Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Japan has dispatched a senior envoy to try to ease soaring tensions with China as stock markets in both countries fell after Beijing issued a travel warning to its citizens over the weekend.
Tokyo sent Masaaki Kanai, head of the Japan foreign ministry’s Asian and Oceanian affairs bureau, to Beijing for talks that will start on Tuesday, according to officials.
Kanai will seek to convince Beijing that Prime Minister Sanae Takaichi’s comments this month that Tokyo could consider a Chinese attack on Taiwan as an “existential threat” to Japan — and order its military to intervene — did not represent a departure from previous policy.
Beijing has reacted furiously to those remarks, which China said represented a military threat, culminating in a travel warning to its citizens last week against visiting Japan.
Kanai is expected to lodge a protest over a threatening social media post by China’s consul general in Osaka in response to Takaichi’s comments, but will also use the visit to urge Beijing to refrain from any further action that would worsen relations, according to Japanese media.
Chinese airlines have begun offering free refunds to citizens who cancel flights to or from Japan before December 31, while state media has warned that it was not safe to travel to the country, claiming a risk of attacks on Chinese people in Japan.
Shares in Japanese companies plunged on Monday on the prospect of a sudden decline in the number of Chinese tourists, among the largest sources of foreign visitors, and whose spending patterns have reshaped the country’s retail sector.
Cosmetics firm Shiseido shares fell as much as 11 per cent, the most since April, while those of Pan Pacific International Holdings, which operates the Don Quijote and Don Don Donki retail stores, dropped as much as 9.3 per cent, the most since August last year.
Department store operator Isetan Mitsukoshi Holdings, whose earnings have been driven by sales of luxury goods to Chinese visitors, fell more than 12 per cent. J Front Retailing and Takashimaya shed 6 per cent.
Tokyo Disney Resort operator Oriental Land declined 5 per cent and Uniqlo parent Fast Retailing lost 6.5 per cent, the most since mid-July.
Chinese travel platform Trip.com was down nearly 5 per cent, while airline stocks listed in Shanghai were also hit, with Spring Airlines falling more than 4.5 per cent, Air China losing 0.2 per cent, and Southern Airlines dipping 0.5 per cent. Hong Kong shares were also down.
Takaichi’s comments suggested that a military attack on Taiwan could reach the threshold for Japan to exercise its right to self-defence under its pacifist constitution.
China’s foreign ministry said last week it had summoned Japan’s ambassador to demand that Takaichi retract her comments on Taiwan, over which Beijing claims sovereignty.
Japan, meanwhile, has lodged a protest against a Chinese diplomat in Osaka, who posted a since-deleted post on social media platform X wrote that “if a filthy neck sticks itself in uninvited, we will cut it off without a moment’s hesitation”, in an apparent reference to Takaichi.
Anti-Japan rhetoric also dominated Chinese social media platform Weibo on Monday morning, with five of the top 10 trending topics mirroring the official line on the dispute, including one claiming: “Japan dragged into national crisis by prime minister”.
