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Do land sales to foreign entities represent a potential Trojan horse?

10 Comments

Isn't democracy great? Vote out the government held by a different party or coalition, and you can blame them for all subsequent troubles that ensue. Take ownership of property in Japan by non-citizens. Writing in the conservative monthly WiLL (July), Koji Hirai notes growing exports of agricultural products from Japan to China and blames the government of Tomichi Murayama, which in 1994 became a signatory to the General Agreement on Trade in Services (GATS) under the auspices of the World Trade Organization (WTO).

As of March 2021, 164 countries and regions had come on board the GATS accord, which, among its various provisions includes sales of real estate.

In 1994, when Japan signed the agreement, it agreed to allow foreigners to acquire land and other real estate without restrictions. Some of the other 164 signatories to GATS adopted different policies, restricting, or even banning outright, sales to non-citizens.

Property ownership by foreigners can have both economic, security and defense implications. Much like the unequal treaties the European powers forced the Tokugawa shogunate and Meiji government to conclude in the 19th century, the current situation has been working to Japan's disfavor, and Hirai is arguing for revisions.

The present government coalition, together with several other political parties, has already formed a study group to mull new changes in the law as concerns property ownership and utilization.

The way the law stands now, some Japanese -- we don't know what percent -- apparently feel some anxiety over the aims and purposes of acquisition of property by foreigners, particularly in the case of those located proximate to defense facilities or other key sites, which would possibly make the country more vulnerable to fifth columnists from a hostile nation.

Covering the topic of acquisition of properties in Africa and Asia by Chinese corporations, the Nikkei Asia newspaper of July 13, 2021, noted land holdings on those two continents were roughly equivalent to the total land area of Sri Lanka or Lithuania. These acquisitions by China are considerably more extensive than by corporations based in the U.S. or other major countries.

Between 2011 and 2020, Chinese businesses reportedly procured agricultural lands, forests and mining properties outside of China totaling 6.48 million hectares. By contrast, over the same decade, UK, American and Japanese companies acquired 1.56 million, 860,000 and 420,000 hectares, respectively.

As an example of the economic impact of such land acquisitions, take Chinese acquisitions of land for banana cultivation in Kachin State, in northern Myanmar. In 2013, Myanmar exported bananas valued at US $1.5 million to China; by 2020, the figure had jumped 250-fold, to $370 million.

But economic progress can also have downsides, including environmental degradation: Take the purchase of 75 hectares devoted to pig farming in Vietnam's Binh Phuoc Province by China's New Hope Liuhe, an agribusiness conglomerate. The farm's resulting environmental damage now reportedly threatens the production of natural latex, a major local industry.

In the U.S., presently 14 states have laws restricting or banning land purchases by non-citizens.

According to a report dated August 2021, Japan's Ministry of Agriculture, Forestry and Fisheries tallied 278 cases of foreigners purchasing forest land between 2006 and 2020, a total of 2,376 hectares. Sales in Hokkaido led the nation with 1,804 hectares.

Hirai writes that when Japanese buy land, they put priority on such factors as access, such as proximity to rail stations or major trunk roads. Chinese, on the other hand, are less concerned with access and place more importance on good water resources and availability of clean air, which are problems in their own country.

As former Diet member Masaru Onodera explained, in way of justification, "In recent years, Chinese have been acquiring real estate in Hokkaido with a long-term vision of creating a base for self-sufficient living."  

But Hirai looks at provinces in China's west such as Tibet and Xinjiang, and notes that government policies have encouraged the nation's Han majority to outstrip native populations. Considering Japan's declining birth rate, might not Chinese, or the Japanese offspring of Chinese immigrants, eventually come to form large segment of local population? And if this were to occur, asks Hirai, what would be the implications in terms of social demographics, or even loyalty to the state? He cites a law passed by China's government in 2010 that stipulates all male citizens age 18 to 60 years, and females between 18 and 55, are "duty bound" to defend the nation in the event of an emergency.

In a scary but unlikely scenario, might China someday possibly take a tack from Vladimir Putin's incursion into eastern Ukraine and go to the extreme of ordering its military into Hokkaido, under the pretext of "safeguarding" the approximately 750,000 Chinese nationals presently living in Japan?

Before that happens, let's see what the Diet does, or doesn't do, about changing the law on property sales to non-citizens.

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10 Comments
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Depends on who you're selling the land to.

6 ( +8 / -2 )

If they're scared of Chinese enclave communities, they should go to Vancouver and take a look around. It seems most of the neighborhoods are now Chinese majority.

The arguments are pretty rich coming from a Japanese. Plenty of wealthy Japanese own homes in Singapore these days while Vietnam is their new favorite market. Japanese trading houses also have long been voracious acquirers of global commercial property.

Sure, put restrictions on foreigners. But make sure the countries affected put reciprocal restrictions on Japanese buyers.

-2 ( +10 / -12 )

The arguments are pretty rich coming from a Japanese. Plenty of wealthy Japanese own homes in Singapore these days while Vietnam is their new favorite market. Japanese trading houses also have long been voracious acquirers of global commercial property.

Sure, put restrictions on foreigners. But make sure the countries affected put reciprocal restrictions on Japanese buyers

EXACTLY!

-5 ( +8 / -13 )

ALSO especially rich coming from a country that has over 9 million vacant homes AND a population declining so quickly it will be non existent in 100 years...

-6 ( +9 / -15 )

We all like bananas, right? I won't blame anyone for helping to grow more, provided they are sold on open markets, not shipped only to 1 location, even if others are willing to pay more when any contract is over. I suspect that's the real fear.

Ownership needs to be reciprocal in every way. In China, nobody owns the land. Only the govt owns it and the govt can take it back, legally, at any time. That is unlikely, but it has happened.

That happens in every country. Govts meddle, but the CCP seem to meddle in many more lives on massive scales, but all govts meddle, in theory, for the overall good of the people they represent.

In 1994, it was a different world. The cold war had ended and the world was looking for a "peace dividend". There was much optimism. An invading country, Iraq, had been defeated and pushed out of Kuwait a few yrs earlier in about 6 months of effort.

2 ( +3 / -1 )

If the entity is from a country

whos flag is Red with 5 orange stars it should be banned and outlawed. If an entity is from a country whos flag is Red with a blue square and within the blue square is a white sun which is the flag of The Chinese Republic or Real China, than it should be welcomed with open arms.

-2 ( +2 / -4 )

Of course! Don't do it! Land should be reserved for its people

-2 ( +2 / -4 )

According to a report dated August 2021, Japan's Ministry of Agriculture, Forestry and Fisheries tallied 278 cases of foreigners purchasing forest land between 2006 and 2020, a total of 2,376 hectares. Sales in Hokkaido led the nation with 1,804 hectares.

Oh please....what's the big deal...in my country alone Japanese companies own a hundred times that. Pot, kettle ,black.

0 ( +1 / -1 )

藤原:

You need to know the difference between orange und gelb.

I didn't hear them complain when the Japanese were snapping up land and property abroad.

I remember when Utada Hikaru was complaining about foreigners buying property in Japan. All the while, she had property in New York and god knows where else.

2 ( +2 / -0 )

The arguments are pretty rich coming from a Japanese. Plenty of wealthy Japanese own homes in Singapore these days while Vietnam is their new favorite market. Japanese trading houses also have long been voracious acquirers of global commercial property.

Except for the fact that governments in Singapore or Vietnam can unilaterally seize any land or asset at a whim if they deem there is a national security issue. The same goes with China which also allows foreign ownership of lands.

Japan and US are on the free market systems that enshrined the private ownership of properties in their laws. It's not easy for any of them to seize foreign assets in Japan.

-1 ( +0 / -1 )

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