Japanese Economy Getting a Lift from Hundreds of Thousands of Chinese Tourists

Snapping up four Japanese luxury Seiko watches as if they were cheap chocolate souvenirs, a 36-year-old Chinese tourist plunks down $4,500 in cash at a glitzy store in downtown Tokyo. For years, Japanese auto and electronics companies have been expanding in China as its economy boomed to offset slow growth at home.

But now, Japan’s languishing economy is getting a lift from hundreds of thousands of Chinese tourists who are eager to flaunt their newfound wealth by purchasing brand name goods, from Canon digital cameras to Shiseido cosmetics.

Last year, a record 481,696 Chinese tourists visited Japan, up nearly 20 percent from 2007, according to the Japan National Tourism Organization. While it’s difficult to measure the precise impact of Chinese tourist spending, it is warmly welcomed by Japan’s struggling retailers.

As Japan’s population ages and declines, the world’s No. 2 economy will become increasingly dependent on such consumer spending from those who live outside the country. Thanks to years of rapid growth, China now has the world’s fourth largest population of millionaires after the United States, Japan and Germany, according to a Merrill Lynch Wealth Management/Capgemini survey.

To cash in on China’s rising wealth, Tokyo will start to issue tourist visas to Chinese who hold gold cards — credit cards granted to those above a certain income level with good credit histories — or who earn more than 60,000 yuan ($8,800) annually.