said a Chinese employee at a shop renting out traditional Japanese kimonos in the old traditional district of Asakusa in central Tokyo.
The store, located on the third floor of a multi-tenant building, was dimly lit and had no clientele when Nikkei visited in mid-December. The employee acknowledged seeing few customers of late.
Another headache for Chinese business owners in Japan revolves around the stricter policies concerning foreigners being pushed by the new Takaichi administration.
In mid-October, Japan raised the minimum capital requirement for business manager visas by sixfold to 30 million yen. New rules also require relevant work experience and education, and are much tougher than previous regulations. The revisions came after the was initiative was criticized for being misused as an easy path to immigrate to Japan. Many private lodging owners had obtained the visa and the government is also now considering tightening real-estate regulations for foreigners.
Residents from China have been "surprised by the speed at which the government has moved" to tighten regulations for foreigners, said Takehiro Matsutomo, adjunct researcher at Waseda University and the author of "Run [to] Japan" ("Run Ri,") a book on how rich people from China are leaving their homeland for its neighbor.
"There is also a rise in xenophobic sentiment, and so Chinese residents are generally worried about how these changes will affect them," he added.
Additional reporting by Yurika Yoneda and Yuki Kohara.
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