On November 17, stocks of Japanese travel and retail companies fell sharply, after China warned citizens of this country not to travel to Japan. This move is the latest response to the diplomatic controversy over Japanese Prime Minister Sanae Takaichi's comments on the issue of Taiwan (China).
Relations between the two countries have seriously deteriorated over the past week. Takaichi, a conservative and hardline figure, issued a statement saying a Chinese attack on Taiwan could threaten Japan's "survival" and implied that Japanese defenses could intervene.
These comments, which reflected the views of the right wing of the ruling Liberal Democratic Party (LDP), were met with an angry response from Beijing. The Chinese Foreign Ministry accused Japan of "rude interference in China's internal affairs". Tensions escalated when China and Japan summoned ambassadors from both sides last week.
Not only stopping at diplomacy, Beijing has also called on citizens to boycott Japan as a tourist destination, and advised students to reconsider studying at Japanese universities. Last weekend, Chinese cruise ships also passed through the disputed Senkaku archipelago (also known as the East Sea).
This call for a boycott has immediately affected businesses. In the morning trading session of November 17, the stock of Shiseido cosmetics company decreased by 9%. The stock of the supermarket group Takashimaya decreased by more than 5% and of Fast Retailing (owner of the Uniqlo brand) decreased by more than 4%.
China is the largest source of tourists to Japan, and Chinese tourists are known for spending heavily on cosmetics, clothing and consumer electronics.
In response to the backlash, Ms. Takaichi said her comment was just a "hypothesis" and said she would avoid making similar comments.
In an effort to prevent tensions from escalating, Japan sent Masaaki Kanai, Director of the Asia-Pacific Administration of the Japanese Ministry of Foreign Affairs, to meet with Chinese counterpart Liu Jinsong on November 18.
Japanese media reported that Mr. Kanai is expected to reassure Mr. Liu that Ms. Takaichi's comments will not signal a change in Japan's security policy, and at the same time call on China to curb actions that could harm bilateral relations.
