Posts Tagged ‘China’

Annals of cheap: bananas

Thursday, November 8th, 2012

Yes, we have mo’ bananas

Bananas have been unusually inexpensive this fall. Normally the retail price remains in the ¥200-¥230 per kg range (1 banana is about 150 grams) year-round, and the average price for all of 2011, according to the Ministry of Internal Affairs, was ¥218. However, the ministry recently conducted a survey of 42 retail outlets in Tokyo and found that from January to September of this year, the price was slightly less than ¥210, and at the end of September it suddenly dropped to ¥197. Then, in early October, it fell further to ¥192 and has stayed there ever since. It’s the lowest price for bananas since 1979, and importers and wholesalers don’t like it at all. According to Tokyo Shimbun, smaller importers are hoping that the larger importers will limit their supply since it appears the price drop is due to a continual flood of bananas into the market.

Why the sudden price collapse? Apparently, it has to do with political situations on two fronts. China is, for all intents and purposes, currently carrying out an embargo of Philippine bananas due to a diplomatic flareup between the two countries over control of an island in the South China Sea. Though there are no formal sanctions involved, China recently reinforced inspections for diseases and pests that have resulted in banana shipments from the Philippines being held for extended periods of time in Chinese ports. Consequently, they are in danger of spoiling, so a lot of the bananas originally meant for the Chinese market have been coming to Japan.

China is the second biggest producer of bananas in the world (after India, which consumes 80 percent of its product), but several years ago the country signed a free-trade agreement with the Philippines, and bananas are one of the latter’s few big export crops. Another major banana market for the Philippines is Iran, which is currently under the shadow of a genuine U.S.-led embargo owing to Iran’s nuclear development program, so some of the bananas that the Philippines were planning to ship to Iran are now also going to Japan.

Continue reading about bananas →

Clarifying the economic damage of the Senkakus row

Wednesday, October 17th, 2012

Prepare for descent.

Japanese conservatives contend that people should not get “emotional” about the economic consequences of the current row with China over the Senkaku islands, implying that some things are more important than money. But what exactly are the economic consequences given that since 2009 China has been Japan’s biggest trading partner?

According to the Finance Ministry, one-fifth of total Japanese exports in 2010 went to China, while the same portion was 7.7 percent in 2001. A Reuters analysis shows that Japan would suffer mightily if trade stopped, citing an annual loss of ¥12 trillion if exports went down to zero for only one month. Under such conditions, automobile companies would be the main loser. They’d lose ¥144 billion. Bank of America estimates that 25 percent of all Nissan’s profits are derived in China, 21 percent for Toyota and 16 for Honda.

Moreover, Japanese companies directly invested ¥1 trillion in China in 2011, 60 percent more than what they spent in 2009. China’s Bureau of Statistics says that as of the end of 2010 there were 22,307 joint Japan-China ventures operating in China comprising 3 million workers and accounting for 16 percent of all the country’s foreign-related companies.

Still, the sector that tends to get the most media attention in Japan is tourism, since visitors from China spend more here than visitors from any other country. According to the Asahi Shimbun, China’s state tourism agency, which controls some 5,500 travel agencies all over the country, has stopped selling tours to Japan for the time being. Cancellations of reservations already made amount to about 500 million yuan, or ¥6.2 billion.

For the big vacation week of Oct. 1, there were at least 10,000 cancellations. China said it originally expected to sell some 45,000 individual tour packages to Japan for that week. On the other hand the agency said that the number of Chinese tourists who visited South Korea during the big vacation week was 125,000, a new record. They spent the equivalent of ¥190 billion, according to South Korea’s retailers association. Department stores and duty-free shops, in particular, did booming business.

Japanese companies lose less with cancellations of Japanese tourists going to China, but the cancellations do have an effect on Japanese airlines and tour packagers. Various media have reported that there were around 52,000 seat cancellations on flights between Japan and China as of September 24, with 37,000 on ANA and 15,000 on JAL. Many of these cancellations were Japanese business travelers, who tend to pay premium prices for tickets.

Japanese tour companies suffered, too. China and South Korea are always two of the top three destinations in terms of number of Japanese tourists, and Sankei Shimbun reports there has been a 30-45 percent decrease in the number of tours to these two countries in the second half of the year compared to the same period last year. This negative effect spreads to other sectors, since tourist companies are also not bothering to advertise. They say it would just be a waste of money.

The other New Year: Can Chinese prop up J-retail?

Wednesday, February 10th, 2010

Celebrating Chinese New Years at Llaox

Celebrating Chinese New Years at Laox

The sorry state of Japanese department stores has one hopeful sign: Chinese tourists seem to love them, or, at least, the richer tourists do. According to TV Tokyo’s “Business Satellite,” many of Japan’s nicer department stores are directly catering to Chinese visitors, who are reacting favorably to the attention by whipping out their Union Pay cards, which qualify them for discounts at a lot of Tokyo retailers, including most of the electronics stores in Akihabara.

And right now is the prime time to catch them since it’s Chinese New Year when Chinese people traditionally open their purses and spend big. If you go to the Laox Duty Free store on Akihabara’s main drag you’ll see tour bus after tour bus pull up in front and disgorge happy shoppers from the mainland, Hong Kong, Taiwan and Singapore.

It’s more than just the duty-free aspect that brings them to Laox. The company went through a thorough reorganization last year that involved the closing of most of its suburban branches and a hefty investment from a Chinese company. In fact, the president of Laox is now Chinese, and he’s made sure that every tourist who comes to Japan has the Akihabara store on his or her itinerary. Since the store reopened in October, sales have been very good, since the buyers have focused on merchandise that specifically target Chinese rather than Japanese.

Continue reading about Chinese tourism →

RSS

Recent posts