By Cheng Chung-lan | 2025-09-18

Reports are emerging in Japan of large-scale land acquisitions funded by Chinese investors, much to the chagrin of the Japanese public.

From a tourist resort in Hokkaido to an island in the Seto Inland Sea, these purchases are fueling suspicion that what appear to be ordinary commercial projects may threaten strategic sites and vital resources, evolving into new national security risks.

The town of Kutchan on Hokkaido lies at the foot of Mount Yotei about two hours southwest of Sapporo.

Chinese real estate plans for Kutchan have aroused controversy. In July, the weekly magazine Shukan Bunshun reported that a consortium of Chinese companies bought about 60 hectares in Kutchan to develop a "China Village." Developers illegally cleared 3.9 hectares of forest, shocking the local community.

After confirming the project's violations, the Hokkaido government ordered a halt to construction in early June.

A former employee of the construction company told a TV station that the workforce included "a team of Chinese living in Japan" as well as laborers brought from China for exterior wall construction.

Crews rotated every two weeks, with 60 to 70 workers on site at any time, and building materials came from China in containers, the ex-employee said.

According to Shukan Bunshun's investigation, work began on the project, also called "Kutchan Town New Life Project," in 2019. It is scheduled for completion in 2035. Plans envision a hotel, condominiums, a supermarket and public spaces.

"This development is aimed at Chinese people [buyers]. They've already started running ads on Chinese websites to promote sales of vacation homes," said an anonymous official.

Part of the 60 hectares has already been resold to other Chinese investors and companies, another official confirmed.

Some observers speculate that Chinese firms are considering bottling local fresh water for export to China. The export of water could pose risks to local infrastructure and security.

The development may have violated seven laws, including those on logging, building codes, urban planning, landscaping, soil pollution and water conservation, reported Shukan Bunshun.

Local farmers expressed anxiety.

"It looks like it's going to be turned into a place for wealthy Chinese," one farmer told Shukan Bunshun in July. "What's more, construction work was done without obtaining permission, and is chock full of violations ... and the most frightening thing of all is that it might raise the possibility of floods."

Strategic outpost under Chinese investment

A similar case has emerged on Kasasa Island in the Seto Inland Sea. Once described by residents as a quiet retreat, the island is experiencing a wave of Chinese acquisitions. Developers are "leveling mountains to make housing plots," one resident told Sankei Shimbun.

According to the Yamaguchi prefectural government, the island lies about 2km from Komatsu Port on Suo-Oshima Island and covers roughly 940,000 sq. meters.

It has only five households with seven residents, just three of whom live there full time. Transportation relies on a ferry that runs three or four times daily from Komatsu.

In once-deserted areas, heavy machinery and what appear to be power lines have begun to appear. Recent aerial photos show forests cut down, apparently in preparation for large-scale development.

Some landowners have registered addresses in Shanghai, according to property records.

Real estate agents report a surge of inquiries, including generous offers from Chinese nationals living in Tokyo and Saitama. A tour group from Dalian, China, even visited the island.

"We have not been directly harmed by anything, but ... if this land all ends up owned by Chinese people, we Japanese will become the minority here," said one resident.

Chinese social media carry gloating comments like "It's so cheap. How can I buy it?" One user even urged a potential buyer to "plant the Chinese flag after you buy it."

Near a US military flight path

Chinese purchases on such sensitive real estate have perturbed Japanese commentators. Kasasa lies near the flight path of the US military base in Iwakuni. One needs only a small boat to reach the Japanese naval base in Kure.

Chinese laws empower Beijing to seize overseas Chinese assets and require citizens to cooperate in intelligence work.

Kasasa could become a Chinese "drone base," Iwakuni City Councilman Takashi Ishimoto said.

"If the Chinese continue to acquire islands in the Seto Inland Sea, that will be tantamount to a de facto Chinese invasion," he said, according to Taiwan's CNA news site.

Japan's current law, which requires foreign land acquisitions to be reported only after the fact, is insufficient, Kiyoto Adachi, a law and economics professor at Hokusei Gakuen University in Sapporo, told Sankei Shimbun in September.

"Introducing a framework for advanced screening would be reasonable," he said, citing something similar to Australia's system of vetting purchases.

He advised enacting local measures like scenic ordinances or special taxes on villas.