Osaka's tourism badly hit as China-Japan tensions simmer

Sudden retreat of Chinese tourists threatens one of few bright spots for Japan's economy

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Mr Denryu Lin, who runs about 80 holiday rentals in central Osaka, has been watching his business evaporate since late November as tensions between Tokyo and Beijing escalate.

More than 600 bookings - over 1,000 Chinese guests - have been cancelled through the year-end, he said.

“Everyone I know in real estate and the travel industry is struggling,” he said, underscoring a sense of sector-wide stress that could tip into a broader crunch if the pullback persists.

Osaka, Japan's second-largest economic hub and one of the clearest symbols of the nation's reliance on Chinese tourism, is bearing the brunt of the pullback. Kansai International Airport has logged the steepest flight cuts nationwide, while hotels, retailers and restaurants face waves of cancellations.

Chinese visitors are Japan's biggest spenders, accounting for a fifth of the nation's 8.1 trillion yen (S$67 billion) tourism revenue. Their sudden retreat - triggered by Beijing's advisory after Japanese Prime Minister Sanae Takaichi's Taiwan remarks - threatens one of the few bright spots for Japan's economy.

China bookings for Osaka-bound travellers for winter and early spring departures are down 55 per cent to 65 per cent - a sharper drop than the nationwide average, with Kansai International Airport carrying a disproportionate share of cancellations, according to market researcher China Trading Desk.