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Economy & Tech

Businessmen Agonize Over Japan’s Approach to the Beijing Winter Games

To boycott or not? While trade with China represents nearly a quarter of Japan’s market, customers and investors are concerned about human rights issues, too.

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Over 180 rights groups that are calling for a boycott of Beijing 2022, in Lausanne, Switzerland November 26, 2021. REUTERS/Denis Balibouse

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The Japanese government announced on December 24, 2021, that it would not send a government delegation to the Beijing Winter Olympic and Paralympic Games in February 2022.

However, Prime Minister Fumio Kishida chose to avoid using the term “diplomatic boycott” — a phrase that would irritate China. His decision has been largely welcomed by the business world.

This is because many Japanese companies would struggle if business with China, a gigantic market consisting of 1.4 billion people, is suddenly cut off.

A number of business leaders in Japan anguished about the pros and cons of this approach to the Beijing Winter Games before and after the government’s statement on December 24.

“It was good judgment to avoid saying explicitly that participation in an event marred by human rights issues must be handled carefully,” said Kengo Sakurada, chairman of the Japan Association of Corporate Executives, in the wake of the government’s decision.

Sakurada added, “Stating the country’s position clearly would not be in Japan’s interests.”

A few days before the announcement, on December 22, Hiroshi Ozaki, chairman of the Osaka Chamber of Commerce and Industry (OCCI), said: “We will let the government decide. I have nothing more to say.”

Other senior members of the OCCI were present when Ozaki spoke, including the provocative chairman of Kokuyo, Akihiro Kuroda. Yet, everyone stayed silent on the matter of the Beijing Winter Olympics.

China’s suppression of human rights in regions such as Xinjiang and Hong Kong is behind the diplomatic boycott of Beijing 2022, which countries such as the United States and United Kingdom have already said they would join. 

Japanese business executives, however, have been more apprehensive about the idea of staging a diplomatic boycott, according to Keidanren chairman Masakazu Tokura. 

He explained:

If we say too much and irritate the Chinese government, China could suddenly regulate exports from Japan as well as the local sale of Japanese goods. Japanese TV, newspapers, and the net are all closely watching what we say.

We are seeking a point of compromise that will anger neither the US or China. If they see our point as “ambiguous,” then what’s the big deal? 

China is Japan’s biggest trading partner, according to Ministry of Finance statistics. In 2020, total trade between the two countries reached ¥32 trillion JPY ($277.65 billion USD). That is 1.6 times Japan’s trade with the United States, which comes in second at ¥20 trillion JPY ($174 billion USD). Overall, trade with China makes up about a quarter of Japan’s total trade with other countries.

Virtual signing of the RCEP in 2020, chaired by Vietnam.

New Regional Trade Deal Goes Into Effect

On January 1, 2022, the Regional Comprehensive Economic Partnership (RCEP), which involves Japan, China, South Korea and ASEAN countries, took effect. It has been speculated that because the RCEP is the first trade agreement between Japan and China, Japan doesn’t want to hinder trade with China by announcing a diplomatic boycott of the Beijing Olympics.

However, at the same time, the Japanese business world has become cautious about China’s excessive technology transfer demands and data leaks. It has also objected to China’s intimidating “wolf warrior” diplomacy

There is an additional concern of the business world. If it remains quiet on the issue of human rights in China, it fears that this will displease investors and trigger a strong backlash from conservatives in Japan.

RELATED: EDITORIAL | Uniqlo Case Shows Japan Must Take a Stand on China’s Rights Violations

The business world is deeply anxious about how to deal with China, but some members have nevertheless voiced direct criticism, stating that the Japanese business world must criticize China over its human rights violations.

Allegations of human rights violations by China in the Xinjiang Uyghur Autonomous Region are among the issues raised by proponents of the Olympics boycott.

“It’s risky to walk alone with the term ‘diplomatic boycott,’ but I approve of a Japanese government delegation not being sent to Beijing 2022 [as a form of protest],” said Kyoco Ikoma, chairperson of the Kansai Association of Corporate Executives, on December 23.

RELATED: Japanese Firms Plan to Boycott Chinese Partners Forcing Uyghurs to Work

“We need to send out the fair message that ‘unacceptable behavior is unacceptable,’” added Ikoma, saying such straight talk was important to improved Japan-China relations as the two countries mark the 50th anniversary of the normalization of diplomatic relations in 2022.

The Business World and Beijing 2022

As the world approaches the Beijing 2022 Winter Olympic and Paralympic Games, there will be much focus on the words and actions of Beijing 2022’s corporate sponsors. In the case of Tokyo 2020, some sponsors held back in areas such as TV advertising due to the spread of COVID-19.

There were high expectations for Beijing 2022, but now among the Japanese business world, there seems to be growing disappointment. The business leaders interviewed expressed disillusionment that there is no longer a sense of trying to boost the Olympics. Instead, in their world, there is just a sense of having to make difficult decisions. 

(Read the Sankei Shimbun report in Japanese at this link.)

Author: Akihiro Fujiwara