Goldman Sachs economists warn that worsening political frictions between Japan and China could deliver a measurable drag on Japan’s economy by hitting tourism flows and demand for consumer goods. The bank estimates that a meaningful decline in visitors from mainland China and Hong Kong—Japan’s most valuable inbound tourism segment—could shave around 0.2 percentage point off GDP growth.
The projection is based partly on the 2016–2017 episode when China sharply curtailed tourism to South Korea during the Thaad missile-defense dispute, demonstrating how political retaliation can spill into consumer behaviour. Goldman’s Tomohiro Ota and Yuriko Tanaka suggest that a scenario involving a 50% drop in Chinese and Hong Kong tourists would deal a similar blow to Japan today.
Some of the loss would likely be cushioned: tourists from other markets may partially fill the gap, and domestic travel remains strong. After such offsets, Goldman estimates the net drag would be closer to 0.1 percentage point, but still meaningful given Japan’s already modest growth trajectory.
The analysis underscores the sensitivity of Japan’s recovery to diplomatic dynamics with China—especially because tourism has become a key post-pandemic economic driver.
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I know Trump is motivated by getting a deal with China, but it was probably advice that'll help Japan's economy:
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Not to mention the ability China has to sell the **** out of Japan assets.
