Japan is already feeling the economic sting as China’s advisory against travel to Japan begins to bite. The move followed remarks from Japanese Prime Minister Sanae Takaichi suggesting that a Chinese attack on Taiwan could pose an existential threat to Japan, provoking what Beijing characterised as unacceptable commentary.
Chinese tourists and Hong Kong visitors account for around one-fifth of all arrivals in Japan, and tourism itself contributes roughly 7 % of Japan’s GDP, according to the World Travel & Tourism Council. Within days of Beijing’s advisory, more than ten Chinese airlines offered refunds for Japan-bound flights and one operator estimated around 500 000 ticket cancellations. The research firm Nomura Research Institute estimates the annual cost to Japan could reach about ¥2.2 trillion (US $14.2 billion).
Tour operators are bearing the brunt: for example, the Tokyo-based firm East Japan International Travel Service reported an 80 % drop in bookings for the remainder of the year. The ripple effects are already visible in the market. Retailers, airlines and hospitality firms with exposure to Chinese travellers have suffered share price setbacks.
Beyond immediate tourism losses, the situation illustrates broader risks tied to geopolitical tension. Japan now faces a more tangible consequence of its diplomatic stance: the threat of economic retaliation through consumer- and travel-based channels. China’s advisory and emerging industry impacts show how tourism can quickly become a lever in bilateral disputes. Response options for Tokyo are limited: while the dispatch of senior diplomats has begun, Beijing has shown little inclination to soften its approach.
For the Japanese economy, this means re-evaluating dependence on one large source market and reinforcing resilience in sectors exposed to external pressures. In tourism and beyond, firms may now need to buffer against sudden shifts in international sentiment. If the dispute deepens or prolongs, the losses could extend beyond single-year bookings into structural disruptions across retail, hospitality, film releases and cultural exchange. The coming weeks will be pivotal in determining whether the downturn is a short-term shock or the start of sustained weakness.
