While Chinese consumers were boycotting all things Japan three years ago, many will be celebrating the upcoming holiday marking the 70th anniversary of China’s WWII victory against Japan by flocking to Japanese cities for everything from Hermès bags to high-tech toilet seats. On September 3, a handful of world leaders will be present in Beijing for an elaborate military parade on China’s Victory Day, a newly declared national holiday that observes the end of what China calls the “Chinese People’s Resistance Against Japanese Aggression and World Antifascist War.” Although the buildup to the parade has led to diplomatic friction between the Chinese and Japanese governments, the holiday will be an opportunity for travel at a time when Chinese visits to Japan have been booming. After seeing a dramatic downturn in the number of Chinese tourists in the wake of China’s fall 2012 anti-Japanese riots, Japan’s rebound has been swift. Buoyed by price-conscious Chinese shoppers chasing a weaker yen and no sales tax for foreigners, the country is expected to see 4 million Chinese tourists by the end of 2015, a two-thirds increase from last year. In the first half of 2015, Japan was the third most popular outbound market for Chinese travelers after South Korea and Taiwan, soaring past Hong Kong and Thailand. This marks a significant turnaround from China's 2012 anti-Japan riots that sparked a mass boycott of both Japanese goods and tourism to Japan. Sparked by the Japanese government’s decision to purchase the disputed Senkaku Islands that are also claimed by China, the demonstrations quickly turned violent with rioters smashing Japanese cars, vandalizing Japanese businesses, and even burning Japanese factories. Despite an onslaught of anti-Japanese propaganda TV shows and films in the lead-up to the parade, this summer saw especially high Chinese traveler growth numbers in Japan as many Chinese tourists opted to skip South Korea due to the MERS outbreak and Hong Kong due to increased travel restrictions and anti-mainland sentiment. In July, more than 550,000 Chinese travelers headed to Japan, a number that more doubled from last year. Easier visa access and a growing number of transportation options have also helped increase the flow of visitors, who are arriving not only on more direct flights, but also on a rapidly expanding number of cruise ships embarking from Shanghai. Chinese shoppers in Japan have boosted a wide range of brands spanning from French luxury labels to Japanese electronics. Hermès recently reported that its operating profit rose by 20 percent in the first six months of this year thanks in large part to Chinese shoppers in Japan, and the Japanese market itself saw 20 percent sales growth during the period. Thanks to a belief that Japanese household brands are superior to their Chinese counterparts, Chinese tourists are also scooping up everything from disposable diapers and talking rice cookers to automated toilet seats. Pop culture also plays a part—Chinese parents are currently going crazy for US$823 schoolbags with “earthquake-resistant” steel reinforcements after one was featured on a Chinese TV drama, according to a recent report. Although Japan is seeing big business from China for now, there are several factors that could possibly hinder Chinese spending in the future. China has been ramping up its anti-Japan propaganda in recent weeks, but the main issues generating worries seem to be more economic than political. China’s recent yuan devaluation along with a recent slight appreciation in the yen could cramp lavish spending, while experts are questioning whether China’s stock market crash will dent consumer confidence despite the fact that a low amount of household wealth was actually invested in the market. For now, many brands and some experts are downplaying the potential impacts of these factors on outbound spending. Hermès said on Friday that it will not be downgrading its year-end sales growth forecast as a result of the recent economic changes in China. Meanwhile, the yuan is still at a two-year-long high against the yen, meaning that price will still be a strong draw for Chinese shoppers. At least in the short-term, cheaper handbags are beating nationalism when it comes to winning over Chinese consumers’ wallets.
