OSAKA – Since Kansai International Airport opened in 1994, business and political leaders in Osaka have touted the region as the gateway to Asia. Often showing little interest in other parts of the world, they would tell each other in conference rooms, cocktail parties, symposiums and seminars that China and East Asia were the future of Kansai’s international relations.
The strategy worked. Kansai Airport developed an extensive network of connections with the rest of East Asia. More recently, low-cost carriers from China and Hong Kong arrived, helping fuel the inbound Chinese tourism boom.
But with the outbreak of the COVID-19 virus in Wuhan, China, the benefits of the unofficial “Asia First” strategy have suddenly revealed an inherent weakness; namely, putting your economic eggs into one basket. In Kansai’s case, the basket is China and East Asia.
Last week, Kansai airport revealed that two-thirds of its weekly scheduled passenger flights to and from mainland China were canceled due to the virus. A survey conducted earlier this month by the Osaka Chamber of Commerce of 274 local firms showed that 87 percent of those with China-related businesses, and 60 percent overall, had seen a negative effect on their business activities due to the virus.
On the other hand, if Osaka merchants and businesses were worried, many individual residents appeared relieved as they could more easily navigate streets and train stations because of a lack of foreign tourists and their large pieces of roll-along luggage.
But whatever short term feelings individuals may have, going forward COVID-19 presents tough political questions about the region’s economic plans, including a goal of drawing even more visitors from East Asia to Osaka by air and sea.
The saga of the Diamond Princess cruise ship quarantined off Yokohama due to the virus has supporters of an Osaka-based casino resort on Yumeshima island in Osaka Bay now wondering about its potential impact on their efforts to have it open in a few years.
Last year, the city announced plans to build a dock and terminal for large cruise ships on the north side of Yumeshima, right beside where it wants to construct a casino resort.
Osaka’s leaders envisioned welcoming ships carrying hundreds of Japanese and East Asian tourists, all anxious to place their bets at the casino resort or drop by the 2025 Expo, which will be held on another part of the island.
But now, Osaka’s politicians may find themselves attempting to address concerns about whether lots of cruise ships docking at Yumeshima, or anywhere else, is a good idea. At least until stricter national measures for dealing with onboard virus outbreaks are created. But that could mean long discussions at the Diet and city assembly which, in turn, could delay completion of new dock facilities at Yumeshima. Without those facilities in place by 2025, the island is less convenient to reach, which could affect the numbers of expo and casino resort visitors.
Overall, the strategy of reaching out to East Asia has succeeded economically. But what Osaka’s leaders need to do now is to remember that it’s a big world. Diversifying their economic basket, especially when it comes to international tourism, can help minimize negative effects when natural disasters and pandemics invariably break a few single, regional eggs.
View from Osaka is a monthly column that examines the latest news from a Kansai perspective.