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EN
China-Japan Tension Puts Strain on Tourist Spending
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WWD
SHANGHAI — China–Japan relations have hit a low point after its newly elected Prime Minister Sanae Takaichi’s comments about Taiwan sparked anger in Beijing.
During a recent parliament meeting, Takaichi suggested that Japan could deploy its Self-Defence Forces in a hypothetical case in which China attacked Taiwan.
A law was passed in 2015 that activated Japan’s Self-Defence Forces in response to a “survival-threatening situation” to Japan and its allies.
“The warning against traveling in Japan is a negative for the luxury sector as most of the offshore Chinese spending happened in Japan over the past year,” remarked Barclays in a research note, adding that around 40 percent of Chinese nationals’ luxury spending happens abroad.
“Despite having 10 percent of sales from Japan, we think Hermès might be less impacted than peers by any Chinese spending disruption, as sales in Japan are mostly driven by domestic spending,” noted the report.