Diplomatic Strain with China Causes Decline in Tourism to Okinawa, Japan, Here’s All You Need to Know

Published on November 26, 2025

The southernmost prefecture and tourism hotspot, Okinawa, is affected greatly because of the decline of some of the prefecture’s major suppliers of tourism revenue, Chinese visitors. Chinese visitors began declining after the recent comments made by Japanese Prime Minister Sanae Takaichi made about Taiwan, which greatly irritated the Chinese and diplomatic problems between the two nations arose. This relaxation from the Chinese caused several Chinese ministries to implement travel restrictions to Japan which made Okinawa tourism problems worse.

The downturn of business tourism is now extending to ferry and local business tourism, as the majority of local businesses now report significant losses. Chinese tourism have long accounted for a significant portion of Okinawa’s tourism, and their absence and lack of money footed on the business have made the problem a lot worse.

Impact on Okinawa’s Tourism Industry: Cancellations and Loss of Revenue

Since mid-November, more than 540,000 ticket cancellations have been reported, as Chinese travelers who had already booked trips to Japan decide to cancel or reschedule their visits. Chinese airlines, responding to the downturn, have offered free refunds and rebookings for tickets purchased before December 31, 2025. The majority of the cancellations are attributed to group tours, with many travel agencies in China halting or canceling tours to Japan altogether for the remainder of the year.

This drop in bookings is causing significant disruption to businesses in Okinawa, with hotels, restaurants, and shops seeing a sharp decline in foot traffic. Many of the region’s tourism-dependent businesses rely heavily on Chinese visitors, and with these tourists staying home, local business owners are concerned about the long-term impacts of the situation. Restaurants and retail stores that cater to Chinese clientele are particularly struggling, as they face financial losses from the lack of visitors.

Local Business Owners Remain Hopeful Despite Concerns

Despite the current downturn, some local business owners in Okinawa are holding out hope that the tensions between Japan and China will eventually subside, and that tourism will return to normal in the near future. Naoko, a local business owner, expressed her optimism, stating that she believes the situation is temporary. “I’m a bit worried about the political situation, but I think things will return to normal soon,” Naoko said. However, her sentiments are not universally shared. Other business owners are more cautious, acknowledging the potential long-term consequences of the diplomatic rift.

Yukihiro Iha, another Okinawan business owner, emphasized the economic importance of China to Japan, particularly in terms of imports, exports, and tourism. “If Japan loses China as a partner, the economy could collapse,” he remarked, suggesting that a resolution to the tensions is likely to be found eventually. For now, however, the situation remains in flux, and many are left wondering how long it will take for Chinese tourists to return.

Economic Impact on Japan’s GDP and Tourism Revenue

Tourism plays a significant role in Japan’s overall economy, accounting for roughly 7% of the country’s GDP. Chinese tourists have been a key driver of this sector, with China being the top-spending nation for inbound visitors. According to data from the Japan Tourism Agency, Chinese tourists made up 30% of the total foreign tourist spending in 2024. This underscores the economic importance of Chinese visitors to Japan, and specifically to Okinawa, where Chinese tourists represent a sizable portion of international travelers.

However, with the current decline in Chinese tourism, Nomura Research Institute predicts that Japan could lose up to 1.79 trillion yen ($11 billion) in tourism revenue over the next year. This could result in a 0.29% reduction in Japan’s GDP, compounding the economic challenges the country is already facing. The reduction in Chinese visitors could also affect local economies in regions heavily dependent on tourism, like Okinawa, where the tourism sector plays a vital role in supporting the economy.

The Broader Impact of Diplomatic Tensions on Japan-China Relations

The fallout from this diplomatic rift is not limited to tourism. China’s reaction has extended into various sectors, including entertainment and trade. Recently, Chinese authorities postponed the release of two Japanese movies—the comedy “Cells at Work!” and the animated film “Crayon Shin-chan the Movie: Super Hot! The Spicy Kasukabe Dancers”—as a further indication of the strained relations between the two nations. Similarly, a comedy festival in Shanghai canceled performances by a Japanese entertainment company, and book publishing projects involving Japanese authors have also been delayed or suspended.

These actions reflect broader economic pressure on Japan, which extends beyond the tourism sector and into areas such as imports, exports, and cultural exchanges. Japanese seafood exports to China remain uncertain, with China still withholding the technical documentation required for resuming trade. There are also concerns that rare earth minerals, which are crucial to Japan’s electronics and automotive industries, could be targeted next, following China’s earlier restrictions on these materials.

Okinawa’s Recovery: Waiting for a Political Resolution

As Okinawa’s tourism sector grapples with the fallout from this diplomatic dispute, business owners and government officials are left in a waiting game, hoping for a political resolution between Japan and China. While some businesses are confident that the situation will resolve itself, others are preparing for a longer-term impact. The Japanese government has not provided a clear timeline for when the tensions might ease, and the tourism recovery in Okinawa could take months or even years, depending on how the diplomatic situation evolves.

For now, Okinawa remains a beautiful destination, but the loss of Chinese tourists is having a tangible impact on the local economy. The hope is that diplomatic tensions will cool, and the flow of Chinese tourists to Okinawa—and Japan as a whole—will eventually return to normal. In the meantime, businesses in Okinawa will need to adapt and explore new strategies to attract other international visitors and maintain their economic viability.

The Long-Term Effects of Political Strains on Tourism

The decreasing number of tourists coming to Okinawa from China illuming the impact of geopolitics on cross-border tourism and local economy. As the Diplomatic Relations Between China and Japan continue to unfold, the tourism sector in Japan and especially Okinawa will have to adapt and prioritize on the diversification of their customer base and enhancing the robustness of local enterprises. The tourism sector in Okinawa is doomed to rely on the state of the world and international relations, especially on the challenges brought about by the ongoing geopolitical turmoil.