Ishikawa Prefecture in north-central Japan was hit by a strong earthquake, causing widespread concern.
On January 2, according to CCTV News, citing Japanese media reports, as of 15:30 local time, the death toll in Ishikawa Prefecture, Japan, has risen to 48 due to the earthquake.
The earthquake in Japan occurred on the first day of the new year. According to the Japan Meteorological Agency, at around 16:10 local time (15:10 Beijing time) on January 1, a strong earthquake with a magnitude of 7.6 on the Richter scale occurred in the Noto area of Ishikawa Prefecture, Japan. Mitsuhiro Izumiya, the mayor of Zhuzhou City, Ishikawa Prefecture, Japan, said that 90 percent of the 6,000 households in the area were completely destroyed or almost completely destroyed in the earthquake. As of the morning of the 2nd, the fire in Wajima City had been brought under control, and the local fire department reported that about 200 buildings, including residential shops, had been burned down due to a fire in Wajima City, Ishikawa Prefecture, due to the earthquake. In addition, the Japan Meteorological Agency lifted all tsunami warnings after the earthquake on the Noto Peninsula in Ishikawa Prefecture at 10 am on the 2nd.
After the earthquake, there were still intermittent earthquakes in Japan, and the local power and transportation systems were greatly affected. Fears were also raised by the strong earthquake that caused water to overflow the spent fuel pools of several units at the Shiga nuclear power plant, and the spent fuel pool cooling pumps also stopped working in an emergency manner.
Zhang Yanming, a professor at the Law School of Dalian Maritime University and dean of the Huang Bohai Research Institute, told the 21st Century Business Herald reporter that the water in the spent fuel pool of the reactor of units 2, 3, 6 and 7 of the Kashiwazaki Kariba Nuclear Power Plant overflowed due to earthquake shaking. "The discharge of nuclear-contaminated water into the sea has caused serious damage to Japan's international image, and the world's people's suspicion of Japan-related products and boycott of Japan cannot be eliminated in the short term. ”
This seems to have made the recovery of the Japanese economy more difficult. Japan's real gross domestic product (GDP) fell by 0.5% quarter-on-quarter in the third quarter of 2023 and 2.1% on an annualized basis, according to the Cabinet Office, which was significantly more than previously expected, and it was the first time since 2023 that the Japanese economy experienced negative quarterly growth.
Will the earthquake affect the local economy as desired? What headwinds are facing Japan's economic recovery?
Image source: Xinhua News Agency
Japan's electricity and transportation have been affected
In the aftermath of the earthquake, the Japanese government promptly issued evacuation instructions to the local government. On the 1st, the Fire Agency of the Ministry of Internal Affairs and Communications of Japan said that in response to the strong earthquake and tsunami disaster, more than 97,000 people in nine prefectures, including Akita Prefecture, Ishikawa Prefecture, and Fukui Prefecture, have been issued evacuation instructions. These evacuated residents will spend the night in stadiums and school gymnasiums, which are often used as evacuation centers in case of an emergency. Aftershocks continued for the next 4 hours. According to the Japan Meteorological Agency, from 16:00 to 20:00 local time on the 1st, 49 earthquakes with a seismic intensity of 1 or higher have been felt in the area centered on the Noto area of Ishikawa Prefecture (when an earthquake with a seismic intensity of 1 occurs, some people who are stationary indoors can feel a slight tremor).
According to the U.S. Geological Survey, it was the strongest earthquake to occur in this part of Japan in more than 40 years. At a press conference, the Japan Meteorological Agency said, "In the next week or so, especially in the next two or three days, we need to be vigilant against earthquakes with a maximum seismic intensity of about 7." ”
A once-in-a-decade severe earthquake wreaked havoc on Wajima City, Ishikawa Prefecture, Japan. Japanese media said that according to the local fire department, the fire has burned about 200 buildings, including residential shops.
The strong earthquake also disrupted communications and transportation in Ishikawa Prefecture and neighboring areas. According to Japan's Hokuriku Electric Power Company, as of late on the 1st, about 32,000 households in Ishikawa Prefecture were still without power. Japan's Tohoku Electric Power Company said about 700 households in Niigata Prefecture, near Ishikawa Prefecture, lost power. A number of Japanese telecom operators said that communication services were restricted in parts of Ishikawa and Niigata prefectures, and emergency calling services were also affected to some extent.
Traffic disruptions are equally severe. On the 1st, some sections of Japan's Hokuriku Expressway and Joshinetsu Expressway were closed. Previously, 40 railway lines and two high-speed rail lines to the earthquake-stricken area ceased operations. In just one day, the suspension or delay of this part of Japan's railway line has affected about 63,900 people. As of the afternoon of January 2, East Japan Railway Company said that the Joetsu Shinkansen, which had been suspended due to the earthquake, had resumed operation on all lines. In addition, the Hokuriku Shinkansen has also resumed full operation.
The rail transport situation is gradually improving, but the air transport situation is not recovering as expected. On the 2nd, 4 to 5 cracks with a depth of more than 10 centimeters and a length of more than 10 meters have been found on the runway of Noto Airport in Japan. At Noto Airport, 500 people, including passengers and local residents, are "isolated." In addition, all flights between Haneda Airport and Noto Airport on the 2nd and 3rd of All Nippon Airways will be suspended.
Under these circumstances, Japan's tourism industry is expected to suffer. On January 2, Hong Kong Zongheng Tour Holdings Co., Ltd. announced that in order to ensure the safety of passengers, all tour groups in Wajima City, Ishikawa Prefecture, Japan in January will be cancelled, and the tour groups can choose to transfer, keep or refund in full.
The 21st Century Business Herald reporter learned that a number of tour groups in Guangzhou said that there is no tourist group in Ishikawa County at present. A spokesman for the tour told reporters that the travel agency had two tour groups to Hokkaido on the 8th and 14th of this month, involving a group in Honshu, where Ishikawa Prefecture is located, on the 18th of this month, and has not received any information from tourists about the withdrawal of the group.
But even so, the reporter learned from a number of travel agencies that the recovery of group tours in Japan was indeed not as expected. "Recently, due to the discharge of nuclear sewage into the sea in Japan, the willingness of domestic people to travel to Japan has decreased, and now there is a serious earthquake in Japan, and citizens must be resistant to traveling to Japan. Chen Jieling, deputy general manager of Guangzhou Kanghui International Travel Service Co., Ltd., told the 21st Century Business Herald reporter.
"After seeing the news of the earthquake in Japan, I decided that I would not travel to Japan in the near future," Zhou Yu (pseudonym), a Guangzhou citizen who originally had plans to travel to Japan, told the 21st Century Business Herald reporter, "mainly because I was worried that aftershocks would occur, and the original plan had to be postponed for at least half a year." ”
Liu Ying, member of the Chongyang Institute for Financial Studies and director of the cooperative research department of the Chongyang Institute of Financial Studies of Chinese University, said in an interview with the 21st Century Business Herald reporter that the strong earthquake will have a huge impact on the local tourism industry in Japan. The earthquake in Ishikawa Prefecture also triggered a tsunami warning on the western coast, which has scared those who are interested in traveling to the area, especially with the upcoming Spring Festival holiday, and the outlook for Chinese New Year tourism in Japan is not expected to be promising.
What are the negative effects of nuclear wastewater?
The earthquake occurred at a sensitive time in Japan's nuclear power industry.
Since the March 11, 2011 earthquake that caused a nuclear accident at the Fukushima Daiichi Nuclear Power Plant in Japan, Units 1-4, Japan's nuclear power plants have faced strong opposition from local residents. Since 2023, people from Fukushima and other parts of Japan have also expressed strong opposition to the Japanese government's decision to discharge nuclear sewage into the sea. Today's powerful earthquake has once again aroused the fear of nuclear leakage.
On January 1, Japan's Nuclear Regulation Commission said that one external power supply system at the Shiga nuclear power plant in Ishikawa Prefecture had failed, but that functions such as spent fuel pool cooling continued to operate because the other external power supply system was normal. Immediately afterwards, some Japanese media reported that after the earthquake on the 1st of the Shiga Nuclear Power Plant Unit 1, the spent fuel pool cooling pump stopped working for a time and resumed at 16:49 on the same day, probably due to the change in the water level of the spent fuel pool due to the earthquake shaking.
According to media reports, TEPCO announced on the same day that on the afternoon of the 1st, during an inspection of units 1 to 7 of the Kashiwazaki Kariba Nuclear Power Plant in Niigata Prefecture, it was found that the water in the spent fuel pools of the reactors of some units had overflowed due to earthquake shaking, but the water did not flow outside the building and did not affect the outside world, but the overflowed water contained radioactive materials, and the radioactivity level was being measured.
Zhang Qiyue, an assistant researcher at the Institute of Global Governance at the Shanghai Institute of International Studies, told the 21st Century Business Herald reporter that if the news from TEPCO is true, the water containing radioactive materials has not spilled into other areas for the time being, and the monitoring stations around the nuclear power plant to measure the radiation intensity show the same level as normal, indicating that the radioactive materials have not had an impact on the outside world for the time being, and are still under control.
Zhang Qiyue believes that there is a lot of concern about the possible leakage of nuclear-contaminated water because the water that spilled from the earthquake is water used by nuclear reactors, not the nuclear-contaminated water discharged by TEPCO, which has not been treated in any way and is likely to contain more radioactive materials. Once leaked to other areas, it will cause greater harm and damage, and it is a relatively serious nuclear leakage accident, which will cause long-term serious damage to human life and health, animals and plants, and the ecological environment, and cause new environmental damage.
At present, the earthquake has not caused any new leakage of nuclear-contaminated water, but this does not mean that the crisis caused by the discharge of nuclear-contaminated water has subsided.
At present, the impact on Japan's seafood exports is mainly reflected in the decrease in the export volume of fishery products and the decrease in export prices. Trade statistics released by the General Administration of Customs of China showed that China's imports of aquatic products from Japan totaled 2.4 million yuan in October 2023, a decrease of 99.3% from the same month of the previous year. Since the discharge of nuclear-contaminated water from Fukushima into the sea, the export of Japanese seafood has been severely hampered. There are also Japanese media reports that in the warehouses of some aquatic product processing enterprises, scallops and other aquatic products are about to be piled up to a ceiling of about 8 meters high. In an interview with the media, some merchants said that the storage costs are increasing every day due to the overstocking of inventory, and it is still unknown whether the company's operation can survive until the day when it receives compensation from TEPCO.
"The main export objects of Japanese aquatic products are neighboring countries in Asia, among them, China is the largest importer of Japanese aquatic products, China and South Korea and other countries to reduce the import of aquatic products to Japan directly leads to the loss of the market for Japanese aquatic products, resulting in unsalable aquatic products, which greatly damages the economic interests of Japanese aquatic products merchants. Zhang Yanying believes that the negative impact of nuclear sewage discharge into the sea will be very long-term, due to the backlog of inventory, the storage cost of aquatic product processing enterprises has increased significantly, and enterprises cannot make ends meet, and in the long run, it will be difficult for aquatic product enterprises to operate, resulting in a regional economic decline in the aquatic product industry. This will be a huge blow to Japan's coastal areas, which rely on the export of aquatic products.
Even at such a high cost, the Japanese government is still insisting on going its own way. The fourth round of discharge of nuclear wastewater from Japan's Fukushima Daiichi nuclear power plant will start in late February 2024 and is expected to be completed in March of that year. TEPCO said the emissions were about 7,800 tonnes, the same as the previous three rounds, but the process would be different. NHK reported that the first three rounds of discharge were made by injecting nuclear sewage diluted with seawater into a pool to confirm the concentration of tritium, a radioactive substance, before discharging it into the sea. In the fourth round, the process of confirming the tritium concentration was omitted, and the diluted nuclear wastewater was discharged directly into the sea.
Talking about the follow-up impact of Japan's discharge of nuclear wastewater, Zhang Yanying believes that Japan's aquatic product consumption market will further shrink, and the export volume of Japanese beauty brands will also decline, and at the same time, it will also bring heavy damage to Japan's tourism industry, and the sustained development will be a big blow to Japan's economic development.
Japan's economic recovery has been overshadowed
In the wake of the earthquake and the lingering negative effects of the discharge of nuclear wastewater, Japan's economy has unsurprisingly declined.
Japan's real gross domestic product (GDP) fell by 0.5% quarter-on-quarter in the third quarter of 2023 and 2.1% on an annualized basis, according to preliminary statistics released by the Cabinet Office, which significantly exceeded previous market expectations.
Specifically, the decline in the main economic data in the third quarter was very obvious. Both domestic and external demand contributed negatively to Japan's economic growth in the third quarter. According to the data, domestic demand fell by 0.4% quarter-on-quarter in the current quarter, of which personal consumption, which accounts for more than one-half of the Japanese economy, fell slightly quarter-on-quarter, and enterprise equipment investment fell by 0.6% quarter-on-quarter, both of which fell quarter-on-quarter for two consecutive quarters, and net exports fell by 0.1% month-on-month.
Meanwhile, Japan's core consumer price index (CPI) continues to cool. Japan's Ministry of Internal Affairs data showed that the core CPI data, excluding fresh food, rose 2.5% in November from a year earlier, a result that was in line with economists' forecasts. The overall consumer price index (CPI) in the Tokyo area rose 2.6% year-on-year in November and fell by 0.2% month-on-month on a seasonally adjusted basis.
Chen Zilei, director of the Japanese Economic Center of Shanghai University of International Business and Economics, told the 21st Century Business Herald reporter that although inflationary pressure has declined, personal consumption willingness has declined due to the impact of higher expectations. Coupled with the contraction of external demand, enterprise equipment investment recorded negative growth month-on-month.
Recently, a survey by Japan's Yingdezhi Market Consulting Company showed that high inflation and the depreciation of the yen have affected the consumption enthusiasm of the Japanese people during the holiday period from the end of 2023 to the beginning of 2024. According to the survey, 52.5 percent of respondents said they would cut back on seasonal spending after experiencing recent price increases, and 51.3 percent said inflation had affected their holiday food spending, including booking New Year's meals. In addition, 56.2% of the respondents said they had no travel plans.
Liu Ying believes that Japan's CPI recorded negative growth month-on-month, indicating that Japan is still plagued by deflation. She said that in order to solve the problem of deflation, the Japanese government has sacrificed the strategy of "Abe's three arrows" since the Abe period, and Japan has adopted an unconventional monetary policy to solve the downturn in the country's economy. However, Japan's economic growth is still weak, mainly because of the country's own structural problems, such as the country's low birthrate and aging population, and the bankruptcy of Japanese company Toshiba some time ago, which just shows that Japan lacks momentum in a new round of economic innovation.
Talking about the frequent depreciation of the yen during the 2023 fiscal year (April 2023 to March 2024), Liu Ying said that the monetary policy of the United States and Europe will most likely not raise interest rates in 2024, and will gradually enter a cycle of interest rate cuts. Japan may also maintain an unconventional monetary policy, and if the United States cuts interest rates, the pressure on the depreciation of the yen will be weakened, but in the long run, the trend of the yen depends on the direction of the Japanese economy, and the Japanese government is indeed required to carry out a series of innovations, including not only technological innovation, but also industrial innovation, fiscal and financial innovation.
"It is extremely difficult for Japan to adjust its industrial structure, so the earthquake may induce deep contradictions in its economy, further worsening its economy and reducing the country's attractiveness to foreign investment. Liu Ying believes that at least in the four quarters of fiscal 2023, Japan's economic development will show a downward trend.
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