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Opinion / Op-Ed Contributors

Tourism boom can't hide Japan's need for reforms

By Cai Hong (China Daily) Updated: 2015-11-24 08:19

Tourism boom can't hide Japan's need for reforms

Chinese tourists hold their shoppings in Shinjuku shopping district during the China National Day Golden Week holiday on October 5, 2015, Tokyo, Japan. [Photo/IC]

A friend is planning to tour Kyoto, Osaka and other places in the following two weeks. To her surprise, there are no rooms available in Kyoto.

She had no idea what a large number of rivals she would have for a room when touring around Japan.

Travelers from China alone contributed 24 percent of the 1.82 million foreign travelers visiting Japan in October, a 99.6 percent rise over the same month the previous year. The cruise ships shuttling from China's mainland to Japan have increased from 12 in 2014 to 46 now.

The tourism industry is one of the few bright spots in Japan's economy. Japanese Prime Minister Shinzo Abe's growth strategy, dubbed Abenomics, has been made up of the Bank of Japan's massive quantitative easing programs, along with easier fiscal policy. It has weakened the Japanese yen, which in turn has made it cheaper for tourists.

With foreign visitors pouring in, Japan is within reach of its ambitious tourism goal well ahead of its five-year target, which is to lift the number of foreign tourists to 20 million by 2020.

Japan's Chief Cabinet Secretary Yoshihide Suga has said the country needs to set a new goal for tourism, which is seen as an important new area for Japan's growth.

But while tourism is booming, the country's economic situation is not getting closer to another goal - raising the inflation rate to 2 percent.

Japan's gross domestic product declined 0.8 percent in the third quarter of this year, following a 0.7 percent drop in the previous quarter. Two consecutive quarters of contraction meets one of the criteria for a recession.

While household spending increased 0.5 percent in July to September, Japan's companies held back spending. Business investment declined 1.3 percent in the third quarter from the previous quarter, worse than the 0.5 percent fall forecast by economists.

The Japanese prime minister has been urging the country's corporations to give their employees wage rises and invest more, hoping to start the virtuous cycle that his economic agenda is supposed to engender. He envisions private sector-driven growth, in which higher corporate earnings boost people's wages and spending, thereby encouraging more business investments.

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